Department of International Relations & Cooperation & African Renaissance Fund 3rd 2015/16 Quarter Performance, with Deputy Minister present

Meeting report

Opening Remarks

The Chairperson asked the Department of International Relations and Cooperation (DIRCO) why the Committee had received different versions of the briefing document. In addition, he observed that the Director-General, Mr Jerry Matjila, was not present in the meeting said that the Committee had not received a formal apology for his absence.

Mr Caiphus Ramashau, Chief Financial Officer, DIRCO, responded that DIRCO had to attend two meetings in Parliament today and Mr Matjila was at the other meeting. He formally apologised on behalf of Mr Matjila.

The Chairperson noted that the Committee had not received a formal letter of apology at the start of the meeting.

Mr Zahir Amien, Head of Office: Deputy Minister’s Office, DIRCO, agreed that there should have been a formal letter of apology. He would look into the matter.

The Chairperson stated that the Committee always requested that documents be sent to the Committee ahead of time in order for there to be a better quality of engagement between the DIRCO and the Committee. DIRCO should make it easier for the Committee to do oversight. Members needed to ask probing questions.

Mr Ramashau once again apologised for the lateness of the documents and said that the DIRCO had not had a great deal of time within which to prepare the document as notice of the meeting was sent  to it only five days prior. The Department would however send documents to the Committee beforehand.

The Chairperson noted that he was aware that notice of the meeting had only been sent to the DIRCO only five days prior.

Mr S Mokgalapa (DA) agreed with the matters raised by the Chairperson. It was unacceptable and hoped that the matter of the Director General’s apology would be followed up.

Briefing by the Department of International Relations and Cooperation (DIRCO) on it’s and the African Renaissance Fund’s (ARF) performance and financial reports for the 3rd Quarter of 2015/16

The DIRCO briefed the Committee on its performance and financial report for the 3rd Quarter of 2015/16. The delegation comprised of Mr Caiphus Ramashau Chief Financial Officer (CFO), Ms Mmathari Mashao Chief Director: Human Resource Management and Ms Mavis Mapheto Director: Management Accounting. Deputy Minister Nomaindiya Mfeketo was also in attendance accompanied by Mr Zahir Amien Head of Office: Deputy Minister’s Office.

Mr Ramashau said some of the changes in the international arena were the rapid weakening of the rand against major currencies, slowdown in growth of China and its impact on the global economic outlook as well as plummeting oil prices. On the up side, SA had hosted the Forum on China-Africa Cooperation (FOCAC) Summit in December 2015 which led to China making an investment of $60bn in Africa of which $10bn would be given to SA for infrastructure, industrialisation and skills development. The Committee was given insight into the performance of the DIRCO for Quarter 3 as per its Programmes i.e. Administration, International Relations, International Cooperation and Public Diplomacy and Protocol.

Administration Programme - The target of paying 100% of its suppliers within 30 days was met. It had also exceeded its target of having 30 training programmes by implementing a total of 34.

International Relations Programme - A total of 14 high level visits had been planned but only 10 were undertaken due to unavailability of political stakeholders. It did however manage to exceed its target of holding 28 trade and investment seminars by achieving to hold 39.

International Cooperation - SA was elected for a 4-year term on the Executive Board of the United Nations Educational, Scientific and Cultural Organisation (UNESCO) and was appointed as the Vice Chairperson of the Africa Group in the Executive Board.

Public Diplomacy and Protocol - On public diplomacy it had met and exceeded its targets on the numbers of media briefings, opinion pieces and public participation programmes that it held. The DIRCO had also met 100% of requests for protocol services for state and ceremonial events as well as incoming and outgoing state visits.

The Committee was also provided with insight into the DIRCO’s implementation of its Management Performance Assessment Tool (MPAT) as well as highlighting key performance areas. The MPAT assessed four management areas ie Strategic Management, Governance and Accountability, Human Resources Management and Financial Management. Detail of scoring was provided to members.

Detail was provided on the DIRCO’s financials for Quarter 3. Total expenditure for the Quarter amounted to R4.520bn or 69.4% of the adjusted appropriation. The expenditure was 1% higher than the projected expenditure for the period. The Committee was also provided with expenditure figures for each of the aforementioned Programmes.                   

