The South African Maritime Safety Agency, an entity of the Department of Transport (DoT), presented its annual report to the Portfolio Committee on Transport.
The Deputy Minister introduced the presentation by giving the Committee a detailed insight into the international obligations and responsibilities that South Africa had, in order to be part of the maritime community. SA was playing a significant role in the maritime economy and exerted substantial influence on the international stage. SA had again been elected to serve in the International Maritime Organisation (IMO) as a leading player in the Africa region. She informed the Committee about progress made so far on Operation Phakisa’s ocean economy, a jobs-creating initiative forming part of the National Development Plan (NDP) 2030.
SAMSA said its mandate was to ensure safety of life and property at sea, to prevent and combat pollution of the marine environment by ships, and to promote the Republic’s maritime interests. There were no fewer than 30 000 ships that transited SA’s waters annually, and 13 000 of them called in to the country’s eight ports. South African cargoes exceeded 300 million tons, which made it a very substantial player. Its biggest trade was in the bulk market -- generally iron ore, coal and manganese -- and vessels averaged about 21 days at sea, going to destinations such as China, India and Europe. SAMSA had been given an additional mandate, to ensure that it looked after safety on the inland waters. This was because of the rise of the accidents in the boating sector, which had a huge tourism element to it. This had brought the entity into the ambit of maritime tourism.
Financial achievements included a R52 million reduction in the deficit, a drop in the amount of fruitless and irregular expenditure, and a 3% growth in revenue. Challenges that had been raised by the Auditor General were presented, and commitment to address them was given. Challenges that still existed included vacancies in the leadership positions; the retirement and resignation rate of the experienced and ageing personnel; and the absence of the required legislative framework for the Department to operate effectively. The Department and SAMSA referred to their success in training cadets and being involved in community initiatives.
Many Members expressed their displeasure at the failure of SAMSA to attend their scheduled meeting with the Committee the previous week. A major concern was the commitment of the country to become signatories to international conventions, which came at a price. They said these conventions were initiated by the big countries, who ended up not joining them. Another issue was the dumping of obsolete ships in South Africa by companies that were evading maintenance costs, which was a burden for the country to clear at a considerable cost. Members were concerned about safety and intelligence issues, referring to poaching by foreign vessels and also to ships that reached South African shores without having been noticed by SAMSA. The issue of transformation in the Department came under scrutiny, and the need to train suitable candidates to take the place of a rapidly declining core of experienced, but ageing, personnel was highlighted.
At the end of the meeting, the Chairperson indicated that SAMSA and the Department would have to return to unpack their turnaround strategy with the Committee, as their targets did not appear to be focused or clear. The issue of finalizing legislation was critical, as it was a major factor in holding back the progress of the Department and SAMSA.
Opening remarks: Deputy Minister of Transport
Ms Sindi Chikunga, Deputy Minister of Transport, said that last November a delegation from the Department and the South African Maritime Safety Authority (SAMSA) had attended the elective assembly in London where South Africa was once again elected to serve in the 40-member state countries that made up the council of the International Maritime Organisation (IMO). South Africa had also supported the election of the Secretary General, Mr Kit Kim, from South Korea. South Africa was working together with Africa with only one mandate, which talked to what the African Union (AU) was doing to bring the countries together.
SAMSA and the Department had been invited to attend the World Maritime Day Parallel Event (WMDPE) in Turkey at the beginning of November 2016. South Africa would be going in order to learn from other countries, as South Africa would be hosting the WMDPE in 2020.. South Africa had ratified a number of conventions, an important one being the agreement adopted in 2012 in Cape Town, which had brought the provisions of the 1993 Protocol relating to the Torremolinos International Convention for the Safety of Fishing Vessels, 1977, into effect”. It had also ratified the Annex IV and Annex V of the Marine Pollution (MARPOL) Convention, which was the international convention for the prevention of pollution from ships, and she hoped that SA would process local legislation to ensure that it was implemented in this country.
South Africa had an opportunity to conduct the Global Maritime Energy Efficiency Programme (GLOMEP). There was a delegation from the International Maritime Organisation (IMO) which ran the workshop on this programme. Officials had been trained in drafting the relevant legislation referred to, and there were also officials who would enforce the provisions of Annex VI, and advise on the infrastructure and human resources that were required to give full effect to it.
South Africa had also ratified the Convention on the Standards of Training, Certification and Watch-keeping for Fishing vessel personnel (STCWF), enabling fishermen to be employable not to only in South Africa, but also elsewhere in the world. What was needed, however, was a training programme with a curriculum that met all the requirements set out in the convention.
