Department of International Relations & Cooperation on its 2014/15 Annual Report

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Meeting Summary

The Department of International Relations and Cooperation (DIRCO) briefed the Committee on its 2014/15 Annual Report, providing the Committee with insight into some of its key highlights. DIRCO’s African Agenda formed the backbone of its foreign policy objectives. It had recorded many successes in pursuit of regional peace initiatives such as the mediation done in Lesotho. On the home front DIRCO had concluded its organisational review in order to streamline its work for the achievement of its strategic objectives. The briefing continued with performance information on its Programmes: Administration, International Relations, International Cooperation and Public Diplomacy and State Protocol.

Programme 1: Administration - On the payment of service providers within 30 days, DIRCO had been 98.25% compliant. On the target of filling vacant posts within 4 months, the average turnaround time achieved was 5.3 months. On senior management service performance agreements a total of 279 out of 280 had been signed and filed. DIRCO was only able to handle 21% of its lodged grievances within 30 days and only finalise 28% of its disciplinary cases within 90 days.

Programme 2: International Relations - A total of 29 out of 34 planned structured mechanisms had taken place. Bilateral engagements focussed on socio-economic development, market access and energy, agriculture, education, science and technology. 32 out of 65 planned high levels visits had taken place. The shortfall was mainly due to national elections. On economic diplomacy trade and investments, seminars were one of the areas targeted. DIRCO had managed to promote exports in agro-processing; renewable energy; various sectors such as banking; mining; automotive components; fruits; cosmetics and military equipment.

Programme 3: International Cooperation – In setting the promotion and protection of human rights as a target area, DIRCO negotiated and influenced the adoption of resolutions on the implementation of the International Decade on People on African Descent, on the right of the Palestinian people to self determination and also on the right to development. On continental cooperation with the Southern African Development Community (SADC) with regional integration as a target, SA as Chairperson of SADC had convened various summits to address peace and security challenges in countries like Lesotho, the Democratic Republic of Congo and Madagascar. On South-South and North-South Cooperation, an achievement for DIRCO was the Sixth Brazil, Russia, India, China and South Africa (BRICS) Summit which saw the signing of the first formal BRICS intergovernmental agreements as well as the signing of the agreement on the New Development Bank with its regional centre in South Africa.

Programme 4: Public Diplomacy and State Protocol – On public diplomacy, DIRCO had held 32 media briefings (target of 24). A total of 229 out of 240 targeted media statements had been released. There were also 24 opinion pieces (target of 11) and 20 publications (target of 19). On state protocol, DIRCO had provided protocol services at four special events and had also facilitated 28 174 dignitaries through state protocol lounges. On diplomatic immunities and privileges, DIRCO had issued 6 015 diplomatic passports and visas, responded to 7 887 requests for diplomatic accreditation and had responded to 2 350 requests for diplomatic privileges.

The briefing continued with insight into the financials of DIRCO for 2014/15. DIRCO had spent 98.2% of its appropriated funds for 2014/15. Members were also provided with a breakdown of figures on expenditure as per programme.

The Committee was provided with details about its 2014/15 audit outcomes. DIRCO had for a successive year obtained a qualified audit report for 2014/15 on its annual financial statements due to problems with asset management. However DIRCO had not received a qualified audit report on its performance audit. DIRCO was already six months into its new financial year and was trying to sort out its qualification. One of the problems with the asset register was the manner in which assets were captured and how they were valued. For example, at SA’s London Mission collectable paintings and tapestries were captured as assets and not as heritage assets as they should have been. A Forum for South African Directors General (FOSAD) meeting between DIRCO and the Department of Arts and Culture (DAC) had been held where Deputy Directors General could interact. The decision was made that heritage assets at missions would be properly valued. Another challenge was that SA had 125 missions where new persons were employed all the time. The new employees often did not wish to use the same beds and furniture as their predecessors. It was a challenge to get rid of beds and furniture. To remedy the situation DIRCO was rather opting for accommodation for its staff that came furnished. It was furthermore difficult for DIRCO to implement the Public Finance Management Act (PFMA) at its missions. The only option was to do a condonement afterwards. DIRCO was also trying to resolve challenges on procurement and financial delegations. On expenditure management, if processes were not followed then it amounted to irregular expenditure. It was not only DIRCO’s head office that was audited but missions too. Corporate services managers had been trained to keep registers up to date. DIRCO had also improved systems on revenue management as it often had to do the Department of Home Affairs (DHA) work. For example if a South African lost his passport abroad a mission would issue the individual with a replacement passport. The revenue generated had to be collected in terms of PFMA requirements. There was an agreement between DIRCO and the DHA for DIRCO to manage this function.

