The Portfolio Committee on Tourism met virtually to be briefed by the Tourism Transformation Council of South Africa (TTCSA) on the state of transformation in the tourism sector. The Committee first elected Ms Tandi Mahambehlala as its Chairperson. In accepting her role, she stated the importance of an international approach to the Committee’s work, and the promotion of South Africa as a tourist destination through effective coordination of resources.
The Council first outlined its mandate, as provided by the broad-based black economic empowerment (empowerment policy) codes
The entity then detailed the progression of the state of transformation in the tourism sector, starting from the 2018 empowerment policy survey report. One of its findings was that a limited number of enterprises had achieved the 30% black ownership target. Less than 50% of enterprises in the three sub-sectors (accommodation, hospitality, and travel) achieved the minimum ownership targets. The 2019 survey report, amongst other things, revealed a lack of partnership, collaboration, willingness and trust between enterprises and key stakeholders to promote procurement opportunities for small, micro and medium enterprises, and entrepreneurs. It also revealed a lack of innovative infrastructure support for business operations.
The Council then reported on its five key objectives or priorities for its plan of action. Some of the key ones included ensuring effective monitoring of compliance with the empowerment policy Codes, and impact assessments; another is ensuring that the youth are included and elevated in the tourism structures.
The Members raised a concern on the noncompliance with the empowerment policy codes. They asked how the Council will ensure that there is compliance. Are there any stakeholders to improve compliance? Did it have any strategic stakeholders it worked with outside the Tourism Department for skills development of the youth and women?
Members were also concerned about the transformation being very slow. They asked if the Council has any strategies to enforce it. In the presentation, the Council referred to the development of a business case, but there are no timeframes indicated for that. Are there any timeframes? Members felt that there needed to be consequences where transformation resistance was encountered.
The Council acknowledged the challenges of ensuring noncompliance without any consequences in place. It assured the Committee Members that it is working with the Department of Labour and Home Affairs to leverage some of these issues. Through the Executive Women Development Programme in partnership with the University of South Africa, the Council is upskilling women to help them progress into executive positions.
The Council will provide responses, in writing, to the questions on definition of transformation and the importance of non-compliance. The Council also agreed to report on progress more frequently to the Committee than its current yearly meeting.
The Acting Chairperson opened the virtual meeting, and welcomed the Members, including the new Committee Member, Ms Tandi Mahambehlala.
The Committee Secretary welcomed all Members and the Tourism Transformation Council of South Africa, led by its Chairperson, Ms Lindiwe Sangweni-Siddo. He shared that the purpose of the meeting is in two parts. Part A was the selection of a Chairperson; Part B was the main business of the Committee. He highlighted that the governing party had made them aware of the changes that were made to the Committee. The Members’ role was to prepare and support those changes as well as the decisions, because they do not have any leeway to question.
Election of Committee Chairperson
The Committee Secretary indicated that the Portfolio Committee must elect a Chairperson in consideration of the ninth edition of Rules of Assembly, Rule 158 (1), which states that the Committee must select one of its Members as Chairperson. He requested Members to provide nominations.
Mr H April (ANC) nominated Ms T Mahambehlala (ANC)
Ms P Mpushe (ANC) seconded the nomination.
The Committee Secretary asked if the nomination was acceptable.
Ms Mahambehlala accepted the nomination.
The Committee Secretary confirmed there were no any other nominations. He declared Ms Mahambehlala the Chairperson of the Portfolio Committee on Tourism. He recounted that, in 2020, the Portfolio Committee took a decision that the Tourism Transformation Council will brief the Committee on the progress of transformation in tourism, annually.
The Chairperson said that she would like to bring an international approach to the Committee’s work, alongside what the Committee has been doing. She highlighted how Covid-19 has had a huge impact on the sector. The Committee must ensure the leveraging of promoting tourism in the country through exploring all possible scenarios for coordinated, effective and efficient use of resources.
She put forward the creation of tourism promotional initiatives focusing on strengthening of partnerships; developing of a communication strategy; analysis of tourism outlook, and leveraging of tourism opportunities. The oversight becomes the mandate, which is something that they should take seriously as the Portfolio Committee.
The Chairperson welcomed the presentations and the agenda.
Ms M Gomba (ANC) moved for its adoption, and Mr April seconded the motion.
