International Relations and Cooperation Budgetary Review and Recommendations Report

Meeting report

Opening remarks

The Chairperson requested the Content Advisor to deal with key aspects of the report including the findings and possible draft recommendations as the Committee would have read the draft beforehand.

Portfolio Committee on International Relations and Cooperation draft Budgetary Review and Recommendations Report

Ms Lineo Mosala, Committee Content Advisor said the Budgetary Review and Recommendations Report (BRRR) was meant to assess the Department of International Relations and Cooperation (DIRCO) performance for the financial year (FY) 2015/16.

Therein contained were the mandate of the Committee and the purpose of the BRRR and the core functions of DIRCO together with its measurable objectives. Committees were also requested to check whether there had been alignment in the work of a Department in its previous year’s performance to the National Development Plan (NDP) and the State of the Nation Address (SoNA). There were narratives under SoNA and the NDP in terms of foreign policy which the Committee was assessing the performance of DIRCO against.

Major Highlights

Listed in the draft were activities within the Southern African Development Community (SADC), the African Union (AU), the Brazil, Russia, India, China and South Africa (BRICS), partners in the south and activities with the multilateral forums together with partners in strategic countries of the north. The DIRCO seemed to have covered all its objectives on all its programmes for the year under review.

DIRCO had also planned to table the Foreign Service Bill which was with the Committee where the process was with the Committee soliciting comments and had intended a study tour on the Bill.

Financial and Non-financial performance of the Department of International Relations and Cooperation

Ms Mosala said that key there was the fact that DIRCO had exceeded its budget for the 2015/16 FY by R134 million which had been due to foreign exchange fluctuations. DIRCO had also made some savings in terms of hosting the Forum on China–Africa Cooperation (FOCAC) and the AU summit in South Africa where there had been no expenditure on accommodation and travel for DIRCO officials.

Programme 2-International Relations and Programme 5-Transfers had been the cost drivers in DIRCO as they had both exceeded their allocated budgets since they were implemented through foreign exchange payments in the missions abroad.

On unauthorised fruitless and wasteful expenditure DIRCO had not been seen to be taking steps to recover monies that had been lost through fruitless and wasteful expenditure whereas on unauthorised expenditure DIRCO had been very slow in submitting motivation to National Treasury (NA) for deviations.

New/ Proposed activities

The South African Development Partnership Agency (SADPA) was still in the pipeline as DIRCO had informed the Committee during the tabling of its Annual Performance Plan (APP) for 2015 that it planned to table that law in 2016/17.

Mr N Paulsen (EFF) interjected asking whether the Content Advisor was reading from the draft as it was, because he struggled to follow her.

The Chairperson said that normally the Content Advisor enumerated the pages which she would be reading from as she was presenting however; if Mr Paulsen had queries he could note them so that those could be deliberated during the discussion.  Page by page presentation would take a lot of time, of which there was not.

Ms Mosala said DIRCO had informed the Committee that the SADPA bill had been delayed because of governance issues where NT differed with DIRCO on such matters. Cabinet had since directed that NT and DIRCO engage one another on that matter so that SADPA could be established.

Agency Services

DIRCO rendered agency services to other departments in the foreign missions where there were officials from Home Affairs (DHA), Science and Technology (DST), Agriculture Forestry and Fisheries (DAFF), Tourism (NDT) and Defence (DoD) that DIRCO spent on. Half the time the processes of reimbursing DIRCO took longer as the DIRCO also was slow in claiming back its monies from other Departments. There were also departments, including Parliament, that owed DIRCO missions because when delegations travelled abroad their expenses were paid by embassies which monies were still outstanding.

African Renaissance Fund (ARF)

The Fund was a foreign policy tool in terms of development, peacekeeping and other democratic governance aspects which the fund covered. Some of the projects that the fund allocated funds to had been completed, especially the Cuban medical brigade programme.  Payments for the rice project had been made and where there had been elections, observer missions had been funded in that regard.

