Video (Part 1)
Video (Part 2)
Video (Part 3)
The Select Committee met on a virtual platform for briefings on the Copyright and Performers Protection Amendment Bills by the Constitutional and Legal Services Office in Parliament and the Department of Trade, Industry and Competition. The Select Committee also met with the Department of Tourism and its entity, South African Tourism, for a briefing on their 2023/24 Annual Performance Plans.
The meeting began with opening remarks from the Deputy Minister of Trade, Industry and Competition in which she tracked the progress of the Bills, acknowledging that the Bills themselves were highly complex and addressed several policy issues but that meeting the needs and obtaining approval of all sector role players was a challenge. She emphasised the extensive public consultation and engagement with experts that had taken place.
The Senior Legal Advisor in the parliamentary Constitutional and Legal Services Office provided a constitutional and legal perspective of all proposals arising from the public submissions that the Committee had called for. Having explained the redrafting process that the two Bills had undergone and the implications of the section 79(1) process, she proceeded with a section-by-section analysis of the public input in respect of legal, constitutional and procedural matters, assuring Members that both her Office and the Office of the State Law Advisor were convinced that the Bills would pass constitutional muster. Stakeholders could challenge aspects of the Bills, or various sections, but not the Bills in their entirety. Specific issues addressed included constitutionality, exceptions and arbitrary deprivation, compliance with international treaties, deprivation of property, retrospective clauses, royalties and the BlindSA judgment.
The Department of Trade, Industry and Competition had read and considered every public submission made and briefed the Committee on the Department's response to each of the submissions. Unusually, and a clear indication of the diverse stakeholders in the sector, a significant number of submissions addressed the definitions included in the Bills. The Department justified the retention of most clauses as presented in the Bills but it did concede to considering changes to a few aspects of the Copyright Amendment Bill. The statutory royalty entitlements were criticised and the Department recommended that an amendment be effected by including equitable remuneration while retaining other modes of remuneration. The Department suggested amendments making it compulsory to compile and retain music usage information records. The Department recognised the many concerns about the absence of a meaningful economic impact assessment and recommended that the Select Committee initiate a process of an independent regulatory impact study. It also suggested a relook at the resale royalty rights but, despite many concerns raised about the reversion of copyright to the author after 25 years, no change was recommended.
Members did not have comments or questions.
The recently appointed Minister of Tourism attended her first Select Committee meeting. She informed Members that she had ensured that the Tottenham Hotspurs deal did not go ahead and had asked the board chairperson for reasons not to dismiss the board. Subsequently, eight members resigned and she intended to dissolve the board and replace it with an interim three-person board with expertise in finance, governance and tourism. The matter would be gazetted that Friday. Together with the interim board, she would consider the appointment of a CEO for the South African Tourism entity. The board would be investigating a wide range of complaints. She intended to improve the oversight as well as monitoring and evaluation of the entity. The Minister also announced the Travel Indaba to be held in May 2023.
The Department of Tourism presented its Annual Performance Plan for 2023/24 to attain its key strategic outcomes of increasing the tourism sector's contribution to inclusive economic growth and good governance. However, nine risks had been identified that threatened the attainment of the outcomes. Tourism had been identified as one of the priority areas of intervention in the Economic Reconstruction and Recovery Plan (ERRP) with a range of possible contributing factors from infrastructure and skills development to mass public employment. This, too, was beset with risks. Each of the four Programme Deputy Directors-General - Corporate Management, Tourism Sector Support Services, Tourism Research, Policy and International Relations and Destination Development – presented details of the Annual Performance Plan. The Chief Financial Officer stated that of the Department’s budget for the year of R2.5 billion, R1.3 billion would be transferred to SA Tourism.
South African Tourism was represented by acting officials who explained that the role of SA Tourism was to stimulate domestic demand through targeted initiatives and campaigns and to execute a global marketing programme to reignite international demand. The plan for 2020 to 2025 had prioritised 24 markets which were segmented into 16 "growth" and eight "defend" markets, with an additional set of markets earmarked as "watchlist". The estimated budget for 2023/24 was R1.47 billion. Expenditure went on five programmes: Corporate Support, Business Enablement, Business Events, Tourist Experience and Leisure Tourism Marketing. The lion's share of just under R1 billion went to Leisure Tourism Marketing. The Deputy Minister of Tourism assured Members of the focused attention of the Department of Tourism but conceded that the target of 21 million visitors was currently unattainable and it was unlikely that even the reduced target of 15 million visitors would be attained.
Members noticed that there was an emphasis on Asia, Europe and America although the big spenders were in the Middle East. Why was there no emphasis on that region? Could that be looked at? Were people in the South African missions abroad trained to deal with tourism? In missions that did not have a tourism officer, was another officer identified to promote tourism in that particular area? Was the issue of gender parity taken into consideration when the Department created job opportunities? Were women, youth and people with disabilities included in those who had been given job opportunities? Was the issue of gender parity considered in the Chefs Programme? Why was the Free State not involved in the programme that was going to other provinces? Why were there no detailed targets relating to an increase in tourism sectors, specific targets for the contribution to inclusive economic growth from a baseline of the previous financial year or medium-term expenditure framework, etc? Was there any collaboration between the Department of Tourism and the Department of Small Business Development in respect of programmes offered by the latter for SMMEs? Could specific details be provided in respect of a provincial breakdown of the Working for Tourism programmes and the number of participants per province?
