Defence Review 2015: Minister on implementation & funding model; President’s letters on SANDF deployment

Meeting report

Letters from the President dated 31 March and 4 May 2017
The letters from the President were read out by the Committee researcher. Highlights of the letter of 31 March 2017 indicated that the South African National Defence Force (SANDF) had deployed naval units for maritime efforts in the Mozambican Channel while the letter of 4 May 2017 indicated that SANDF had deployed soldier units to the Democratic Republic of Congo for peacekeeping, with the release of specific funds for both deployments.

Mr B Bongo (ANC) moved the motion for the adoption of both letters.

Mr S Marais (DA) said that the two deployments which had a total cost of about R1 billion was part of Milestone 2: Rebalance and re-organise the Defence Force. He expressed concern about how these two operations would affect the other objectives in Milestone 2 because they had cost about R1 billion.

Mr S Esau (DA) expressed concerns on the lateness of letters to Parliament and objected to the late receipt of letters from the President. He suggested that the President would need to inform the Committee on time to ensure that the Committee performed its statutory role even though deployments were vital. He observed that the Department of Defence (DoD) classified deployments even though they cost about R1 billion. Hence he suggested that the particular deployments should be placed back on the list of items that should be monitored.

Mr M Booi (ANC) seconded the motion for the adoption of the two letters and said that even though the DA had registered its objections, the letters should be adopted because SANDF personnel had already been deployed.

The Chairperson observed that the Presidents’ letters always arrived late to the Committee even though the Committee had complained about the lateness of the letters. He remarked that Mr Marais’ concerns on Milestone 2 would be addressed by the Minister and invited the Minister to give her brief.

Minister of Defence and Military Veterans briefing
The Minister of Defence and Military Veterans, Nosiviwe Mapisa-Nqakula, commended her team for its efforts on Defence Review 2015. Despite the financial constraints, the DoD had the mandate of implementing the Defence Review.

She introduced her entourage to the Committee and clarified the issue of the deployments. During a SADC Extraordinary Summit of Heads of State in Swaziland in March 2017, there was report on the situation in the Democratic Republic of Congo (DRC) and all the countries supported the mandate to deploy troops to DRC. However, the President approved the deployment of troops based on the Minute from the United Nations Council. Although South Africa had an agreement on the continued deployment of troops to the Mozambican Channel, the implementation plan was signed in August 2016. In the agreement plan South Africa agreed to continue with the deployment of troops until piracy was stopped in the Mozambican Channel because the sea routes were used to export South African goods to the world.

The Chairperson said that the Committee should wait until the Minister’s team had completed its brief on the Defence Review Milestone projects of DoD before questions were asked.

Mr Marais requested that he might ask a question that was specific to the deployments and the Chairperson allowed him to do so.

Mr Marais observed that based on the letter sent to South Africa, it showed that Tanzania was not aware of the piracy attack and asked DoD to clarify if the expenditure was only for off-shore deployment or for the whole naval units.

Mr Booi said that he wanted to ask Members to wait until the brief was complete before asking questions.

The Minister stated that the international media reported on piracy activities in the Mozambican Channel but the three countries (South Africa, Mozambican and Tanzania) were not aware of the piracy activities in the Mozambican Channel. She said that as a result of the Committee’s resolution for the DoD to provide an update on the Defence Review, the DoD had met to draw up a plan for the implementation of the Defence Review and a costing plan was developed. This costing plan identified areas of the Defence Review that did not involve additional costs. The purpose of the meeting was to present the reviewed costs, plans and areas that had been adjusted on the Defence Review to the Committee.

Mr Booi remarked that during the Committee oversight visit to the DoD, various matters had been raised about the Defence Review and the purpose of the meeting was to deliberate on those matters.

The Chairperson said that he understood why Mr Marais was asking the questions because during engagements with National Treasury, these same concerns were put forward. However he insisted that the questions would be answered after the DOD presentation. The Chairperson said that the Minister had noted the questions and the questions would be answered at the appropriate time.

Implementation of the Defence Review: briefing by DoD
Brigadier General John Gibbs, Director: Defence Review Implementation Project, said the brief would address the Milestone 1 but draw attention to high level issues that informed the Defence Review. He reported that factors such as maritime crime, inter-land border disputes, issues of federalism and presence and propensity of rebel forces impacted world security. DoD was concerned with issues of national sovereignty, interventions to defend democracy, peace stability and economic development and securing the ability of the nation to trade. He mentioned the goals of DoD; priority missions; contribution of DoD to developmental agenda; its international obligations and said that the Defence Review of 2015 focussed on ‘Reach and Intervene’ as against the Defence Review of 1998 which focussed on ‘Core Growth Force’.

