National Conventional Arms Control Committee Third Quarter Report 2023; Committee report report on the oversight visit to Rheinmetall Denel Munition and Damen Shipyard

Meeting report

The Chairperson requested that the presentation begin only at the point which covers the Third Quarter Report [slide 19].

Presentation by the National Conventional Arms Control Committee (NCACC)
Adv Ezra Jele, Head of Secretariat, NCACC, led the presentation to the Committee. (See the presentation for details)

The NCACC received and processed 41 registrations in the third quarter, with four approved for marketing purposes. 55 contracting permits were authorised across 28 countries, with one application denied. 162 export permits were authorised to 31 countries. 82 import permits were authorised from 24 countries, while the exports of Dual-Use Goods and Technology saw 23 authorisations issued to 11 countries. The presentation also outlined the Arms Control Information Technology costs in context, particularly the maintenance of Service Level Agreements (SLAs).

Presenting some historical challenges, Adv Jele reported that the system has been in the making for eight years. The Secretariat is the System Owner and had little influence on the design and development. The Project Office was based in the Inspectorate, who are not the System Owners. The presentation further covered the Arms Control IT Recovery Plan and its renewal costs, estimated initially at R12,135,944.81, after the systems crash. This figure had to be adjusted to reflect current and foreseeable costs until the financial year end.

The Committee also heard that the NCACC Framework is grounded in domestic law, which is in harmony with Treaties and Conventions. The Cabinet Committee applies itself effectively within the confines of prescribed Laws. The Cabinet Committee agreed to comply with our International Arms Control Deals and the Secretariat has been permitted to go to Arms Control Meetings no matter where they occur. The Defence Industry is essential and most important to the South African Defence Structure.

Discussion
Mr S Marais (DA) wished to confirm whether the money earmarked to be rolled out and spent would be for this financial year only; if they will be able to roll it over to the next financial year, and whether the NCACC had enough resources to begin the processes in December. It was important that the programmes continued to run and that funds were available as the economy also relied on them. He also enquired about the application period for import/export permits (if it is still 45 days) and if the NCACC needed to inform the Committee in cases where applications have lapsed.

Adv Jele assured the Committee that as of the day of reporting, the entity should have enough funds to see it through the end of the financial year. The amount of about R11 million was for hardware that would need to be spent to get the system going. The normal budgeting cycle then kicks in when they estimate what will be required in the next financial year and will cover the aspects related to SLAs and the licensing fees. These are repeatable and not reflected in the current amount and must be spent by the end of the financial year. What the entity cannot do, is to provide for contingencies in the event of a system crash. It would be best to manage this risk elsewhere, but within the budget. He confirmed that the applications are processed within 45 days, but the system is flexible to allow for extensions to cover unforeseen circumstances. When an extension deadline has not been met, the system shuts down as it indicates that the exporter is not ready at that stage. The figures presented to the Committee are of actual exports that have taken place. Even when the NCACC reports to the United Nations, actual exports are presented.
Report of the Joint Standing Committee on Defence Following Its Engagement with Members of the South African Defence Industry at Rheinmetall Denel Munition and Damen Shipyard.
The Committee considered the draft of the Committee Report on the one-day visit to Rheinmetall Denel Munition and Damen Shipyard in Cape Town on 3 November 2023. This was a follow-up to the Committee’s Study Tour to Germany, where it engaged with the parent company. The Committee Content Advisor presented the Committee observations and recommendations.

The Committee unanimously adopted the report.

Consideration of Committee minutes
The Committee considered and adopted the minutes of its meetings dated 09 and 16 November 2023.

Closing Remarks
The Co-Chairperson reported that the Committee Legacy Report had been delayed. Members agreed that the report will be considered early in the new year.

The meeting was adjourned.