The Chairperson returned to the Committee after a lengthy absence owing to illness. He was warmly welcomed.
The Chairperson welcomed the Members and the Deputy Minister of Trade, Industry and Competition. He invited Deputy Minister Gina, Deputy Minister of the Department of Trade, Industry and Competition to make opening remarks.
Deputy Minister’s Opening Remarks
Deputy Minister Gina articulated the happiness of the ministry to see the Chairperson return. She noted that very extensive work had been done concerning the two Bills over quite some time. The Bills had been returned by the President, which justified the subsequent attempts made to ensure quality outcomes via the wide consultation with the sector. On behalf of the ministry and the Department, Deputy Minister Gina extended the gratitude of the ministry to the public for the submissions made to strengthen the legislative process and to ensure that the law was sound so that the Bills could create an enabling and conducive environment for the copyright-based industry. All sectors affected had been involved in the consultations, including people living with disability, the education sector, libraries, archives, museums, the technology sector, the art sector, advertising music industry, film and television industry, photographers, collecting societies, the publishing industry, the broadcasting industry, authors and performers. She might have left out some industries, but every effort had been made to ensure that everyone was included so that everyone had a say when it came to the Bills.
Deputy Minister Gina recognised that the Bills were not easy at all. They were very complex and they addressed several policy objectives. She recalled addressing the diverse groups of copyright-based industries with all their diverse needs. On 5 December 2018, the National Assembly adopted the Bills and on 28 March 2019, the NCOP adopted the Bills. They were referred to the President on 16 June 2020. A letter was received from the President of the Republic to the Speaker of Parliament to refer the Copyright Amendment Bill and the Performer's Protection Amendment Bill (2016) back to the National Assembly for consideration of the President's reservations on the basis of their constitutionality. The President raised the following constitutional reservations: firstly, it was the incorrect tagging, the retrospective and arbitrary deprivation of property, an impermissible delegation of legislative law to the Minister, the issue of fair use and the copyright exceptions, and international treaty implications. Some of the reservations that were raised by the presidency were procedural and others substantial in nature. The Bills, and the reservations, had since been deliberated extensively in Parliament. Section 79(1) of the Constitution of the Republic of South Africa requires that the President must either assent to sign a Bill or if the President has reservations about the constitutionality of the Bill, he can refer that Bill back to the National Assembly for reconsideration and that was what had happened. The initial briefing by DTIC to the Portfolio Committee on Trade, Industry and Competition was in August 2020. It included a presentation, part of which was delivered by the Minister of Trade, Industry and Competition. The Bills were adopted by the National Assembly on 1 September 2022. They were referred to the NCOP for concurrence which led to the briefing to the Select Committee on Trade, Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on 25 October 2022. The briefing to the provincial legislatures had taken place in most of the provinces and the Department was participating in public hearings in some of the provinces, including Mpumalanga, Eastern Cape, KwaZulu-Natal, Western Cape, Limpopo and Northern Cape. A journey had been travelled with the two Bills and departmental officials had clarified all matters raised by the sector, including ensuring an alignment to the Marrakesh Treaty.
Deputy Minister Gina thanked all the officials from the Deputy Director-General's Consumer and Corporate Regulation Division, parliamentary and provincial officials and leadership participating in providing support to the public hearings. The Bills had recently been advertised for public comment by the National Council of Provinces. The public hearings were held by the Select Committee between February and March 2023. Today's presentation would be brief and open and presented by DDG, Dr Evelyn Masotja, who would take the Select Committee through all the proceedings and the progress made thus far so that they could take discussions and input from the Select Committee. The Department always treasured and valued, the comments from the Select Committee because they helped the Department to do its work even better. She was looking forward to the inputs and the discussions of the Committee.
The Chairperson appreciated the recap by the Deputy Minister. He informed the meeting that the management committee had filled him in as to what had taken place during the public hearings. He asked Advocate van der Merwe to take the Committee through the responses of the Constitutional and Legal Services Office to the public comments.
Presentation on the Performers Protection and Copyright Amendment Bills by the Office of Constitutional and Legal Services
Adv Charmaine van der Merwe, Senior Legal Advisor, CLSO commenced her presentation by explaining the role of the Constitutional and Legal Office (CLSO) in providing assistance with a Bill. Her function was to assess and address constitutional and legal concerns. She ensured that all aspects of the Bills were legal and constitutional but she was prevented from addressing any policy issues or questions; that was the scope of the Department. She assured Members that she took a neutral position and did not support nor reject any aspect of the Bills.
Adv van der Merwe explained the redrafting process that the two Bills had undergone and the implications of the section 79(1) process which limited the National Assembly processes but did not impose any limitations on the NCOP (National Council of Provinces).
She proceeded with a section-by-section analysis of the public input in respect of legal, constitutional and procedural matters. In respect of the concern that the whole Bill could be declared invalid, Adv van der Merwe stated that the advisers of the Department and Parliament, as well as the State Law Adviser, had carefully considered the Bill and were of the view that the Bills would pass constitutional muster. If the new policy direction was not supported by companies and organisations, it was their right to challenge the Bills once enacted but if a section were to be found unconstitutional, only that section would be excised.
