The Standing Committee on Finance, Economic Opportunities and Tourism (WCPP) convened to receive a briefing from the Western Cape Department of Economic Development and Tourism (DEDAT) and Wesgro on Delta Airlines, film permits, attracting the film industry to the Western Cape, and the issuing of visas.
Regarding Cape Town Air Access, until 2019 there was no direct route between Cape Town and the United States. The direct flight between Cape Town and New York started operating in 2019 and stopped in March 2020 because of the COVID-19 pandemic outbreak. The route reopened in December 2021 and is doing very well, the service will operate all year.
Delta Air Lines applied to amend the Foreign Operators Permit (FOP) to operate a triangular route from Atlanta to Johannesburg, and Cape Town back to Atlanta. This was necessitated because of the Airbus A350-900 aircraft, which would not be able to operate a non-stop flight from Johannesburg back to Atlanta without severe load penalties. This was because of its take-off altitude and the occurrence of headwinds.
Regarding film permits, the Committee heard the method for the industry to gain access to shoot permits is uneven around the province and makes some regions less ready. Wesgro and the Department of Economic Development and Tourism (DEDAT), as part of an inclusive film action plan with the districts, are developing the film permit process in the districts.
Regarding Remote Working Visas, the Department said a submission has been sent to the national Ministers of Home Affairs and Tourism. This submission has been followed up with lobbying efforts to both the National Department of Transport (DoT) and Department of Home Affairs (DHA) to gain support for the proposed policy amendment.
The Committee wanted to know the long-term growth prediction for the number of commuters from Cape Town to the USA; and if South Africa is geared to market this opportunity for South Africans to travel.
The Committee asked about the reasons for the Singapore and Etihad Airlines not being approved yet as well as the average flying hours from the United States to Cape Town; and what the decrease would be if it was able to fly directly to Cape Town.
Regarding Remote Working Visas, the Committee wanted to know what the security and health implications of the Remote Working Visa would be; as well as the mitigation measures that would be undertaken.
Regarding film permits, the Committee wanted to know how the application process works when one wants to apply for a film permit which is not necessarily within the City of Cape Town, but within the Western Cape.
The Department and Wesgro said it demonstrated through the intergovernmental disputes, it is making some progress. Although it has not heard any substantive response, the Minister of Transport’s latest letter and his appeal for time to deal with the matter urgently provide the Department with some hope the issue will be resolved soon. It has not managed to show similar progress when it comes to the question of matters which reside under DHA, such as Remote Work Visas, e-Visas, the backlog in issuing visas, even in the film industry, and the backlog in issuing passports.
The Chairperson welcomed Members of the Standing Committee, as well as the delegations from the Western Cape Department of Economic Development and Tourism (DEDAT), and Wesgro to the meeting.
Presentation by DEDAT & Wesgro
Mr Rashid Toefy, Deputy Director-General: Economic Coordination, DEDAT, introduced the delegation from the Department and handed over to the Air Access team from Wesgro to lead the presentation.
Mr Paul van den Brink, Project Manager: Cape Town Air Access, Wesgro, said Cape Town Air Access was established in 2015 by the provincial government and one of its tasks was to attract the US Carrier, as until 2019 there was no direct route between Cape Town and the United States. The direct flight between Cape Town and New York started operating in 2019 and stopped in March 2020 because of the COVID-19 pandemic outbreak. Fortunately, the route reopened in December 2021 and it is doing very well. The service will operate all year. In November last year, there was an almost 40% recovery since 2019 in the number of commuters arriving in Cape Town from overseas, but the numbers were reduced in December because of Omicron and started to increase again in January this year. The good news is, since the first three weeks of February, the numbers are back to above 50% compared to 2019. Wesgro expects bookings will remain good at least until after the Easter season and it is optimistic more people will return to Cape Town during the next few weeks.
Regarding Delta Airlines, Mr van den Brink said Delta Airlines applied to amend the Foreign Operators Permit (FOP) to operate a triangular route from Atlanta to Johannesburg and Cape Town, back to Atlanta. This was necessitated because the new generation Airbus A350-900 aircraft would not be able to operate a non-stop flight from Johannesburg back to Atlanta without severe load penalties. This is due to its take-off altitude and the occurrence of headwinds. Delta's application has not been approved and Singapore Airlines and Etihad Airways submitted a similar application, without success, in 2021. Western Cape Provincial Minister, David Maynier, and the Wesgro Board Chairperson individually sent letters to the Minister of Transport setting out the arguments in support of the Cape Town route to be approved, but to date, no substantive response has been received from the Ministry. An intergovernmental dispute has been initiated.