The Minister said Sipho Mbatha was South Africa’s new representative at the IMO, who replaced Mr Dumisani Ntuli, who had served the country there exceptionally well. Students who had been sent to Sweden, to address some of the challenges with regard to their accreditation and recognition by South Africa, had been told that those who wanted to leave this year should leave.
South Africa owed money to the International Oil Pollution Compensation (IOPC) fund, which had accumulated since the convention was ratified. Since the country did not locally legislate for it, shipping companies had said that they were not going to pay, and said the state was responsible for the outstanding sum of R36 million. This had been paid, but the issue of outstanding interest on the amount was still under consideration. If it was not exempted, it would have to pay.
Ms Chikunga said that with the Operation Phakisa Oceans Economy, the Department now had four ships registered, and she thanked SAMSA and the maritime branch for ensuring that South Africa had vessels, particularly the commercial ones, that were flying the national flag, She encouraged both SAMSA and the maritime branch to move faster to ensure that more ships were registered South Africa’s name, as this created opportunities for the country’s seafarers.
SAMSA: Annual report
Mr Fred Jacobs, SAMSA Board Member, said that Operation Phakisa and other initiatives could end up contributing R20 billion to the country’s gross domestic product (GDP) by 2020. SAMSA had to maintain and enhance inputs into the sector, taking into account the fact that South Africa was bordered by oceans and had a maritime zone that was much larger than the land mass of the country. If the Prince Edward and Marian Hill Islands were included, the country was talking about the 3 600 kilometers of coast line which needed to be exploited in a very positive sense to add value to the SA economy. SAMSA was under no illusion that it had to play a major role in this, and had to contribute towards three areas in Phakisa: the infrastructure and operational excellence factor, skills and capacity building, and market growth. The entity would be actively addressing the challenges identified in the annual report so that it could play a major role in the growth of the county’s economy, and job creation in particular.
Mr Sobantu Tilayi: Acting Chief Executive Officer, said SAMSA’s mandate was to ensure safety of life and property at sea, to prevent and combat pollution of the marine environment by ships, and to promote the Republic’s maritime interests. There were no fewer than 30 000 ships that transited SA’s waters annually, and 13 000 of them called in to the country’s eight ports. South African cargoes exceeded 300 million tons, which made it a very substantial player. Its biggest trade was in the bulk market -- generally iron ore, coal and manganese -- and vessels averaged about 21 days at sea, going to destinations such as China, India and Europe.
In 2007, SAMSA had been given an additional mandate, to ensure that it looked after safety on the inland waters. This was because of the rise of the accidents in the boating sector, which had got a huge tourism element to it. This had brought the entity into the ambit of maritime tourism.
The vision of SAMSA was to champion South Africa’s global maritime ambitions. The way to achieve that was through the objectives of SAMSA, which were to ensure maritime safety and environmental protection whilst promoting South Africa’s maritime interests, developing and positioning the country as an international maritime centre. The importance of the last objective was related to how the IMO operated, as there was recognition of countries by the amount of trade that they carried. China was the biggest player in maritime affairs, but there was recognition of the number of ships that a country owned, so a tiny country like Greece which had a substantial number of ships, was a substantial player in maritime policy development.
The Cape route was one of the oldest east-west routes, so in world affairs one would find that South Africa was pressured to make sure that certain things happened in this area in promotion of international trade. It was represented at the IMO and all the decision-making structures because of its substantial role in maritime affairs.
SAMSA was concerned with competency, good standards and practices, as a means to participate in global shipping as a maritime trader. Local seafarers were employed all over the world. SA had implemented a naval cadetship programme, and all 500 of those trained were employed in no fewer than ten countries. Such was the international reach of the maritime industry, and this was what SAMSA was doing as its part of the National Development Plan (NDP). It was also responsible for the safety of stevedoring at port operations.
SAMSA had a fully constituted board with seven members, including the CEO as an ex-officio member. The requirements for those positions based on the Act, which stipulated that one members must come from the shipping sector, one from organised labour within the sector, and one must be a maritime legal expert. He lauded the structure as the one that had helped SAMSA by guiding it to where it was today, because it understood the entity’s operations.
SAMSA had achieved 62% of the indicators, even though there were a few challenges which were contained in the annual report. There was a turnaround strategy in place, and the Agency was able to deal with those challenges, and this was being monitored by the board. In order to be closer to the Department, there were scheduled monthly meetings.