She assured Members that Parliament had fully complied with all required procedures and the Portfolio Committee had erred on the side of caution in dealing with all the President's reservations, so it was unlikely that the Bill would be found invalid based on the process. However, fair use would give rise to more litigation. Although one submission had indicated that there was only one court case that had considered fair dealing, the law programme used by Parliament showed at least 1 011 cases where "fair dealing" was mentioned together with the word "copyright" and Burchell's Intellectual Property law library had 21 cases that had been discussed.
She pointed to a USA Department of Justice memo (1999): “The fair use doctrine thus permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.”
Specific issues addressed by Adv van der Merwe included the following:
Section 79(1) process – National Assembly and Consultations – fully complied with.
Constitutionality, exceptions and arbitrary deprivation – no arbitrary deprivation.
Constitutionality, Section 22 (TOP - Every citizen has the right to choose their trade, occupation or profession) – no legal impediment to TOP.
Compliance with international treaties – requirement met.
Exceptions: Three-step test – no legal impediment.
Constitutionality in terms of S25, deprivation of property – no deprivation.
Retrospective application: clauses 5, 7 and 9 - recommended that those clauses be amended to provide for prospective operation only.
Royalties in clauses 5 (S6A), 7 (7A) and 9 (8A) - a matter of interpretation of laws and a policy decision.
Fair use and exceptions and the hybrid system – no duplications or additions to the Bill as examples of fair use
Section 19D: Changes required because of Blind SA judgment, Copyright Amendment Bill - small amendment recommended
Clause 25 section 23 (25-year reversion right) – no legal objection.
Litigation as a concern - Unlikely that the Bills would be found invalid based on the process.
Procedural fairness: The Bills did not interfere with existing procedures. The limits were clear and any use that did not comply with the fair use test, or internal limits (proved by S12A) could be challenged. The Bills had followed a fair legislative process.
Ms Shamara Ally, Procedural Officer, Parliament, agreed with the legal analysis of the Bills and that the Department had met all procedural requirements.
Presentation on the Performers Protection and Copyright Amendment Bills by the Department of Trade, Industry and Competition
The Chairperson requested Dr Evelyn Masotja, Deputy Director-General Consumer and Corporate Regulation Division, dtic, to begin her presentation on Slide 9 as the content of the preceding slides had been covered by Deputy Minister Gina in her opening remarks.
Dr Masotja began the presentation by indicating the objectives of the Bills, the purpose of the Bills and some of the issues that had transpired. She assured the Committee that she and her team had been through every submission from the public and had read each one. She added that they had grouped some of the comments. So if those who had submitted comments saw a comment made by the entity or by the person but one’s name or entity did not appear, it was not because her team had not looked at them. Some of the comments were representative of other comments similar to the ones that would appear in her presentation.
She began with the concern that the amendment to the definition of broadcast was vague and could create uncertainty for the creative sector. The Department justified the retention of most clauses as presented in the Bills but it did concede to considering changes to a few aspects of the Copyright Amendment Bill. The statutory royalty entitlements under sections 6A to 8A were criticised and the Department noted the issues relating to the remuneration model. It recommended that the amendment be effected by including “equitable remuneration or royalties” in section 8A to take into account other modes of remuneration but that section 8A be retained in the Bill. To address concerns arising from the need to record and report all commercial uses, the Department recommended that the legislation should be amended to make it compulsory to retain music usage information records. Concerns about the absence of a meaningful economic impact assessment led to a recommendation that the Select Committee could, if possible, initiate a process of an independent regulatory impact study to address the concerns of the public, including concerns about fair use and exceptions.
In respect of section 19D, the recommendation to delete section 28P(2) was supported by the Department. Removal of sub-section (i) in section 19D(3) was recommended as it restricted the rights provided in the provision and was not in the spirit of the court judgement. Other minor amendments to ease the provision could be considered. The resale royalty rights comment should be reviewed. Despite many concerns raised about the reversion of copyright to the author after 25 years, the Department was adamant that the timeframe should not be changed to the 50-year period commonly used internationally.
No changes to the Performers Protection Bill were recommended.
The Chairperson thanked Dr Masotja for the presentation. He reverted to Adv van der Merwe for her to confirm that the issues highlighted in her input had been addressed. For example, the issues highlighted in slides 19 and 21 of the report dealt with royalties for authors and issues of policy that referred to the use of the hybrid. A lot of amendments were required in section 19, as indicated in slides 28 and 29. Thereafter, he would allow Members to ask questions, but also to respond to some of the issues that were referred to the Committee.
Adv van der Merwe confirmed that all the questions she had raised on policy issues had been addressed. For instance, the proposal was that section 8 should stay part of the Copyright Amendment Bill, but that the same terminology could be used in the Performers Protection Amendment Bill. Regarding fair use, the proposal was that fair use be retained with a hybrid approach containing specific exceptions. All of the issues had been addressed in respect of the slides specifically mentioned by the Chairperson, including section 19 which spoke to the localised organisations and why it was necessary to make provisions for localised organisations. Concerning BlindSA, they were more or less the same on the same page, except for the authorised entity, and it was possible that she might not understand that point correctly. When the matter had been discussed, she had understood that the authorised entity was one person who could make accessible format copies as defined, and that there could be another entity that would be prescribed. So that was perhaps something the Department could highlight a bit better.