Mr van den Brink said on 17 February 2022, Delta applied for approval with US authorities to operate an Atlanta to Cape Town route to introduce the service in November 2022. Delta said it is still seeking approval for the triangular route. The Air Access team continues to monitor the situation, but as it stands the applications for triangular air routes by Singapore Airlines, Etihad Airways, and Delta Air Lines remain unresolved.
Ms Monica Rorvik, Head of Film and Media Promotion, Wesgro, provided an update on the Film Permits in the Western Cape. The permitting method for industry to gain access to shoot “permits" is uneven around the province and makes some regions less ready. Wesgro and DEDAT, as part of an inclusive film action plan with the districts, are developing the film permit process in the districts. The other forms of support by Wesgro and the Department include the following:
Ongoing visa & locations assistance for new reality shows and television (TV) series from the Netherlands, Belgium, Germany, France, Australia, India, Russia, UK, and the USA
Lobbying for removal of barriers to access, for example, lobbying with tourism on Red List removal / OMICRON travel restrictions removal (film sector needed access to the summer high season from the U.K. for commercials and catalogue marketing campaigns).
Ongoing offering of investment advice to new and possibly expanding large studios, and other investors projects in the film and media value chain (foreign investment).
Ms Ilsa Van Schalkwyk, Chief Director: Economic Sector Support, DEDAT, presented an update on the Remote Working Visa. A submission has been sent to the National Ministers of Home Affairs and Tourism. This submission has been followed up with lobbying efforts to both the National Department of Tourism (DOT) and Department of Home Affairs (DHA) to gain support for the proposed policy amendment. A remote work portal has been launched, which is a website that aims to assist with all logistical requirements for any potential tourists. The objective is to entice people from around the country to visit the destination as remote workers through engaging collateral and a unique toolkit aimed at business conversion. A digital campaign has also been launched to promote remote working. DEDAT has made submissions to the DOT, arguing for the introduction of a remote working visa. Currently, international tourists are restricted to 30 or 90-day stays, depending on citizenship. At present, there does not seem to be much interest on the side of DOT and DHA to institute a remote a remote work visa.
David Maynier, Provincial Minister of Finance, Economic Development and Tourism in the Western Cape, said the Department received a recent item of correspondence from the Minister of Transport, who requested its final indulgence and an opportunity to urgently deal with the Delta Airline matter. He referred the letter to legal services to seek advice on how to reply, given the intergovernmental framework. The correspondence is recent, and he reassured the Committee the Department will continue to engage national government on the matter, so the dispute about co-terminalisation and Delta Airlines can be resolved.
The Chairperson wanted to know what the actual response from the National Minister of Transport was.
Minister Maynier said the Minister of Transport requested a final indulgence and an opportunity to deal with the matter from DEDAT.
Mr A van der Westhuizen (DA) said it all comes down to profit when talking about the Delta Airline. He wanted to know what the long-term growth prediction for the number of commuters from Cape Town to the USA is, and if South Africa is geared to market this opportunity for South Africans to travel.
Ms N Nkondlo (ANC) asked for an explanation of the Remote Working Visas and asked what it entails. She also asked what the security and health implications of the Remote Working Visa would be, and asked which mitigation measures would be undertaken.
The Chairperson said she was happy to hear there was a response from the national Minister of Transport regarding the Delta Airlines issue, albeit not substantive. Delta Airlines must make it as convenient as possible for tourists to choose South Africa, and it is clear the United States (US) is increasing its Tourism to South Africa, especially to the Western Cape. She wanted to know what the reasons were for Singapore and Etihad Airlines not being approved yet. She also wanted to know the average flying hours from the United States to Cape Town, as well as what the decrease would be if the airline were able to fly directly to Cape Town. She asked because it is convenient for tourists to fly as direct as possible to manage costs. She also asked for the same details about the flights from Singapore and Etihad.