The financial position of DIRCO was healthy even though it remained exposed to currency fluctuations. As a result cost containment measures were put in place to avoid unauthorised expenditure. An action plan had been put in place to address the audit findings.

DIRCO briefly spoke to the Annual Report of the African Renaissance and International Cooperation Fund (ARF). The ARF had received an unqualified audit report. On democracy and good governance objectives, the ARF had achieved in processing payments to the amount of R3 440 949.52 for the South African deployment of election observer missions to Mozambique, Botswana, Namibia, Zambia and Mauritius. On humanitarian assistance, there was a processed payment of R141 000 as a final payment for humanitarian assistance to Niger. On the ARF’s contribution towards the Project for Conflict Resolution and Development (PCRD), the ARF had processed a payment of R18 230 000 as SA’s contribution to the SADC Secretariat for the Lesotho peace process. The Committee was given insight into the financials of the ARF. Total funds available as at 31 March 2015 was R1 670 869. DIRCO was working on the South African Development Partnership Agency Bill to review the legislative framework so as to consolidate the international assistance provided by the South African government. The Bill was planned to be tabled in Parliament in the 2016/17 financial year. The objective of the Bill was to support SA’s outgoing development cooperation policy by providing funding and technical support for development initiatives.

Members raised concern that DIRCO’s performance in the handling of lodged grievances and the finalisation of disciplinary cases was not good. The achieved figures sat at 21% and 28% respectively. DIRCO was asked what it would have liked those figures to have been. Members felt that it was possible for DIRCO to resolve its lodged grievances and its disciplinary cases. Failure to do so could lead to having contaminated industrial peace. Some members queried what the benefits of the BRICS Agreement were for SA. Concern was raised over the financial burden that the BRICS Development Bank could have on SA. There was also concern about the 60 day deadline that President Barack Obama had given SA on outstanding matters on the Africa Growth and Opportunities Act (AGOA). Other committee members responded that they had been part of a multi party delegation from SA that had gone to Russia to finalise the BRICS Agreement. The multi party delegation had supported the BRICS Agreement. There was definitely benefit to SA. SA’s contribution towards BRICS was considered only to be a drop in the ocean compared to the benefit it derived. On AGOA, members emphasised that it was a unilateral agreement. SA did benefit from AGOA even though the USA could pretty much do as they pleased. Of utmost importance was that SA needed to balance its trade imbalance. SA’s exports should be greater than its imports. SA needed to be wary about making its own sectors vulnerable. Members disapproved of the USA wishing to dump its salt water laden poultry on SA. It was good that SA was protecting its local poultry sector. Members felt that SA should stand its ground and protect its agricultural sector as well.

 

Meeting report

Department of International Relations and Cooperation 2014/15 Annual Report
The Department of International Relations and Cooperation (DIRCO) delegation comprised of Mr Kgabo Mahoai, Deputy Director General: Corporate Management, and Ms Delores Kotze, Chief Director: Monitoring and Evaluation. DIRCO provided the Committee with insight into some of its key highlights. DIRCO’s African Agenda formed the backbone of its foreign policy objectives. It had recorded many successes in pursuit of regional peace initiatives such as mediation that had been done in Lesotho. On the home front, DIRCO had concluded its organisational review in order to streamline its work for the achievement of its strategic objectives. The briefing continued with performance information on its Programmes: Administration, International Relations, International Cooperation and Public Diplomacy and State Protocol.

Programme 1: Administration - On the payment of service providers within 30 days there had been 98.25% compliance. On the target of filling vacant posts within 4 months, the average turnaround time achieved was 5.3 months. On senior management service performance agreements, a total of 279 out of 280 had been signed and filed. DIRCO was only able to handle 21% of its lodged grievances within 30 days and only able to finalise 28% of its disciplinary cases within 90 days.

