SANDF Force Employment Briefing; Deployment of SANDF to Eskom power stations; with Deputy Minister

Meeting report

Opening Remarks

The Chairperson welcomed Members and provided context on the day’s agenda items stating that the meeting was largely because the South African Defence Force (SANDF) needed more money.

The Chairperson noted that there were no apologies.

Dr Thobekile Gamede, Acting Secretary for Defence, introduced her team to the Committee.

Remarks by Deputy Minister

Deputy Minister Mr Thabang Makwetla provided an overview of the presentation. There was a very disproportionate ratio between ordered commitments and ad hoc deployments, but it was preferred to be the other way around. The disproportionate ratio showed that the SANDF was stretched dangerously and placed in situations where it might not be adequately prepared. The ad hoc deployments spoke to the resources spent concerning operations versus capital expenditure and human resources. Those ad hoc deployments were urgent and necessary, and the Defence Force could not have refused. However, the concern was that in its activities, the Defence Force was becoming an organisation not fit for purpose as required by the constitution. The SANDF budget had not accommodated contingencies. The ship was further sunk without reimbursements from National Treasury. The Committee needed to consider deployments taken on humanitarian grounds in Mozambique, Malawi, and Zimbabwe, which were not reimbursed for but were politically ordered ad hoc interventions. The documents of the Force tended to raise questions when inspected because figures of what was appropriated for activities, and what was spent was the same as there were reimbursements.

SANDF Force Employment Briefing

Mr Edem Abotsi, Acting Chief Financial Officer, reported that the SANDF had about 13 deployments for the last three to four years. Four of them were ordered commitments while nine were ad hoc deployments.

The bulk of expenditure in Operation Corona, Operation Mistral, and Operation Copper was on the compensation of employees. The bulk of the funds spent on the compensation of employees went to allowances.

Operation Copper dealt with anti-piracy in the Mozambican channel.

The expenditure on Operation Cordite was close to what was expropriated because the Force did not receive the funding for most of the operations before deployment. Most of the funding was given to the Force by National Treasury during the November/December adjustments. The Force incurred expenses first and then Treasury reimbursed. The Force moved money around between the different operations until Treasury reimbursed what was appropriated.

On ad hoc deployments, most of the funds went to goods and services. The amount included expenses from when the Force had to pick up citizens from China during Covid-19.

Operation Vikela cost the Force quite a bit of money. What was not on the slide was the R13.5 million that needed to be paid to the Southern African Development Community (SADC) standby force deployment. Depending on the exchange rate, this was an additional R220 million which was not funded by National Treasury. Money from Operation Mistral was used to assist in that regard. Operation Vikela still continued, and the Committee could expect a true picture of its expenses towards the end of the financial year.

He concluded that the commissioning of deployment without financial resources led to those operations being funded through reprioritisation within the ordered commitments. Reprioritised funds resulted in a shortage of funds to sustain the operations where funding came from. The current funding situation for ad hoc operations negatively affected ordered commitments and deployments.

The Chairperson said that conclusion did not follow with what Mr Abotsi had been reporting. He thought the picture that was being presented was that National Treasury was not short-changing the Force. There had been an outcry that the Force was not getting enough funding. The Force managed to break even despite not having top funding. The Chairperson requested a summary from Mr Abotsi that could put the Committee at ease.

Mr Abotsi highlighted the timing of the funding as the issue and explained that in most instances, the Force “robs Peter to pay Paul”. Specific operations came up in the beginning of the year and then funding would only come towards the end of the year. By then, the Force would have taken money from other operations to fund other operations. The challenge lay in replacing and replenishing stock levels and supporting equipment fully. The long delays in the procurement process of ammunition for deployments was a problem that slightly benefited the Force. The procurement expenses were delayed, and that money was then used to fund other operations that needed funding.

Major General V Ngcobo, Chief Director:   Joint Operations, said the Chief Financial Officer would not know what happens on capital level in situations where adjustments were made to the budget. It seemed that the Force was being short-changed.

