NCACC 2018/19 Annual Report, with Minister of Defence & Military Veterans, & Minister in the Presidency

Meeting report

The Minister in the Presidency, Mr Jackson Mthembu, and Minister of Defence and Military Veterans, Ms Nosiviwe Mapisa-Nqakula, were present.

Presentation to the Joint Standing Committee on Defence (JSCD) by Minister J Mthembu, Chairperson of the NACCC

Reporting to Parliament is prescribed in the law by the National Conventional Arms Control Act (NCAC Act). The Joint Standing Committee on Defence (JSCD) has an oversight role and an entity appearing before the Committee to brief it, is by invitation. The National Conventional Arms Control Committee (NCACC) of the Department of Trade and Industry (DTI) will always respond to the invitation by the JSCD to provide the briefing. The NCACC can only brief the JSCD on Tabled Reports to Parliament.

Tabling of Report(s) will always take place within 45 days after a period of reporting. This is how reporting is realised:

• The period of reporting must be over
• The report must be approved by the NCACC within the month after that
• The Reports(s) must be submitted for tabling in Parliament within 14 days of approval.

Highlights of 2018/19

The NCACC received a clean Audit for the Financial Year 2018. This is an unbroken record for the past 10 years. South Africa was chosen by the Arms Trade Treaty (ATT) to present its Arms Control Framework to the ATT Technical Working Group in Geneva, in April 2019. South Africa was admitted to the Bureau of the ATT in Geneva, and we are the only African Country and one of six countries admitted globally.

The Legal Framework in an International Context

• Treaties are based on International Public Law which is legally binding.
• Conventions are based on International Common Law through accepted practice which is morally and persuasively binding.
• International Interest Group Arrangement(s) attempts to close gaps which may not be covered by either Treaty and Convention.

South Africa’s Membership to Treaties and Conventions

• ATT: Arms Trade Treaty
• MBT:  Anti-Personnel Mine Ban Treaty
• CCW: Certain Conventional Weapons
• CCM: Convention on Cluster Munitions
• WA: Wassenaar Arrangement
• NPT: Non-Proliferation Treaty
• BWC: Biological Weapons Convention
• CWC: Chemical Weapons Convention
• MTCR: Missile Technology Control Regime
• NSG: Nuclear Suppliers Group
• Zangger Committee Trigger List

The Legislative Imperative in a Domestic Context

The National Conventional Arms Control Act

• Act 41 of 2002 (as amended) (primary Act)
• Act 73 of 2008 (amended Act)

The National Conventional Arms Control Act also frames the:

• Regulation of Foreign Military Assistance Act (RFMA), Act 15 of 1998/
• Prohibition of Mercenary Activities and Regulation of Certain Activities in an area of Armed Conflict Act – Act 27 of 2006

Policy Imperatives

The Act captures the Object as being:

• To ensure compliance with government policy in respect of arms control
• To implement a legitimate, effective and transparent control process
• To provide for an inspectorate to ensure compliance with the provisions of the Act
• Protection of Economic and Security Interests
• Foster National and International confidence control over trade in conventional arms

Composition of the Committee

• The Committee is appointed by the President in terms of Section 5 of the NCAC Act
• The Cabinet Committee is sui generis
• Section 5(3) states the Committee may not be chaired by Minister(s) with a line responsibility interest in trade conventional arms
• Section 4(a-c) sets out a member must vacate office if a member resigns , or is removed from office by the President

Pillars of SA Arms Control

RSA Government

• NCACC Act: Department of Defence
• Non-Proliferation Act: Department of Trade and Industry
• Firearms Control Act & Explosives Act: South African Police Services

Scrutiny Committee (SC)

• Established in terms of Section 7(1-9)
• The SC is chaired by the Secretary for Defence as Director-General of the Department of Defence
• Members are senior government officials
• Scrutinises and recommends decisions to the NCACC

The Secretariat

• Chief Directorate for Conventional Arms Control (CDCAC)
• Established in terms of Section 8 of the Act
• Serves as the Secretariat of the National Authority for Licensing, the NCACC
• Nodal Interface Point with the South African Defence Industry

