Boxing South Africa 2021/22 Annual Report; with Deputy Minister

Meeting report

In her opening remarks, the Chairperson congratulated Banyana Banyana on their win in the 2022 Women’s Africa Cup of Nations (WAFCON), and said the Committee was proud of what was happening in women’s sports. She thanked the Minister for taking women’s sports seriously.

The Chairperson also congratulated Ms Fiona Clayton and Mr Solomon Mthombeni, who were recently appointed as content advisors to the Portfolio Committee.

She suggested the item on the agenda: outcomes of the independent medical review of the injury that led to the death of Simiso Buthelezi, be removed from the agenda considering the sensitivity around it and what it meant for the family. She asked the Committee and the Department to advise on a way forward, and indicated that it was on the agenda because many people were asking for the information.

Mr D Joseph (DA), commenting on the Chairperson’s suggestion to remove the agenda item, said that Boxing South Africa's annual report presentation already contained it, so removing it may be pointless.

Mr M Zondi (ANC) suggested since the matter was covered in the presentation of Boxing South Africa, the agenda item could be removed unless the Committee wanted more in-depth details of the matter. He supported it's being removed.

Ms Sumayya Khan, Deputy Director-General: Recreation and Sports Development, clarified that Boxing South Africa was clear that it would not provide a written presentation, and that the medical officer would be present in the meeting to provide a report.

Mr Luthando Jack, Chairperson of Boxing South Africa, said they had been requested to report on the investigations done on the matter. He shared the Chairperson’s sentiments on the sensitivity of the issue. The investigation had not been concluded, and there was only a preliminary report. To respect cultural practices, the family would be briefed first, once everything was concluded. He supported its removal from the agenda.

Mr Zondi proposed adoption of the amended agenda, and Ms R Adams (ANC) seconded.

Department of Sport, Arts and Culture (DSAC) overview

Ms Khan said Boxing SA (BSA) was mandated by the South Africa Boxing Act No.11 of 2001 to accomplish the following functions:

• Provide a new structure for professional boxing in the Republic;
• Ensure effective and efficient administration of professional boxing in the Republic;
• Recognise amateur boxing and create synergy between professional and amateur boxing; and
• Promote interaction between associations of boxers, managers, promoters, trainers and officials.

Boxing SA operated within the amended Boxing Regulations, 2005, international boxing directives and conventions, and sport movement directives and conventions.

She said 92% of BSA's non-financial performance had been achieved in the 2020/21 financial year, while in 2021/22, it had been 71% thus far. This meant there were more non-achievements than the previous year.

Update on whistle-blower information

A tip-off had been reported during the 2021/22 financial year regarding a tender irregularity. An independent consultant investigated allegations of irregularities involving the Peter "Terror" Mathebula Tribute tournament tender at the public entity at the request of the BSA Board, which covered the period November 2021 to December 2021. The investigation was concluded on 13 January 2022, and resulted in the suspension and resignation of the chief financial officer (CFO) and written warnings for supply chain management (SCM) role players. The implementation of some of the recommendations, which involve the disciplinary hearing of the promoter awarded the tender, was in progress.

Other pointers in the presentation mentioned the composition of the board, the executive management and the governance engagements held.

(See presentation for more details).

Boxing SA 2021/22 Annual Report

Mr Erick Sithole, acting Chief Executive Officer (CEO), Boxing South Africa, presented a general overview of the performance of the entity for the year under review.

To measure the organisation’s performance, it developed an impact statement that stated: To regulate, develop and promote professional boxing in South Africa. The measurement outcomes were through three programmes -- governance and administration, boxing development, and boxing promotion.

The Auditor-General’s audit opinions had been unqualified with findings for the past three years.

(See presentation for more details).

Discussion

Mr Zondi asked what had caused the vacancy at BSA, and when would the vacancy be filled. He said stakeholder management was a critical component of growing a sector and enhancing collaboration, so why was the entity targeting low in this regard? The BSA website had minimal information on promotional information -- what was the cause of this, and how was the entity going to address it? He commented that women's boxing seemed to have been a challenge, and urged BSA to allocate more funds in its budget to women’s boxing development, assisted by the Department.

Ms Adams commended BSA for increasing its 2022 and 2023 key performance indicator (KPI) targets, including the number of boxing practitioners trained and number of tournaments held. There had been a decline in expenditure, despite an increase in revenue over the past three years -- how would this be prevented in 2022/23 financial year? Within the 71% achievement of procurement on an affirmative basis, what percentage of purchases were from women's businesses?