Regarding the Remote Working Visas, she said the Department said the e-Visa Pilot Projects will be extended to 50 markets; and she wanted to know if this has been implemented, and how. Regarding the Department of Home Affairs increasing the number of Visa-exempt countries, she wanted to know if there are any countries which the Department was currently working with and if there is a timeline for the lobbying.
Responses by DEDAT & Wesgro
Mr Toefy said one of the powerful aspects of the Air Access Programme is the combination of stakeholders. One example was marketing the outward flight from Cape Town, which is where the inclusion of Cape Town Tourism, the City of Cape Town, and South African (SA) Tourism comes in.
Mr van der Brink said it does a lot of data research and work on routes, identifying the gaps, and until 2019 there was no route to the United States, and New York was the largest market it did not have a direct flight to. Regarding the numbers, currently to the US, there are about 220 000 visitors between Cape Town and North America, both inbound and outbound. Between 2015 and 2019, between North America and Cape Town there was only one percent growth on average, and this was because there was no direct service, which shows wherever there is a direct route, there is market stimulation. The Department expects the route between North America and Cape Town to grow further in the next few years, but this also has to do with macroeconomic developments such as the current situation in Europe for example, which will result in a spike in the oil prices, as it may cause ticket prices to become expensive. There is a lot of tourism promotion in markets. SA Tourism has an office in New York, and Cape Town has cooperation with New York. A lot of promotions are happening within this market. On the route, about 80% of the volume is inbound, coming from the US to Cape Town. Twenty percent is outbound.
In bilaterals, it is often mentioned how routes operate, for example, if a route existed in the past and the bilateral has not changed, it means the route should be possible to operate. In the case of Etihad, it used to operate the route from Abu Dhabi to Johannesburg to Cape Town, and backwards, between 2009 to 2012. In the meantime, the bilateral agreement between South Africa and the United Arab Emirates (UAE) was examined, and it has not changed. This means, based on the historical routes, it should be possible to operate this route. The passengers were from the European and Asian markets. Singapore Airlines operated the route four times a week between Singapore, Johannesburg, Cape Town, and backwards. Through the engagement of stakeholders, the route grew from four times weekly to daily, until the COVID-19 outbreak in March 2020. The Asian route is more closed currently, but Singapore Airlines is coming back to the routes from 1 March, and the route has been approved by the Department of Transport (DoT). The problem with the Singapore route is not the DoT, but it is with DHA because it is afraid of contaminating international passengers from other passengers at the Cape Town International Airport. The Asian market is important because the average growth between 2015 to 2019 was six percent, and whenever there is a direct route, the markets grow.
Mr David King, Project Manager: Cape Town Air Access, Wesgro, said it is much quicker to fly a non-stop route than to connect through an airport. In the past, with the US traffic, most of the passengers flew via Europe into Cape Town. Those flight times were between the ranges of 25 to 30 hours, but through a direct route to Cape Town, the flight times were about 16 hours, but the issue came from the direction in which one would be flying because flying to the US from Cape Town takes longer. This is because one is facing headwinds. Flying from the US to Cape Town is faster because of the tailwinds. The Singapore Airline flights take about 11 hours to Johannesburg, and to Cape Town, it would be about 13 hours direct. Etihad Airline takes about nine hours to Johannesburg and would be about an hour more to Cape Town direct. Bilaterals are a framework by which all nations operate and it enables airlines to fly between countries. The framework is there but it also depends on the civil aviation authorities within each country to approve the operating permit. Currently, there is not an Air Services Licensing Council. Only current approvals are able to operate. If it is in the bilateral to fly, then there should be no problems, but as far as new rights go, the DoT’s view is there is a moratorium on all bilateral decisions until the Aviation Policy Review Process is complete. Wesgro and WCEDT do not agree. The process has been ongoing for more than a year now and was expected to finish last year in June. There is currently no draft and no indication the process will be finished. This is creating a lot of pressure in the industry as it means no airline can expand its services, even South African airlines.
Ms Wrenelle Stander, Chief Executive Officer, Wesgro, said there is a study that positively correlates connectivity to economic growth, and it is important to increase Cape Town’s connectivity to the rest of the world. It is something the Air Access team is working hard on ensuring.