The briefing continued on the performance and financials of the ARF for Quarter 3. Actual performance was that two project proposals had been processed for the ARF Board meeting. Furthermore, one advisory committee meeting had been held to consider project proposals. On democracy and good governance payments, totalling R847 303.63 for election observer missions in Tanzania and Seychelles had been made. On socio-economic development, payment of R1.187 861 for a rice and vegetable production project in Guinea had taken place. A total of R5 338 125 had been provided to Namibia for drought relief. Members were provided with detail on the financials of the ARF. Cash and cash equivalent at 1 April 2015 sat at just over R2.2bn. Accumulated surplus as at December 2015 was R1.6bn which was not yet committed. 2015/16 ARF approved projects included just over R38m towards technical support for general elections in Burundi. The funds had not yet been disbursed due to the situation in the country. A total of R195 000 had been provided to the Gift of the Givers for transportation of humanitarian assistance to Madagascar. 

Discussion

The Chairperson informed the Committee, that he together with some members of the Committee attended the FOCAC Summit. SA had hosted the Summit in December 2015. It was the third FOCAC Summit. China had agreed to invest in Africa and SA as well. He was fortunate enough to have attended the Ubuntu Awards as well and had been impressed by companies that were patriotic and they were recognised for being so.

Mr M Maila (ANC) was concerned about DIRCOs Dar-es-Salaam and Lilongwe Projects. He pointed out that in Quarter 2 the Projects had been 55% and 74% completed respectively. It was already Quarter 4. At Lilongwe the issue was about weather conditions and it looked as if the Project was going to extend into the new financial year. Both Projects seemed to be running over three financial years. He noted that no mention had even been made about the Hague Project which also had problems. What was happening? He furthermore pointed out that the DIRCO had asset management problems which had been highlighted by the Auditor General of SA’s Office (AGSA). What was being done to avoid a negative audit opinion?

Mr Ramashau replied that in Dar-es-Salaam there were delays with the contractor to start the project. DIRCO was hopeful that by June 2016 the contract would be finalised. The funding had in the meantime been used to cover costs on hosting the FOCAC and the AU Summit. There was also a dispute with the contractor on the Hague Project. Renovations were supposed to have been done. DIRCO had been advised by lawyers in the Hague to litigate the matter outside of court. The issue was that the contractor at present wished to get out of the contract as it was considered too small a job.

Mr B Radebe (ANC) pointed out that on pages 3 and 14 of the briefing document investment figures of FOCAC differed. Figures given on the pages were $60bn and $50bn respectively. What was the correct figure? He felt that the New Development Bank (NDB) would put SA on the map. All the countries involved in the NDB were being targeted physically or economically by the west. Russia and China were for example being pressurised militarily. He asked whether the DIRCO had analysed the phenomenon. The world found itself in a recession due to China not absorbing the commodities of the world any longer. President Valdimir Putin of Russia had even commented that the situation was potentially leading to a second cold war.

Deputy Minister Mfeketo appreciated all the questions that had been asked by Members and stated that the questions that are related to finance would be addressed by the CFO. The issue around the NDB was difficult as global politics came into play and South Africa was part of the global community. It is clear that countries like China, Russia, Brazil and India to some extent were being affected in one way or the other either financially or politically. The Brazil, Russia, India, China and SA (BRICS) Agreement was of extreme importance to SA. Some of the challenges that are largely covered by the media are as a result of global politics. There were honest brokers and then there were those who set their sights on the mineral riches of other countries. SA had been working closely with Iran and Russia to try to sort things out in the Middle East. Western countries went to Syria through the involvement with National Treaty Organisation (NATO) and United Nations (UN) not with the agenda of fighting the brutal Islamic State (IS) but that of toppling democratically elected presidents and this was an undemocratic practice. It was a repetition of what had happened in Iraq. China and Iran got involved in Syria to try to broker peace and assist Syria to stabilise democracy in the region and create peace between government and the opposition. People had been saying that US was attacking Syria because the country was fighting against terrorism. However, the reality was that US was assisting terrorists in Syria. The situation in Syria was nevertheless getting better and this was because of the intervention of Russia and the promotion of dialogue and peacemaking resolution. Everyone was trying to come up with a workable solution. If no intervention was made by Russia then there was a possibility that Syria would have turned into another Iraq or Libya where their leaders had been toppled and murdered in some instances. It was evident that Western forces tend to enter countries under the pretext of peace and thereafter create turmoil that would leave a legacy of persistent conflict. 
                          
