Department of Labour response to Gauteng committee oversight visit report

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Employment and Labour

16 August 2017
Chairperson: Ms L Yengeni (ANC)
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Meeting Summary

The Department of Labour with the Unemployment Insurance Fund (UIF) who is in charge of the Labour Activation Programme appeared before to the Portfolio Committee on Labour to respond to the oversigh visit to Gauteng report.

The Committee was not interested in the presentation by the UIF Commission until they provided answers to what was called a disastrous visit. According to members, the Labour Activation Programmes are allocated large sums of money every financial year and this visit was suggested by a Committee Member so that there was “a good story to tell”.  Prior to the visit, the Committee was given information by officials on institutions funded by the Department, and when they finally reached those institutions, it came to their attention that some of the projects referred to as being ‘live’ projects were actually projects funded in 2012.

The Committee says these officials undermined the integrity of Members of Parliament and according to the feedback from these institutions, Department officials showed up a day before the visit to enquire if the Department in fact was funding any projects. The Committee questioned if there are any records of the institutions being funded and how government funds were being channelled. Out of the six companies that were visited over the duration of two days, only one (ArcelorMittal) had a ‘good story’. The Committee also questioned the usefulness of the current presentation if the Committee cannot trust information provided by the Department.

The visit was cut short on the second day agreed and Members agreed that it was nothing less than fruitless and wasteful expenditure, from which nothing was gained. The Committee challenged the numbers of learners being trained; the amounts spent on the training, the absence of monitoring and evaluation, outsourcing without oversight and the transformation objectives of the project.

While Department officials readily accepted responsibility for the failures, the Committee was not impressed and demanded detailed and current reports on projects accounting for every cent spent. Failing that, the Committee will have no choice but to write to the Minister. 

Meeting report

The Chairperson welcomed everyone and said the agenda will focus mainly on the Labour Activation Programme. She rejected the apologies by Mr W Madisha (COPE) and Mr A Plouamma (AGANG), because no reasons were provided for their absences. She said all the Members are extremely disappointed and embarrassed by what happened during the Committee’s recent oversight. The Labour Activation Programmes are allocated large sums of money every financial year and this visit was suggested by a Committee Member so that there was “a good story to tell”.  She asked if Members wanted to comment on the oversight visit before the report. Following the addresses provided to them, Members often got lost and arrived at incorrect locations, because the information was incorrect. The Chairperson stated that although she felt disheartened by the events of the first day of the oversight, she was prepared to proceed with the second day, but was ultimately dissuaded by Members who felt there was no need to embarrass themselves any further. She gave Members an opportunity to ask questions before the presentation.

Ms F Loliwe (ANC) welcomed the approach taken by the Chairperson. She said the Committee spent Parliament funds on the visit to Gauteng under the impression that the work of the Department will be on show.  The Committee was given information by officials on institutions funded by the Department, and when they finally reached those institutions, it came to their attention that some of the projects referred to as being ‘live’ projects were actually projects funded in 2012. These officials undermined the integrity of Members of Parliament. According to the feedback from these institutions, Department officials showed up a day before the visit to enquire if the Department in fact was funding any projects. She asked if there are any records of the institutions being funded. When Members complained about the absence of the person leading the labour activation programmes, Members were told she will be available the following day, but she suddenly became available in the afternoon. Out of the six companies that were visited over the duration of two days, only one (ArcelorMittal) had a ‘good story’. She asked why Members had been misled to spend Parliament money on a fruitless oversight visit and where government funds are being channelled. She questioned the usefulness of the current presentation if the Committee cannot trust information provided by the Department.

The Chairperson agreed and explained that cutting the oversight short resulted in nothing more than fruitless expenditure, from which nothing was gained. ArceloMittal South Africa has been in existence for a number of years, but the amount of money that was approved for that project and the numbers provided by the officials was far too small.

Mr Thobile Lamati, Director-General, Department of Labour (DOL) said he was just as disappointed and there was no excuse for the kind of experience Members had to endure. The Department should have checked that the information sent to the Committee was correct. There were quite a number of things that went wrong, which is now in the process of being corrected. The purpose of the presentation was to clarify what they should have done, and what they will do going forward and that it did not serve as a platform of excuses in relation to the complaints. The UIF Commissioner is commissioning an investigation into what happened.

