Legitimacy of SA Tourism Board; with Minister
21 February 2023
Chairperson: Ms T Mahambehlala (ANC)
The Portfolio Committee on Tourism sent the South African Tourism Board packing, and told it to come back when it was legitimate to present its first and second quarter organisational performance.
The Committee's bone of contention was that due process had not been followed in appointing three new Board members. The sequence of events in the process had been haphazard and lacked transparency, because three members had resigned on Wednesday and were replaced by three on Saturday. The appointed members were not even from the pool that had been interviewed for the SAT Board's vacant positions. The Committee said the Tourism Act included a provision about the role of the Department in the appointment of the Board. It felt the whole process indicated an abuse of power.
The Committee pointed out that the legal advice given to the Minister was not satisfactory because it did not follow what the Tourism Act stipulated. The legislation stated the matter of appointing board members should be gazetted first, before the Minister made an appointment, but in this case, the Minister had appointed Board members because there had been a vacancy. The Committee argued that people could not be appointed on the basis that they had been vetted before. There was a need to satisfy the Tourism Act and ensure one made the right appointment. It appeared as if the newly appointed Board members had received a lifetime clearance.
The Committee said the SAT board had contravened the legislation because it had had 13 meetings since its appointment in October 2022 to date, instead of the four that were required by law. This was an indication the SAT Board was not going to have more meetings. It also noted the composition of the SAT Board was not a broad representation of the country, which did not satisfy section 13 of the Tourism Act.
The Committee learnt the Department had not received formal information about the resignation of the three members of the Board. When pressed for answers on this matter, the Director General said the company secretary of the SAT Board had the details, and he did not want to mislead the Committee. The Committee felt the Director-General, as the accounting officer, should have all this information because the SAT Board was accountable to the Department. The company secretary then told the Committee that all the information about the resignations and appointments was with the Minister. This left the Committee with the impression there were no lines of accountability between the Department and SAT, and that the executive was not relaying information to the Department.
This sequence of events led the Committee to question the legitimacy of the SAT Board. It resolved to submit its announcements, tablings and committees (ATC) report urgently so that its decisions became the final decision of the National Assembly. It also resolved that amendments to the Tourism Act should be made soon, because it was clear there were many loopholes in the legislation.
Discussion on legitimacy of SA Tourism Board
Mr A Matumba (EFF) remarked that the apologies from the South African Tourism (SAT) Board had not been reported in the standard manner, because the Committee was not informed about the number of people who were expected to attend the meeting and the number of those who were not in the meeting.
Dr Thozamile Botha, Chairperson, SAT Board, said the Board was comprised of ten members, and apologised for not stating the number of the members who were expected in the meeting because they had been trying to accommodate the budget by not bringing them to the Committee meeting, and that had been the decision of the Board.
Ms M Gomba (ANC) wanted to know why there was no apology from the acting chief financial officer (CFO), and why the acting chief executive officer (CEO) was not in the meeting.
Ms L Makhubela-Mashele (ANC) sought clarity on the status of the SAT Board, because it had been appointed last October, and the Tourism Act referred to a "Tourism Board," but not about an "interim board."
Ms Lindiwe Sisulu, Minister of Tourism, said that in October 2022, Cabinet had concurred with the appointment of the SAT Board, and was busy putting together the process of merging Brand SA and SA Tourism.
Ms S Maneli (ANC) suggested the Committee should not accept apologies about logistics that had caused SAT Board members not to attend the Committee meeting.
Ms P Mpushe (ANC) wanted to understand if the presence of the four SAT Board members that were in the meeting meant that those members would continue attending Committee meetings, because budget constraints were given as a reason why the entire Board could not attend the meeting.
The Chairperson said the SAT Board was listed as a national public entity subject to the Public Finance Management Act (PFMA). It was also expected to account to the National Assembly. She pointed out proper processes had not been followed in the appointment of the SAT Board. The Minister should tell the Committee if the newly appointed board members were vetted to allay fears about the legitimacy of the Board, and to let the Committee know if the vacancies were advertised to ensure compliance with the Tourism Act, because Members were not satisfied with the responses. Further, the Tourism Act stated that the composition of the Board should be a broad reflection of the country.
Ms Gomba wanted to understand if the matter between Brand SA and SAT had been finalised, or how far the process was.
Ms H Ismail (DA) asked what the normal timeframe was for the replacement of members of the Board, why three members of the Board had resigned, and for more information on the proposed merger between Brand SA and SAT.
Ms Maneli wanted to know the total number of meetings of the SAT Board per annum.