He reported that Cabinet had chosen to independently expand the defence force by pursuing sovereignty and the ability to intervene in security situations that affected South Africa. He compared the Defence allocations on the continent with that of SA and reported that SA had the lowest allocation based on percentage Gross Domestic Product (GDP) in 2015, even though other countries expected SA to be more active in funding defence. Inflation had caused defence projects to have reduced value for money in the last 22 years. Urgent interventions were needed to ensure that SANDF did not deteriorate. Defence challenges included sustainable use of defence aircraft and naval vessels and the current unsustainable deployable capacity that depleted defence stock levels. Impaired force rejuvenation, operational and strategic reserves challenges were the risks faced by SANDF.

He identified two fundamental packages in the revised project planning deliverables which focussed on arresting decline (Milestone 1) and a long term defence plan based on military systems (Milestone 2 to 5) and reported that in addressing decline some elements in Milestones 2 and 3 will be impacted. He highlighted the Minister of Defence priorities which were organisational renewal, strategic resourcing, defence strategy, human resource renewal, sustaining capability, ordered defence commitments and use of technology for the defence industry. He identified five work packages based on the revised project planning deliverables but stated that work packages three, four and five would need additional funding while work packages one and two could be funded from budget allocation. In conclusion, he outlined three alternative options for funding the Defence Review and stated the impacts and risks of the three alternative options.

Discussion:
Mr G Michalakis (DA; Free State) observed through oversight visits that although there was a decline in the Defence Force, the DoD had made sacrifices for maintaining the force. He suggested engagements between the Committee and National Treasury to address the funding challenges faced by the DoD.

The Chairperson remarked that Mr Michalakis had not been present during the engagements that the Committee had with Treasury to secure more funding for the DoD.

Mr Marais noted that, based on the oversight visit, the Committee had suggested that for better management of the SANDF, the DoD needed to cut down on some military bases and reduce unsustainable deployment capabilities. He asked DoD to state what it needed to meet sovereignty obligations in terms of aircraft, sea vessels and equipment. Based on observations from the President’s letter which showed that the DOD had incurred further expenses on SANDF deployments, he asked DoD to clarify how it would fund its exit mechanisms to exit the SANDF.

Mr Bongo expressed concern at the lack of progress in the cyber domain because it had come up continually in DoD’s programmes. He asked the DoD to reconcile cross-cutting funding issues on staff reduction in Milestone 1 and increase of the SANDF in Milestone 3; give updates on the Military Skills Development System and state how some of the scrapped items could be refitted and be used to alternatively fund the Defence programmes. He asked the DoD to state how endowment properties, United Nation payments for deployments and technology could impact GDP positively as a Force Multiplier and be used to fund the Defence Review

Mr Booi said that if the exit mechanism of the SANDF was addressed the challenges of violence could be avoided. He asked DoD to clarify if SANDF had the capability to maintain itself at the border to ensure criminality was avoided, to state measures put in place to stop burglary at Silvermine, the SANDF high-tech communications facility base, and think of other funding solutions aside from Treasury.

The Minister of Defence appreciated that the Committee had engaged with National Treasury on behalf of DoD but said that such engagements with Treasury should include DoD to ensure that Treasury fully understood the impact of the efforts of SANDF on the economic stability of the country. Exit mechanisms exist for SANDF but it was a sensitive issue because it had impacts on economic stability. The restoration of SANDF through re-skilling to Works Formation for military infrastructure restoration had been put in place but not everyone wanted to join Works Formation. Disciplinary measures should be enforced for incidents of burglary at military bases (Silvermine) and the culprits should be dismissed. Laws that do not allow culprits to be dismissed should be repealed. She requested the assistance of Parliament in processing the Military Discipline Bill. The DoD has not fully implemented the Military Skills Development System in the current financial year because caution was been applied in rejuvenating the force as the full implementation could introduce criminality into the country if not well managed. In the past DoD was responsible for its Works projects but the projects were presently handled by Department of Public Works (DPW). However, she suggested that SANDF should have capacity to build at the borders and not have to depend on contractors. Consequently, the DoD solicited the assistance of Parliament on its endowment properties. The UN owes DoD some funds however when the funds are paid, they go to National Treasury hence the DoD has to use its money to repair equipment instead of using funds received for payments of services rendered to the UN. She suggested that Parliament should assist in ensuring that DoD received the payments from the UN.

The Chairperson interrupted and said that a joint meeting should be scheduled with National Treasury.

