Bilateral Agreements / Memorandum of Understanding with other countries; with the Deputy Minister

Meeting report

Briefing by Department of Tourism

A team from the Department of Tourism briefed the Portfolio Committee on bilateral and multilateral engagements on tourism. The team comprised Ms Aneme Malan, Deputy Director General: Tourism Research, Policy and International Relations; Mr Ntobeko Buso, Director: Multilateral Relations and Co-operation; Mr Shavani Mukwevho, Acting Chief Director: International Relations; and Ms Ramona Jacobs, Director: Bilateral Relations and Cooperation. The purpose of the briefing was to provide information on the multilateral forums to which South Africa was a signatory and a member. It was also aimed at providing the status of signed agreements/memorandums of understanding (MOUs), to provide progress on the implementation of signed MOUs, and to provide an update regarding MOUs under negotiation, as well as the benefits derived.

The challenges faced in the implementation of MOUs included a lack of buy in from counterparts on the implementation plans, either due to lack of engagement with the projects proposed or financial constraints on their part, and budget cuts for the Department of Tourism. The rotation of staff at the embassies in Pretoria often caused challenges, as new relationships needed to be formed and stagnated collaborations already established. The changes in governments hampered continuity, as different administrations pursued or prioritised different interests. Agreements may have been signed purely for political considerations, as a mechanism to strengthen diplomatic relations between states.  Political instabilities like civil wars, health challenges like the outbreak of ebola in other parts of Africa, and the restructuring of governments which resulted in the movement of political heads and/or officials responsible for tourism, were also constraining factors.

Regarding the way forward, the Department would continue servicing the current existing agreements. It would also identify the agreements that were dormant, as they were not yielding any outcomes, and establish a mutual process to formally terminate dormant MoUs with counterparts. The Department would pursue the signing of MOUs with countries that had indicated a keen interest in signing an agreement with SA. In deserving cases, it could opt to agree on a project for a short period, instead of signing an MOU.

The Department was prioritising the establishment of joint working groups for each of the countries with which it had signed an MoU to facilitate the implementation of bilateral agreements to advance SA’s tourism objectives, as highlighted in the areas of cooperation. The national and provincial government collaboration coordination -- the national and provincial departments -- were in the process of drafting a coordinated framework to implement MOUs with international countries. The Department would contribute towards investment opportunities and economic growth, and continue to advance interest and strengthen tourism through participation in multilateral fora.

Discussion

Mrs V Bam-Mugwanya (ANC) said that the presentations had been very good, illustrative and informative as well. The Department had mentioned that it had some signed agreements from the municipal level, the provincial level and so on -- how did it deal with these relations and agreements, because it had been said that there were so many such agreements that sometimes South Africa was over burdening some countries, because some municipalities would want to twin with countries in which the Department was also interested. She also asked how the Department calibrated and prioritised all of the agreements they had signed, and what the Department’s criteria were for classifying these agreements. The Committee appreciated the fact that the Department was spending so much money and investing so much in these agreements. She asked if there was any return on investment, besides the exchange of personnel and exchange of ideas, and if there was any monetary value that accrued.

The Department had talked about of dormant agreements -- how did these agreements become dormant, and which of them had become dormant? What did the Department do with the dormant ones? There was also the issue of the Regional Tourism Organisation of Southern Africa (RETOSA), where the Department seemed to have been the ‘Father Christmas’ of that arrangement, and now that it had been wound down, it still wanted to honour its obligation in paying whatever had been outstanding. What about the countries who had not honoured their obligations -- were these countries also going to do the same as South Africa, or was there a mechanism whereby they would be traced and made to pay as well?

Mr S Bekwa (ANC) said that presentation indicated to them as a Committee that membership was just a voluntary membership -- nothing was enforced on them to respond to any agreement that they signed. If they could look back from where they were coming from as a country, they would say that they wanted to create space for the people to be part of the economy. It would be a very frustrating agreement if it did not develop or yield anything. South Africans should find a way to do better, because most of the countries that the Department had mentioned were not economically sound. Some of these countries should come to South Africa and say they did not have enough capacity. In the presentation, BnBs had been mentioned, and he asked what the Department had done to assist those BnBs to grow, because he was sure that those people had created their BnBs without any assistance, which meant that they were small businesses. He asked if there was anything that had been done to assist them so that they could participate in the economy in developing businesses.