The Auditor General (AG) had given SAMSA an unqualified audit opinion. There were a total of 268 employees as of the end of the financial year. The gender ratio was made of 47% female and 53% male, with 80% blacks, including the executive committee.
As part of its corporate social investment programme, SAMSA had sponsored a team to take part in the Duzi Marathon, and it had been doing very well. The three-year sponsorship had been completed, and it was looking at extending it. It had also adopted another community in Enkovukeni, in northern KwaZulu-Natal, which had never had boats, and an industry had been requested to donate boats so that this community could connect with the mainland, as it was an island.
The Maritime Rescue and Coordination Centre was responsible for saving lives at sea. There was also the Import Trade Control regime of the IMO, in terms of which SA was supposed to inspect a certain percentage of ships operating on the high seas when they visited a local port. South Africa was a signatory to the Indian Ocean Memorandum of Understanding (MOU), which was constituted by all countries with ships trading in the Indian Ocean, as well as to the Abuja MOU, on the western (Atlantic) coast, and SAMSA contributed and coordinated inspections in the region. SAMSA was required to ensure that all ships flying the SA flag complied with SA legislation, as well as to certain obligations with regards to safety and environmental pollution protection. SAMSA had had to institute a regime called Flag State Obligations, which stated that no fishermen could leave port if they were not issued with a clean bill of health in regards to their safety, which was an obligation that SAMSA had to carry out.
The number of maritime incidents had been on a downward trend over the years, and that trend was continuing. SAMSA also was required as part of maritime security to vet all ships calling into the SA ports with the State Security Agency. There was a 96-hour notice for every ship that called into the SA ports, to make sure that SAMSA coordinates all the security/
Mr Mathabatha Mokonyama, Acting Director General: Department of Transport (DoT), said were still a few challenges with regards to the registration of ships, which was largely contained in the legislative environment of the Treasury. There were still certain issues which SAMSA had to finalise with the Treasury, which had indicated that they needed the Agency to conclude the maritime policy, because this had to inform all the other incentives that SAMSA was looking at. The Department would conclude its discussions with the National Treasury based on the finalisation of the maritime transport policy. SAMSA.
Mr Tudor Hungwe, Acting Chief Financial Officer: SAMSA, said that revenue had been stagnant for a number of years, and in this current financial year, it had grown only by 3%. The growth was due to the new revenue streams that had been introduced, because the tariff structure had remained the same for quite a number of years, which had been a negative for the organisation. In the current financial year, the revenue issue had now been resolved. New tariffs had come into effect from June 2016, and the situation was beginning to improve.
There had been a reduction in capital expenditure (capex) from R387 million to R351 million, which was a decrease of 9%. Under the circumstances that the organisation had been operating, it had had to actually engage in serious cost-cutting measures. These had compelled SAMSA to reduce expenditures so that it could operate optimally, and that had had an impact on reducing the working deficit of R82 million to R35 million, and the deficit for the year, after all the expenses, from R81 million to R29 million. SAMSA had not been able to eliminate all of the deficit, because there were some things that it could not stop doing. There had had to be re-prioritisation to ensure that SAMSA got value for all the money that it spent, which had resulted in it being able to reduce its deficit but still being able to deliver on their mandate to a large extent.
Mr Hungwe acknowledged that SAMSA was always been having cash flow problems, which had had an impact on their ability to invest in infrastructure. Now it had negatively impacted on the ability to renew its vehicle fleet, its computer systems and other items that were needed in order to run an efficient and effective organisation. In the current financial year, things had now been adjusted, and it had started to prioritise those particular areas of infrastructure where it needed to operate optimally.
Irregular expenditure had been a quite significant issue in this financial year, involving areas like contract management policies, delegation of authority and the supply chain management (SCM) environment. SAMSA had been able to resolve a number of the issues. Policies had now been approved, the SCM environment was receiving attention, and the issue of contract management was receiving greater attention. These challenges would not happen in the coming financial year if these measures were carried out effectively and efficiently. Fruitless expenditure had been incurred because of a building lease agreement, and the issue had been resolved.