Deputy Minister Mfeketo added that the BRICS countries were the true friends of SA. China had offered SA $10bn. There were Development Banks in Russia and China and these banks would assist developing countries to access funding at lower rates compared to those offered by World Bank. The relationship with BRICS countries went broader than finance. Much of the DIRCOs expenses were for its missions. South Africa would have to look very seriously at the implication of cutting missions, especially on the side of investment. The payment of membership fees by SA to organisations like the UN was not something that could be changed by the Department. It is indeed true that the membership fees were costly and the National Treasury had already provided DIRCO with a list of things that could be cut to save money. One of the lists of things to be cut to save money was the number of delegations to be travelling overseas and the kind of luxury that is provided to delegates. Every department had been asked to “tighten the belt” and the Department was no exception.

There were ambassadors that had been recalled because of behavioural problems and these included an ambassador in Japan. The DG was responsible for taking an action whenever there is an ambassador that had committed any offence. There was an ambassador in Fiji that was involved in the fatal collision last year but he only died two weeks ago under natural death. China was investing in South Africa in a number of ways and this included skills development. The $10 billion that had been given to South Africa was part of the huge amount that had been given to the African continent and the focus at the moment was about the forum of China and Africa. South Africa was regarded as a gateway to Africa and that was why $10 billion out of the $60 billion that had been allocated to the continent was given to South Africa. It was unfortunate that there would be no country that would invest in South Africa or any country without looking for some kind of benefits, just like South Africa could not go to another country without having some sort of interest. Most countries were still keen to invest in South Africa and this was because of the advancements that had been made in the respect for law and protection of the constitution. There were also ordinary people who wanted to live in South Africa because this was known as a non-sexist and non-racial country and it protected the rights of gays and lesbians. The officials from the Department would continue engaging with Pan African Parliament (PAP) but it must be highlighted that DIRCO is not represented in PAP.

Deputy Minister responded that in relation to the question around Burundi, this was a difficult question, especially when one considered that there were different narratives about Burundi. The President was standing for a position that had been agreed by the constitutional court. The constitutional court in Burundi agreed that the current President would be entering the second term because the first term was an interim arrangement, where the current President was put as peace maker but not democratically elected by people and Parliament.  Most of the people who were troubled by what was happening in Burundi were not even in the region and it was mainly the US. The narrative that was coming out of the continent was that indeed the current President of Burundi, Mr Pierre Nkurunziza would be entering the second term. The position that was taken by South Africa was to wait for the African Union (AU) to make a ruling on the matter before making any proclamation. The AU had indeed deliberated and agreed that this would be the second term of Mr Pierre Nkurunziza   

Ms S Kalyan (DA) noted that it looked as though the budget of the DIRCO was going to be exceeded. She consequently asked what austerity measures had the DIRCO planned to put in place. The effect of erratic rand fluctuations was being felt. She also asked under what section of the DIRCOs work did the Pan African Parliament (PAP) fall. The President of the PAP seemed to be making demands. He had refused to move into his residence until such time that it was renovated as he wished. DIRCO had offered to accommodate him in the meantime in a hotel but he had refused as he had an entourage of 21 persons. He had furthermore refused to be driven around in a Mercedes Benz E-Class and had demanded an upgrade to an S-Class Mercedes Benz. It seemed as if the President of the PAP was trying to create a little empire for himself. She asked whether his demands were being accommodated from the DIRCOs or the African Union’s Budgets.

Mr Ramashau addressed the question on austerity measures implemented and said that cost cutting was taking place. In the norm, ambassadors travelled economy class and only travelled business class when they were being posted overseas or returning from a posting. On the PAP, he noted that there was a host agreement in place. There were times when dignitaries wished to have things other than what was stipulated in the host agreement. DIRCO bore the cost of things requested. DIRCO had an operational budget for the PAP. The budget was approximately R8m for the PAP and the New Partnership for Africa’s Development (NEPAD).  

Deputy Minister Mfeketo said that when SA hosted dignitaries then it tried its best to do it decently. However the dignitaries should also be cognisant of costs and not be too demanding. Requests should be reasonable. 

The Chairperson said that there were five members of Parliament deployed to the PAP. Members deployed to the PAP could provide the Committee with a report on the host agreement, their observations and on other issues like security etc. The Committee was entitled to be briefed on the PAP because SA was hosting it.