Ms E Masehela (ANC) referred to the section of the presentation dealing with the Indian Ocean Rim Association (IORA), where tourism had been prioritised in 2013. She wanted to check what the situation was presently, whether it was still prioritised or not. She had not heard the presenter very well as far as the trilateral forum was concerned -- the one for India, Brazil and South Africa -- taking into consideration that now there was BRICS. She asked if the two of them – the trilateral forum and BRICS -- really had to be side by side. She also asked if it was not possible for the trilateral forum to fall within Brazil, and still yield the same results.

Under the IORA, the Department was talking of available membership stages for projects initiated by IORA, and the money that had been paid. She wanted to check whether there were any projects presently being funded, and how much was being spent on them. A lot had been said about RETOSA, but she wanted to ask what the tangible benefits from the RETOSA agreement were, since South Africa was the highest contributor. Was there value for the money South Africa was using, and could it exist if South Africa pulled out of it? She also wanted to check how far the Department had cooperated on the Southern African Development Community (SADC) Tourism Masterplan and the African Union (AU) agenda 2023.

Ms Masehela said that when the Department talked about some of the MOUs that needed to be renewed again and reviewed because they were dormant, and everything, was it going to follow the same frustrating process again, or could they shorten the process of doing it?

Ms S Xego (ANC) said she had an interest when the Department was mentioning Lesotho and Zimbabwe, as they seemed to be increasing in numbers in South Africa, and she wanted to know if they were contributing to the economy of the country, or if they were just there. She understood that the signing of MOUs was not just a simple thing matter, like building a relationship, and it took time. That was why there were those that had become dormant now. She asked what the responsibility of the Department was -- not as a country, because most of the MOUs were with the country, and not specifically the Department of Tourism -- as they were directed to them as a Department. There were provinces and municipalities that signed agreements with the international world -- what did the Department intend to do to strengthening those agreements to reinforce the benefits and value of these partnerships?

Ms Xego said understood that the MOUs were not for the people who just wanted to tap the low hanging fruit, but were intended as middle to long term, because the cycle was a long one, and those that wanted to see things happening quickly were not for these MoUS. As RETOSA was winding up, had the Department tried to establish how many member states were there, because it seemed like South Africa had been very active -- it was paying while others were not, and it intended to pay again. She wanted to know the number of member states that were there, so that it could be seen that there was value for money and there was a need for that organisation to be at least recognised further. It could then be said that a lot had been done, because if the Department’s intentions had been to increase the number of visitors, at least they could acknowledge that a lot had been done.

Ms S Nkomo (IFP) also followed up on the matter of payments which would still be made to RETOSA, considering the finality of the matter now that it was being taken over by SADC. With all the payments that South Africa had been making through all thee MOUs and agreements, how much would the total be, and how much would be the value of whatever South Africa had put in? One needed to look at how any of those agreements had actually had an impact on the poverty in South Africa, the unemployment and all the major issues which were problematic in the country so far. She was grateful that the Department was actually addressing the issue of certain projects that were being conducted with other countries. It was important for South Africa to get an understanding of why it had so many of these MOUs, and how the country was benefiting from them.

Her second issue referred to the Department’s contention that South Africa needed those countries so that they could assist when it was going for positions on international platforms. She was a bit disappointed by that statement, because she would have expected it to rather look at how any of those areas could assist in addressing the social area, much more than helping it to get into high positions. If South Africa needed those people to be there for it as a country when it needed a vote, was that the reason for having so many MOUs, many of which were dormant? That was incorrect, and the country had try and change it around so that it showed that South Africa needs these MOUs in order to make a difference. The most important thing she had noticed from the input was that it seemed as if South Africa had so many MOUs that it would be ideal if there was an evaluation of what the countries had, so that South Africa could see whether it still needed them.