Briefing by the Tourism Transformation Council of South Africa
The Chairperson of the Tourism Transformation Council of South Africa (TTCSA), Ms Lindiwe Sangweni-Siddo, asked her fellow delegates to introduce themselves. The delegation consisted of Mr Bernard Mbenga, Ms Bunny Bhoola; Mr Ravi Nadasen; Ms Mmatsatsi Ramawala; Ms Hapiloe Sello; Mr Jeff Rosenberg, and Ms Mmaditonki Setwaba. There was an apology from Mr Jerry Mabena. These delegates covered a variety of portfolios in the Council.
Ms Sangweni-Siddo then briefed the Committee. The purpose was to brief the Portfolio Committee on Tourism about the work done by the Council, in an attempt to address transformation challenges within the tourism sector in South Africa. This included: the briefing on the Council Plan of Action and an update on the institutional arrangements of the TTCSA, including its autonomy and funding structure, to strengthen the Council’s capacity to perform its monitoring function on transformation in the tourism sector.
Mandate of the Council
The Council is appointed to fulfil the following mandate, as provided under Section 6.4 Statement 003 of the broad-based black economic empowerment (B-BBEE) Codes:
-provide guidance on sector-specific matters affecting B-BBEE in the tourism sector.
-compile reports on the status of broad-based black economic empowerment within the sector
- and share information with sector members.
State of Transformation in the Tourism Sector
The 2018 report showed that:
-The pace and extent of transformation showed noncompliance with the B-BBEE Code.
-A limited number of enterprises had achieved the 30% black ownership target. Less than 50% of enterprises in the three sub-sectors (accommodation, hospitality, and travel) achieved the minimum ownership targets.
-The Western Cape was the least transformed with Limpopo province being the most transformative.
-11% of enterprises had black women representation at board, executive and senior management levels
-About 66% of large enterprises were TOMSA levy collectors, whereas 56% of them contributed to Socio-Economic Development.
The 2019 B-BBEE Survey Report showed that:
-Several organisations expressed frustration about the administrative burden involved in the exercise.
-Several potentially-key respondents were not willing to participate considering their non-compliant status and the fact that transformation was not applicable to them as their market was international tourists.
The following challenges were recorded in the sector:
-Lack of marketing efforts to promote new and existing SMMEs and entrepreneurs;
-Low level of staff members with relevant skills and passion, drive, correct attitude, and interest in the sector;
-Inadequate awareness of the opportunities offered by the sector;
-Inadequate accessibility due to lack of financial support.;
-Lack of partnership, collaboration, willingness and trust between enterprises and key stakeholders to promote procurement opportunities for SMMEs and entrepreneurs;
-Lack of innovative infrastructure support for business operations.
Plan of Action
Five key objectives or priorities were proposed as indicated below:
-Ensuring effective monitoring of compliance with the B-BBEE Codes, and impact assessment;
-Ensuring that the youth are included and elevated in the tourism structures;
-Ensuring improved education and skills training for tourism job seekers and entrepreneurs;
-Ensuring that an environment conducive to support tourism products development in small towns (dorpies), townships and rural areas exist, and introduce new complimentary funding mechanisms to support transformation; and that tourism supportive infrastructure also exist;
-Advocating for advancement of SMMEs access to preferential procurement opportunities available in government and state institutions.
Institutionalisation of TTCSA
-The Council will create awareness of the Plan of Action, especially the B-BBEE, for greater growth and development.
-A joint funding to ensure sustainability funding model for TTCSA was established.
-In due courses, they will appoint a Chief Transformation Officer to champion transformation and be capable of engaging with respective executives of the industry.
-They are hoping to start the implementation process and ensure all relevant stakeholders are aware of this plan to advance the transformation in the tourism sector.
-The Council is currently finalising some policies and systems.
Mr M De Freitas (DA) asked for the definition of transformation. Is it only to meet the B-BBEE score card, or are there other factors?
Ms Mpushe raised a concern on the noncompliance of the B-BBEE code. She asked how the Council will ensure that there is compliance. Are there any stakeholders to improve compliance? Are there any strategic stakeholders the Council can work with outside the Tourism Department for skills development of the youth and women?
Ms S Xego (ANC) asked the Members to be mindful of what is acceptable given the TTCSA autonomous status as a registered non-profit organisation (NPO). She accepted the priorities highlighted in the presentation, and asked about the seriousness of transformation – if the TTCSA accounts annually to the Committee. She asked for reconsideration of the frequency of the TTCSA feedback.
She asked what the TTCSA will do, noting that the Western Cape province is the least compliant. Is it only engaging with three provinces? If not, when will it report on the other provinces?