Non-Financial Service Delivery Performance

• Administration

Ms Mosala said that DIRCO seemed to be slowly complying with legislation and stipulated requirements in terms of filling of vacancies and paying service providers within 30 days, though that was not 100% yet. DIRCOs qualified audit opinion dealt with Information and Communications Technology (ICT) governance, asset management, consular services and wellness programmes.

• Programme 2-International Relations

She said the programme was DIRCOs core deliverable as it dealt with bilateral relations with different countries of the world which were meant to advance SAs national interest, the agenda of Africa and the south. The Committee would realise that some of DIRCOs activities were taken up by the President of the Republic as he was a key role player in SAs foreign policy. SA had also visited the Americas and the Caribbean where DIRCO had discussed an agreement with the Americas in the year under review where an extension had been granted for further discussion.

Western Europe was a key partner in terms of SA in engaging on domestic matters as some were in the BRICS arrangement where SA had visited Russia for the BRICS Summit where issues pertaining to cooperation to achieve the aspirations of operation Phakisa had been discussed.

• Programme 3- International Cooperation

DIRCO had attended international conferences including those in the United Nations (UN) where the UN had been celebrating its 70th anniversary since its establishment and where also, countries of the world had adopted Sustainable Development Goals (SDGs). Ambassador Kingsley Mamabolo had ably led the developing countries as he chaired the group of 77 plus China to influence the outcomes of the SDGs.

• Continental Cooperation

SA had been able to influence the extension of term for the African Scientific Research and Innovation Council (ASRIC) so that the formation and readiness of the Africa Standby Force (ASF) could be achieved. The AU summit had discovered the ASF was ready though there remained a funding challenge meaning the ASF could not be operationalised.

On public diplomacy, DIRCO had been disseminating SAs foreign policy through public participation forums across all the provinces to the general public.

• Programme 5-International transfers

DIRCO had paid Membership fees on time however; foreign exchange fluctuations had affected SADC, AU as well as the UN. Additionally, the AU had agreed on a new scale of assessment after the Budget of DIRCO had been allocated.

Auditor-General South Africa Audit Report for the Department of International Relations and Cooperation

Auditor-General South Africa (AGSA) had reported that there had been a noted regression from clean audit which DIRCO had received in 2009/10, where after the audit opinion moved to unqualified opinion with findings in 2010/11, 2011/12, 2012/13. From there the audit opinion went to qualified audit opinion since and to date in the year under review. The reasons for the qualified audit opinion were that the asset register of DIRCO was not in a manner that satisfied AGSA. Additionally, there were matters on consequence management by DIRCO leadership. The Committee had also noted that all investigation undertaken in the year under review had been completed.

AGSA had reported an unqualified audit opinion on the ARF

Committee findings

Ms Mosala said that the first finding dealt with sentiments of the Committee in terms of the overall service delivery performance of DIRCO, which it felt had been commendable. The Committee also acknowledged the effect of foreign exchange fluctuations on DIRCOs budget.

The Committee also noted the audit opinions for DIRCO and the ARF. It also noted the incurred fruitless unauthorised expenditure, together with the slow response on consequence management by leadership at DIRCO.  

The Committee also had findings on the operationalisation of DIRCOs new organogram, audit and risk management Committees which had been supposed to be the first line of defence at DIRCO but had challenges instead.

The Committee also noted the launch of the Tripartite Free Trade Area (TFTA) in Egypt in 2015, where SA had participated; the coordination by SA through the able leadership of Ambassador Mamabolo in chairing the G77 plus China and influencing the SDGs; Senior Management Staff (SMS) of DIRCO not signing of performance agreements; the sizeable exit of officials from DIRCO. It noted the issues around the Chief Operations Officer (CFO) saying because DIRCO officials were diplomats they were not keen on administrative issues which was a challenge.

The Committee had observed that the risk management of DIRCO had capacity issues; what needed to be done regarding heritage assets in terms of auditing them first and thereafter categorising them, and general asset management challenges which affected all 126 missions abroad including DIRCO headquarters. 