She added a response to the Chairperson’s question on dramatic works. “Dramatic works” might be new to the Bill, but the term was already in the Copyright Act, so it was not a new term. The drafters would have to see when they put it in the Bill, whether some sections would need to be changed to make provision for the inclusion of the term in the Bill. She did not agree that the Committee was the correct entity to look at a socio-economic impact assessment as it was not a parliamentary function. The socio-economic impact assessment was a Cabinet requirement and that requirement was necessary for consideration of whether the Bill should receive Cabinet approval. She was aware that the Bill had undergone such a process and that it subsequently received Cabinet approval, or that was how she understood it from what the Department had presented so far. If the Department was concerned about the impact of the Bill currently, it would be for the Department to halt the Bill; the Minister could not withdraw the Bill anymore as it had passed the second reading twice. If the Department wanted to be satisfied that the Bill would achieve what it wanted the Bill to achieve, in other words, that the impact would be the correct impact, then the Department should simply say that to the Committee. Parliament looked at the impact of a Bill via public consultation. That had taken place and the Committee had considered the concerns raised by members of the public.
The Chairperson thanked Adv van der Merwe. He asked the Procedural Officer if there was anything that she had picked up from the presentation by the Department.
Ms Ally stated that she concurred with her colleague about the impact assessment and that it was not a recommendation for the Committee to consider; that should be done by the Department. However, at that stage, it did not make logical sense to carry out an impact assessment considering that the Bill was in the second House of Parliament to be finalised.
Dr Masotja clarified two things: concerning the issue of “prescribed” in section 19D, she agreed with the advocate, although they seemed to have said things differently. She proposed that they came back to the Committee on that one. Proposed amendments had been circulated to the Committee but she would like to engage with those. In the Department’s understanding, some authorities could be prescribed while recognising that there were authorised entities. Secondly, on the impact assessment, she clarified that the Department was responding to the public comments and an overwhelming number of them had raised the concern about the socio-economic impact assessment. So by recommending it, she was not saying that the Committee should draft it themselves or even outsource it. She added that even in the previous process, the Department had been of the view that it had done sufficient work, sufficient research and had consulted sufficiently. However, given the overwhelming concern raised by the submissions, she had brought the matter to the attention of the Committee. She requested the Chairperson to provide guidance on that issue because she could see a possible challenge in the future. The Department’s position was that the Bills, as they stood, passed constitutional muster, and could be passed as they were. However, the Department had to take into account the concerns that had been raised in the public consultation process and what different researchers were saying, especially the Copyright Review Commission. She acknowledged that a lot had been done on the Bills but she did not want to miss an opportunity to take into account the concerns that had been raised. It was a big issue and after the Bills had been passed, it might be one of those issues that could be raised again.
The Chairperson suggested that if Parliament passed the two Bills, then the Department could monitor the implementation and, if amendments were necessary, the same process could be followed, that of a socio- economic impact assessment, and then the Department could introduce new Bills to Parliament after following the Cabinet process. It was up to Parliament to pass the Bill. And also, it would be up to the Department to monitor its implementation and perhaps some unforeseen challenges. But the Members were satisfied with the constitutionality of the two Bills. He called on Members then to ask questions for clarity.
The Chairperson added that Members would have the opportunity to use the documents handed out to prepare for the discussion with the Department the following week. He suggested that the drafting team could compile a report that took into account some of the new proposals and deletions and table it for consideration by the Committee on 25 April 2023. Because they were Section 76 Bills, it was up to the provinces to decide on the issues. The following week, the NCOP process should be done and the reports sent to the provinces. When the negotiating mandates were submitted, the Committee would see what the provinces were proposing and also take into account the report that would be sent to the provinces concerning amendments.
Mr M Dangor (ANC; Gauteng) agreed with the Chairperson but suggested that they needed to look at the timing of when to take it to the provinces because sometimes there was a clash between the Committee’s programme and that of the provinces. The programmes needed to be harmonised because at times one was not able to attend the provincial meetings.
The Chairperson explained that was why he was planning that by the following week, 25 April 2023, the Committee should be done with the NCOP processes and they could wait for the negotiating mandates and engage in those negotiations and then wait for the final mandates from the provinces. He had been informed that the meeting on negotiating mandates would be held in person in Parliament.
The Committee Secretary agreed that, in terms of the legislative programme, the negotiating mandate meeting would place on 16 May 2023 in person in Parliament. The venue was subject to change.
The Chairperson checked if there were any comments.
Adv van der Merwe indicated that she would not be able to attend any meetings the following week but she would give input into the report to be presented.
The Chairperson thanked Adv van der Merwe and Dr Masotja for their work. It was very interesting that there were a lot of submissions on the issue of definitions, which was not usual but it showed a lot of interest in the two Bills that they were dealing with.
Engagement with the Department of Tourism
The Chairperson welcomed the Department of Tourism and South African Tourism to the meeting to brief the Committee on their Annual Performance Plans for 2023/24. He welcomed the Deputy Minister of Tourism, Mr Fish Mahlalela.
Minister De Lille indicated that she had just logged in. She was really, really honoured to have her first meeting with the Select Committee and looked forward to engaging with Members. She would be leaving early to catch a flight.
The Chairperson welcomed the Minister. He noted that the Members had met with her when she was the Minister of Public Works and Infrastructure.
Ms Nomosonto Ndlovu, Acting Chief Executive Officer, SA Tourism, informed the Chairperson that Mr Themba Khumalo, Acting CEO, was away and so she was the Acting CEO for the week.