Mr Tilayi told the Committee about the challenges that the entity was grappling with. These were restricted to resources, most of which had funding implications. SAMSA’s work required it to carry out many functions out at sea, and for that it needed the necessary “tools.” Ships had to be available to prevent pollution, and if a ship spilt oil, SAMSA had to be in a position to send ships to control it in order to minimise environmental damage and pollution. It needed a great deal of floating infrastructure to be able to operate out at sea. He related an oil spill incident off Port Elizabeth where, days later, SAMSA’s monitoring mechanisms had enabled it to track the vessel to Cape Town, where the ship and crew had been arrested. He was trying to emphasise that if it had had a facility like a helicopter to conduct surveillance, it would have been in a position to have scanned the environment quickly and easily, to find whoever the polluting ship was. There was a need for SAMSA and the Committee to consider this.
Part of SAMSA’s work involved sea watch operations, and there were still challenges in getting that funded, but it was working through the board and it would soon be presenting to the Department that regard.
Another issue was the diminishing skills capacity. There had been a number of retirements in the Department, which had grossly affected the skills capacity in the last few years, and it would still haunt the country for the next five to eight years. He stressed that the cadetship programme had to continue, as this was where there would be the development of the new skills and capacity that was needed for the success of the entity and the country.
He reinforced the Deputy Minister’s comments that there was a legislation in the pipeline. The process of formulating and adopting legislation was long and frustrating if one urgently needed it. There were monthly meetings with the Department to address these issues. The legislation was said to be with the Cabinet, and when it was ready to be brought to the Committee, they would ask to be given time to come and present it.
SA was considered a substantial player and maritime champion because it provided assurance for all the passing traffic along its coast line, and for that there was great need for aviation assistance. Communication infrastructure was necessary so that SAMSA could deal with the ships, as this was the infrastructure that began to pay for SAMSA’s work. Negotiations with TELKOM to have those systems put in place were urgent and necessary.
Mr Hunsinger (DA) complimented the Department and SAMSA for bringing down the deficit by over R50 million, and commented that the Committee would love also to see the improvement in other areas of performance, on issues to which the AG had referred. He wanted an explanations for the increase in fruitless and wasteful expenditure, which had escalated from R60 million to R70 million between 2015 and 2016. He asked for clarity on the risk contract referred to in the presentations. The AG had mentioned the lack of appropriate competencies, and also the need for training and filling vacancies -- what was being done in these areas, as the AG had mentioned them previously. Were his messages not being taken seriously? He suggested that stability in areas like SCM, could be solved through policy formulation. The AG had also made mention of the reluctance by the leadership to respond to the recommendations of the AG, and Mr Hunsinger claimed that all these issues could be resolved.
Ms D Carter (Cope) said the AG’s report had not been all that good. She was disappointed with the financial management, as the requirements of financial management -- ICT management, proper record keeping, daily and monthly controls, financial and performance reports -- was a repetitive process. She referred to the policies and procedures as alluded to by the AG in his report on risk management, internal audit, and asked what systems were in place to change the situation. She wanted to be informed of the average age of the workforce of the Department, as more than 85% of the staff was above the average of 56 years old in the nursing division. She asked about the cost of coordinating the operations of the vessels in particular, as her concern was on the adequacy of the allocated budget. What budget would be needed for the helicopters requested? What was the relationship between SAMSA and the Department of Agriculture, Forestry and Fisheries (DAFF), because there were a number of problems associated with the pollution of sea water and the countries and corporate entities that stole South Africa’s resources. The last question she raised concerned the Chinese vessel which was kept outside the Cape Town harbour for a period of eight months because of non-payment, and also did not have the necessary fuel and food for the crew. The company was eventually liquidated, and the people on the ship were left stranded, with no food. Was it humane to leave people in sea water without food, or medicine? How did SAMSA deal with such situations?
Mr T Mulaudzi (EFF) wanted to know how many big dams there were in the country, and the statistics of accidents in these dams. Did SAMSA have a strategy for flood management in inland areas, as during heavy rains it was possible to find people stranded without rescue operations taking place. Did SAMSA have awareness programmes for children? What was the municipal empowerment strategy in terms of the lifeguards at municipal swimming pools, because children drowned in the pools and dams in municipal areas, and this might be because there was no capacity at the municipal level? He wanted clarity on the SAMSA governance structure, which was male dominated, with a 71.5:28.5 ratio. What was SAMSA doing to fast track the balance? He wanted to know whether the ownership of the ships alluded to by the Deputy Minister was informed by government policy of Black Economic Empowerment (BEE), or by corporations from outside the country. He reflected that previoulsy there had been a problem on the registration system of ships, and there had been an old system and a new system. This system had cost a lot to purchase, but the staff had been reluctant to use it. Which system was being used now -- the new or the old one? SAMSA was dealing with the deficit in a professional manner, but when would they bring it down to zero? He asked whether there was income from the vessels’ fisheries and law enforcement which could put provide funds for SAMSA. What were the implications of funding the sea watch function, as it was said that there had been under-funding since 2009. The outdated legislation had to be finalised or ratified -- when would that happen? He asked when the Department was going to transfer the SA Agulhas to SAMSA, and about the finalisation of the national transport policy? The funding model had not been finalized -- when would it be finalized?