Mr S Mokgalapa (DA) asked Deputy Minister Mfeketo what steps had been taken against diplomats that had been out of line. The conduct of diplomats had been previously discussed by Members and Deputy Minister Mfeketu.  A senior diplomat stationed in Oslo had not too long ago been charged with drunken driving. What had happened? He asked whether diplomatic immunity had been waivered. What was the status quo? He referred to the target of 77 fieldwork investigations that were vetted. How many were done at the DIRCOs head office and how many at missions. On structured bilateral mechanisms, he asked how many of it could be converted into foreign direct investment. He asked about the impact that the visa regulations had on tourism. Was the impact on tourism discussed with the Department of Home Affairs?

Deputy Minister Mfeketu noted that the ambassador to Japan had been recalled. The recalling of an ambassador was an administrative matter and was the responsibility of the Director General of the DIRCO. The matter in Norway was being dealt with by the Director General. On visa regulations, the relevant departments were involved and there was an inter-ministerial committee dealing with the matter. The Department of Home Affairs and the National Department of Tourism were involved. 

Ms Mashao responded that the South African diplomat to Norway had been recalled and an investigation was underway. Disciplinary action would be taken. She explained that all of the 77 transferred officials were at missions not at head office of the DIRCO.

Ms O Hlope (EFF) agreed that media reports had spoken about unbecoming behaviour of diplomats abroad. She asked whether SA at present had an ambassador in Denmark. Regarding SA’s participation in the United Nations she asked what was the status regarding the International Criminal Court (ICC). She asked for more detail on the Cuban Medical Brigade stationed in Sierra Leone.

Mr Ramashau responded that the Cuban Medical Brigade was established out of a trilateral agreement. The agreement was that Cuba would provide doctors to Sierra Leone and SA would pay the doctors a stipend. The agreement was nearing its end. He noted the question on the ICC and said a response would be forwarded to the Committee. SA’s ambassador to Denmark was Ms Zinzi Mandela.

The Chairperson noted that the matter of the ICC was sub judicae and that the Committee could be briefed by the Minister once judgement was given.

Ms Hlope responded that the matter of the ICC was a concern as it impacted upon SA. 

Mr Radede pointed out that the ICC matter fell under the Portfolio Committee on Justice and Constitutional Development. The Committee could deal with the issue of President Omar al-Bashir.

Mr D Bergman (DA) asked what China expected in return for the $10bn investment to SA. He noted that nothing was for nothing. On rand fluctuations and the mitigation thereof, he asked whether National Treasury could not meet with the Committee about its forecast on what could happen. He suggested that more commercial engagements with organisations like the Chamber of Commerce were needed. What was the problem on the payment of suppliers? He asked whether there were countries that SA had not met with that wished to meet with SA.

Deputy Minister Mefeketu responded that there was definite benefit to SA on the investment made by China. The benefit came in different ways. For example China was providing skills development to South Africans. There was a strong relationship between China and SA. China saw SA as the gateway to Africa. Out of the $60bn; $10bn was allocated to SA. The benefit depended upon the strength of bilateral. It also depended upon how well SA negotiated. If a representative of a country wished to meet a representative of SA then it would happen. She did point out that there were processes that needed to be followed.

Mr Ramashau said that rand fluctuations were difficult to manage. DIRCO was getting revenue from applications to the Department of Home Affairs that was being processed by them abroad. The issue was not about the paying of suppliers on time. Reports had been sent to National Treasury as the issue on the payment of suppliers was more about non compliance.

Ms D Raphuti (ANC) noted that the Committee needed greater detail regarding disciplinary hearings. Who was being disciplined? The Committee required a narrative report. She asked what intervention was required on the payment of suppliers. She also asked what it was on diversity that was lacking in human resource management. She was concerned that expenditure on public diplomacy was only 43.5%. What interventions had the DIRCO implemented to address problems with asset management?

Ms Mashao replied that specifics on disciplinary cases would be forwarded to the Committee.

Mr Ramashau said that the DIRCO would report to the Committee on progress made on asset management. Root causes of problems with the DIRCO’s asset management had been identified. Integration was lacking. DIRCO had also increased monitoring. There had been problems relating to the barcoding of assets. The AGSA had a problem with the existence of assets. At the time the DIRCO was using different systems. In 2014 the DIRCO had migrated assets from the old system to the new system. Missions were requested to do physical verification of assets. At the end of September 2015 there were only 12 missions that had not completed the physical verification of assets. There were twenty DIRCO officials working on cleaning up the asset register. With the new system in place there was a better capturing of assets. Engagement with the AGSA had taken place and an interim audit had been done.