The Chairperson handed over to the Minister to make her opening remarks, after which the Director-General of the Department of Tourism would brief the Committee on the Department's Annual Performance Plan (APP).
Opening remarks by the Minister of Tourism
Minister De Lille confessed that most of the work in the APP had been undertaken in coordination with Deputy Minister Fish Mahlalela. She thanked him and also the DG of the Department. She had come in at the tail end and was able to get all the briefings from them, She looked forward to working with the Committee and obtaining advice from the Committee. Tourism was a key sector in terms of job creation and one of the priorities would be to look at how to increase the number of jobs created through the tourism sector by improving destination marketing and getting more people to visit the country. She was aware that the Portfolio Committee would be joining the Department in Durban at the Travel Indaba where about 5 000 delegates were expected from all over the continent. She was not sure whether the Select Committee would be attending. The Indaba would have exhibitions of what was available across the continent. It would be a real Pan-African gathering. If the Select Committee had not been invited, she advised that Members join them there to help the Department to engage with the buyers coming from all over the world to the Indaba. The Department had sponsored 120 small and medium enterprises in the tourism sector and provided space for them where they could display and sell their goods and be exposed to the world market.
The Minister informed the Committee that she had agreed on the four key priority areas with the President the previous week; she had to report back to the President within six months. At a later stage, she could go into detail and share those priorities with the Select Committee.
The Chairperson asked the Minister if she could brief the Committee on the entity itself, the appointment of a board and on the issue of the important full-time CEO of the entity.
Minister De Lille said that when she had arrived in her post about six weeks earlier, one of the issues that she had to deal with was the issue relating to the board. Some issues came from her predecessor but the first elephant in the room was the Tottenham Hotspurs deal. The matter had been successfully dealt with and the deal was no longer going to proceed. The deal had led to some money being shifted from other programmes to fund the deal but they had been able to rectify that. One of the programmes addressed the question of how to grow the domestic market. The second issue relating to the board members was the composition of the board. The composition of the board no longer reflected what was required in the law in that it should reflect the demographics, and representativity in terms of provinces, gender and race. So that was another issue. She had written to the members of the board and the chairperson of the board, raising the three concerns with him and then on 6 April 2023, she wrote a letter to the chairperson of the board, to request that the board give reasons as to why it should not be dissolved. She gave them until 18 April 2023 to respond. She could confirm that since writing the letter to the chairperson of the board, eight of the board members had resigned. With only three board members remaining, the board was not functional anymore. So on Friday, through a government gazette, she would officially dissolve the board and in the same government gazette, she intended to appoint three people with experience in finance, governance and in the tourism sector to the board. The three members would have the full powers of the board. There were several issues within the entity that needed to be attended to but which she would not go into, except to say that the interim board or the three members that will be appointed will have to deal with various matters, including the position of the CEO. In terms of the Act, the board, in concurrence with the Minister, must deal with the issue of the CEO. She would write to the Chairperson of the Select Committee officially in the following week to inform him of the outcome of this process.
Minister De Lille stated that she had received several other complaints and been informed of issues, which she would not have time to investigate herself, so she would ask the interim board to go into them. She hoped that the board would be in the interim capacity until she could conclude the process of appointing a new board in the most reasonable timeframe. The appointment of the new board was critical because it was the middle of a financial year and the entity was in the middle of implementing the APP. She intended to put a mechanism in place to undertake proper monitoring of the implementation of the tasks of the board. There was a weakness with no clear KPIs (key performance indicators). In implementing and working with the new board, she hoped to substantially improve the performance of South African Tourism. Over 50% of the budget of the Department of Tourism was transferred annually to SA Tourism and she had spoken to the DG and the Deputy Minister about looking at a service-level agreement between the Department of Tourism and SA Tourism and working out clear deliverables for what needed to be achieved in each quarter. She intended to improve the oversight as well as monitoring and evaluation of the entity.
The Chairperson thanked the Minister for the update on the status of the board. On the issue of the Travel Indaba, he informed the Minister that several Select Committee Members had attended the Indaba the previous year. There had been only one Member from the Portfolio Committee because the Committee was not permitted by the Chair of Chairs to attend. The Select Committee looked forward to attending again in the current year. However, there were processes to be followed in planning for such a visit and a long list of approvals had to be obtained. He asked whether the Committee Secretary had received a letter of invitation.
The Committee Secretary indicated she had not yet received an invitation to the Indaba.
The Chairperson hoped the Minister would assist.
Minister De Lille promised to check on the matter as she would love them to attend. On their arrival at the Indaba, she could receive the Committee and brief Members on the whole programme for the four days of the Indaba.
The Chairperson thanked the Minister and asked if there were any questions or comments from Members before she left.
Ms H Boshoff (DA, Mpumalanga) commended the Minister on being proactive. The Committee needed to see a South African Tourism board work the way it should work, especially in light of the budget that they received from the Department. She was looking forward to seeing what the key priorities would be and who the three board members would be.
The Chairperson assured the Deputy Minister that he would be given an opportunity to deal with other policy and governance issues that arose from the meeting.