Mr M Sibande (ANC) criticized the Department and SAMSA for not attending the Committee as scheduled last week, and said the responsibility for coordinating the Departmental structures was the responsibility of the Department and not the Committee, so whatever the reason for their absence, it was not the fault of the committee.
Operation Phakisa was an initiative of the National Development Plan 2030, and Mr Sibande wanted to know how far SAMSA and the Department had progressed with it, based on the key challenges the Department and SAMSA were experiencing currently. The increasing age of the technical staff was creating problems, and he asked SAMSA about their recruitment drive strategy and how they marketed themselves. He asked of the visibility of SAMSA around the country, or if they were just confined to Cape Town or the Western Cape. He Were they visible in the inland regions of the country? There were a lot of students in schools who were eager to learn a lot of things, but they did not did not get exposure to maritime matters, and SAMSA was still struggling to get cadets. Capacity shortages and skills development were also problems. Monitoring and oversight over SCM had to be enhanced and enforced to ensure compliance.
The issue of communication infrastructure was exposing the country to maritime risks as the result of the absence of legislation. SAMSA had once taken the Committee to its facilities to see the instruments they used in surveillance over ships coming in and out of the country. One year, there had been a ship that had come into the country at night with a lot of people, and they had got into the country while SAMSA was there. That must never happen again. He was not sure whether this had happened because the instruments were not working, or because of the people who used them. The Committee needed clarity on why it happened. This was avery sensitive matter, and involved both SAMSA and the Intelligence Agency.
With the turnaround strategy, Mr Sibande wanted an explanation on the exact problem so that intervention could take place. The relationship with the IMO was another issue. Was thereanything that needed to be signed by the Committee? He asked whether countries dumping their old ships in South Africa, and costing a lot of money, was still a problem, as this was a global environmental issue. Did SAMSA still have problems concerning the non-registration of foreign ships coming to SA?
Mr M Mabika (NFP) said there had been a mention of consequence management as a result of the challenges pertaining to the SCM, as mentioned by the AG. Had any people been taken to task after the forensic report? On the issue of contract that was to be terminated, what was the specific date and year when the contract would be terminated? The AG had found that the targets were not measurable – what were the challenges that prevented them being measurable? He referred to the issue of using helicopters and drones, and wanted to establish if there were no cost-effective measures, as other countries used cheaper ways of dealing with the matter. He was not happy that so many officials were in acting positions, and asked when vacancies would be filled.
Mr M Maswanganyi (ANC) referred to the issue of the White Paper, and asked that after 20 years, when exactly would the committee have the legislation. With international conventions, did they come with financial obligations, and what about other conventions? The developed countries were treating SA as a developed state, and this affect the state budget. Did the delegates in those organisations prioritise the national interests of their countries?. He made an example of the international institutions of which SA was a member, and the big powers were not, while at the International Criminal Court ,where the US, China and Israel were the biggest law breakers, they were not members. He was concerned that the country ran to ratify these international conventions while the criminals causing havoc in the world stayed in the big countries and did not get arrested. Could SAMSA improve on its 62% achievement of targets? Regarding the outdated laws and absence of new legislation, he wanted to get an idea on how this was to be addressed.
The Chairperson wanted to know the challenges that directly prevented SAMSA from looking at the tariffs, as the more they stay stagnant, was the more the problems persisted, and this had to be remedied. She was also interested on what the Department had been doing to realise Operation Phakisa, as there were more programmes to be implemented. Targets that were not achieved were outward looking ones, and the inward looking of the targets was important for the improvement of the Department’s systems. The Department must look at the impediments, and be able to address them. She reminded the Department that it had partners in other departments as they were working on water, whether sea or inland waters, and she wanted to know if there was any way that they were coordinating their programmes. She made mention of the Departments of Defence, Environmental Affairs and Agriculture, and the South African Police Services. How did it harmonise its programmes with other departments which dealt with issues of pollution and safety?