Discussion

Mr S Marais (DA) stated that slide 31 gave a good picture of the realities. If the programme was funded from own sources, the project would have had adequate revenue to offset expenditure. The problem was that the change inside the Force had restricted it from preparing properly and training soldiers for deployment. Reprioritisation was a challenge. The medium-term adjustment budget was predominately the amount of money the United Nations (UN) reimbursed for South Africa’s involvement in Operation Mistral. How much money did the UN reimburse South Africa versus South Africa’s costs, not versus what South Africa had to fund internally? The South African taxpayer had to foot the bill for the difference between South Africa’s expenses and what the UN refunds. This was unfair because it was not South Africa’s mission or operation. This applied to Vikela too. How much money had SADC refunded South Africa? At the beginning, the Minister had assured the Committee that this was a SADC operation and deployment, and that SADC would foot the bill, not South Africa.

Given that this was still classified as ad hoc, it was a massive expense knowing that there were struggles concerning equipment and helicopters due to budgetary shortages. The cash flow needed to be managed because of such expenses. Slide four said other things were compromised to ensure that others were funded. On the allowances South African soldiers in Mozambique and the DRC were getting, he heard that SADC was refunded about USD 18,000 per month per soldier being deployed. It did not seem that South African soldiers were getting USD 18,000 per month in terms of their deployment in Mozambique and the DRC. Was that what South Africa was getting back to National Treasury? How did that compare? He had picked up that South African soldiers were unhappy because they seemed to be getting a much smaller allowance than soldiers from other countries. The concern about Mistral had always been that it was known that the dominant part of the refund was based on the effectiveness of the helicopter squadrons. The Chief of the South African Airforce had told the Committee that he favoured removing the helicopters from the DRC considering the country’s limited resources and the limited number of helicopters available in South Africa. He could fault him for this because it made operational and financial sense. However, if it was the case that this happened and if the helicopters were responsible for 80% of reimbursement from the UN, then that meant the country would be in a totally different position and would hardly afford that and expect taxpayers to pay for it. That information was needed to decide whether South Africa could afford to sustainably be in Mozambique and the DRC. From all the goods and services given to South Africa on all the operations, what was the situation regarding Vikela and Mistral? It was known that other cargo had to be charted to do the logistical support functions due to the situation with the C-130s. To what extent were those charters included in that cost? It was known that there were 70 or so flights the previous month that was with charter aircraft. To what extent had neighbouring countries reimbursed South Africa for the services that South Africa was deployed in support of services like Eskom and the South African Police Service (SAPS)? It was not a fair situation to expect the Dept of Defence and the SANDF to foot that expense from its own pocket. The money South Africa contributed to the SADC standby force was significant compared to the country’s own expenses and how that would push that up. Were the allowances that South Africa paid for its soldiers on foreign soil, Mistral, and Vikela the same per person per day or did that differ? If so, why did it differ? In the Mistral presentation, he saw a significant cost reduction from 2019 to 2020. Why was there a significant reduction? The operation took quite some time but that showed there was suddenly significantly less money spent.

Mr T Mmutle (ANC) asked whether the Force was happy with the lead time of the UN reimbursements as they stood, because the reimbursements were received very later in the year after the Force had conducted the deployment. In most cases, the Force then “robs Peter to pay Paul” as the Force awaited the reimbursements. Did the lead time make sense? Had the Force done any engagements if it did not make sense? Letters detailing deployments and the costs related to deployment were sent out during deployments. Were these costs estimates or projected figures? The Deputy Minister said spending was not up to standard. Was it because the Force had a surplus, a deficit, or those resources were less than what the Force incurred on expenditure for the deployment? The Minister of Finance explained the available emergency resources the previous day [in the budget speech]. To what extent could the emergency fund be utilised to support deployments? Was the Defence Force happy with how deployments were made with those resources and how deployments were funded? What were the other emergency funding avenues that could be explored to allow deployments to be conducted without “robbing Peter to fund Paul”?