Programme 2: International Relations - A total of 29 out of 34 planned structured mechanisms had taken place. Bilateral engagements focused on socio-economic development, market access and energy, agriculture, education, science and technology. 32 out of 65 planned high levels visits had taken place. The shortfall was mainly due to national elections. On economic diplomacy trade and investments, seminars were one of the areas targeted. DIRCO had managed to promote exports in agro-processing; renewable energy; various sectors such as banking; mining; automotive components; fruits; cosmetics and military equipment.

Programme 3: International Cooperation – In setting the promotion and protection of human rights as a target area, DIRCO negotiated and influenced the adoption of resolutions on the implementation of the International Decade on People on African Descent, on the right of the Palestinian people to self determination and also on the right to development. On continental cooperation with the Southern African Development Community (SADC) with regional integration as a target, SA as Chairperson of SADC had convened various summits to address peace and security challenges in countries like Lesotho, the Democratic Republic of Congo and Madagascar. On South-South and North-South Cooperation, an achievement for DIRCO was the Sixth Brazil, Russia, India, China and South Africa (BRICS) Summit which saw the signing of the first formal BRICS intergovernmental agreements as well as the signing of the Agreement on the New Development Bank with its regional centre in South Africa.

Programme 4: Public Diplomacy and State Protocol – On public diplomacy, DIRCO had held 32 media briefings (target of 24). A total of 229 out of 240 targeted media statements had been released. There were also 24 opinion pieces (target of 11) and 20 publications (target of 19). On state protocol, DIRCO had provided protocol services at four special events and had also facilitated 28 174 dignitaries through state protocol lounges. On diplomatic immunities and privileges, DIRCO had issued 6 015 diplomatic passports and visas, responded to 7 887 requests for diplomatic accreditation and had responded to 2 350 requests for diplomatic privileges.

Financial performance
Insight was provided into the financials of DIRCO for 2014/15. DIRCO had spent 98.2% of its appropriated funds for 2014/15. Members were provided with a breakdown of figures on expenditure as per Programme.

Ms Kotze provided details about its 2014/15 audit outcomes. DIRCO had for a successive year obtained a qualified audit report for 2014/15 on its annual financial statements due to problems with asset management. However DIRCO had not received a qualified audit report on its performance audit. DIRCO was already six months into its new financial year and was trying to sort out its qualification. One of the problems with the asset register was the manner in which assets were captured and how they were valued. For example, at SA’s London Mission collectable paintings and tapestries were captured as assets and not as heritage assets as they should have been. A Forum for South African Directors General (FOSAD) meeting between DIRCO and the Department of Arts and Culture (DAC) had been held where Deputy Directors General could interact. The decision was made that heritage assets at missions would be properly valued. Another challenge was that SA had 125 missions where new persons were employed all the time. The new employees often did not wish to use the same beds and furniture as their predecessors. It was a challenge to get rid of beds and furniture. To remedy the situation DIRCO was rather opting for accommodation for its staff that came furnished. It was furthermore difficult for DIRCO to implement the Public Finance Management Act (PFMA) at its missions. The only option was to do a condonement afterwards. DIRCO was also trying to resolve challenges on procurement and financial delegations. On expenditure management, if processes were not followed then it amounted to irregular expenditure. It was not only DIRCO’s head office that was audited but missions too. Corporate services managers had been trained to keep registers up to date. DIRCO had also improved systems on revenue management as it often had to do the Department of Home Affairs (DHA) work. For example if a South African lost his passport abroad a mission would issue the individual with a replacement passport. The revenue generated had to be collected in terms of PFMA requirements. There was an agreement between DIRCO and the DHA for DIRCO to manage this function.

The financial position of DIRCO was healthy even though it remained exposed to currency fluctuations. As a result cost containment measures were put in place to avoid unauthorised expenditure. An action plan had been put in place to address the audit findings.

African Renaissance and International Cooperation Fund
DIRCO briefly spoke to the Annual Report of the African Renaissance and International Cooperation Fund (ARF). The ARF had received an unqualified audit report. On its democracy and good governance objectives, the ARF had achieved to process payments to the amount of R3 440 949.52 with respect to the South African deployment of election observer missions to Mozambique, Botswana, Namibia, Zambia and Mauritius. On its humanitarian assistance objective, there was a processed payment of R141 000 as a final payment for humanitarian assistance to Niger. On the ARF’s contribution towards the Project for Conflict Resolution and Development (PCRD) the ARF had processed a payment of R18 230 000 as SA’s contribution to the SADC Secretariat for the Lesotho peace process.