The Deputy Minister started with the Operation Phakisa programme on oceans. The Department had identified five focus areas which included maritime transport and manufacturing, oil and gas exploration, aquaculture, and maritime tourism, which had just been added. This area was championed by the Department of Transport, and had identified 18 initiative projects and under each there were sub-projects. It might be appropriate to request the Committee to call a meeting on its own to unpack this initiative because, if they were to have a say in these projects, to create supportive funding, it had been agreed that both the government and the private sector must contribute around R7.5 billion. In the area of oil and gas infrastructure, there was a lot of good work taking place, such as Saldanha Bay, which was why she proposed a meeting of its own to brief the Committee on these initiatives. She further stated that out of the 18, eight of the areas were focused on infrastructure and operations, six were on skills and capacity building, and four on market growth. The Department had managed to identify projects that were budgeted for, and for those that were not budgeted for, the plan was to invite the private sector or investors within the country, as well as foreign investors. Some of the projects had gone out for tender, and others had been closed.
She indicated that a list of legislation had been submitted for processing by the Portfolio Committee, which was why they had learnt about the National Land Transport Act (NLTA). She mentioned the long process of processing the legislation which was in the Cabinet. The legislation had to be sent to the Cabinet, the SA Local Government Association (SALGA), the National Economic Development and Labour Council (NEDLAC) and Parliament, and then to the Portfolio Committee. This would be brought to the attention of the Committee early in 2017.
The Deputy Minister said that the Department was supposed to have started by briefing the Committee on the acting positions of the CFO, and the CEO. The former CEO had resigned this year, and the board of directors had advertised for these posts using the normal and regulated approach to job advertisements. The COO appointed was Mr Tilaye, but first the CEO had to be appointed, so that he/she appointed the CFO, and not vice versa. The board member was in the process of being appointed.
There had been progress in regard to the White Paper. The Department did not have a land water waste strategy, and policies were needed for the Department. The Department was prioritising the policy, and it hoped that it would soon be taken to the Cabinet to allow them to take it for public comment, as was the normal process. The inland water strategy was in place.
Referring to international conventions, the Deputy Minister stated that as a country, SA was expected and always advised to ratify and sign these conventions. The IMO, for example, had been ratified because the country was losing out on tariffs and fines because the companies that operated these vessels knew that SA did not have the powers to charge them, as they had not ratified the convention and did not have effective legislation to enforce companies to pay. South Africa was obliged to ratify these conventions, so it could not ignore ratifying the international legislation. SA would not be able to hold other countries accountable for their acts, as SA had signed the Cape Town Agreement. South Africa had to lead in the agreement, and it was the ninth country to ratify. The Department was in the process of consulting for advice.
Acting Director General’s response
Mr Mokonyama said that there had been progress with regard to the legislation. The White Paper on transport policy had been adopted in 1996, and was in the last stage of being reviewed. The Department was reviewing the 1996 White Paper on Maritime Transport Charter, and was in the process of expanding it into a policy, taking into consideration new developments. A favourable tax regime was part of the policy that had been agreed to, the reasons being that it had to attract investors, and also accelerate the development of the industry. The Department was also overhauling the Merchant Shipping Act 57 of 1951, as amended. The domestication of the international convention was an obligation, as SA was not operating in silos, and this was the UN mandate. Further, the IMO does not impose, but SA participated at different levels in the crafting of protocols. Regarding the funding register, after every audit, the auditee had to develop an action plan.
Mr Mokonyama said an imbizo had been held at the Gariep dam. In terms of cooperation, there was a partnership between the Department, the Department of Environmental Affairs and Tourism, Water Affairs, and now there was a plan to sit and negotiate with the Department of Science and Technology. The fact that the majority of officials came from KZN did not mean that the organisation was confined to the coast.
The SA Agulhas issue was over, as the vessel was already in SAMSA’s books. There had been engagements with the Department of Higher Education in order to best institutionalise for the approach to the cadet training programme. He referred to the issue of under-funding of SAMSA on sea watch and response operations, and said there was an allocation by the National Treasury of about R100 million for satellite instruments, and the programme would be completed in March 2017. There were engagements on a Public-Private Partnership (PPP) process to have a tug boat that would operate within the local coastal areas of the country, and in this regard there were negotiations with the National Treasury. Regarding the issue of a funding model, the Department was expecting to complete that process in March 2017.