The Chairperson recommended that the DIRCO look at the recommendations made by the AGSA and the weaknesses identified by it. Specific items raised had to be attended to. Ambassadors at missions should be informed of what was required of them in order to address issues raised by the AGSA. The Committee was expecting a progress report from the DIRCO on the matter.

Ms Dineo Mosala, Committee Content Adviser, added that the DIRCO had received the Committee’s Budget Review Recommendations Report (BRRR). In it, the Committee made recommendations which the DIRCO had to respond to by February 2016. The AGSAs concerns was contained in the BRRR.

Mr Ramashau said that the problem in the past was that the asset register of the DIRCO did not reflect heritage assets.

Ms T Kenye (ANC) asked what the reason was for the problems in Dar-es-Salaam. Were the delays due to clearance at the port of entry or was it due to conflicts with the contractor. She asked why there were outstanding invoices in Lilongwe and Dar-es-Salaam. When was the launch of the NDB project? It had been earmarked for 2016.

Mr Ramashau responded that the BRICS Development Bank had a Board of Governors. The headquarters was being set up in Shanghai and the launch would most probably be in March/April 2016. The Committee would be kept abreast of progress.

The Chairperson was aware that SA tried to promote good governance and democracy. He referred to the R38m that had been allocated through the ARF for technical support and elections in Burundi. He pointed out that the President of Burundi was standing for elections for a third term even though it went against the constitution of Burundi. The African Union was uneasy about the situation in Burundi. The President of Burundi had changed the constitution of the country to suit himself. Did SA support elections of the sort held in Burundi? What was SA providing assistance for? The President of Burundi had defied the African Union. It was important for DIRCO to avoid a second negative audit opinion. DIRCO was asked to provide the Committee with the research paper on the Chinese Economic Downturn and perhaps the Committee could be briefed on it. The Committee needed to be briefed on the PAP. Perhaps Deputy Minister Mfeketu could enlighten the Committee. He suggested that the PAP could be placed on the agenda of the Committee. He felt that the issue of Western Sahara still being colonised by Morocco needed to be prioritised just as the Palestinian and the Cuban issue. 

Deputy Minister Mfeketu noted that the PAP had representatives from parliaments all over Africa. SA also had representatives and hence Parliament was supposed to receive reports. DIRCO was not however represented in the PAP. She was in agreement that the Committee should be receiving reports from the PAP. The Burundi issue was a difficult one. There were different narratives out there on what was happening. The Constitutional Court in Burundi had come to the conclusion that technically the President was only running for his second term. His first term had been an interim measure and he had been elected by Burundi’s parliament. The second term was therefore the President’s first term in which he had been elected by the people of Burundi. The current term was therefore technically only his second term. The US was most troubled by what was happening in Burundi. When a meeting was called in Tanzania with the Burundian President news was received that a coup was taking place in Burundi and the meeting was disrupted. The report of a coup in Burundi was circulated by the US. Many reports seem real as they were carried by media. She conceded that there were challenges in Burundi. The opposition in Burundi was convinced that the President was running for a third term. At one stage the AU had deliberated over the Burundi issue. She stressed that SA would not release any funds to Burundi unless the AU gave it the go ahead. The President of Burundi was thus serving a second term and not a third term.

Mr Ramashau said that the R38m set aside for the elections in Burundi had been decided on before the situation with the President had arisen. However the funds had not been released and were still with the DIRCO.

The Chairperson asked about the decolonisation of Western Sahara and asked what the progress was.

Deputy Minister Mfeketu said that in meetings SA’s representative would put forth SA’s stance on the matter. Resolving the issue was difficult but progress was being made.

The Chairperson said that the rising phenomenon of statelessness needed engagement. DIRCO and the Department of Home Affairs needed to look into the matter. A discussion was needed on statelessness and migration. He suggested that an expert be called in to provide a critical analysis of what countries like China, USA, Europe and Russia wanted out of Africa.

Mr Maila said that China and Africa had a commonality. Both had been colonised.

The Chairperson said that if one looked at the BRICS Development Bank then one needed to look at the World Bank and the International Monetary Fund as well.

The meeting was adjourned.