When she looked at the information on her document, she had taken note of all the countries when South Africa had very low numbers, or numbers that were declining, and when there were no people coming in the country, that was a problem to her because those could be countries that had financial resources and financial muscle. She asked what was being done to make sure that they were brought back on board again. The presentation had indicated that the United States was the only country whose numbers were increasing, and she was wondering when this information had been obtained --if it had been obtained before President Trump went on his offensive. She understood why African countries had a lot of people visiting them. South Africa needed to weigh this up and see that there was value for the country once they were taken on board.

The Chairperson referred to the issue of agreements being signed by municipalities and provinces. The Department had mentioned the fact that these agreements took a long cycle so that at the end of the day it was a document that could be agreed upon by both parties. However, what she had seen was that municipalities and provinces would go to a country and, after visiting it, MOUs would be signed and the pictures would be seen on Twitter and Facebook about the agreement that had been signed between a municipality or province, and this country or that agency. She wanted to ask if the process in such cases also went through the cycle that the Department had mentioned, or if they had a quicker way of making sure that their agreements did not go through the process that the Department was taking. She had read of times where some of the agreements were in conflict with other issues -- like when the City of Johannesburg had once signed an agreement with another country – and she wanted to find out how the Department monitors these in the tourism space. When did they come in to monitor and ensure that the municipalities and the provinces actually sign MOUs that were inline with the prescripts that were there, to which the Department adheres.

The Department had mentioned that RETOSA would now fall under the AU, but they had also indicated that the model was going to be changing.  She asked the Department to share with the Committee how RETOSA was going to be modelled and whether it would still achieve the desired outcomes. It was one thing to say there were governance issues and that they were winding up and closing because of this, but she would think that governance, leadership and finance issues should be corrected, because RETOSA had been established to ensure that there was regional integration. Was RETOSA was still going to be relevant, wherever they housed it, and how best would the Department be able to remedy its governance, leadership and finance challenges?

Department’s response

Ms Malan said she wanted to take one step back with the RETOSA matter, because she thought it was important for the Committee to get a bit more information. Many years ago, in former Minister Van Schalkwyk’s time, there had been  a period when South Africa had not paid its membership fee to RETOSA because it had an issue with the governance of RETOSA, and until it was corrected they were not going to pay their membership fee, and they were clear around their position. South Africa had not paid for two years, and they had been open about it and indicated that they would pay as soon as the governance issues had been remedied, because the country was using taxpayers’ money to pay its R3 million annual membership fee. South Africa believed in the concept of RETOSA for regional integration to create a better Africa, working together in marketing the region, but South Africa believed that the vehicle did not support that concept.

The SADC ministers at that time undertook a process, because the SADC secretariats were then delegating all tourism related responsibilities to RETOSA, although RETOSA had initially been created as a marketing entity. RETOSA was doing everything and SADC was not really giving attention to tourism. The member states therefore decided to recommend that because SADC was not South Africa, it should establish a process with 15 member countries. The member states decided to restructure and re-establish RETOSA within a unit in SADC, where the unit was responsible for policy matters and RETOSA had the mandate for marketing. The process then went through many years and many discussions before the unit was re-established, a new board was elected, with a new CEO and new membership. However, there was again a situation of governance issues, with members not paying. South Africa’s contribution was roughly around 27% of the total contribution. All member states were part of RETOSA, except for Botswana and Mauritius, who withdrew -- not from SADC, but from RETOSA.

At the meeting of the SADC council last week, many countries were still saying they were committed to paying their membership fee, but the Department had heard this before -- in many forums countries say they were committed, then at the end they do not pay. So at this point, ministers made a commitment again, saying they were looking forward to that membership fee being paid.

Ms Malan said that South Africa was paying and RETOSA was going to be closed down. It was not going to exist anymore, but there was a contract for rentals, leases, copying machines, legal, and salaries that they had to settle, and if they were not paid for, it was going back to member states. South Africa had said they would honour their commitment and pay their dues so that RETOSA could be closed. In terms of the way forward, RETOSA was no more, and what the SADC Secretariats had been instructed to do was to work on a plan to make sure that moving forward, the mandate of promoting the region would still be executed.