Finding 18 related to the Committee wanting to meet with DIRCOs audit and risk management Committee quarterly; 19 involved the recurring financial misstatements by DIRCO where the Committee had recommended a skills audit be undertaken for the financial component of DIRCO.

DIRCOs ICT infrastructure had been found to be outdated which rendered a security risk on the information handled by DIRCO; property maintenance activities were still left to individual missions to carry out where DIRCO had no verification visas to verify whether the maintenance plans were being carried out.   

Only the DHA had signed a Memorandum of Understanding (MoU) with DIRCO on Agency Services with all other MoUs outstanding.

The Committee had also found that SA had been re-elected to the AU Peace and Security Council for two years.  Additionally, it had found that DIRCO had to have better research capacity as an early warning tool on policy changes and trends.

There was also the issue of the Minister not attending Committee meetings.

Discussion

The Chairperson said that recommendations had to be specific on key weaknesses, financial or otherwise that the Committee wanted DIRCO to attend to. He commended the support staff on the detail captured in the draft BRRR concerning concerns of the Committee regarding DIRCO.

Mr D Bergman (DA) was concerned that the Committee was commending DIRCO and that there were so many recommendations for a BRRR. When a Department had a qualified audit report for a third year running and there was R350 million that still needed to be ratified in terms of wasteful expenditure the Committee had to be careful on how it placed itself in relation to DIRCO.

In terms of recommendation 4; best practices, DIRCO had to do a re-audit of its personnel especially its SMS in missions to ensure that there would not be another embarrassing international incident. Currency fluctuation was also caused by political turmoil and it was all very well for SA to withdraw from the International Criminal Court (ICC) the truth was that SA was playing in an international stage. Somewhere along the line the decision that was made had to be done in some consultative way and responsibly where the risk of currency fluctuation could be mitigated, as the last currency fluctuation had happened possibly because of something that could have been controlled a little bit better. A way had to be found in which international relations networked with other portfolio committees a bit better to discuss on finances, trade and industry and that could be done at Ministerial level where cluster Ministers could meet.

Ms D Raphuti (ANC) felt Mr Bergman was out of order because the discussion was about the BRRR and not anything else.

The Chairperson said the order would not be sustained. Mr Bergman was actually talking to the draft BRRR for instance his view was that he thought the Committee wrong to praise DIRCO on financial matters; and the Committee had found that politically DIRCO was doing well.  However; the internal controls on finances at DIRCO were wrong and there was a finding and recommendation to that effect. Indeed, the Committee had agreed in a previous meeting to recommend a skills audit of ambassadors but for the 2016/17 BRRR.  Additionally, currency fluctuation indeed had a dependency on country internal situations but the Rand/dollar exchange had to be considered as it was a reality. However; if Mr Bergman wanted to include what he had said about consultative way and responsible political decision making without having explained himself, that would mean for the 2016/17 BRRR he would have to repeat himself and that would be engaged then and if there was agreement then it would be included there.

Mr Bergman recalled that he had mentioned that all he had said he had also said on the 2014/15 BRRR though the example was different. What he was looking for was a way in which the Committee could recommend to DIRCO mindful that all actions had reactions and reactions had consequences. In 2014/15 his comments had been a suggestion and in 2015/16 the Committee had seen the risk; how then could the recommendation be drafted to ensure that there was diplomatic responsibility to guard against currency fluctuation and political risk where possible. 

Mr B Radebe (ANC) said that all the recommendations emanated from the findings in the report. He proposed that the Committee accept the recommendations as they were but on recommendations 5 and 6 had to have specificity on DIRCO liaising with the South African Reserve Bank (SARB) and AGSA and NT.  The Committee had agreed that on ambassadors there was a need for a re-vetting process.  However; the Committee was also aware that there was a backlog in Government vetting processes and that debate on vetting could certainly be taken up with the Minister in DIRCO but could not be included in the BRRR. Additionally, the Minister would have to explain what value a cabin attendant added to policy.

The Committee was still being quite diplomatic in most of its recommendations especially those to do with financial mismanagement but the Committee could accept them as outlined in the BRRR.