Mr D Ryder (DA, Gauteng) said the Mistral operation was in its 22nd year now. The Committee had been trying to get to the bottom of the finances behind it and the inflows versus the outflows. The tragic passing of flight Sergeant Vusi Mabena called for a focus on the state of readiness in the DRC. What was a deprivation allowance? Based on the Finance Minister’s Budget speech, it appeared that there was an acknowledgement from National Treasury that funding was needed for emergency responses. With such a consensus, it was important to say that the internal arrangement and the arrival of money was an administrative matter not having much to do with the Committee. It needed to be hammered with National Treasury directly with the assistance of whoever was providing the banking assistance to the Force. Vikela started in Mozambique as a three-month operation and South Africa had been there for little over two years. Was South Africa getting reimbursed for that? Was the reimbursement adequate? When was South Africa planning on leaving?

Mr K Motsamai (EFF, Gauteng) said some soldiers were not being paid and were earning so little that they could not do their jobs. Employees needed to be paid well to do their job and not become corrupt. What was the Force saying about deprivation allowance? It appeared the Force wanted to explain that they did not have rounds for the reservists. Were they reservists' volunteers or were they paid? Reservists would do the exact necessary job they were paid. It was important to ensure that people were paid well so that they could perform their jobs well.

The Chairperson said the Deputy Minister had stated that there were no contingency reserves. It would be better if the Force had an allocation like that to attend to ad hoc deployments because they were now becoming regular. He suggested that this be a note for the Committee’s engagements with National Treasury to consider making an allocation as a contingency to help the Force with cashflow. Other operations were paralysed when the Force spent money to be reimbursed later. It was easier to move funds around in the Force where there was a surplus. However, this became difficult when every single cent was committed. The Committee’s discussions with National Treasury needed to pick up this. The ratio between the number of the Reserve Force and the number of the regular force members for each deployment needed to be picked up. There was a need for consideration of the posted target of employee compensation. There was talk about reduction of the number of reserve soldiers, but that target was elusive and had never been reached. It was cheaper to deploy regular Force as opposed to reserve soldiers. From the presentation, the appropriated amount versus expenditure was clear, but there was a need for clarity on the reimbursements from the UN, particularly for Operation Mistral and reimbursements from other Forces serviced by the Force of Defence. Was the amount received from the UN enough to cover all the costs of participation? This was an important point of discussion that needed high-level comment later. South Africa’s participation in Operation Mistral needed to be discussed. The nuances of why South Africa got to the DRC in the first place needed to be considered, including the prognosis, how long South Africa would most likely be there, and when the exit was likely to be. The conversation needed to be had with the Force in a closed meeting.

Responses by the Force

Mr Abotsi responded to the question on the UN reimbursements, saying the Force did get reimbursed, but the problem was that this came a year later after actually incurring the cost. The Force received R760 million from the UN for the DRC deployment in the previous year. The Force received reimbursements on MOUs quarterly. The challenge was with the letters of assist (LOA) regarding the helicopters. The Force did receive the money and put it back into the environment that incurred the costs. The previous year the Force received R333 million from the oryx. That money returned to the Air Force for the repair and maintenance of platforms. The MOU received R358 million which went back into the joint operations environment.

The Chairperson asked whether these funds went through National Treasury or directly to the Force.

Mr Abotsi replied that the money went through a B7 account at National Treasury and then through an adjusted budget process around October and November, it was given to the Force. That was always a year later.

On the losses based on the reimbursements, he replied that there were losses. However, tracking the actual loss versus the reimbursement was difficult. There were penalties levied against the Force because the Force’s equipment was not always in the required state based on the agreement with the UN. The Force did send a team to the UN to reconcile the invoices between the DRC and the UN and the Force’s offices. That exercise normally assisted a lot in the Force to get reimbursed. The challenge was that the UN could only reimburse when the contributing states contribute.

On reimbursements from other agencies and Forces, he replied that the Force did have a reimbursement policy and did work for other agencies in the past. The Force billed those entities, but the entities did not always pay back in time. There was a policy on how to recover that money.

On the foreign allowances for Vikela and Mistral, he replied that the allowances were the same whether the recipient was at Vikela or Mistral.

On the reduction of expenses and allocation in Mistral during the 2020/21 financial year, he replied that this was during the Covid-19 period and there were fewer activities in that environment, hence the reduction from R800 million to R600 million for that period. The Force had to use that money to assist with the Covid-19 process.