Ms Loliwe made a request that before the presentation was to begin, could it first be clarified what exactly happened in terms of the wrong addresses and information.

Ms L Mjobo stated that on the projects that they went to oversee, Vereeniging and ArceloMittal South Africa, a report had been requested before the information was still outstanding. Before the Committee could delve into the contents of the presentation, the reports needed to be received.

The Chairperson asked if Members were deliberately misled and she urged the Department to be truthful. If challenges were raised in the Committee, Members would have gone on the oversight prepared for those challenges.

Ms Loliwe said the Department has a partnership with MerSETA, but the role of MerSETA is known in most institutions while the Department’s role was not known. She wanted to know what percentage of funding the Department had with MerSETA.

The UIF Commissioner admitted that so many things went wrong and said that some companies were not monitored in their spaces, on their progress or even on the activities of the company itself. He further added that in some instances, there was no monitoring done before the visits were set to take place. Some companies had relocated, and this had occurred without their knowledge. The pathways for learners were not clearly defined and once they were skilled there was no tracking. There was no excuse for things to go as far as they did, and as a pilot, the labour activations went on too long without being monitored. This was without taking stock as that, with this labour activation growing, is it really closing the gaps intended? He indicated that he took full responsibility and that the Director-General was within his rights to take corrective steps in terms of consequence management, even against himself.

Ms Mpumi Mnconywa, Chief Director: Labour Activation Programme, DOL, said the training programmes are outsourced through MerSETA and MerSETA was the implementing agent. The Fund communicated to MerSETA that Members of the Committee would like to visit the projects to see where UIF money has been invested. The list came while driving back to Pretoria and the list was sent while still on the road. Parliament sent the list of projects that have been identified and in the list to Parliament there were two different phases. There were projects that were completed and another column for current projects. The only current project that has more learners is ArcelorMittal with 200 learners, but when the Committee went there they did not find 200 learners. Most of the companies that are active under manufacturing and engineering are training one to three learners, except for ArcelorMittal, but under phase 1 many companies had a reasonable number. The Fund indicated to Parliament that most of the companies that were chosen seemed to be under phase 1 which was already completed. By trying to meet the deadline, the wrong information was sent (of completed projects). The request from Parliament indicated that they wanted to focus on steel and manufacturing and the decision was made, if the focus were on the numbers, to include projects where the focus was not on steel and manufacturing. The Fund was advised that Parliament will continue with the completed projects, i.e. on the amounts invested, where the learners were, whether they have been absorbed or were they just trained for the sake of training. This is how it resulted in Members visiting companies that have completed training.

Ms Mnconywa said in phase 1 at ArcelorMittal 100 learners was trained and 35 were absorbed. Currently ArcelorMittal are training 200 learners. Companies absorb according to their capacity. On the head of the project not being present on the first day of the visit, she said the visit happened on the same day a meeting was scheduled on the Annual Performance Plan (APP). The Auditor-General had picked up a gap where the labour activation programmes clashed with the APP and Monitoring and Evaluation (M&E) had already drafted some key performance indicators (KPIs). M&E was doing the presentation and the labour activation programme had a responsibility to engage on what the unit was not comfortable with. The team decided that the head will be part of the meeting and the Director and Deputy Director for Gauteng, North West and Limpopo will be with Members while the head will join the following day.

On funds allocated to the project, she said the labour activation programme did not only focus on manufacturing and engineering. Under building and civil construction, the Department was investing R1.8 million for each Technical and Vocational Education and Training (TVET) college to train 50 learners per college where  R1 500 is paid per learner for a period of 12 months and R900 000 is paid towards the college, because the Fund outsources the training programme with the college. The Fund was also running partnership projects with the Transport Education and Training Authority (TETA), i.e. training of artisans, pilots, and scuba divers. Some have been placed for jobs and others have been placed for further training with an estimated 42 learners been taken to Saldana Bay for further training. There is also a partnership with AgriSETA on training

Ms L Theko (ANC) said the problems needed to be addressed.

Ms Mjobo raised a concern as to if it were not for the oversight, would the Committee have come to know the truth that there are challenges being faced by the UIF. She also questioned the faith the Committee can put in the findings of the report should the meeting continue.  The Department seems to be circumventing questions of clarity posed to them. There a review is due in September and she asked what they are to do with this situation as it has now unfolded.