The Chairperson re-emphasised that the proposal was that the recommendation be accepted with the amendments as proposed by Members. Additionally, some matters were to be taken up with the Minister when she came to the Committee before Parliament rose. He said that the letter which the Committee had instructed him to write to Minister Maite Nkoana-Mashabane contained all of those matters, where the Committee had requested that she specify a date where she would avail herself before Parliament arose.

Ms Raphuti seconded the proposal by Mr Radebe.

Mr Paulsen said his concern was the fact that the Committee was not aware whether the qualified audit opinion was because of recurring matters or new matters. The Committee had to find out the exact amounts owed to DIRCO for agency services so that it could recommend strongly in that regard and be able to protect DIRCO from abuse by other Departments.

Mr L Mpumlwana (ANC) said he agreed with the recommendations except number 8. Regarding Parliament, he would recommend that the Committee recommended that it be allowed oversight tours to the missions at least four times a year instead of the recommended single oversight tour.

He felt that the spatial distribution of findings involving finances could be listed in one paragraph instead of separate instances in the draft BRRR.

He was also unhappy with applauding one ambassador for work done as part of his responsibilities, as that could cause animosity between ambassadors who also had been doing good work as Ambassador Mamabolo.

The Chairperson interjected that there were ambassadors of SA in missions abroad. The finding regarding ambassador Mamabolo was for his role chairing G77 plus China which was an International Institution instead of a country. Additionally, ambassadors retained their titles even after their tenures had ended. The observation was a countrywide observation about Ambassador Mamabolo’s work at that institution. 

Mr Mpumlwana maintained that selecting an individual amongst his peers who did similar work for DIRCO could have a negative repercussion. He asked why that particular ambassador was being selected and what would be the consequence of said finding being included in the draft BRRR? He also was not certain that the finding on Minister Nkoana-Mashabane not appearing before the Committee was necessary to be included in the BRRR as she would be coming to the Committee where she could be asked as to why she had not been prioritising Committee appearances. 

Ms C Dudley (ACDP) said that the finding on SAs chairmanship of the G77 plus China had been a huge responsibility and therefore Ambassador Mamabolo had done good work and therefore there was nothing wrong in commending him on a job well done. She suggested the Committee could remove ‘continuous, utmost and disquiet’ in the finding against the Minister so that the finding read: ‘the Committee expressed its deep disappointment with the Minister absence from the Committee’.

She also proposed that the two first paragraphs under recommendations could be removed so that the thread went directly into recommending without introduction. If the Committee could also exchange the word ‘conduct’ for ‘prioritise’ so the recommendation read: ‘prioritise an assessment on’. Additionally, if the collecting of money could have its own recommendation as she had not picked up on anything regarding that in the draft report. Was there a tool that could help the DIRCO forecast what foreign currency fluctuations could be so that when DIRCO was budgeting that could be considered; that is what the risk assessment would be in terms of where global finances were going.

Ms S Maila (ANC) supported Mr Radebe’s proposal about the recommendations and the inclusion of the finding about Ambassador Mamabolo as he felt that would encourage hard work rather than fermenting animosity or discourage other ambassadors. 

Ms T Kenye (ANC) noted that though the creation of a post for a Chief Operations Officer (COO) was covered by recommendations one and nine. Was there a need to specify that instead of simply leaving the recommendations to speak about the need for capacity at DIRCO in terms of operations?

The Chairperson reaffirmed that the COO had been covered indeed. He also supported Mr Radebe’s proposal for the Committee to accept the recommendations with the amendments that emanated from the discussion.

Responding to Mr Paulsen, he said indeed the qualified audit opinion against DIRCO was recurring and that was due to the sluggish management of DIRCOs finances. The Committee had met with the external risk management and audit Committees at DIRCO where the Committee had told both Committees that DIRCOs biggest weakness was in their realm. The Committee was also of the view that the officials in the finance unit of DIRCO were inadequate and others lacked appropriate skills.

When the Minister presented herself, the Committee had to point to the weaknesses AGSA had pointed out at DIRCO successively and she had to say what interventions there had been in that regard.