Inspectorate

• Directorate: Inspectorate and Audit
• Established by Section 9 and is accountable to the Committee
• Section 9(2)(a-b) sets out the object of the Inspectorate:

- Ensure that the conduct in Conventional Arms Control is in compliance with the Act

             - Ensure that Internal regulatory Processes of the Committee are complied with
             - Inspectorate must consist of persons appointed by the Minister

Safeguards on Transfers

The Guiding Principles and Criteria of Section15:

• UN Security Council Resolutions (Arms Embargo)
• Governance – Politics, Human Rights
• Regional Dynamics – Stability
• Risk of Diversion – Proliferation (Non-State Actors)
• National Interest – Security, Political & Economic

Sources of Information – Risk Assessment

• Publicly available information
• Government processed information from line function departments
• Diplomatic missions
• Information from bilateral and regional cooperation arrangements
• Information from multilateral institutions

End User Certificate

• A legal document recognised under International Law (article 1 Hague Convention)
• Required in terms of Section 17 of the Act, underpinned by Section 16
• Supports criteria 3 and 4 of Section 15 – Risk of Diversion (primarily) but lends greater support in promoting non-proliferation of arms (controlled items) and Regional Stability
• Permit Holders are under obligation to provide a valid End User Certificate
• Permit Holder must inform the potential client (importer) of the requirement that ensures that there is compliance with the NCAC Act

Topical Matters Handled by the NCACC (years under review)

• Inter-sessional Approval Mechanism (IAM) – proposal to approve applications by the Committee when unable to sit on the date scheduled
• Risk Management of Transfer(s) in light of indications per risk (regional instability/diversion)
• Risk Diversion and End User Certificates, in relation to Sovereignty of Recipient

Reporting Cycles

• Statistics done on a calendar basis not a financial year basis
• The Annual Report of the past calendar year is compiled during Quarter One of the following year
• The 1st Quarterly Report of the current year is compiled during the Second Quarter
• The Report to the United Nations (UN) is also compiled in Quarter Two, this report needs approval by Parliament before submissions to the UN
• Department of International Relations and Cooperation DIRCO reports to the UN on behalf of RSA

Discussion

Co-Chairperson Xaba asked the presentation to be numbered in future to make referencing easier, and spoke of the irregularity of meetings and the attendance delays which had to be addressed. The issue around lack of bulk buy procurement by national and sub-national governments was raised again, as it was in previous meetings, mentioning the Metro gets items from abroad that could easily be procured within South Africa’s own Defence industry.

Mr S Marais (DA) thanked the Ministers and delegation for their presentation and said that Minister Mthembu mentioned that Members could call him at any time. However, meeting on a monthly basis would ensure that communication would be easier. An issue also brought up in the Committee’s discussions with the Defence industry’s key players was that if the Entity continued on the current trend, as set in the previous years, it would place the Entity in a very difficult predicament.

Referring to page 6 of the presentation, which mentioned the Bureau of the ATT in Geneva, Mr Marais asked what the exact benefit was for South Africa in being one of six globally, and what was the cost of being one of six globally? Other questions asked were what the legal binding of the conventions were, especially where it refers to undertakings, guarantees and obligations, what the role and contributions of those Ministers of the NCACC are. He could understand the involvement of the Minister of Defence and Minister Patel, but wanted to know if the others were there just to make up numbers or if there were specific contributions they made, and what input they gave.

He said he wanted to understand the agreements and obligations of the End User Certificate, which arose as a result of bilateral agreements between countries, and whether backlogs were dealt with. A big complaint by the Defence industry stakeholders was the massive backlog leading to non-performance. The relationship between contracting and exporting had to be explained.

The Co-Chairperson interrupted Mr Marais and said he had to be mindful of time. All the questions posed could not be answered because of time limits and all members had to have a fair chance to ask questions. If there was time remaining the Committee would come back to any further questions Mr Marais had. He could also email questions to their delegations to get an email reply.

Mr D Ryder (DA; Gauteng) referred to slide 12 of the presentation. It was an absolute selling point for some but not for him, as there was something he wanted to drive home very strongly. The picture showed a G6 howitzer yet listed it as a G5 howitzer. The G5 cost around US600 thousand dollars while the G6 cost around US3.2 million dollars. Such an error in the presentation gave doubt to whether or not everything else in the presentation was accurate or correctly done. The incorrect classification of things could have a major knock on effect. The 15% decline in the Annual Reports were alarming and concerning to say the least, and he asked for reasons explaining this. There was a big drop in the rand exports, which showed that the Defence industry was not doing as well as it ought to be. He asked why.