She observed that there was resistance to transformation in the tourism sector, and that women are less represented in executive positions. The body that took the Minister exercising differentiated treatment during lockdown to court. Ms Xego wanted to know whose interest it was serving, considering that the Department was brought to court.
Ms Gomba was happy to see that the TTCSA was dealing with transformation in the rural and township areas. Her concern was the low employment rate of South Africans because most of the tourism businesses purposefully exclude employing South Africans. She asked how the TTCSA will ensure that there is a balance in the employment issue. Are there any policies that will enforce and ensure that South Africans are employed?
For those tourism businesses that are not compliant, she asked whether there are any fines or imposed fines. Has it been introduced, or is nothing being done to enforce compliance to change the status quo?
Mr K Sithole (IFP) was concerned about the transformation being very slow. He asked if the TTCSA has any strategies to enforce it. In the presentation the Council mentioned the development of a business case, but there are no timeframes indicated for that. Are there any timeframes?
He supported Ms Xego’s reconsideration of the yearly progress report to ensure close monitoring of transformation in the sector. The report does not mention the how and when and this poses hindrances in identifying progress areas. It also mentioned the hiring of a Chief Transformation Officer (CTO) but, they do not state when. He asked for programme of action with timeframes for monitoring purposes.
In response to the definition of transformation, Ms Sangweni-Siddo responded that the B-BBEE score card assists it in looking at the five elements with ownership being an important part to ensure transformation. Those elements allow them to receive a report to see if they are fulfilling their score card. They are other elements that they consider. They look at the entire value chain – aspects of being part of the mainstream and other opportunities afforded by the industry. If they are unable to transform establishments that give access, they would have failed their role. Therefore, they engage and communicate on what is expected when it comes to transformation. They also consider other departments such as Labour, if there are opportunities for them to assist. With the current Employment Equity Act, there has been an amendment with greater emphasis placed on hiring of women and black people in managerial structures. Beyond the B-BBEE score card, they engage in other aspects of participation.
In response to ensuring compliance, Ms Ramawela noted challenges in effectively ensuring compliance on the achievement of transformation targets. The adopted the approach of the Department of Tourism and the TTCSA is collaboration, collegiality, and incentives to encourage business to advance the agenda. The transformation agenda benefits everywhere when all South Africans are inclusively involved. To add on the definition of transformation, it is inclusive growth and engagement for those that have previously been politically, socially, and economically excluded. For example, there was a skill shortage around women. Through partnership with the University of South Africa (UNISA), a programme of upskilling women who are already in the system for executive skills to enable them to advance in their organisation was initiated. As a result, many women have graduated and been promoted. TTCSA has done work with the youth on mentorship and transferring of skills through its partners. Different partnership with different organisation has afforded the TTCSA to report on notable successes in pushing the agenda on transformation.
In response to the slowness of transformation, Ms Setwaba indicated that the tourism business tends to be a family business passed from one generation to the next. In most cases, there do not have the incentives to transform by employing black people.
In response to the employment patterns, she said that they are taking it seriously. Their recent meeting with the Department of Home Affairs will assist in the review the scarce skills category for employment of foreigners in this sector.
In response to the Department being taken to court, she stated that this is not the first occurrence. When a relief tourism fund was opened, they were taken to court, and they won the case. Being taken to court each time there is a transformative effort from their side reflects on the unwillingness and participation towards the transformation agenda.
In response to the representation of women and youth in the sector, she indicated that there are programmes they will be presenting on. They have plans through their partnership with UNISA to increase the participation of women. Most of their skills development programmes are targeted towards the youth as well. Collectively, their programmes are aligned in driving the transformation agenda.
In response to autonomy, the TTCSA is on its way to being fully autonomous. The Portfolio Committee will have a bigger oversight on the work that TTCSA does.
In response to the numbers in the provinces, Mr Nadiesen emphasised that for transformative movement to be seen, it will require the collaboration and partnership of the whole value chain. The annual transformative survey is run by independent research companies to determine the level of compliance in all the provinces provides a critical analysis for the TTCSA. These findings are shared with all stakeholders. Limpopo was the most transformed at 56%, Mpumalanga at 51%, KwaZulu-Natal 48%; Free State at 34%, Eastern Cape 39%, and the Western Cape at 25% with the amount of tourism being the leas transformed at 25%. Engaging in roadshows in different provinces to create awareness to and encourage collaboration is critical. Through the Department of Tourism and the with Tourism Grading Council partnership, they have the basic product verification project that allows for products to be ready and to accessible in villages and townships. The project is being piloted out in the Eastern Cape, which is at the bottom three of least transformative provinces. Ms Sangweni-Siddo, added that the Members of the Committee will receive the report highlighting that the Council is engaging with all provinces. When she presented, she had only highlighted the most-performing and the least-performing provinces, but the Council is concentrating on all provinces.