Ms Takalani Ndou, Assistant Company Secretary, SAT, responded that the SAT Board had had 13 board meetings in the current financial year.
Ms Makhubela-Mashele remarked the process of appointing new board members was not transparent, because three members had resigned on a Wednesday and were replaced by three on Saturday. The appointed members were not even from the pool that had been interviewed for the SAT Board's vacant positions. She wanted to know why the appointment of these three members had been haphazard, and asked the Director-General (DG) to give the Committee details about when the Department had received information about the resigned members and to provide a full report about the whole process of replacing the resigned board members, including the pool of the candidates that had been interviewed and the pool from which the three appointed members had come.
Ms Mpushe suggested the Committee invite both ministers responsible for Brand SA and SAT to brief the Committee about the status quo of the merger.
The Chairperson wanted to find out from Ms Ndou why information requested by the Committee during its previous meeting had not reached the Committee secretary.
Ms Ndou said the request for information from the Committee had been received on 17 February.
Mr Victor Tharage, Director-General (DG), Department of Tourism (DT), responding to the question from Ms Makhubela-Mashele, requested Ms Ndou to answer the question on when the Department had been informed about the resignation of the three members.
The Chairperson told the DG the question had been directed to him, not the assistant company secretary.
Mr Tharage said he did not have formal information about the resignation of the three members of the Board. The assistant company secretary had the information, and he did not want to mislead the Committee.
Ms Makhubela-Mashele said the DG should have all this information as the accounting officer because the SAT Board was accountable to the Department. She then suggested the Committee be given the exact date for the resignation of the three board members, and the exact date of the appointment of the three board members.
Mr Tharage said he did not have the resignation letters. He stressed that there were limited powers that an accounting officer had pertaining to the entity. In some entities, legislation was specific about the role of the accounting officer. Once the entities compiled their plans and budgets, that information was presented to the Minister and then to the Committee. The Department would then do an appropriation, and that was where the accounting officer had to come in. The Department would then provide advice if the entity requested it, and the accounting officer would then act. The appointment of the Board was the prerogative of the executive authority.
Ms Ndou said the information regarding the resignations and appointments was with the Minister.
Minister Sisulu informed the Committee that she had received advice from her legal advisor about the matter. Three members had resigned. The people who had been appointed had got clearances, and were competent. The process that had been followed was legitimate. The names of the three members came from the pool of people who had been in the public service. On Saturday, after the Wednesday resignations, she made sure the new members were inducted. The newly appointed members had been cleared by security. On that Saturday, she wanted to understand the reasons for the resignations. The acting CFO had been excused from the meeting. That was why it was decided there should be an inquiry about the acting CFO.
The Chairperson remarked that having had 13 board meetings in this financial year meant the actions of the SAT Board were contrary to the Tourism Act, which meant contravention of the legislation. She then wanted to know if the newly appointed members had received a lifetime clearance, because people had to be vetted before being appointed to the entities.
Ms Gomba asked if the Committee could be given an opportunity to get copies of the clearances about the newly appointed members of the Board so that Members could understand the situation. She added that there had been no adequate response to the apology of the acting CFO.
Dr Botha responded that the then-acting CFO had resigned after being given a suspension letter. In the interim, the SAT Board had decided to appoint the general manager of finance as the acting CFO.
Mr Matumba commented that the legislation stated that the matter of appointing board members should be gazetted before the Minister made an appointment, but in this case, the Minister had appointed board members because there had been a vacancy.
Mr M de Freitas (DA) indicated the Tourism Act had a provision about the role of the Department in the appointment of the Board.
Mr Tharage pointed out that the Department had representation on the Board, but it did not put that person in a position of conflict. That representative had fiduciary duties, and should make the Board aware when it was pursuing policy decisions or encroaching on the terrain of the Department. The DG has no discussions with the person representing the Department on the Board. The Board acted independently.
Minister Sisulu said the legal advice she had read to the Committee in the previous meeting had been accepted by the Members. Unfortunately, the legal advisor was not in the meeting to discuss clauses. She admitted the Department had an oversight role over the SAT Board. There had been a resignation of three board members at once, and the SAT Board did not have a quorum to call a meeting. That was why the legal advisor had been called. The meeting was called so that the Minister could take the necessary decisions and assure the country that the executive was on top of events that had occurred.
Ms Makhubela-Mashele commented that amendments to the Tourism Act should be made soon, because it was clear there were many loopholes. The sequence of events showed an abuse of power, because three people had resigned on a Wednesday, a board meeting had been called on a Saturday, and on Sunday, appointments were made. This must be corrected through legislation.