Co-Chairperson Nchabeleng said more time should be given for questions as it was not nice to watch someone take up to 20 minutes asking questions while the rest of the Members served as spectators. It was not nice that all other questions by Members basically be repeated because someone else asked all the questions in one go, it made other Members look like they either did not know what was going on or they were not interested.

Mr Marais took offence to this statement and asked if it was directed at him. He said he would ask questions as it was his right to do so. Other Members could not take offence at the fact he was asking questions as he was there to do this.

Co-Chairperson Nchabeleng said he did not know why Mr Marais took offence and was so sensitive. Certificates issues related to Saudi Arabia and the Yemeni crises. South Africa should not be supplying arms to people who are fighting like it was a World War. The Entity should ensure equipment that is sent to other countries do not land up in the hands of people who do not use them responsibly.  He wanted to know what was happening with the Saudi Arabian dealings.

Co-Chairperson Xaba said when the Ministers replied they had to bear in mind that Denel said they had potential buyers who were hesitant to enter into trade because of the issues brought up by Members. The answers given could either increase or relieve concerns by those potential buyers.

Minister in the Presidency, Mr Mthembu, answered the question about the End User Certificate. They had since, as a Committee, reached an agreement. This was something all countries agreed with them about. Things brought by country A to Country B had mechanisms, but the mechanisms should be through diplomatic channels and it could not be the Ministers who appoint an envoy to go to another country without engaging properly through diplomatic channels.

About trade, the Minister said it was no longer a problem. They cleared up their backlog and it was no longer holding them back or holding back those who wanted to export any defence material. Many countries they spoke to were in full agreement when it came to trade. Many countries also looked to South Africa as to what it could offer. Other countries appreciated South Africa’s practices.

On the Membership of the NCACC, he said their responsibility was to deal with matters of the Defence industries and to make approvals or disapprovals on recommendations that came from the  Defence Committee. They were appointed as a collective by the President as is his prerogative by law. Their role was to make approvals or disapprovals on matters that needed to be exported or even imported. Each Minister has a collective responsibility as appointed by the President to the Committee.

Backlogs were an issue they dealt with, as they understood the frustration surrounding it. The Committee met more regularly, on a monthly basis, to discuss, scrutinize and recommend what must be done. The Scrutiny Committee look at applications and give recommendations to the NCACC, before the NCACC meet.

The Minister of Defence and Military Veterans, Ms Nosiviwe Mapisa-Nqakula, thanked Members for their questions. The End User Certificates was controversial. Some people would opt out of it, if Ministers themselves were saying the inspection process was problematic. At some points in time there were situations where a country conducted an inspection which actually exposed them to their neighboring countries, that it secured the following equipment and no country wants to be exposed.  It is important for the committee members to appreciate that everybody was making a fact of the End User Certificate. The only time where Africa ever conducted an inspection, was once in the 20 odd years since democracy. It was done with Pakistan and with specific reason as to why it had to be done. Much of the issues which became controversial about the End User Certificate, prompted their own investigation. This is why they proposed it should be done through diplomatic channels.

It is important to have information so that an impression is not created, but due to the End User Certificate it was difficult to conduct regular inspections. When an inspection is requested, there is always a reason for it. 

Being the only one in Africa that is part of the Bureau is an inherited position from the previous State. As far as the current and future direction, it is actually difficult to get a nomination because there is a lot of shortage. She did not wish to say anything disparaging about Africa, but South Africa was one of the biggest producers. The ATT was a legally binding instrument for the transfer of conventional arms.

Minister Mthembu, said they have tried their best to answer questions posed, however, if they had missed questions or were unable to answer them, they were available at any time via cell or email to be answered. The delegation is accountable to the Committee and would not hesitate to answer any questions that were unanswered.

The Co-Chairperson said any questions which could not be answered would be forwarded for a reply. He thanked the Ministers and their team for their attendance.

The meeting was adjourned.