SAMSA forensic Investigation & ensuing disciplinary action; Railway Safety Bill: deliberations

Meeting report

Opening remarks

The Chairperson welcomed the members and the delegations from the Department of Transport (DOT) and the South African Maritime Safety Authority (SAMSA) to the meeting.

Apologies were noted.

The Chairperson acknowledged the apology of the Minister and appreciated that she ensured representation from the Department in her absence. In the past, the instability in the SAMSA Board and senior vacancies and other issues that were highlighted as needing the Committee’s attention negatively impacted the audit outcomes of the entity and caused delays in tabling annual reports.

The Committee was vocal in its need to see the senior vacancies in the entity filled to ensure stability in the leadership of the entity. In the last meeting between the Committee, SAMSA, and the DOT in October 2022, the Committee heard that SAMSA’s CEO position has been vacant since 2016/17. The Department should update the Committee on the progress of these matters and whether there are any delays.

To date, the Committee had not received any briefing from SAMSA nor the Department on the Morar Inc investigation report. However, the Committee had noted the communication from stakeholders regarding concerns over SAMSA and its ability to ensure that it executes its mandates and functions as expected, as well as the vacancies in the entity and questions on how the entity intends to collaborate with the Department to deal with the findings of the Morar Inc investigation report.

The Committee was also informed that various parties consulted their own legal representatives and that there were also allegations that there was a situation where two legal firms were appointed to represent SAMSA on the same matter.

The Chairperson clarified that the meeting was not for the Department or SAMSA to clarify any individual legal issues that affected individual parties who may have been present in the meeting. The focus of the Committee was to receive the relevant information on the filling of the vacancies of senior positions in the entity as well as the processes to fill any upcoming vacancies within the entity. Furthermore, the Committee sought to receive a briefing on the findings of the Morar Inc investigations.

Briefing by the Department of Transport (DOT) and the South African Maritime Safety Authority (SAMSA

Mr Mthunzi Madiya, DDG: Maritime Transport, DOT introduced the delegation from the DOT and SAMSA.

Mr Tau Morwe, Deputy Board Chairperson, SAMSA briefed the Committee on board and administrative concerns raised in writing to the Committee and in media reports on alleged irregularities and proposed disciplinary action flowing from the Morar Inc Report. On the appointment of the CEO, he said the Board advertised the CEO position on 31 January 2021. Following a thorough recruitment process supported by an external head-hunter, the Board’s recommended candidate was submitted to the then Honourable Minister, Mr. Fikile Mbalula, on 17 December 2021, in line with the Board’s performance agreement.

The Board requested a secondment from the Minister in March 2021. Ms Toane-Mashiloane was seconded into the Acting CEO position until 31 March 2022. The Board requested a further secondment from the Minister in March 2022. The Minister responded with a recommendation to appoint Captain Lekala from TNPA. Due to the governance requirements of a secondment from outside of the DoT, the Board resolution to appoint Captain Lekala was subsequently declined by both the Transnet and TNPA CEOs. The Board has since rotated SAMSA Executives into the Acting CEO role since 1 April 2022.

With the imminent conclusion of the Board's term of office in August 2023, the Board resolved on 2 June 2023 to formally close off the CEO recruitment process as unsuccessful. This will enable a fresh process to be undertaken by the incoming Board.

The MORAR report provided findings and recommendations in respect of the investigations conducted. The recommendations pertaining to the three suspended Executives were implemented through a disciplinary process. The three suspended Executives were served with charge sheets end-April and early-May 2022. Due to the seniority of the suspended Executives, SAMSA appointed external legal and dispute resolution counsel, to conduct the disciplinary hearings in May 2022. There were numerous delays in conducting the disciplinary hearings, largely due to the unavailability of counsel and/or the suspended Executives, illness, and bereavement.

Mr Madiya said Mr Morwe joined the Board at the beginning of 2023 to add capacity and bolster the Board of SAMSA. When the Board took over, SAMSA had been receiving qualified audit reports, but that has changed as the entity received an unqualified audit report from the Auditor General of South Africa (AGSA). It is important to remember the mandate of SAMSA, which is to ensure the safety of life and property at sea. That means SAMSA must be able to respond when life at sea is compromised, and the entity has an international obligation for the vessels coming into the country’s ports and on the open sea.