The Committee was given insight into the financials of the ARF. The total amount of funds available as at 31 March 2015 was R1 670 869. DIRCO was working on the South African Development Partnership Agency Bill to review the legislative framework so as to consolidate the international assistance provided by the South African government. The Bill was planned to be tabled in Parliament in the 2016/17 financial year. The objective of the Bill was to support SA’s outgoing development cooperation policy by providing funding and technical support for development initiatives.

Discussion
Mr W Faber (DA, Northern Cape) referred to page 7 of the briefing which spoke to DIRCO’s performance in handling lodged grievances and the finalisation of disciplinary cases. DIRCO’s achieved figures only sat at 21% and 28% respectively which were considered not too good. He asked what percentages DIRCO would have liked  to achieve in resolving grievances and disciplinary cases. He referred to page 15 which spoke to DIRCO’s achievement on the Brazil, Russia, India, China and SA (BRICS) Agreement. What was the benefit to SA? He was concerned about the financial burden that the BRICS Development Bank would have on SA. SA already had a development bank. SA was apparently required to contribute R10bn towards the BRICS Development Bank. He pointed out that President Obama of the USA had given SA 60 days to meet the requirements on the Africa Growth and Opportunities Act (AGOA). If the deadline was not met President Obama intended to implement tariffs on agricultural products. He felt that it could have a huge impact on imports and exports.

Mr Zahir Amien, DIRCO Office Head: Deputy Minister’s Office, said that in dealing with grievances and disciplinary cases, the Department’s situation was unique. This had become evident to him in the four years that he had worked with DIRCO. Its uniqueness compared to other departments was that it operated in other countries where different labour regimes applied. DIRCO not only employed South Africans but also Locally Recruited Personnel (LRPs) from its missions abroad. Therefore pieces of legislation such as the Labour Relations Act and the Basic Conditions of Employment Act did not apply to these LRPs. Local laws applied to LRPs. It was therefore difficult in reality to apply the 90-day rule on the finalisation of disciplinary cases.

Mr Mahoai added that DIRCO had submitted a section 75 Bill that was aimed at resolving these issues.

Mr B Nthebe (ANC, North West) felt that DIRCO needed to resolve its lodged grievances and disciplinary cases. If DIRCO failed to do so then it would have contaminated industrial peace. Grievances and disciplinary cases should be resolved. He noted that he had been part of the South African BRICS delegation that had gone to Russia. The BRICS Agreement had been finalised. There was a great deal of benefit that SA could derive from the BRICS Agreement. SA’s contribution towards BRICS was only a drop in the ocean compared to the benefit that it derived. He emphasised that the delegation that had gone to Russia had been a multi-party delegation and there was general agreement on BRICS. The AGOA was a unilateral agreement. He acknowledged that SA did derive benefit but unfortunately the USA could do whatever it wished. Of great importance was that SA needed to balance its trade balance. SA’s exports should be more than its imports. SA also had an agreement with the Ukraine but the Ukraine made sure that it protected its agricultural sector. SA should be wary about making its own sectors vulnerable. The AGOA needed to be beneficial to all parties. It was unacceptable that the USA wished to dump its salt water laden chicken on SA. SA had to protect its own poultry industry. There were tangible issues that needed to be taken into consideration. SA also needed to protect its agricultural space.

Mr Amien said that the comments made by members themselves answered some of the questions that were asked. He pointed out that the Department of Trade and Industry (DTI) was driving the AGOA issue. The big issue at present was that SA did not wish to be the USA’s dumping ground. Not only were there tangible benefits to AGOA for SA but it also allowed for beneficiation. There were exports of VW motor vehicles from SA to the US market. The USA also wished for other markets to open up. He emphasised that a country’s foreign policy was guided by its national interests. The USA always placed its national interests first. Having said this he noted that SA had made it clear that it would not be bullied. A balance was needed. Minister Rob Davies and the DTI would do their best to come up with the best solution. There would be tradeoffs but SA would not be bullied. The USA was putting SA to terms because it had stood its ground. In a sense it was about the lesser of two evils.

The meeting was adjourned.

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