On emergency funding, he replied that the Force did not have an emergency fund. National Treasury did have an emergency fund for unforeseen and unavoidable expenses or operations. Where needed, the Force then wrote to National Treasury for reimbursements. The Force agreed that National Treasury needed to consider having emergency funding for the Force’s ad hoc operations. National Treasury could keep the money, ring-fence it, and then allocate it when needed.

On deprivation allowances, he replied that these were allowances paid to soldiers for being away from home for a longer period. Whether they lived with family or alone and were deployed for three weeks or three months, since they were deprived of living as a normal human being.

Major General Ngcobo responded to the question on soldiers, especially reserve force members, needing to be paid adequately. In operations, it was the reserve force members who got advantage or appropriate payment because a reserve member and a regular force member earned the same allowances and wages in operations - when deployed, their wages were paid under the force employment budget.

On how much the Force spent on Mistral, he said the Chairperson indicated this could be answered on a different day. It seemed that the Force’s soldiers were paid less in Vikela. It would also cover the issue of allowances. In standard allowances, a standard soldier deployed got danger allowance, a standby allowance, and deprivation allowance. They also received international obligation allowance when outside the country. The Mozambique tariffs were less than those of the DRC. Adjustments were made when the collar changed.

On what had made the spending on Mistral decrease from 2019 to 2021, he replied that it was due to Covid-19, the movement to the mission area from sustainment and for operations visits and various aspects. Secondly, the procurement of ammunition to areas such as Mistral. Spending was dependent on usage. Ammunition was not purchased in some years and expenditure would therefore be less.

On whether the costs indicated on the employment papers were realistic estimates, he replied that the Force planned for the worst-case scenario when planning their employment papers. It did regularly happen that the Force did not spend everything. Planning had to be done for three months of operation such that it could not happen for the Force would need to go back to the President to seek authority. Sometimes, a situation such as riots would exceed what was planned. These were estimated costs. 

On the newly introduced emergency funding the Minister of Finance mentioned, he replied that the Force still needed to sit down and see how to benefit from that. He was of the opinion that the Committee had heard the Chief of the National Defence Force indicating frustrations with funding. He had said he was willing to allow National Treasury to keep the money from the operations and activate it when needed.

The deprivation allowance was a compensation because the soldier was active for 24 hours for the period.  

Mr Marais asked about reimbursement from SADC. While Major General Ngcobo said there would be a detailed yearly report of the last three or four years, similar to all these comparisons, there was a need for comparisons on what was received from both the United Nations and from SADC. How much did the other Forces owe the Dept of Defence? The Committee needed to know who the culprits were to be able to take it up during interactions, as it was their responsibility. The practices in other countries were that there were operations and deployments where Parliament considered approvals for additional appropriations at that stage when necessary. While the systems in other countries might be different from South Africa, research could be done to assess what other available practices the Committee could consider and suggest to National Treasury to deal with cash flow and the long refunding delays.

The Chairperson stated that Mr Marais was correct and that other systems such as the US did this too. He asked the Force to get back to the Committee on the cost versus what was received from Operations Mistral and Vikela, including the costs and recovery thereof from the Forces that receive services from the Force of Defence.

He asked about Eskom, stating that the Committee was yet to consider the letter of employment. It was perhaps a discussion for another day because National Treasury stated it did not have money and the Committee needed to speak to Eskom.