The role of South Africa as per the International Maritime Organisation (IMO) mandates stretches from South Africa to halfway to Brazil, from the west it stretches up to Ghana, and then to the Antarctic part of the globe, as well as East Africa through the Mozambican channel. If SAMSA is not functioning well, the ability to respond on time is compromised. A fully functional SAMSA is important because if anything happens, then the country will be exposed. The second mandate of SAMSA is to prevent and combat pollution from ships in the maritime environment. The Maritime Rescue Coordination Centre (MRCC) is important in this regard because it can spot vessels when they are dumping things at sea, and it can spot spillages.

The Chairperson said there were things that Mr Morwe spoke about in his presentation that fall under the Department, including the non-appointment of the CEO. The Department must take the Committee into confidence that there will be no vacuum in the appointment in the appointment of a new Board and CEO. What indicators were giving the Department confidence that SAMSA will get unqualified audit reports?

Mr Madiya said SAMSA came from an era of qualified audit reports to where it currently is now where it is receiving unqualified audit reports, as the AGSA had noted that SAMSA improved its controls. The entity had already advertised for the new Board and the advert closed on the 17th of April 2023. The Public Entity Oversight Unit within the DOT that is responsible for the recommendation of the Board to the Minister had already done its work, so the finalisation of the new Board should be done before the outgoing Board’s tenure ends.

Mr Morwe joined the Board in January and is the only member of the Board that is guaranteed to be part of the new Board that will be appointed. When a new Board is appointed, there should be at least one member from the outgoing Board who will form part of the new Board to take forward issues of the Board, so there will be no vacuum as the process of the appointment of a new Board started well on time.

On the non-appointment of the CEO, he said when the first process was finalised, on the eve of taking recommended candidates to Cabinet, the Minister received an anonymous report saying that the person was not suitable for the job. There was another process that was conducted, which was also disrupted, and the third process was not finalised. The previous and current Boards executed their mandate to appoint an accounting officer, and the current Board is right to say they cannot appoint a CEO when they are left with three months of their tenure.

The Board’s mandate is to recommend a candidate for the CEO position to the Minister, and that process was under the leadership of the former Minister. If that process was never finalised, it would be irregular for the Board to advertise for another position because it would be fruitless and wasteful expenditure. There should be official communication from the Department saying the matter is being closed and stating the reasons so that the next Board can run another process. Mr Madiya said he would take the matter to the Minister to request a formal closure of the process so that the accounting authority can be able to commence the advertisement. Ideally, a CEO should be appointed so that they can appoint the executive, so it is dicey to expect the Board to capacitate an organisation when it is not capacitated at the top.

(See Presentation)

Discussion

Mr P Mey (FF+) said when the Committee visited the International Maritime Conference in Durban last year, he spoke to two people from Singapore and asked them what they thought about the South African Maritime industry; they responded that they were satisfied. However, the pertinent question was how the Maritime industry can be developed to create jobs. 

Mr K Sithole (IFP) sought clarity if Mr Morwe had made opening remarks or if what he presented was the full presentation from SAMSA.

The Chairperson said Mr Morwe presented what was required by the Committee but did not go into details of the single cases as she had advised him to do.

Mr Morwe said he did not omit anything in the presentation, and he presented what was asked, but he did not go into the details of the allegations.

Mr Sithole asked what the duty of the CEO was because he expected her to do the presentation instead of the Deputy Board Chairperson. He was concerned about the Board and its ability to have a fully functioning SAMSA because they had more than three years to appoint a CEO and they failed to do their duty. Did the entity manage to address the audit findings from the AGSA? While it was a significant reduction, the R7 million irregular expenditure was a concern because that is a lot of money that could be used for other purposes. He asked SAMSA to provide timeframes for when it will appoint a new CEO because the rotation of staff as acting CEOs was a terrible joke that they were playing on the country.

Ms F Khumalo (ANC) welcomed the presentation from Mr Morwe and noted that her question regarding the vacuum in the appointment of a new Board was covered. She welcomed the invitation from SAMSA for the Committee to do an oversight visit at the MRCC. She said the instability in the institution caused the disfunction and concerns but appreciated the efforts that were made to stabilise it. She wanted to know how long the suspensions of senior positions were, as she understood them to be suspensions with salaries. She also asked for details regarding the claim of R44 million by Ms Simmonds as well as how far the allegations were raised to the Minister about a SAMSA board member.