A question had been asked about the strategy DoT used in relating to the Departments of Defense and Environmental Affairs. There were two processes. The first was that there were engagements with the Department of Environmental Affairs in transferring the combating functions to the Department, and certain recommendations had been made to the Minister and Deputy Minister in terms of how these ministries could begin to implement a particular process. As soon as they had agreed, and the Ministers had approved, then they would have to deal with the recommendations that they had outlined in the process, and they would be able to articulate on that.
There was a draft Hydrographic Bill that was undergoing a Cabinet process, in terms of the Department working with the Department of Defence. There had been an agreement and concurrence through their Ministers that they would support the Minister of Defence in leading that particular function, with the concurrence of the Minister of Transport. That particular process was twinned with the Departments..
Mr Jacobs said he had been a SAMSA board member since 2014, and it had been a pretty rough ride for the AgencyA. There had been a number of issues with the board even taking the existing management to court. However, things were improving, and he thanked the Minister and the Deputy Minister for their leadership in providing assistance in this regard.
He said that 32 policies had been developed by the board in the past six months. These included the delegation of authority document for the first time, to combat irregular expenditure. Further as far as time allocation was concerned, the board spent most of the time in meetings, and he himself flew maybe once or twice a week. The board and the Chairman of SAMSA had addressed the shortfall, and the board members were passionate about improving SAMSA. The Department was working with the Treasury on the issue of the tariff regime and some tariff adjustments had been put in place. SAMSA had been approved to be a revenue generating entity on its own. The issue of deficits would be a thing of the past once these revenue plans and operations were in place.
It had been made very clear to SAMSA that the focus and priority should be on the safety of life at sea. SAMSA now had an MOU with the Nelson Mandela Metropolitan University, and the Minister of Higher Education was the regulator and governor of the initiative, as SAMSA was not a training authority. The SA Agulhas was a training vessel, through the DHE. There were 500 trained cadets who were employed, while all of the black students trained and qualified were not coming from the cities or from the Cape, but from different places throughout the country -- 80% of them from inland, and not from the coast, as it used to be before.
Mr Jacobs shared the same sentiments as the Committee Members who were concerned about the manner in which the structure of the Department was fragmented. H said that if the Department continued working like this, SAMSA was not going to go anywhere. The response had been that there had been a series of interviews with candidates who had applied for the advertised posts. In the performance systems, there was no reference to the grading systems and capacity related to the advertised jobs. The issue on the attendance at board committee meetings was important, that they should all be at the meetings, with no excuses. Regarding competencies, there was no policy and grading system, where proper people were selected based on their qualifications and experience and skills. He admitted that there should not be any excuses for the board not to attend committee meetings.
It was true that people were doing things and getting away with them. There was a lack of disciplinary actions. There was now a forensic audit, which had been done but had not yet been finalised. In the past two weeks, there had been another racial incident where an official was likely to be suspended. The CFO had resigned after the forensic report came out. There were many more people who were implicated by the report, and they would lose their jobs, as some had already been suspended.
Mr Tilayi, Acting CEO, stated that there were four pillars on which the turnaround strategy was built. The first was governance, which addressed policy issues, the forensic audit and the existing internal finance strategy. The second pillar was human resource capacity, as it had been found that structures were not sized correctly to match the requirements of the Department, and the aim was to re-structure and re-orient the organisation. Part of the pillar looked at training the seafarers who have to be trained, and to do that, there should be relevant policies. There was a fully fledged plan. The Department had been involved in training for more than 10 to 18 years to produce a maritime captain. The third wing of the turnaround strategy was the systems, which sought to register ships. It was a new system, and it had taken the Department a while to complete it. The fourth pillar was on the financial management systems, which was going to deal with the sources, use, management and accountability of policies. It was wise to sort out the rest of the systems before the financial management system was in place. The issue of tariffs had been approved, there were tariff adjustments, and there was a two-step mandate. He asked the Committee to give them a chance to work on these strategies and to return to present on the progress.
Regarding the question on SAMSA’s involvement at the country’s dams, he said the Agency was working at dams where they had an impact, and where activities took place during the week. Examples were the Hartbeespoort and Vaal dams. South Africa was approaching a total of 600 dams.
There was mixed ownership of ships. Some of were owned by South African interests, while others had a foreign shareholding, because of the need to secure funding. One ship was owned by Unicorn, which was South African with BEE status. The Department had been instructed not to operate the SA Agulhas ship itself. It had then met with Transnet for funding purposes, and the ship had been commercialized. PetroSA had been approached for most of the operations, and was busy finalising the operation plan. Fuel costs were around R3 000 a day, which made it not cheap to operate. The issue of acceding to international treaties, was a critical one. There were restrictions in the IMO, as the SA ships could not trade anywhere else, as they would be embargoed.