Ms V Malomane (ANC) noted that Boxing SA had addressed only 48% of the external audit findings due to changes in senior management. Which specific senior manager position was vacant so that the audit plan could not be implemented? Why could other management personnel not be delegated to handle those responsibilities? Secondly, BSA's revenue of R21.5 million had been R1.1 million less than expected, with significant drops in sanctioning and licensing fees, interest, and safety and public liability. What caused the non-attainment of the target collection?

Mr Joseph referred to the South Africa Boxing Act No.11 of 2001 that had been quoted from in the presentation, and asked if it had not been amended since then. From an international point of view, were there any changes that needed to be complied with in boxing? What non-financial programmes and areas were not achieved, and why? There had been spending differences between the last two financial years, and Covid-19 was a sound reason for one year. What were the audit outcomes findings for the 2019-2021 financial year? He commented on the gender representation on the board -- only one woman among seven members -- and said the oversight activities management committee had held no meetings between 2019 and 2021. Overall, the positives had been the audit committee's good attendance and good record. Returning to the board's composition, he noted that only black males were in executive management positions. Referring to the whistle-blower information, he said this was well explained in the presentation, but were the written warnings to the SCM officials juniors or seniors, and did they have a clear understanding of the supply management rules? How did the promoter fit into the structure of the disciplinary hearing? Lastly, he asked if BSA's fees were statutory money that had to be paid, or was it voluntary -- based on the number of events?

Mr B Mamabolo (ANC) said the work done by BSA thus far had been good, but there was still room for improvement. Boxing matches should be held nationally across the various provinces and in schools. He asked why there had been an under-expenditure of R3.3million. What was the issue that led to the CEO’s resignation? Who were the three principal debtors owing the entity?  

Mr T Mlohlongo (DA) congratulated BSA for promoting women in boxing. It had been noted that they had been to schools in KwaZulu-Natal (KZN) and other provinces to promote women in sports. How much had been spent on that tour, and where did the budget come from? Why was there still an acting CEO, and not a permanent one?

The Chairperson asked if a formal criminal case had been opened against the CFO. How did the entity conduct disciplinary hearings on promoters, and what framework existed to guide such processes? What lessons could be drawn from the recent celebrity boxing matches, like the one of rapper Cassper Nyovest, which had attracted much attention to the sport? How would BSA promote these initiatives to promote the sport? Lastly, what was the economic value of BSA, and how did it ensure that sectors benefited? She said she was pleased with the current work done by the entity, and urged them to expand the boxers' benefits, like having funeral policies and other support.

BSA's response

Mr Jack responded on the economic impact of the sport of boxing, and said the organisation's turnaround strategy included a programme focused on development. This looks at the value addition of the sport of boxing to various sectors of the economy -- for example, sports tourism. The management had set out to conduct a study on the economic impact and growth by province. This also included the social impact of boxing, especially among young people, and grooming them to be champions for life. Regarding advancing the benefits for boxers, some of the top promoters in the country include provident funds for their boxers. A few months ago, one was launched in the Eastern Cape -- this was part of Boxing SA’s priorities.

He confirmed that a criminal case had been opened against the CFO, as per the recommendations of the investigation. There had been disciplinary action against the promoters involved with the people who violated the regulations of Boxing SA. There were instruments and tools that guided such matters. There were two disciplinary committees (DCs). One was for the staff which was regulated in terms of the Labour Relations Act, and there was a DC for licensees, which was regulated by the Boxing Act. Both DCs had a panel of independent lawyers who presided over the various disciplinary cases.

The issue of the CEO position had been reported to the Portfolio Committee. The CEO had been fired after disciplinary processes, and had taken the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA). Currently, the final judgment is awaited from the labour court before acting further. Once the judgment was released, then action would be taken on the basis of the outcome, hence there was still an acting CEO.

On the matter of boxing tournaments in most provinces, as raised by Mr Mamabolo, there had been a recent match in Limpopo. There had been engagements with the Members of Executive Councils (MECs) of sport in the provinces who agreed to work with Boxing SA. There had been a huge uptake of tournaments across the country, and the level of activity had grown. If the Committee Members wished to have the statistics, these could be provided in writing. BSA wanted to have boxing being the talk of the town. It had started being like that so far, but more work needed to be done.

Concerning management positions, going forward, it was intended to target more females and introduce a multi-racial dynamic. This also included the country's Commonwealth Games success, and supporting women in boxing. Boxing SA had the same sentiments as the Committee on this.

The work being done in KZN currently was in collaboration with the province, to create a talent base focused on development. With women in boxing, Lotto had been approached as a potential sponsor for funding, and a proposal had been submitted.