Ms L Tito (EFF) was concerned about the CEO position because the report received by the Committee shows that the position was vacant for a long time, and one Acting CEO was appointed for five years when an acting CEO is supposed to be appointed for 12 months. The previous Board, the Minister and Deputy Minister, the Department, and the Committee did not exercise their duties to hold the SAMSA executive accountable as they were not supposed to leave the entity in this situation for a long time. The three suspended executives are getting their full salaries, and the personnel acting on their behalf also receive a salary, so the entity must take itself seriously. She hoped the next Board that will be appointed will take its job seriously and will not leave the CEO position vacant.

Mr T Mabhena (DA) said receiving an unqualified audit report since 2016 is a commendable milestone for the entity and echoed the remarks that R7 million is a lot of money that could be used for good, so the entity must remove the irregular expenditure. In terms of the SAMSA Act, an Acting CEO can only be appointed for a period of 12 months, meaning every person that is on the SAMSA exco will eventually get a chance to be CEO at some point.

There also seemed to be a disconnect between the Board and the political principals because the Board had decided to appoint a company to do the vetting and four candidates were provided, of which the board chose one candidate for the CEO position and forwarded the name to the Minister, who ignored the Board. The Board followed up with the Minister on the recommendation, but the Minister ignored them. The entity said it reached a settlement with one of the suspended executives and it agreed to a number of concessions including giving them a good reference. He asked the entity to explain why it agreed to give the executive a good reference. Media reports say some Board members were alleged to be involved in wrongdoing, so what was the response from the shareholder in this regard?

Ms M Ramadwa (ANC) said it was indicated in the presentation that SAMSA was inconsistent with the tariffs because the shareholder was not responding to their requests. What reasons were given by the shareholder for their non-response? Were the Acting CEOs receiving acting allowances? What actions were taken by the shareholder regarding the Board members who were alleged to be involved in wrongdoing at SAMSA? What are the Department’s plans to stabilise the entity?

The Chairperson advised the DDG to not respond to political matters that needed the Minister’s response, and that the Committee will submit their questions in writing to her. She said it would help to know the people who held the acting CEO position in the entity and asked SAMSA to clarify the matter regarding the two legal firms that were appointed to perform the same function. She understood that SAMSA works with other entities and organisations in the maritime space and that perhaps some inefficiencies are beyond SAMSA’s control. If the seashores of the country are not fully guarded, does this not leave the country vulnerable to poaching and other related matters?

Mr Morwe said the Board positions were advertised and the closing date had passed. The first task of the incoming Board will be to ensure that the CEO and the other executives are appointed. The entity moved from qualified audit findings to unqualified audit findings. The new Board will come back to the Committee regarding how to grow SAMSA and the maritime industry in South Africa and they will provide a plan of action and strategic approach for that.

He said the Board failed to appoint a CEO because the entity has no CEO regardless of who did what and when and the Board takes full responsibility for that. He agreed that R7 million is a lot of money and said ideally, unauthorised, irregular, fruitless and wasteful (UIFW) expenditure should be R0, and in the entity’s next presentation it will focus on ensuring that it eliminates UIFW expenditure. The Board will await a date from the Committee to visit the MRCC.

The issue of instability and having people on suspension is not ideal, but the labour dispute mechanisms of the country require certain processes to be followed. In the case of the three executives, the recommendation of the Morar Inc Board was immediate dismissal, but individually they have a right to go to the Commission for Conciliation, Mediation, and Arbitration (CCMA). The entity did not accept what the former Acting CEO wanted it to accept and is waiting until the Chairperson of the disciplinary process makes recommendations on the 20th of June.

Regarding SAMSA Board members implicated in the Morar Inc report, he said he would leave that to the shareholder to respond. There is no conflict between the board and the political principals because on the tariffs, the port regulator is responsible for ensuring that port tariffs are in place, and SAMSA recommends the tariffs to the Minister who either signs off or does not sign off on those tariffs. It is unfortunate that in most state-owned entities (SOEs), once someone is appointed to act in a position, they demand an acting allowance and by law, a person who transgressed cannot be fired and another person cannot be appointed in their position until the dispute is resolved.

The entity did not reach a settlement with the acting CEO, but it rejected his proposal of a settlement and will wait for the 20th of June. SAMSA works closely with the Department of Forestry, Fisheries, and the Environment (DFFE) in terms of the vessels that are guarding the marine environment around fisheries. At some point, the Board ought to revert to the Committee via the Ministry to highlight some of the challenges around patrolling and whether it has enough resources to patrol the areas under its jurisdiction.

