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DEFENCE PORTFOLIO COMMITTEE
5 August 2003
ARMSCOR BILL: DELIBERATIONS
Chairperson: T. Modise (ANC)
Delegation: Mr Sipho Thomo (Chief Executive Officer, Armscor); Mr B. Ramfolo (Chief of Acquisitions, Department of Defence); Mr Nick Sendall (Defence Secretariat)
Armaments Corporation of South Africa, Limited Bill [B18-2003]
Proposed Amendments to Armscor Bill (see Appendix)
The Committee gave approval to extensive amendments to the Bill that had been negotiated with the Department of Defence during the parliamentary recess. Some concern was expressed by members whether these amendments make any difference or whether they are merely rewording, but this was not pursued. The Bill was adopted with these amendments.
Mr Middleton (IFP) questioned whether the amendment to Clause 3 (iii) regarding assistance to sovereign states would make Armscor into an international arms dealer.
Mr Thomo replied that it is not intended to enable Armscor to become an arms dealer, but to assist African countries to procure equipment for peacekeeping operations.
Mr Sendall noted that checks and balances are important, and that the Bill had been referred to the National Conventional Arms Control Committee.
Mr Thomo declared that the mandates of Armscor and Denel do not overlap and that each is quite clear. He said that Denel manufactures, but it does not procure and that there is therefore no potential for conflict.
Otherwise, the proposed amendments were accepted with little discussion. In two instances the word "consultation" was substituted for the word "concurrence".
Ms Modise formally placed the Bill before the Committee for agreement that the legislation is desirable for the continued existence of Armscor.
The Committee supported the Bill with its amendments.
The meeting was adjourned.
ARMAMENTS CORPORATION OF SOUTH AFRICA, LIMITED BILL [18-2003]
1. On page 4, in line 21, to omit "recognised" and to substitute "accepted".
1. On page 4, from line 40, to omit paragraph (b) and to substitute:
(b) manage such technology projects as may be required by the Department;
2. On page 4, from line 42, to omit paragraph (c) and to substitute:
(c) establish a programme management system in support of the acquisition and technology processes contemplated in paragraphs (a) and (b);
3. On page 4, from line 44 to omit paragraph (d) and to substitute:
(d) provide for a quality assurance capability in support of-
(i) the acquisition and technology processes contemplated in paragraphs (a) and (b); and
(ii) any other service contemplated in this section required by the Department;
4. On page 4, in line 46, to omit paragraph (e) and to substitute:
(e) establish a system for tender and contract management in respect of defence materiel and, if required in a service level agreement or if requested in writing by the Secretary for Defence, the procurement of commercial materiel;
5. On page 4, in line 49, to omit "and end user administration service" and to substitute "administration system".
6. On page 4, in line 50, to omit "agreements" and to substitute "law".
6. On page 5, from line 1, to omit paragraph (k) and to substitute:
(k) provide marketing support to defence-related industries in respect of defence materiel, in consultation with the Department and the defence-related industries in question;
6. On page 5, in line 4, after "Department" to insert "in a service level agreement".
7. On page 5, from line 8, to omit paragraph (n).
8. On page 5, from line 11, to omit subsection (3)(a) and to substitute:
(3) (a) The Corporation may, with the approval of the Minister-
(i) exploit such commercial opportunities as may arise out of the Corporation's duty to acquire defence materiel or to manage technology projects;
(ii) procure commercial materiel on behalf of any organ of state at the request of the organ of state in question; and
(iii) and subject to the National Conventional Arms Control Act, 2002 (Act No.41 0 2002), Regulation of Foreign Military Assistance Act, 1998 (Act No.15 of 1998), an}
Non-proliferation of Weapons of Mass Destruction Act, 1993 (Act No.87 of 1993), perform any function which the Corporation may perform for or on behalf of the Department in terms of this Act for and on behalf of any sovereign State.
1. On page 5, after line 21, to insert the following subsection:
(1) The Corporation must enter into a service level agreement with-
(a) the Department in respect of any function contemplated in section 4 relating to the Department;
(b) any other organ of state on whose behalf the Corporation procures commercial materiel; and
(c) any foreign State in respect of any function contemplated in section 4(3)(a)(iii).
2. On page 5, in line 22, to omit "contemplated in section 4(2)(n)".
3. On page 5, in line 23, to omit "Chief Executive Officer" and to substitute "Board".
4. On page 5, in line 24, to omit "or other organ of state" and to substitute", other organ of state or foreign State".
1. On page Sin line 44, to omit paragraph (c) and to substitute:
(c) the Secretary for Defence and the Chief of the SA National Defence Force, who serve as ex officio members.
1. On page 5, after line 55, to insert the following subsection:
(4) Subject to section 6(1)(c), no officer or employee as defined in section 1 of the Public Service Act, 1994 (Proclamation No.103 of 1994), or person appointed under a special contract contemplated in section 12A of that Act may be appointed as a member of the Board.
2. On page 6, from line 2, to omit paragraph (a) and to substitute:
(a) holds office for three years and may be re-appointment for one further term; and
3. On page 6, from line 5, to omit "who is not in the full-time service of the State".
4. On page 6, in line 7, to omit", ~ of the Minister of Finance,".
1. On page 6, from line 11, to omit paragraph (a) and to substitute:
(a) he or she becomes disqualified to serve on the Board by virtue of section 7(3) or (4);
1. That the following be a new clause:
Chief Financial Officer
11. The Chief Executive Officer must, in consultation with the Board, appoint the Chief Financial Officer for such period and on such conditions as the Board may determine.
1. On page 7, in line 2, to read "and after consultation of the Minister of Finance".
1. On page 7, in line 4, to omit "directions of the Board" and to substitute "policies and procedures of the Corporation".
2. On page 7, from line 8, to omit", with the approval of the Minister and the concurrence of the Minister of Finance".
1. On page 7, in line 43, to omit "any other source" and to insert "such other source as may be consistent with the objects and functions of the Corporation".
1. On page 8, in line 11, after "tender" to insert "and contract".
2. On page 8, from line 11, to omit ", including tender placement, evaluation, adjudication, contract placement and contact management".
1. On page 8, from line 25, to omit paragraph (c).
2. On page 8, from line 38, to omit subsections (2) and (3).
1 On page 8, in line 50, to omit "instruct" and to substitute "assign".
2. On page 8, in line 52, to omit "instruction" and to substitute "assignment".
3. On page 9, in line 4, to omit "instruction" and to substitute "assignment"
1. Op page 9, in line 9, to omit "may" and to substitute "must".
2. On page 9, in line 10, to omit", defence".
1. On page 9, in line 28, to omit "accounting officer of the Department" and to substitute:
Secretary for Defence in a service level agreement
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