Presentation of the Annual Performance Plan by the Department of Tourism
Mr Victor Tharage, DG, presented the key strategic outcomes for the Department as increasing the tourism sector’s contribution to inclusive economic growth and good governance. Nine risks had been identified to the former outcome, foremost being an inability to meet the Tourism B-BBEE Sector Code targets to facilitate radical economic transformation within the tourism sector, inadequate infrastructure planning and implementation and poor brand reputation and potential visitors' perceptions about the safety of Destination South Africa. Other risks included limited aviation and visa capacity, delays in the implementation of the Tourism Transformation Fund and poor contractual management.
Tourism had been identified as one of the priority areas of intervention in the Economic Reconstruction and Recovery Plan (ERRP) with a range of possible contributing factors from infrastructure and skills development to mass public employment. This, too, was beset with risks: reduced airlift capacity, brand positioning in key source markets and the easing of cross-border travel restrictions, domestic travel not picking up in the short to medium term, considering the weak state of the economy and diminishing household disposable income and issues relating to the Covid pandemic.
Each of the four Programme Deputy Directors-General - Corporate Management, Tourism Sector Support Services, Tourism Research, Policy and International Relations and Destination Development – presented details of their Annual Performance Plan.
Ms Lulama Duma, CFO, presented the budget for the Department. She focused on the 2023/4 figures, the current financial year, for which the Department had a budget of R2.5 billion, of which approximately R1.3 billion was transferred to SA Tourism. 60% to 70% of the allocated budget was allocated to transfers and subsidies. Compensation of employees represented 14.8% of the allocated budget, while goods and services accounted for 22%.
The DG stated that the ministry had impressed on the Department that it had many targets and it needed to achieve those targets before the end of the current term of administration. Officials would have to work hard to achieve those targets. However, he was happy that the Department had a footprint right across the country as that was important and that would continue with the implementation of the current projects.
The Chairperson requested SA Tourism to complete the presentation within 30 minutes as the Members had read the presentation and had been in the meeting since early morning.
Presentation by SA Tourism on its Annual Performers Plan and Strategic Plan
Ms Ndlovu made the presentation on behalf of SA Tourism. She stated that following the development of the ERRP, the Tourism Sector Recovery Plan (TSRP) was adopted by Cabinet in April 2021. The role of SA Tourism, as per the TSRP, was to stimulate domestic demand through targeted initiatives and campaigns and to execute a global marketing programme to reignite international demand.
Ms Ndlovu indicated that she would go through all her slides which would cover the strategic overview of SA Tourism and marketing prioritisation investments, showing where the entity marketed and how the entity selected those markets. She would present an environmental analysis of marketing, tourism, and environmental mobility, one or two slides on strategy, the approach to the business, collaboration with the provinces and programmes, targets and budgets.
The plan for 2020 to 2025 had prioritised 24 markets which were segmented into 16 “growth” and eight “defend” markets, with an additional set of markets earmarked as “watchlist”. The 24 prioritised markets accounted for 92% of all international trips in 2019. Global statistics for a 2022 to 2032 travel and tourism forecast suggested that the sector was likely to return to pre-pandemic levels around the end of 2023.
Details of each programme were provided, including outputs, and annual and quarterly targets but did not include strategies or risks.
The Chairperson suggested that as an hour had expired, the Acting CFO should conclude with his presentation.
Mr Ndlovu, Acting CFO, informed the Committee that the majority of SA Tourism’s funding came from transfers from the Department of Tourism. That constituted 91% of the budget. That was complemented by revenue obtained from TOMSA (tourism) levies, Indaba meetings and other exhibitions as well as grading fees. The estimated budget for 2023/24 was R1.47 billion. Expenditure went on five programmes: Corporate Support, Business Enablement, Business Events, Tourist Experience and Leisure Tourism Marketing. The lion’s share of just under R1 billion went to Leisure Tourism Marketing. The CFO indicated that the economic classification of the budget showed expenditure in three main areas: Compensation of Employees at R246 million, capital expenditure at R17.7 million and goods and services at R1.2 billion.
The Chairperson noted that several Members had logged out as they had time constraints and the meeting was meant to finish at five o'clock. However, he invited Members to pose questions.
Mr Dangor noticed that there was an emphasis on Asia, Europe and America. However, the big spenders were in the Middle East and there seemed to be no emphasis on that region. Could that be looked at? Were people in the missions trained to deal with tourism? Had the Department engaged with the Department of International Relations and Co-Operation to ensure that in missions that did not have a tourism officer, another officer was identified to promote tourism in that particular area?
Ms M Moshodi (ANC, Free State) referred to Programme Three. The presenter stated that the programme had created 4 133 job opportunities. Was the issue of gender parity taken into consideration? Were women, youth and people with disabilities included in those who had been given job opportunities? In Programme Four, 50 chefs received training in Gauteng and were permanently employed. Was the issue of gender parity considered? She knew young people required jobs as the country had a higher rate of unemployment amongst youth, but one could not ignore the issue of gender parity. In slide 48, the presenter mentioned that her programme was being rolled out to different provinces but she did not mention the Free State. Why was the Free State not involved in the programme that was going to other provinces? Slide 43 referred to a programme that was going to be implemented in the Free State with a focus on small towns. Which towns would the Department be focusing on? She came from a small town in the Free State called Edenville. She did not think even people knew about the area, because it was a deep, deep rural area. In Programme Four, generally, she would like to know whether gender parity, including people with disabilities, was considered in all job opportunities that were created.