Regarding the port of Durban and modernisation, he said working with entities like the National Ports Authority, SAMSA ought to be looking ahead and buying new modern containers. The port of Durban should create new job opportunities.

The Chairperson interjected to say the Deputy Board Chairperson must not venture into SAMSA’s turnaround strategy as the time was running out and said most matters that needed a response were covered, and some could be submitted to the Committee in writing. He asked him to wrap up.

Mr Morwe said SAMSA will respond to outstanding matters in writing.

Mr Madiya said the Acting CEOs were paid for acting in the position, but the Department will submit the total expenditure for that in writing. Other matters will be referred to the Minister to respond to the Committee. He said the issue of not approving tariffs timeously has affected SAMSA because when they do their programmes of action, they require funding and they always assume they will have money to execute their programmes, but if the tariff applications are not approved on time, it affects their work. The Department receives requests from the Board stating that they want a specific percentage increase on tariffs because of a specific reason, but the Department must work with Treasury in the matters, which cause the delays. Sometimes Treasury approves tariffs in the next financial year, which affects SAMSA’s work, and that must be addressed by the political principals so that SAMSA’s work can no longer be delayed.

Mr Mabhena asked the Committee to add the delays on the tariffs as well as the bilateral engagements between DOT and National Treasury to the list of questions for the Minister. He also asked if it would be possible for the Committee to invite the Minister to respond to some of the matters in person rather than in writing even if it is in the next term.

The Chairperson said the Committee will be dealing with the BRRR reports in the next term, meaning the Committee might have to consider having virtual meetings to deal with outstanding matters. She thanked the Department and SAMSA for the fruitful and long overdue engagement, noting that some of the issues will have to be responded to in writing within a week. The Committee will also write to the Minister on some issues that need her response as the political principal of the Department, and Treasury regarding how their delays affect the work of SAMSA.

She allowed them to exit the meeting as the Committee moved to the next item on the agenda.

The Chairperson said the Advocate Alma Nel asked to be excused from the meeting before 12pm as the deliberation on the Railway Safety Bill was scheduled to be done by 11:50. She asked that the Committee deal with a few clauses until then, and then it would discuss its housekeeping matters.

Deliberations on the Railway Safety Bill [B 7-2021]

Advocate Alma Nel, Committee Content Advisor took the Committee through clauses 39 to 45 of the Bill.

The Committee accepted clauses 39 to 45 of the Bill without amendments.

Committee internal matters

The Chairperson said the Committee adopted two programmes the previous day, one about the Bill and the other one was the Committee programme. Members spoke about the need to meet virtually during the constituency period to deal with some of the outstanding matters that are not included in the Committee programme. She asked members to suggest what they think the Committee must do in writing by next week so she can speak to the Parliament authorities.

The Chairperson had asked the Committee Secretary to circulate a letter that was received from the Chair of Chairs regarding the Committee’s oversight study tour.

Mr Mabhena said the letter from the Chair of Chairs basically meant the Committee would not do any oversight visits in the third term, which was concerning because the Committee had received two invites to do oversight visits at PRASA and by SAMSA. He asked the Chairperson to try and persuade the Chair of Chairs to allow for the oversight visits.

Mr Sithole said most Committees have done their oversight visits, but there seem to be restrictions for the Portfolio Committee on Transport to do its own oversights. He said the Committee will rely on the Chairperson’s capability to persuade the Chair of Chairs.

The Chairperson said the letter was addressed to all the Committee Chairpersons and not only to the Transport Committee.

Ms Tito said she will leave the matter in the capable hands of the Chairperson.

Ms Khumalo supported the idea of having virtual meetings and agreed with the members that the Chairperson should try and persuade the Chair of Chairs regarding the Committee’s planned oversight visits.

Mr Mey agreed with all the members.

Ms Ramadwa supported the idea of virtual meetings and suggested that the Committee must use its own time to do some of the work that is not included in the programme.

The Chairperson asked members to respond to suggestions that will be made in the week by members to help the process move forward.

Mr Sithole said he was not in the meeting where the Committee programme was adopted and was concerned about the dates of the 20th, 21st, and the 22nd because he is deployed to work somewhere else for two weeks. 

The Chairperson said the Committee notes his apology but that was one of the reasons the Committee was considering adding virtual meetings. She thanked the members for their attendance and fruitful engagement.

The meeting was adjourned.