Ms Malan added that the SADC Secretariats, in collaboration with member states, would work on the plan moving forward. All member states still felt RETOSA was important, but had been just saying the vehicle did not serve the purpose and had decided to close it down because they had tried to restructure it and that had not helped, and in the meantime member states had to pay and nothing happened. She said that the SADC unit would be in Botswana, they would work on the plan and then that plan would be discussed by member states to see how it was going to be implemented.

The process of signing agreements was not a long one -- it was not a legal instrument. At a technical level, she the Department was on the same page when it came to their provincial counterparts, but the decision to sign an agreement was not always at a technical level. Both parties, provinces and national, had decided that they needed to improve on the situation, and were currently busy developing a framework for integration because they were saying that ideally they wanted everything to reside in the national agreement, and then all of them would be implementing the national agreement through various ways. The province, the Department or the private sector would all be doing something, but it would be under the same agreement.

Member states believed that the partnerships and relationship that they had formed through their MOUs with China, Russia and Angola had assisted them to get visa communication in both countries. They were currently working on that framework, and had a sense of which provinces signed twinning agreements with which country, or which province within the countries had an element of tourism in it, and they were trying to group all of this, and it would also get into the process of making a decision around that.

Ms Malan replied to Mrs Bam-Mugwanya’s question on investment in monetary value by saying that sometimes it was very difficult to answer this directly. Indirectly, South Africa had had an MoU with Russia for many years, and they believed that the relationship South Africa had built with Russia had assisted the Department of Home affairs to make a decision that there was no risk any more for Russians who travelled to South Africa. Subsequently the number of Russian tourists to South Africa had increased by 52%, and there was the monetary value that they got out of that.

In assisting BnBs, the Department tried to make a conscious decision not always to stay in big hotels when they travelled, but also to stay in B&Bs, but only the graded ones, so what they were doing as the Department, amongst other things, was to assist B&Bs in being graded. The Department also provided these BnBs market access through its tourism incentive programme, either to exhibit or go to the Department’s Indaba. With the Department’s initiatives around chefs’ training, the B&Bs had an opportunity to get their chefs trained in that programme to achieve service excellence and sector skills development.

IORA Tourism was very much still prioritised. This year the Department had hosted a senior officials meeting on the margins of the Indaba, and had also had a workshop on coastal and marine tourism in line with Operation Phakisa. The Minister of Tourism would host ministers of IORA in October, so it was very much alive and going well in IORA with regards to tourism.

It also needed to be kept in mind that the function of tourism between provinces and national was a concurrent function, so the Department could not really tell the provinces not to sign agreements, but they need to see how they could better align. The Department’s first port of call was not necessarily signing an MoU when they engaged with a country. They would identify a project and then work together on the project and see how it went, and if there was a need to sign an MoU, they would sign it, but it should not be the first thing that they did. The Department did prefer to have a formal agreement with a country before they did anything or partnered in anything, but an example of a project was South Africa working with Namibia, where they were in the process of signing an MOU. They had started with a project they had as part of regional integration. Tourists that travelled from South Africa to Namibia wanted the same experience and same standards when it came to guides. 

Ms Malan also described some of the Department’s training initiatives involving skills and capacity building, which included training in languages such as mandarin. The Department had learnt a lot of languages and understood the importance of partnership in that space. Even the chefs that were placed in Seychelles learned a lot of lessons and expectations of accommodation.