Ms Van Schalkwyk said the Remote Working Visa is for semi-skilled and skilled individuals and it requires proof of accommodation, employment, and a minimum one-year contract, meaning one cannot be employed by a South African company but must come with an existing work contract. There must also be proof of a minimum income, as well as health insurance, and travel documentation. Those are the minimum criteria to apply for this special type of visa, which has to be amended by the Immigration Act and its regulations. If one stays longer, the entry requirements from a health risk perspective will be the same as any tourist arriving in the country, according to the current regulations. Regarding the e-Visa, the system has been launched. It is a web application where one would not need to physically go to an Embassy. It was trialled and successfully launched in February 2022.
There are 50 countries currently exempted from visas, these are the major source markets, which is positive news for the Western Cape. The timelines and dates from DHA on the additional countries being considered need to be firmer, as DEDAT has not received firm timelines and dates on the process or when the investigation will be concluded.
Follow up discussion
Regarding the Remote Working Visa, the Chairperson wanted to know which requirements the Department is lobbying for, as it looks as if it is for a one-year contract. In the film industry, many artists freelance and are self-employed. These artists are not necessarily employed by someone or by a company. In some case,s artists get paid per job. The Chairperson wanted to know which options the Remote Working Visa makes available for freelance workers and how these artists can be assisted.
Ms Nkondlo wanted to know if there is any data that was collected in the country and the Western Cape, on the numbers where the Remote Working Visa was used, before and during COVID-19. She also wanted to know the implications of the current war between Russia and Ukraine, and the sanctions, as Russia is also one of South Africa’s partners in tourism.
Mr Toefy said any geopolitical uncertainty like a war is going to affect the country, so all the Department and Wesgro can do is find a silver lining and find other places to do their work to avoid the conflicting regions.
Ms Van Schalkwyk said the current submission does not deal specifically with the freelancers and it is something that could be looked at by expanding the requirements because it is similar to self-employment. The film freelancers can still come into the country using the 90-day visa, but what this is trying to unlock is when a person is employed in the person’s own country, the person is bringing foreign direct investment into South Africa. This needs to be investigated by DHA when it starts looking at the actual elements in the regulations. The current regulation is looking at the income and employment status, even if one is self-employed.
Regarding the risks, State Security currently vets all visas from all countries, regardless if it is a Remote Working Visa or one from an exempted country. The Department does not have the data from a domestic perspective, but in Dubai, it changed its regulations and the minimum entry into the country to apply for this special type of visa. It was about 5000 dollars a month, which is quite high. The Department is trying to attract the income stream into the country. She asked for an opportunity to submit better statistics to the Standing Committee on the issue. There was an increase in travel coming from Russia, but this will be addressed at the national level, as there are currently no active marketing campaigns in this part of the world.
Mr van der Westhuizen was concerned the Department is setting the bar too high, as the youth are doing more remote and freelance work. He asked for the turnaround time for the e-Visa when one has applied for it in another country.
Ms Van Schalkwyk said the Department serves on a working group with the National Department of Tourism where it talks about visas and policies. Policies have different structures in place, and the Department gets updates. In the last five years, visas were a major concern, as there was different pressure coming into the system regarding unabridged birth certificates. Regulations were then changed, and one had to physically visit an embassy to apply. With the announcement of the e-Visas, there has been a massive dip in red tape complaints regarding visas. Another contributing factor was the announcement of the exempt countries, who are mostly travelling to South Africa. This made it much easier to get a visa.
Ms N Makamba-Botya (EFF) wanted to know how the freelance artists from other countries contribute to the gross domestic product (GDP) of South Africa.
Mr Toefy said what is important when such artists come into the country is the jobs that are created in the country over time.
Mr Jacques Stoltz, Director: Tourism, DEDAT, said having worked in the film industry, many South African film crews also do work in the rest of the world, and this goes both ways, meaning it is not only about international crews coming here, but South Africans being able to work in other countries. He said having an open policy around this situation also helps the country.
Ms Van Schalkwyk said on the matter of the multiplying effect, these freelance artists are spending money on accommodation, petrol, retail, professional services, and more, which is how the artist’s money goes into the fiscus.
Discussion on Film Permits in the Western Cape
Ms Stander provided a summary of Ms Rorvik’s presentation on film permits in the Western Cape to refresh the Committee's memory.