Ms Mpushe wanted to know if the explanation from the DG suggested that there were no lines of accountability between the Department and SAT, and if the Department relied on the executive and information was not being relayed to the Department by the executive.
Mr Tharage said it was unfortunate that he did not have powers as an accounting officer, but once the Committee had passed the budget, he had to make sure that he appraised the executive on what had been done. Chapter 6 of the PFMA describes the powers of the accounting authority. Section 50 was specific about the fiduciary duties of the Board and the representative of the Department that sat on the Board. There could be a violation if the DG overstepped certain borders. The executive authority was responsible for policy matters.
Minister Sisulu told the Committee the Board had been inducted and was continuing. There was an accounting firm, LKA, advising the Board. The Department was in the process of amending the legislation to ensure the merger between Brand SA and SAT was under one Minister. In a government lekgotla at Phala Phala, it had been agreed that Brand SA and SAT should merge. That decision was going forward, but slowly, because the process belonged to the two Departments. However, this did not stop the working of the two entities operating under different pieces of legislation. She had also called the SAT Board to find out what was happening to report to the executive. That Saturday morning, the legal advisor made sure the SAT Board was quorate. That was why the meeting had happened. Everything had been explained to her about why the three board members resigned, and the acting CFO had been asked to recuse himself.
On finalising the legislation, she said the concept was to bring the two entities together. The discussion was taking place in Cabinet to fast-track the process, because the Department was the face of the country, after the Department of International Relations.
The Chairperson said the Committee would invite the Minister in the Presidency to present to the Committee on the merger between Brand SA and SAT. She then asked if Cabinet had approved the newly appointed SAT Board members.
Minister Sisulu said in terms of the law, the Minister may appoint new members. The new names would be given to Cabinet. That was why the information from her legal advisor had been read to the Committee in the previous meeting.
Ms Makhubela-Mashele said the Tourism Act was explicit on what should be done to fill vacancies. The legal advice to the Minister did not follow what the Tourism Act stipulated. The process followed in the appointment of new members was flawed and unprocedural. The sequence of events suggested the process was haphazard. The list of the newly appointed board members still had to be forwarded to the Cabinet and gazetted. This had already led to suspicions. Such actions caused instability in the entities. SAT belonged to the Department, and the DG ought to play a leadership role instead of being a spectator who did not want to take full responsibility.
Ms Ismail wanted to know the decisions that the Board had taken after the appointment of the three members before the due processes were followed.
Ms Gomba asked who was responsible for paying members of the Board for the 13 meetings. She suggested the Board should give the Committee clarity on the media statement where it was stated the SAT would continue to sponsor Tottenham Hotspur.
The Chairperson questioned the legitimacy of the Board when she pointed out the SAT Board had contravened the Tourism Act in terms of holding board meetings, because it had had 13 meetings from October 2022 until February 2023, and this was an indication it was not going to have more meetings. She added that section 13 of the Tourism Act stipulated that the Board should be a broad representation of the country, but its composition did not reflect that.
Ms Maneli suggested the Committee should get its own legal advice on the legitimacy of the SAT Board so that it could make its own decision.
Ms Mpushe said she welcomed the resignation of the acting CFO, and expressed appreciation for the presence of the Minister in the meeting. She also sought clarity on the advisory role of LKA to the SAT Board, and if the company was South African.
Mr Odwa Mtati, Deputy Chairperson, SAT Board, said LKA was rendering secretarial services to the Board and supporting its operations. It also acted as a resource to fill the company secretary position. He confirmed that LKA was a South African company.
Ms Makhubela-Mashele said the Committee had taken note of media reports that it had taken a mandate that was not theirs on certain matters, especially the one about sponsoring Tottenham Hotspur. That meant people did not understand the mandate of the Committee. The Committee had put forward its recommendations to the Speaker. Decisions taken by the Committee had to be agreed upon by the National Assembly to be binding. The recommendations of the Committee were explicit on what needed to happen. The Committee approved the appropriated money and the Committee had to conduct oversight on how the money was spent, and had a role of providing guidance on how the money should be spent.
The Committee was now looking at the discrepancies in the appointment of the new SAT Board members. Nothing stopped it from making recommendations about the matter and putting the filling of the three vacancies in abeyance so that the Minister could follow due process in the appointment of board members. She made it clear there was nothing wrong with the Committee when it intervened and recommended it was not good to make use of such a large amount to sponsor Tottenham Hotspur. She went on to say it would be a very sad day to state the Committee did not agree on the budget of the Department as to how it should be used. The Committee appropriated the money to be spent, so there was nothing wrong when the Committee disagreed with the Department on the budget.