Ms Loliwe said the responses from the Commissioner, i.e. taking responsibility and “daring the Director-General” to take action against him without giving concrete reasons for the failures are patronising to the Committee. Submitting a list without checking the details are very irresponsible. There was no follow-up, because there was indeed time to alert the Committee to discrepancies that should have been picked up before the visit. She referred to the learners where there was no monitoring on the paths dating back to 2014/15, but the Commission continued to budget for this project every financial year. If there was not any monitoring done over the programmes, what influence the Department wished to give to this project. She further asked the Department how they intended to measure growth over the years and be able to know how to allocate expenditure effectively if they did not monitor programmes effectively. They could not rely on outsiders, such as the SETAs to carry out functions such as monitoring of their programmes, as this is the responsibility of the UIF Commission. She asked where the Director-General was when the he errors were being made before the oversight, and whether he perused the documents that were requested before the oversight, or not.

Mr America said the UIF Commission had failed the learners and the unemployed due to their inability to exercise effective oversight in this particular segment of their program. The experience of this oversight highlighted some of the shortcomings of the industry. He noted that while they had highlighted some successes of the industry, they were however miniscule in relation to what the budget could possibility or potentially allow for in these programs. He proposed a full report of all the programs that would account for how much they were budgeted for, how much was appropriated, and how many learners were involved. This will allow the Committee to make a proper assessment, because this presentation has a certain selection of programs from which they decided to report on.

Mr Rawula put forth a suggestion that on the Director-General is to provide the report on the corrective action that will be taken on this matter. The matter reflected a leadership deficiency. It is incorrect to state that SETAs are implementing agents, but rather that they are responsible for accreditation and quality assurance of training. If there is not capacity to monitor, then Parliament cannot release money.  He also raised concerns over the discrepancy in the numbers the large budgets that were approved, and warned the Department not to waste taxpayers’ money.

He expressed disappointment in the transformative context of the training programme, and mentioned that in all the training profiles there are less than 5% of female candidates, and there is no breakdown on the type of training skills that had been discussed. He thought it would be useful and important to include in the reports what skills are being taught, what is the duration, and in terms of the demographics of gender, do the programmes give an expression to gender, colour and age parities of the society we live in, or not. He guided the Commission to ask the SETAs what their monitoring processes are in terms of their accreditation, so that they are not unqualified in instances when some learners have completed training, and are told that whatever they have learnt is not going to find expression in terms of learning mobility. If the Department of does not take responsibility on the quality assurance of the programmes that they are heading, it will prove to be a waste of the Department’s money.

The Chairperson it is clear that the Commission has no idea what was going on. She referred to the outsourcing and said ArcelorMittal confirmed that the 200 students are not only from the Commission. If the Commission had known what they were doing, there would have been no reason to contact MerSETA to provide Parliament with a list. That information should be on the database and it speaks to the mandate of the UIF Commission. It cannot be that when it is time to account, MerSETA should be contacted. She asked why the Committee should vote for this particular budget, especially after everything that was raised and came to light in the meeting. She asked the Commission look into their projects, so that they have better ability to track their progress of their programmes. The Commission need to account for every cent spent, before the Committee approve the next budget, and warned that the Department would not approve until the Director-General accounts, and a successful oversight has occurred.

Ms Loliwe suggested that if the Commission does not have responses to the last set of questions, that the meeting need not go to the report unless the Director-General has explained the correct version of what is going on in the project. The Committee is not interested in window dressing and the Director-general will get another opportunity to provide the Committee with answers and detailed reports. Failing that, the Committee will have no choice but to write to the Minister. The Committee and the Department is only joined by the work that needs to be done and it will be on Parliament’s record that this Committee was not able to effective fulfilling their oversight role.  She agreed with Mr America on current and detailed reports that needs to be submitted

The Chairperson concurred with the point made by Mr Rawula on transformation, especially with regard to the demographics amongst the trainers in the training companies. The Department cannot just hand money over to SETAs without having a say on the recruitment or the trainers. Radical economic transformation starts small, and the Department needed to ensure that the people in most needed areas are empowered by these training programmes.

Mr Lamati promised to compile the reports as instructed by the Members of the committee, and said that for future oversight, the Committee will never encounter this problem again.

Consideration and adoption of minutes

Minutes dated 27 and 28 June 2017 was adopted.

The meeting was adjourned by the Chairperson. 

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