In response to the employment of South Africans, Ms Sangweni said that the codes stipulate that 85% of individuals employed should be South Africans. They are relying on the B-BBEE codes to see if the entities are complying with the stipulated percentage of South Africans being employed. They will continue engaging with the Department of Labour to ensure that these targets are met robustly and those that are non-compliant are called out. When entities are not compliant, it affects their B-BBEE score card. From those with a score card of less than four or five, they hope that it becomes an impairment when they want to procure businesses from government. The council will take note of the Members’ comments and continue calling out and looking for interventions to address this issue.
In response to the reconsideration of the annual reporting of the TTCSA to the Portfolio Committee, they will consider the suggestion proposed by the Portfolio Committee.
In response to the question about timeframes, Ms Sangweni-Siddo said that they have timeframes aligned to their plan of action. Their term of office is from 2019 to 2022. Each year they have deliverables, and 2020 was tremendously affected by Covid-19. She gave the Committee assurance that TTCSA is working hard that, at the close of this year, they would have concluded the appointment of the CTO and a fair process will be followed. On their next report to the Committee, they hope to table out the impact of Covid-19 on the state of transformation. Any documentation that is required to supplement the responses will be made available in writing for easy reference.
In response to non-compliances, Mr Mbenga indicated that it is the same organisations and entities that do not comply. Lack of any consequences has resulted in the occurrence of the same non-compliant behaviour. TTCSA has been thinking about interventions by government to address this considering that most non-compliant companies depend on the government for support. He suggested that more stringent action through penalties must come in such as being denied business.
The Chairperson asked for a review of accountability by the TTCSA. The Chairperson indicated that some responses from the TTCSA were unsatisfactory, and she asked for elaboration. The following questions were indicated: why are women’s programmes not being presented now? The noncompliance by the sectors in particular the Western Cape province; the definition of transformation; a proper understanding of what transpired for Afriforum to take the Department to court.
She asked for clarity on the TTCSA chairperson’s term of office. She said that TTCSA should not regard the Committee oversight as an interrogation but rather as a way for the Committee to see where they can assist for them to be a better version and get to where they need to be.
Mr P Moteka (EFF) suggested that TTCSA reports back once a quarter. He went on to ask how they are pushing and ensuring that women are on ownership and directorship level.
Ms Sangweni-Siddo accepted the suggested number of times for reporting. She said their term of office started in June 2019 and will come to an end in May 2022. They asked the Committee to provide guidance on what the reporting should look like. In writing, they will provide responses to the questions on definition of transformation and the non-compliance issue.
In response to the Afriforum issue, Ms Setwaba highlighted that the TTCSA is not a party to the litigation but to the Minister of Tourism. When the Minister of Tourism announced that the Equity Fund to recover the tourism sector from the impact of Covid-19 was only accessible to people who qualify for the B-BBEE, two organisations launched an application to court against the Minister of Tourism. The fund was halted. The fund could have had a positive impact on the recovery of the tourism sector.
In response to the Departmental programme initiatives for the development of women, Ms Setwana spoke about the Executive Women Development Programme implemented in partnership with UNISA. The programme prioritises on soft skills for sustainability. The business support targets upskilling women in rural townships and women already in the sector to receive formal training to progress in their company ladder. So far, they have had successes through this programme.
In response to pushing and ensuring that women are on ownership and directorship level, Ms Setwana said that they are running short of this transformation target. Through the APP, there is balance in how they have taken and considered the recommendations from stakeholders who have come in with intervention plans, so that black people do not only participate on the lower levels. They are ensuring the implementation of these plans, but progress has been slow.
The Chairperson thanked the TTCSA for their presentation and responses. She relieved them from the meeting. The meeting moved on to the next agenda item.
The Committee Programme for Third Term of 2021
The Chairperson, on revising the programme, requested for the deferring of the Committee Programme for Third Term of 2021 to their next meeting.
The Members agreed to defer the consideration of the programme to the next meeting.
The Chairperson proceeded with the announcements. She asked the Committee Support Staff to remain behind. She thanked the Members for attending the meeting.
The meeting was adjourned.
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