Mr Sithole responded to the question of the vacancies that needed to be filled. He said this depended on the turnaround strategy being approved and the funds being made available by the various stakeholders before it could be finalised. Only then could the vacancies be filled.

Regarding stakeholder management, there were several stakeholders Boxing SA was working with, such as the corporate sector, the South African National Boxing Organisation (Sanabo), provincial and national departments, municipalities and public entities. For example, there was a budget of R400 000 for women in the boxing flagship programme. The parent department pledged to assist the entity with things like accommodation and venue booking through stakeholder management. The KZN Department had also come on board.

A number of the audit findings had been on SCM, and this year those findings had been reduced. These findings reduced irregular expenditure from R3 million in the previous financial year, to R800 000. This year had been similar, but with an improved audit report.

BSA was currently taking boxing to schools. This had been a success, and it was looking to expand across the country.

The under-spending involved the two main programmes. The boxing convention was planned to take place by the end of March, but due to the court order, National Treasury had given a direct order to the entity not to procure anything above R30 000. The Convention had then been postponed to the second week of September. The other programme was the Sports Awards event, which was initially planned to be done by the end of October. However, upon realising there was too much administration involved and considering the number of personnel and resources needed, it was delayed to take place in February 2023.

With regard to staffing ratios, the board had completed them earlier in March in Polokwane.

On the value of celebrity boxing matches, he said Boxing SA felt was a need to embrace innovation. The event that had taken place in Sun City had created a spark since everyone was talking about it, and it had made boxing trend on Twitter. This innovation of involving celebrities, among many other things, was currently being embraced and the entity was capitalising on those milestones.

Mr Sithole said there were some questions he could not hear properly due to network problems, and he requested they be repeated if possible.

He said the warnings that had been given had involved junior employees, according to the official report given. When the matter was investigated, it was noted that they had lacked training, and it was resolved to provide training to ensure this incident never happened again, and they were given verbal warnings.

Department's response

Ms Khan thanked Boxing SA for its detailed presentation and response to the questions that had been asked thus far.

Regarding Mr Joseph’s question about whether the Boxing Act of 2001 had been amended, she said reference had been made to Boxing SA operating under the amended regulations of 2005. There had been discussions around further amendments. The Department had also been looking into a combat sport bill encompassing contact sport -- not only boxing, but also sports like martial arts and so forth. This had been put on hold as a long-term initiative while the main Sport and Recreation Act was being finalised.

The Department of Basic Education (DBE) had more authority and directives in school boxing. Unlike other sports where national schools' championships were held, and learners participated in sports like netball, cricket and soccer, boxing was not the case due to the DBE’s regulations and directives. However, Sanabo was involved in junior boxing development programmes, where young boxers still at school could be accommodated.

The Department and Boxing SA had been working together. The Department had supported the entity when it hosted its successful strategic session earlier in the year. Furthermore, with the matter of women in boxing in the provinces, there had been a directive and resolution coming out of a heads of departments meeting to allocate more funds towards women in boxing. Therefore, the provinces were advised to invest a certain amount of funding from the conditional grant, to ensure that there was support for boxing and that it included women too.

Deputy Minister’s response

Ms Nocawe Mafu, Deputy Minister of Sport, Arts and Culture, commented that the questions posed to Boxing SA earlier in the session had been mainly about improvements to make the entity better. For example, the issue of the CEO which had been a problem for a while now, needed to be eventually resolved. Failure to do so would continue to raise concerns, and Committee Members would continue asking about it. The Department was open to assisting BSA in putting the matter to rest.

Regarding the gender representation in senior management being only one woman, the Department felt this should greatly improve. It was striving not only to mention women in boxing from the sporting perspective, but also to have women in strategic management positions. It appreciated an agreement with the SABC that it would make boxing more visible.

The Commonwealth Games had recently seen South African amateur boxers winning two medals. This spoke to the development of sport and young people. The highlight was that one of the medals was won by a young woman, which was a milestone, as it was the first time in history South Africa had earned a medal from a woman in boxing. She stressed that Boxing SA should look again at celebrity boxing matches, see how they could leverage them to make boxing more fashionable, and have boxing be the talk of the town.

Boxing SA had to appreciate that most of the questions asked were about improving, and the Department hopes that when the entity returned to the Committee, they could present those improvements.

Chairperson’s closing remarks

The Chairperson felt the oversight done by the Committee was positive and productive, as the results shown were impressive. She hoped Boxing SA would consider the Committee’s proposals in the future, especially since the Ministry was also willing to assist and support. The gender matter should be everyone’s priority, as it goes hand in hand with transformation.

The meeting was adjourned.