Mr Ntobeko Buso, Director: Tourism Research, Policy and International Relations, commented that the DDG had spoken a lot about RETOSA, but the gravity of the situation was serious in that the governance challenges were actually mainly because of allegations that had been levelled at the CEO, who happened to be a South African. This put South Africa in a precarious position, because it was perceived that one of our own was contributing to the mismanagement of this organisation, and they ended up settling with the CEO and had fired him. The second issue was that member states were nor paying to a point where RETOSA had requested the Department to give them a loan so that they could pay staff. RETOSA could not pay its staff for three months up until Angola paid their membership last month, and then they had managed to pay those arrear salaries. The biggest problem now was that where was the money going to come from for paying staff in August, and of course the settlement, because there were four executives in RETOSA, and they were working from home. Because of how dire the situation is, part of what the ministers decided last week was that when RETOSA was wound down, they had to ensure that the negotiations on parting ways with executives had to take into account that the organisation did not have money. The money that South Africa was going to pay was going to pay some of the obligations to some extent, but there was still more money that was going to be needed.

Mr Buso said that the SADC treaty was very clear, that if a country was in arrears for a period of two years and more, it must be suspended, but the biggest problem was that with RETOSA that treaty was never enforced. That was why there were countries such as the Democratic Republic of Congo (DRC) that had been in arrears for eight years but it was still part of RETOSA. They came to the meetings and deliberated, but that element was never enforced and South Africa had to carry this all along without the organisation actually achieving its mandate.

Another area was that RETOSA recently requested that the Department give them office space because the landlord was chasing them out of the building. They had said no because this was a SADC institution, not a South African institution. The last part was that the RETOSA board had had a meeting in Durban in May during the Indaba, and had taken a resolution itself that with member states not paying, the best way was for RETOSA to close. A recent development was that even the board now was dysfunctional, with the Chairperson the only person who was working on the board -- the other members had stopped participating.

He said that the decision that was taken by the ministers at the council meeting had been informed by all of this and the gravity of the situation. They had decided that if SADC wanted to promote tourism in the region, they should not be cooperating at a mediocre level through RETOSA. SADC needed to up its game and find a better mechanism that could advance the region.

Mr Buso added that in terms of BRICS and India-Brazil-South Africa (IBSA), the country’s decision that BRICS should continue side by side with IBSA, was bringing some complications. For example, in the tourism stream to coordinate tourism issues, the other countries were not interested. In fact, they were saying that they had bilateral agreements with these countries, and instead of establishing a BRICS tourism, they should rather focus their energies on the bilateral work. Secondly, they said if the SADC feels strongly about BRICS, they must ensure that whatever cooperation they have with BRICS does not duplicate what was being done at IBSA. The SADC cooperation now at BRICS and IBSA was continuing, and they were navigating this quite cautiously so that they did not duplicate what was being done through IBSA and in BRICS.

Regarding the IORA funding, the IORA charter states that a Chair of IORA was not allowed to access funding -- he could access funding of IORA only once he had been given the Chair to another country, and the next coming country that was going to Chair after South Africa was going to be the United Arab Emirates (UAE). It was the only then that Tourism could accept and apply for that funding and by that time they hoped that their tourism eco-group would be up and running and had identified projects, but they were also confined by the regulations of these organisations.

His last input concerned the incorporation of the SADC masterplan into the Department. The Department felt strongly that the National Tourism Sector Strategy (NTSS) as it currently stands had got some articles and areas that stick to what the Department sought to do. For example, the whole issue of regional marketing and cross-border tourism was an issue that the SADC masterplan promotes, and in South Africa now, with the winding up of RETOSA, the Department was embarking on an exercise currently where they were developing a framework that they would use to advance tourism in the SADC region. They were using institutions currently based in South Africa that had a footprint in SADC so that the work was coordinated and the Department could then be in a position to ensure a SADC masterplan that talked about cooperation. Regional integration was being taken care of, ensuring that the South African institutions that were already playing in that space actually took that work forward. The tourism programme was also going to be finalised by the SADC secretariats in collaboration with member states. The Department was sticking to this issue and also the regional objective of establishing RETOSA as well.

Ms Elizabeth Thabethe, Deputy Minister of Tourism, commented that the discussions showed that bilateral and multilateral matters were not easy. She pointed out that IBSA had been in existence for a long time before BRICS, so there was a clear rationale for continuing with both. As far as RETOSA was concerned, the Department needed to come and account to the Committee on what the benefits of membership were.  

The meeting was adjourned.