Ms Carter said she felt disappointed with the responses from the Department and SAMSA, as there was a need for SA to be colour blind when recruiting the youth. The responses had not responded to the questions asked on the criteria for selecting and recruiting students. The Committee did not prefer to see the selection based on colour, but on merit.
Mr Sibande said that although he was happy that students were recruited from all over the country, there was still a gap as there were many areas in the townships that needed to be accessed. Some the issues being addressed were touching on aspects of intelligence and security, and some of the information could not be disclosed to the relevant stakeholders. He reiterated the statement he made about the dumping of obsolete ships in South Africa.
Mr Mulaudzi asked the members of the board present to the chairman to take the Portfolio Committee seriously. With regard to the resignation of the CFO following the forensic report, the Committee would appreciate getting a copy so that it was fully informed.
Ms Carter said that at a meeting with the Passenger Rail Agency of SA (PRASA), it had established that the SAMSA board members were traveling a lot. What were the budget implications of those travel expenses? She wanted the Department to furnish the Committee with a breakdown of the budget.
Mr Sibande was concerned at the fact that SAMSA was operating beyond its scope. He was just warning and advising them not to have serious implications from performing other peoples’ jobs. He requested the Deputy Minister to commit herself on a time frame to fill the vacant posts. The ADG was having a hard time, and was getting nowhere. If the Department did not address the problems of vacancies, then was a likelihood that next year they would be in the same position.
The Deputy Minister responded on the issue of vacancies, and said the Department had wanted to appoint the DDGs, but it had received a letter from the Treasury that there was no money. Interviews had been conducted for the employment of the DDGs. Regarding board members coming to Parliament, it had to be remembered that they were full time employees, and had to be paid for coming to Parliament, and if they came, this had to be budgeted for. The Committee would have to provide the list of meetings so that they were budgeted for. The Department respected what the Portfolio Committee was saying, but it also had to be realised that there were eight members.
She said that SAMSA had just turned the corner, which was testified by the report from the AG. The issue of transformation was real. The issue of pilots in the country was the fact that this area was dominated by ageing whites that were male, and the rate was 90%. Men were in the majority, and that diagnosis meant there was a need to recruit young women of all races.
Mr Mokonyama, Acting DDG, the issue of the board attending the meetings was a serious matter. There was nothing preventing the board from coming to these meetings. There must be specific instructions to make them come, as this had been discussed with the Minister and the Deputy Minister. The Department had been happy that the issue had been raised. Fruitless expenditure was also serious, as disclosed by the AG, and progress needed to be addressed.
Mr Jacobs said the issue of the board and its attendance at Parliamentary meetings was a serious matter, and was being addressed. Transformation issues were also being addressed.,
Mr Tilayi, Acting CEO, addressed the question relating to security. A security advisory committee had been established, and SAMSA was part of that committee that fed the intelligence agency. The issue of abandoned ships was the problem, but the Maritime Labour Convention was addressing the issue. The seafarers were now e safe when abandoned by the crew or the owner of the ship. There was enough legislation to deal with those problems.
Mr Hungwe, Acting CFO, said the issue of the deficit had been resolved. The Department now had a surplus of R30 million, which indicated that next year there would be no deficit. The deficit for the previous years would be resolved by the end of March 2017. On the issue of fruitless expenditure, he said that the Members were right -- it had risen from R2.6 million to R8.2 million. A contributor had been that the Department was not paying service providers on time, and had been penalised for that. The Department had incurred charges of about R3.2 million, and that would not be resolved until December 2016. The contributors to the fruitless expenditure had been lease agreements that could not be cancelled.
Chairperson’s closing comments
The Chairperson said SAMSA would have to brief the Committee on how it would deal with the issues that had been raised by the AG. Very critically, it must also appraise the Committee on the progress to date on the legislative issues, so that the Committee could plan its programmes. She further stated that, it would be very important that issues that were raised in this meeting, by virtue of the committee dealing with the annual reports were very, very critical issues. It was important that one day the Portfolio Committee should give itself time to just listen to SAMSA’s programme of action, and its plans and strategies as to what were they going through, from capacity building, their social investment in the communities, the institutional issues that were there, and the training and collaborations they had made with universities throughout the world.
Adoption of minutes
The minutes of 15 and 16 September, and 11 and 12 October, were adopted unanimously.
The meeting was adjourned.
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