Dr Thobekile Gamede, DOD Deputy Director General: Defence Policy, Strategy and Planning, reported that DoD had detailed reports on its programmes and the questions on funding would be addressed in the funding model as soon as it is approved.

The Chairperson asked the DOD team to give reports on its assets.

Major General Michael Ramantswana , SANDF Chief of Military Policy, Strategy and Planning, stated that the DoD had a plan in place on assets but the details would be submitted to the Committee when the funding model had been approved. The military bases would be retained based on the Cabinet option of retaining sovereignty of the future SANDF and when the funding model was approved details of the approved training programmes and approved bases would be documented to the Committee. The refit or repairs of sea vessels and aircraft costs have high cost implications and would not be feasible with the budget allocated. The Military Command Council has received the documents for the cyber domain strategy, the process is on-going and would be approved soon.

The Minister of Defence remarked that the DoD did not like to communicate achievements that affected it due to threat to security but observed that as long as the Defence Force did not communicate its achievements, it would be difficult for the country to support the SANDF Milestones.

Mr Esau supported the re-prioritisation of the Defence Review that focussed on ‘Reach and Intervene’ instead of being focussed on ‘Core Growth Force’. He asked for the model that supported South Africa taking advantage of trading investments to ensure that SA made money in the countries that it assisted on safety. He expressed concern about the funding constraints that had been raised earlier by the Committee. Hence he asked DoD to give its position on Armaments Corporation of South Africa (Armscor), assets, sea vessel and aircraft repairs, international and continental peace missions, equipment not suitable for the terrain in peace missions. He asked DoD to clarify if other countries had sent deployments on peace missions to ensure that South Africa did not lose funds on United Nations and African Union missions. In order to ensure that the DoD did not have to request additional funding from National Treasury, he asked the DoD to explain how it could generate funds from the dockyard model. He suggested that there be serious consequences for people that committed offences and supported the Minister of Defence call about the completion of the Disciplinary Bill. He asked the DoD to explain why there was under expenditure in the Special Defence Account and to clarify if the Special Defence Account had been factored into the equipment restructuring. He asked the DoD to state if the human resources structure had been changed to reflect the planned rejuvenation of the SANDF. He observed that South Africa sold drones to other countries and asked DoD to explain why Armscor and military industries were not considered in the funding model and technology was not being used as a Force Multiplier.

Mr Marais said that the Defence Force had to be creative in identifying the world’s present economic environment because the increase in the costs of aircraft and sea vessels did not depend on consumer price index inflation but were actually three times the current inflation costs and advised the DoD to work with the right figures. He asked the DoD to clarify the 40:30:30 ratio for compensation of employees and clarify if it had provided security at the Silvermine base. He suggested that SANDF needed to concentrate on having the right aircraft and sea vessels instead of focusing on international peace keeping missions.

Mr Booi stated that the Minister of Defence was correct in stating that if the SANDF did not communicate its achievements, South Africans would not know the economic impact of its missions. He suggested that the DoD should give reports on what it really needed so that during engagements with Treasury the Committee would address this and get additional funding for the DoD.

DoD Chief Financial Officer, Mr Siphiwe Sokhela, answered the finance questions. He reported that the budget cut of 2013/14 was based on goods and services and the funding for Reserve Force fell under the compensation of employees which has been affected by the budget cuts. He reported that projects under the Special Defence Account took a long time to complete. When funds were not spent on the specific project the funds were rolled over into the next year for that specific project. DoD received its allocations from Treasury hence the DOD team should be present during further engagements with Treasury to address criticisms about the Defence Review. The process of the funding model is ongoing, currently there are various engagements on the funding model. When the approval and prioritising for each internal structure were completed, it would be presented to the Minister of Defence.

Mr Esau indicated that some of the specific questions had not been answered

The Chairperson said that DoD would submit responses in writing to the unanswered questions and resolved that the Committee would liaise with Dr Gamede to engage with DoD on another day.

The Minister of Defence acknowledged that the comments and questions were constructive and thanked the Committee. She agreed that DoD needed further engagements with the Committee. She emphasized that she had regular meetings with the Defence Force Service Commission (DFSC), the DoD was focussed on the welfare of SANDF while the DRSC was focussed on the ranking and promotion of the SANDF. The DoD identified an under expenditure of R96 million in the compensation of employee funds. The DoD exercised caution in delinked ranks from the salary structure because the trend could not be sustained without additional funding. In conclusion, she made commitments to give detailed reports on human resources challenges and training programmes of the SANDF.

The Chairperson thanked the Minister of Defence, her team and the Committee for the fruitful deliberations.

The meeting was adjourned.