Regarding comments by Mr Mpumlwana, the Committee had to recall that it was a Committee decision to include a recommendation in the BRRR about the Minister’s absence from the Committee the whole year. The Chairperson had been directed to write a letter to Minister Nkoana-Mashabane to raise the concern about not coming to Committee meetings which he had done. The Chairperson had also written to the Chief-Whip of the majority party as had been directed but over and above that the letter to the Chief-Whip also had a copy of the letter written to the Minister and that to the Minister had the Chief-Whips letter as an attachment. After receiving advice, the Chairperson had not yet written to the leader of Government business whom was the Deputy-President (DP) though the Committee had directed him to do so. That was to allow the Minister to first avail herself to the Committee for engagement however; if she did not improve then the matter would be elevated as directed by the Committee. The Chief-Whip was in Parliament and the DP was a Member of the Executive and the Chairperson thought approaching the DP had to be the last resort. As further clarity; when the Committee resolved to write to Minister Nkoana-Mashabane that was in response to an earlier letter written in February 2016 that there were a set of non-delegable responsibilities which had been communicated with the Minister. The Annual Report (AR), the Budget of DIRCO or even the Foreign Service Bill or a white paper, she had to be present. In the most recent communication with the Minister the earlier letter where the Committee had resolved not to sit without her on the previous FYs BRRR and AR, had been attached and she was aware of the correspondence. When Minister Nkoana-Mashabane had phoned the Chairperson asking to be excused because she had to attend to the Heads of Missions conference and Cabinet recently, she had said she agreed with the Committee and she was not purposefully ignoring the Committee. The Chairperson had asked her to submit a written apology, which had been submitted.  The Chairperson said there had been that one apology versus continuous absence which the finding in the draft BRRR spoke to including the reasons for the apology.

Enforcing oversight and accountability whether political or financial; was in the interest of the Executive, Parliament and the citizens of SA. Moreover, it was also in the interests of the incumbents and from the Chairpersons view; he had been in the Executive for 12 years in five different Departments when one went to the portfolio Committee, the executive was told what his/ her official were doing because the Department was not a Minister or Member of the Executive Council (MEC).  To be polite on very glaring things would not assist colleagues who before they were Ministers were Members of Parliament (MPs). The Committee would create a serious trust deficit in the nation if the thinking was that Parliament could not say certain things.

Regarding Ambassador Mamabolo, the Chairperson concurred with Mr Maila that because the period of the G77 plus China where SA had chaired the institution; even the Deputy Minister of DIRCO had said that all those countries had been full of praise for SAs leadership at the time because Ambassador Mamabolo had been stern and pointed in ensuring that things that would benefit the South be included.

Mr Mpumlwana interjected that he was requesting that the finding that the Minister had also failed to respond to Parliamentary questions and oral replies be removed by the draft BRRR.

The Chairperson clarified that the matter had been raised not once with the Minister and her Deputies not once that Parliamentary questions had been responded to by her deputies for almost a year. That had been a sore point for MPs which had been included to the recent letter to Minister Nkoana-Mashabane. Additionally, when a Committee postponed a meeting because of its Departments Executive Authority (EA) that had to be reported to the House Chairperson, which meant the matter was in the Speakers office as well. He said that amongst other things the House Chairperson had raised the matter that DIRCOs Minister did not answer Parliamentary questions. Therefore, the Committee had to know that that was not hidden and that DIRCO was not the only Department in that situation.

Mr Radebe reiterated his original proposal and said that DIRCO had to be inserted in findings five and six such that DIRCO approached SARB and NT.

Mr Mpumlwana seconded the motion by Mr Radebe to adopt the draft BRRR.

Mr Bergman said the DA reserved its right not to adopt the draft BRRR as there had to be a caucus resolution.

Mr Paulsen said the EFF could not support the draft BRRR as it felt the DIRCO was always on the wrong side of International Relations and Cooperation.

Ms Dudley said the ACDP would support the recommendation with the proposed amendments.

The report was adopted with substantive amendments and the meeting was adjourned.