The Chairperson noted that it was a pity that there was not enough time but maybe the Committee had learned that in the future the Department and SA Tourism should be invited on separate days as there was not enough time for both the Department and its entity.
He addressed the issue of the key strategic outcomes and focus. In the past, there used to be detailed targets relating to an increase in tourism sectors, specific targets for the contribution to inclusive economic growth from a baseline of the previous financial year or medium-term expenditure framework. There were also targets for international tourist arrivals, the percentage increase in terms of domestic holiday trips, the percentage in terms of capital investment in tourism, the percentage increase in tourism, direct contribution to employment, as well as a percentage of the contribution of tourism to the GDP. That was no longer now in the APP of the Department. The maintenance and improvement of the ratings in the competitive index were also not indicated in the report.
He was impressed with Programme One because it was a common programme in all departments but it contained a lot of information. Other departments tended to leave out some of the issues that the departments reported in terms of their APPs. However, he wanted to know about the issue of financial disclosures. The CFO spoke about the financial disclosures and vetting of those employees that worked with the supply chain management. But it would be nice if there was a specific target for financial disclosures and lifestyle audits. The DG spoke about partnering with relevant departments in some of the issues relating to the tourism sector but he was not specific in terms of which departments. The Committee had oversight over the Department of Small Business Development. That Department had quite a lot of SMME incentives and support programmes. Was that one of the departments he had been referring to? Some of their programmes for SMMEs included a localisation programme and the township and rural entrepreneurship programme which they call TRAP, entrepreneur support, etc. He wondered whether there was any collaboration between the Department of Tourism and those kinds of programmes offered by the Department of Small Business Development.
Concerning Destination Development, the Chairperson noted that Ms Moshodi had requested specific information about the Working for Tourism programmes but out of the 4 133 – he did not know if he had the correct figure - whether the provincial spread was considered in addition to the issues of gender young people and so on. Could that figure be broken down in terms of the provinces?
The Chairperson concluded that the Committee would be monitoring the implementation of the APPs and he looked forward to attending some of the programmes.
Mr Tharage requested DDG Setwaba to respond to the issues raised by Ms Moshodi and then DDG Chettiar would speak to the issues of the demographics of job creation. He would conclude with some of the issues that the Chairperson raised in the concluding question.
Ms Setwaba stated that the Department was implementing the skills programmes through the vehicle of the EPWP (Expanded Public Works Programme) and the payment of stipends was set in terms of the EPWP directives and was similar for all genders so the Department was paying men and women the same. The majority of participants in the skills programmes were ladies, particularly in the Chefs programme and the "Food and Bev" programme. So on the issue of parity, the Department was doing well. The Chefs programme was designed for those who had been in the trade for some time but were without qualifications. They were taken through a programme of recognition of prior learning. There was quite a huge intake in Limpopo for the Chefs Programme and 15 chefs went through the programme. There were challenges in that the people were employed and they had to take time off work to be able to attend classes, take practical assessments and write exams. That was why she was so excited that all 30 of the previous candidates had completed the RPL process. It was an intense programme.
The Department would be implementing the service excellence standard at Denysville in the Free State. She did have conversations with the provincial department in terms of partnering with them and making sure that stakeholders around the selected town were prepared to participate. On the question of collaboration with other government entities, especially the Department of Small Business Development, the Department of Tourism offered an incubation programme for food service, in conjunction with SEDA, an entity of the Department of Small Business Development. The Department was gravitating more towards ensuring that those within the tourism space had a clear link to some of the incentives, grants or financial support provided by the Department of Small Business Development. Tourism enterprises in the incubation programme were availed of opportunities to apply for financial support from other government departments. The Department assisted them to comply with the requirements. The Technology Incubator was being implemented in conjunction with TIA (Technology Innovation Agency) which was an entity of the Department of Science and Innovation, so there was some collaboration with other government departments.
Concerning the question on the skills programme that would be taken to the Free State, Ms Setwaba stated that the Department was implementing a hospitality youth programme for 300 people through the EPWP. A 12-month mentorship programme was to be implemented in the current financial year. It was a food and beverage training programme for 100 learners. The service provider had been appointed and she was looking at about 25 learners from each of the four municipalities.
Ms Chettiar responded to the question about the 4 133 work opportunities. Ms Setwaba had spoken about the skills development programme that showed there was a provincial footprint in both the skills development work as well as the infrastructure work. So by way of example, the SanParks programme, a recently completed maintenance programme had employed 933 people in total, of whom 345 were women, 519 were youth and 30 were people with disabilities. As indicated, in the skills program, there tended to be more women than men but it depended on the nature of the programme implemented, but there was a definite bias towards women, youth, and people with disabilities. Planning, both from an infrastructure perspective, as well as a skills perspective, ensured a spread across the provinces. Another example was the skills programme for tourism monitors. The target in phase three was 100 people each in the Free State and the Northwest, 70 in the Northern Cape, 100 in the Eastern Cape, 200 in Mpumalanga and Gauteng, 170 in KwaZulu-Natal and 230 in the Western Cape. The numbers were linked to the number of tourist attractions in each province. It would be possible to present the figures and breakdown per province once the projects had been implemented. But in the planning stage, as indicated, in both skills and infrastructure, there was deliberate planning for projects to have a provincial footprint, and to target women, youth and people with disabilities.