The Chairperson said the presentation shows how one can apply for the film permit online but it only shows it for Cape Town applicants, and she wanted to know how the application process works when one wants to apply for a film permit which is not necessarily within the City of Cape Town, but within the Western Cape. She wanted to know if one would apply at the particular municipality in the region where the plans to shoot were, or if one could still apply on the website.
Mr van der Westhuizen said he is privileged to be part of the Town Council in the Old Franschhoek municipality, where parks and nature areas surrounding the municipality are popular with filmmakers who want to shoot advertisements, especially for cars. Over the years, he noticed film crews would do the shooting and filming in the area and would leave litter, and there would be some environmental damage. He said it was asked for a protocol to be developed whereby people would have to apply for permits, and people would have to pay for an Environmental Control Officer (ECO) to monitor the operations and protect the environment, but there was never feedback on how the regulations have been accepted by the film industry. He asked for feedback on this.
The Chairperson also wanted to know if the money paid for the film permits goes to the City, the municipality, or the province.
Ms Rorvik said Wesgro has been working on a strategy to make the province more film ready. Regarding Mr van der Westhuizen’s question, she said it is developing best practice on how to leave the sites better or at least the same as when the film crews arrived. Part of this best practice includes having an ECO as well as a COVID-19 officer on set. This is a minimum requirement and an extra cost. It is doing online quarterly meet-ups with the districts and it is helping, as DEDAT and Wesgro are meeting with all the municipalities to talk about which by-laws are working because the mandate lies with the landowners in the end. It also worked with Cape Nature and did 22 events last year. It summarised its whole process, and it is available online in the creative locations update. The golden standard is cost recovery and the money goes to whoever is permitting. If one wants to put an ECO on set, one will have to pay the ECO, if the ECO is an employee of the municipality, whoever hired the ECO will have to pay the municipality.
All the permits required allow the film crew to be able to shoot. This is not an event, but a shoot. It is specialised, there is no public and all indemnity leaves the room. For public liability, for events, there is only business liability. When there are costs to manage such as extra traffic officers and so forth, then it will be paid as a cost recovery. It does not want to pay too much, but also wants to pay a fair share. The whole value chain of having a R100 million film shooting in a district for six weeks, including booking of hotels, buying of petrol, tipping car guards, hiring tents, and so on, is a huge moneymaker. Having the correct price permits helps. In the parts of the province where this online system registration for the film permits is not available, Wesgro and DEDAT are helping it to look at what might be best practice and are helping move forward some by-laws at work.
Ms Nkondlo wanted to know if there are any specific estates in certain municipalities which would be authorised and enabled for filming, or if it is open season anywhere where a production company has identified a place that would work for whatever it is filming. She also wanted to know what kind of support would be given to local emerging film production companies owned by young people from historically disadvantaged backgrounds, especially regarding the permits.
Ms M Maseko (DA) wanted to know if there is a standard metric of filming Wesgro has in the Western Cape for local economic development (LED) because the province is beautiful and anywhere can be a shooting site.
Ms Makamba-Botya wanted to know if there are any programmes which enhance transformation taking into account the historical background of South Africa.
Ms Rorvik said South African Tourism and Netflix did research by choosing three big TV projects to measure the impact film tours have on tourism in the country. One of the shows was My Octopus Teacher, which won a BAFTA and an Oscar last year and has driven awareness of our region and its beautiful African seahorse up by 70%. More people now want to come and experience adventure tourism. The TV Series by Gambit Film called Blood & Water has increased the cultural aspect of people wanting to come to the province. It recently helped Gambit Films to go to the US with indemnity, which was a huge thrill.
When big companies give a permit cost, it donates to the Film Industry Fund, which was set up as a brand exercise. It is partnering up with non-governmental organisations (NGOs) which teach early childhood development skills. The Film Industry Fund is always willing to assist anyone who needs funds. The Department of Trade, Industry and Competition has major incentives, of which most are skewed to previously disadvantaged groups. These are called the Broad-based Black Economic Empowerment (BBBEE) funds. Wesgro helps many companies grow through this fund, and the National Film and Video Foundation siphons its development funds to previously disadvantaged creatives and helps people to find the right partners to help get access to those funds.