The Chairperson asked if the DG had prepared a Cabinet memo about what the Minister had said to the Committee.
Mr Tharage said he had not.
Minister Sisulu made it clear she did not want to discuss something she had not been briefed about. The ministry had not been briefed about the media reports Ms Makhubela-Mashele was referring to.
The Chairperson said the concerned media report had been sent to the Minister, and she had not disputed its contents. She then told the Department it was guided by the green book of Parliament about its work responsibilities and functions.
Minister Sisulu said the report from Adv Simelane had given specifics about the law in the appointment of board members by the Minister. She did not want to be drawn into something she did not want to be drawn into, especially about the Tottenham Hotspur matter. It was within her right to appoint new members of the Board.
Dr Botha said the statements reported in the media about what he had said were not true. He had stated only that the parliamentary Committee was not an executive committee, but an oversight body making recommendations that were binding when tabled. The recommendations made in Parliament did not stop the Board from using the funds as appropriated. The matter had been stopped even before it was sent to the Minister of the Department and the Minister of Finance. It was a proposal still to be discussed by the Board and was stopped at that level. A legal procedure would be followed regarding the stoppage of the proposal by the Board.
Ms Maneli said the chairman of the Board thoroughly knew the recommendations the Committee had made in the previous meeting. It appeared he was pushing the Committee to ATC (Announcements, Tablings and Committees) the matter as soon as possible.
Mr Matumba remarked it was important to take counsel, because processes were important. One could not appoint people on the basis they had been vetted before. Before one made an appointment, one needs to satisfy the Tourism Act to make sure one is making the right appointment, because the Minister might get shocked by what people do at night. The process should be followed to the letter and there was nothing urgent in filling the vacancies. There was no crisis.
Ms Makhubela-Mashele commented that due process in the filling of the three vacancies had not been followed. The Chairperson of the Board was not questioning the recommendations and decisions of the Committee, so the report should be ATC-ed very soon for the National Assembly to make a decision on the recommendations of the Committee. The Chairperson of the Board was not aware that sometimes there were decisions that did not see the light of day. She then wanted to know when the report would be sent to the National Assembly (NA).
Mr De Freitas suggested the report should be sent to the NA as a matter of urgency.
The Chairperson commented that the Committee was made up of Members who were highly educated and who came up with different expertise. The Committee thought the SAT Board was illegitimate. The report of the Committee would be ATC-ed so that its decisions became the final decisions of the National Assembly. The Committee further resolved to invite the Minister in the Presidency to make a presentation on the merger between Brand SA and SAT, and it welcomed the resignation of the acting CFO, Mr Johan van der Walt. Seeing that the Board was illegitimate, there would be no presentation on the first and second quarter organisational performance. The Committee had not appropriated funds for the Tottenham Hotspur sponsorship.
Dr Botha said he had never stated the Committee had appropriated funds for the Tottenham Hotspur sponsorship.
The Chairperson replied that he had said he was working with funds appropriated by Parliament, and that Programme 3 made no mention of Tottenham Hotspur.
Ms Makhubela-Mashele said the Committee was not satisfied with the composition of the Board, the manner in which the vacancies had been filled, and the legal advice the Minister had presented to the Committee. The sequence of events in the appointment of the three board members and their functions was not acceptable to the Committee, which was why it wanted an investigation into the matter.
The Chairperson stated it was important to get the legacy report of the late Mr Jackson Mthembu (former Minister in the Presidency), because the merger had been his brainchild, and the Minister of Tourism would be part of the discussion with the Committee. The unfinished merger had brought instability to the SAT because there had been an acting CEO and a list of vacancies. The decisions and recommendations of the Committee would be tabled in Parliament soon.
She then released the SAT Board and told it to come back to the Committee when it was legitimate, and then report on its first and second quarter organisational performance.
[the Committee report was tabled two days after the meeting and can be accessed here https://pmg.org.za/tabled-committee-report/5236/]
Adoption of Minutes
The Committee adopted the minutes of its meeting on 7 February.
The meeting was adjourned.
No related documents
Mahambehlala, Ms T
De Freitas, Mr MS
Gomba, Ms MM
Ismail, Ms H
Makhubela-Mashele, Ms LS
Maneli, Ms ST
Matumba, Mr A
Mpushe, Ms PT
Myeni, Mr ET
Sisulu, Ms LN
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