Deputy Minister’s Closing Remarks

Deputy Minister Makwetla thanked the Committee for the discussions and the Force for the information shared which gave the Committee a clear picture of what was happening. He said there were indeed  challenges on the funding of ad hoc deployments through reimbursements. From a different perspective, these were two sides of the same coin. He believed that where the Defence Force was deployed for an emergency using its own budget, it would likely take a minimalistic intervention as it was not within the finances. The Force would also naturally be anxious as to whether the negotiations of the reimbursement would be successful, where National Treasury felt that the Force was extravagant in their spending. Reimbursement meant those acting could never fully apply their capabilities because they did not know how much was given by those who held the purse. The converse was that the extent to which the Defence Force would be able to act if it knew what was at its disposal could be a completely different ball game. The Defence Force was there and was responding to all these emergencies, but it only seemed that the response was adequate because it was not known how much more could have been done had there been resources for these contingencies. This was a matter that needed to be investigated. The Committee needed to share its views with those responsible for the finances. He agreed with the Chairperson’s suggestion for an assessment of Operation Mistral. The operational dynamics in the DRC and the implication for the deployed Force need to be assessed. The strategic intent that informed the decision to go into the DRC needed to be evaluated in the context of where the country was and what was happening. This was a task that the Ministry would readily accept. What were the ratios in utilising the reserves vis-à-vis the permanent Force? The Chief of Joint Operations could bring these details to the Committee. The utilisation of reserves was a concept intended to avoid a high force level and the country spending highly on the military budget. The reserves were there to provide the surge capacity to provide the levels of engagement of the country’s troops. His understanding was that from a human resources point of view, this provided the Force with an opportunity to make meaningful savings over the remuneration, benefits, and other assistive interventions that the Force provided to those permanently employed or in the regular Force.

On information on the spending of the South African Defence Force on charter - that information was personal information, but it needed to be made available. The deployment of soldiers was always a political intervention in the broader scheme of the interest of the country. The deployments of Mistral and Vikela furthered the political interests of South Africa. The military would always be part of political interests that affected the well-being of a particular country. He thanked the Committee for its reflections on the Defence Force and the ad hoc tasks over the last four years.

Briefing by the SANDF on Employment Letters for Consideration by the Committee 

Major General Ngcobo informed the Committee that there was a requirement from the Commander in Chief of the National Defence Force to the Chief of the National Defence Force who, on an urgent basis, to act on a case prevailing in Mpumalanga where Eskom power stations were being vandalised and challenges with incorrect calls being made. The Chief of the Defence Force then tasked the Chief of the Joint Operations to deploy the force element to provide security to those power stations on an urgent basis and then consider deploying in all nine provinces. Each province would have its own sub-unit. The deployments were being sped to two days. On the second day in Mpumalanga, the Force established a presence in those power stations. The Force was of the opinion that this did help. The Force undertook a process to request authority from the President with a period of deployment from 16 December to 16 March.

Discussion

Mr Marais stated that he was proud that the Chief of Joint Operations and the Defence Force had responded, whether or not the Committee agreed with the instructions and with the authorisation from the President. The concern was still the funding between Eskom and SAPS who were supposed to be responsible for domestic order. The fact that the Defence Force had to be deployed was an indictment on both of them. He hoped they would be held accountable for the costs because the Committee had noted that there was not one deployment that was embarked on without at least a third of the support from the Reserve Force. This cost a lot of money. Tough decisions were needed if those responsible could not foot the bill. The responsible Forces needed to be pushed to pay those costs.

The Chairperson stated that he supported the deployment for the same reason that the Chief of Joint Operations had advised. One could not believe the level of criminality that was rampant everywhere. Some categories of crime were beginning to be stubborn. More needed to be done as a country. He supported that soldiers needed to be released to work with the police to drive crime levels down. He did not know where the proliferation of arms came from. There was impunity and people were being killed from left to right. Drastic action was needed and the augmentation of the number of police was needed. The question of whether it was time that SANDF be released to work in tandem with the police needed to be put on the agenda. Peacekeeping also needed to be done in-country just as it was being done overseas.

The Deputy Minister appreciated how the Committee considered utilising the Defence Force in the country's best interest. The Chairperson’s concerns are well placed. The security cluster had its work cut out. The stability levels of the country needed to be improved to make the country work and recover the economy. He agreed with the Committee.

The Chairperson thanked the Deputy Minister and the Force and moved to other matters of the Committee.

Consideration of Draft Joint Standing Committee on Defence Mid-Term Review

Members were taken through the draft report.

The Chairperson said the Committee report would be shared with the Force for input before making it a final report. This was still a draft report.

Mr Marais supported the Chairperson and said there needed to be a target that by the end of the financial year, it would be concluded and finalised.

The Chairperson said the matter would be back to the Committee for finalisation.

Closing

The Committee discussed updates on the study tour and administrative matters relating to it.

The meeting was adjourned.