Upskilling people goes both ways and it wants to ensure the districts are keeping research and the City of Cape Town keeps the number of its permits as part of its upskilling strategy in the province. It is less interested in how much it is paying the talent, but more interested in how much it is paying below the line, for example, the amount of petrol and food bought locally, and how much was spent to help the LED managers understand the importance of this. In trying to get people on sets, Film SA runs a major project, set out in the Filmmakers Guide to Africa, where it has top young creatives involved in top productions and developing the creatives' own projects. Global Studios are also putting funds into the country, as Netflix is running a Pan-African Fund for Short-films.
Ms Van Schalkwyk said most municipalities in the Western Cape deal with the film permit and the event permit because it does not have the mechanism or the by-law which spoke to film, even though it triggers some of the same things from permissions to town-planning approvals, and so on. The work the team is doing is to work with municipalities to start looking at ways to standardise the by-laws and the legislative requirements across the 30 municipalities in the Western Cape. This is key to ensuring there is a consistent approach on the standards and quality of services, what is required, what is allowed and not allowed. The other thing the business team has been doing is piloting with some of the municipalities to get film approvals online.
The Chairperson asked for a list of municipalities that currently have the film permits which can be applied for, as well as the event permits which can be applied for, and a list of the municipalities which are currently online, so if the Committee wants to assist in the future it will know what it is dealing with.
Ms Nkondlo said she appreciates the work being done by the Department and Wesgro. There needs to be a focus on how municipalities are enabled to assist the innovations made in the film space so more people can participate and benefit from it.
Mr Toefy said the information about the municipalities can be sent to the Committee and the municipalities the online applications have been initiated on are Knysna, Drakenstein in the Stellenbosch area, the Cederberg municipality, and Waterkloof.
The Chairperson wanted to know if the online applications have been initiated in the Drakenstein area in the Stellenbosch municipality or if it is the District.
Mr Toefy said it is in the Stellenbosch area, and asked to reply to the Committee with the correct details in writing.
Ms Van Schalkwyk said the reason the system is implemented at the municipal level is, it deals with the municipal by-law on who is issuing the permit, as well as the landowner.
Ms Stander said all the topics discussed at the meeting, the Delta Airline, Remote Working Visas, as well as the film permits are all about increasing economic activity in the Western Cape, and by doing so it means more jobs will be created. Right now there is a good opportunity because people are looking for opportunities to travel as destinations around the world are consistently being closed and reopened because of COVID-19. This is a good opportunity to make it easier for people to come to the Western Cape because of the weather and the location. The passion from the Committee in helping the Western Cape was clear, and this help is needed for the standardisation of the laws, incentivisation, and establishing international licencing.
The Chairperson said going to the film studio will also help the Committee when it thinks about resolutions.
Ms Maseko said in the last term there was an issue with increasing airport terminals and wanted to know how far this process is, and if the national government agreed to an increase in terminals.
The Chairperson said the question could be answered better by the Airports Company South Africa (ACSA).
Mr Toefy said Wesgro has ACSA in its Air Access community and it received updates from the ACSA general manager. It was a runway extension and not an increase in the airport terminals. It is still upgrading the terminals. It was a runway extension that was going to deal with a potentially huge influx in inbound flights, but unfortunately, because of both COVID-19 and the retraction of the billions of rands from ACSA, it has been put on ice.
Minister’s concluding remarks
Minister Maynier said the investment into the runway was put on hold and if there are any new developments, the Department will share it with the Committee. On the issue of Delta Airlines, it has been demonstrated through the intergovernmental disputes, it is making some progress. Although it has not heard any substantive response, the Minister of Transport’s latest letter and his appeal for time to deal with the matter urgently provides the Department with some hope the issue will be resolved soon. The Department has not managed to show similar progress when it comes to the question of matters which reside under DHA, such as Remote Work Visas, e-Visas, the backlog in issuing visas, even in the film industry, and the backlog in issuing passports. If the Committee had an appetite, it may well be a good thing to have a separate meeting with DHA to hear its views and get a first-hand update on the progress regarding the Remote Work Visas, e-Visas, and the backlogs in issuing visas and passports. The Minister said he hopes the Committee enjoys the visit to the Cape Town film studios.
The Chairperson thanked the delegations from DEDAT and Wesgro for their participation in the meeting and the work it does.
After a short break, the Committee discussed logistics regarding its visit to the Cape Town film studios with the Committee’s procedural officer.
The meeting was adjourned.
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