The DG stated that there were targets for the coming financial year concerning the number of tourists, tourist spend, domestic tourism trips and all those things. They were contained in the SA Tourism APP. Previously, the Department would bring out the targets as contained in the strategic plan and that would include the GDP up to the end of the term, and jobs until the end of the term. The targets had not been presented but they were still contained in the strategic plan. There had not been a change to the strategic plan in terms of the targets but that was information that, in hindsight, should have been included so that it was evident that the Department was still focusing on those things. He asked Ms Ndlovu to address that question, very briefly.
Ms Ndlovu stated that because she had been unable to complete her slides, she had not reached the end where she had the five-year strategic plan and the amendments to it and also those targets in terms of the increase in the contribution of the tourism sector to inclusive economic growth. Those targets were in the APP; they just had not been covered that day, but they were contained in the five-year strategic plan. The presentation highlighted where there had been some shifts and changes purely because of the impact of the pandemic. Some targets were adjusted slightly downwards to accommodate the impact of the pandemic.
Concerning marketing in the Middle East, Ms Ndlovu pointed to slide eight, which showed the watch list markets. The Middle East, in particular, was on the watch list as a market. When the research was done for the Market Prioritisation Investment Framework, those markets did not pop up. However, SA Tourism did work in the United Arab Emirates where one of the strategic platforms identified was the ATM (Arabian Travel Market) which was happening in Dubai just before the Indaba, and SA Tourism was participating. She added that an office called the Embassy Liaison Office managed business development and South African tourism.
The Chairperson handed over to the Deputy Minister to make closing remarks.
Closing Remarks by the Deputy Minister of Tourism
Deputy Minister Mahlalela said that the officials had dealt with all the issues very substantially, except he wished to emphasise the matter that Mr Dangor had raised. As the Department gradually tried to identify markets, it was targeting the UAE as part of the watch list. What was needed was to ask how the Department could go beyond watching that list and gradually include those countries into a growth list market that it should target to expand the scope. However, the Department was not yet there; it was still chasing the target that was set by the President of 21 million arrivals. That target had been revised by the industry to 15 million. The strategy was that while working towards 15 million, there was still a desire to achieve the goal set in 2019. That target was still very far off as a result of the COVID-19 impact that created havoc in the sector. In terms of the tourism sector strategy, the pillar should be in the domestic market and domestic tourism had quickly surpassed the 2019 statistics, which indicated movement in the right direction. Now the necessity was to intensify the way back into the international market. The good thing was the majority of the watch list countries being prioritised were exempted from the visa regime system. That made it much easier. And therefore, it was something that the Department had to exploit and it needed to explore how best to utilise that to its advantage.
He noted that one of the departments that the DG was referring to was Home Affairs and critically the Minister had been engaging with that Minister. That Department had given an indication of which countries were exempt from the visa regime and those were the countries that required special priority and focus because it would be possible to attract people in those countries to South Africa. The Department was also working with the Department of Transport as one of the challenges was licensing for tourists to drive on the roads, which had been a big problem. The Department was collaborating at a political level and also some of the road shows were held in conjunction with other departments. Tourism was then able to share with SMMEs and the general public the programmes the Department of Small Business Development was offering. There was a sizable number of small businesses in the tourism space and, therefore, working together with the Department of Small Business Development was critical, especially from the financial support side because Tourism provided non-financial support. The Department also worked closely with the DTIC. So some of the departments were allies of Tourism. There was a gradual movement towards recovery following the pandemic but there was still a lot of work to be done. Nevertheless, things were moving in the right direction. As Members could see from the presentation, Europe and America were rapidly recovering, followed by Africa and the Middle East. As a country, South Africa was not yet doing extraordinarily well and much effort was required to reach the same level as everybody else.
The Deputy Minister stated that the skills programmes offered through EPWP focussed mainly on the youth and, at all the graduation ceremonies that he had attended, graduates were predominantly female, in fact about 80% young women. The Chefs programme was an RPL programme for people who had been working for years but did not have qualifications or certificates. Those people worked in various areas. They were identified and given training which led to certification. The Department had done its level best to make sure there was proportionality in terms of distribution across the provinces so that no province was left behind. It was critical that the programmes were inclusive, and transformative and benefitted ordinary people, especially youth and women. So that was the approach taken.
He thanked the Committee for the opportunity to present what the Department was going to do or had started doing on the budget that the Committee would approve.
The Chairperson thanked the ministry and the presenters.
The Committee Secretary suggested that the Department and SA Tourism be requested to forward all the missing slides and additional information requested.
The Chairperson asked for more attention to rural provinces as they were depressing. Programme Three of the Department was about infrastructure, maintenance and beautification and some places had potential, especially as Program Three focused on ports and coastal zones. In terms of comparison, international tourists would rather go to Port St Johns than to Cape Town, but it was just an area that had potential. The mayor of that municipality was frustrated because everyone saw potential in Port St John's but nothing happened to move it out of potential to reality. He was looking forward to Programme Three assisting the rural provinces to attain the same level as other provinces in terms of tourism visits and tourism spend.
As indicated, in future he would separate the Department from SAT. The Chairperson asked the Deputy Minister to request Ministers in the Ministers’ Meeting (MINMEC) to encourage provinces to take the Travel Indaba seriously. He had been disappointed to see that some provinces did not even exhibit there. Municipalities should also be encouraged to exhibit.
The meeting was adjourned.
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