Defence Procurement Package Investigation: Preparation of Second Committee Report

Meeting report

STANDING COMMITTEE ON PUBLIC ACCOUNTS
14 March 2001
DEFENCE PROCUREMENT PACKAGE INVESTIGATION: PREPARATION OF SECOND COMMITTEE REPORT; LAW ADVISOR'S INTERPRETATION

Chairperson: Dr Woods (IFP)

Present were Mr Fakie, Auditor General, Advocate Meyer of the Parliamentary Law Office and Mr Marais of the Treasury.

SUMMARY
The drafting of a second report to the Fourteenth Report was further discussed. The Parliamentary law advisor advised that it was permissible for SCOPA to resolve the Fourteenth report in the manner it did since SCOPA determines its own procedures

MINUTES
[Editor's Note: What follows is an edited first person account of the meeting]

Resolving Differences within SCOPA
Mr Beukman (NNP): It is important that we remain non-partisan. It would contribute to SCOPA's work for at least one work group to be headed by representatives of opposition parties. I propose Ms Taljaard.

Mr Kannemeyer (ANC): The central issue facing SCOPA is how do we resolve differences other than by voting? Voting is totally within the constitutional framework of Parliament. There are no members who do not have party allegiance. The Planning Committee has been unable to resolve the issue of convenor, presumably because of party differences.

Chairperson Woods: My understanding was that we had got beyond that, and that Mr Gerber (ANC) was proposing Ms Taljaard to head a SCOPA sub-group.

Ms Taljaard (DP): I had a meeting yesterday which indicates that a parliamentary rule preventing a minority report is itself unconstitutional.

Mr Kannemeyer (ANC): Can the DA assure us there will be no more walk-outs if the vote goes against them?

Mr Makwetla (ANC): The ANC made three proposals, two of which have been agreed to. The ANC is proposing Vincent Smith to chair the work group.

Mr Koornhof (UDM): The principle is that opposition and governing parties share the work-groups. or that we propose individuals. If it is being pushed to a vote here instead of in the working groups, the UDM will abstain.

Chairperson Woods: There are two nominations: Ms Raenette Taljaard and Mr Vincent Smith.

(Ms Taljaard received two votes and Mr Smith eight votes. Mr Feinstien was absent during the vote.)

The Parliamentary Law Advisor's interpretation
Chairperson Woods: The issues to be addressed are whether the chair acted incorrectly in writing to the President subject to the issuing of the Fourteenth report, or whether the Speaker was incorrect in her interpretation. Can we ask Mr Meyer to brief SCOPA?

Adv Meyer (Parliamentary law advisor): We were asked whether it was permissible for SCOPA to resolve the Fourteenth report in the manner it did. Our conclusion was that it was permissible since SCOPA determines its own procedures. The Committee itself must consider its further report to the National Assembly. We do not understand the resolution regarding "definite inclusion" regarding the Heath Unit as "definite inclusion" was too vague to be definitive.

[This resolution was approved February 28, 2001 where the ANC proposed that (a) the interpretation and understanding of the Fourteenth report of SCOPA as adopted by the National Assembly on 3 November 2000 does not provide for the definite inclusion of the special investigative unit headed by Judge Heath; (b) In terms of paragraph two, it is clear that the meeting convened with the various agencies was an exploratory one with the intention of identifying the best combination of skills, legal mandates and resources. The motion was adopted by nine ANC votes to two abstentions of Chairperson Woods and General Holomisa representing the IFP and the UDM; DP and NNP had walked out].

The second report on the Fourteenth Report
Chairperson Woods: This report will include the Parliamentary Law Officer's interpretation, the Committee's response to the views of the Ministers, the response to the Deputy President's letter and advice to Parliament on the state of the investigation, especially the report from the Auditor General's office.

Mr Smith:.Today's meeting should produce the first draft that will in the main be produced by the SCOPA Secretariat. The media was hysterical when we voted that the ANC wanted to rewrite the report. Consequently, we want to reject any inference that the ANC has rewritten the report. The Deputy Auditor General indicated that part of the audit would be the costs of the Haw and Gripen deals. We do not have to do that. We have to identify what is in the domain of the Auditor General, and what is our own. We can then fine tune the Secretariat's draft.

Chairperson Woods: Whoever does the draft will accept input from members. We have had a formal request from Parliament to answer the Deputy President's letter.

Ms Taljaard (DP): We would be loathe to depart from normal procedures. We are dealing with the Auditor General's report. I would be very loathe to outsource the drafting of the report. So would Madam Speaker. We have been instructed by the Chair to make our draft report, which we in the DA have done. We should not create new institutional frameworks because of the difficulties.

Chairperson Woods: I am not sure that it is either fair or within the job description or competence of the Secretariat to draft the report. The Committee was asked to study the transcripts of the Ministers' meeting, and put something to paper.

Mr Smith: Let me clarify. We did not mean that the Secretariat should draft the report, but that they collate the evidence. The Auditor General should not be summarising for us. The Fourteenth report was not drafted by the Auditor General. We must identify a scribe. We do not have a problem with the opposition party's paper, although we do not have an ANC paper. We do not intend any views or issues to be left out of the report.

Mr Kannemeyer: It is important to explain why the ANC is proposing that the initial draft be done by someone who has followed the entire process since 30 October. The simple reason is to avoid party bias. Is Ms Taljaard suggesting that the Secretariat is not part of SCOPA, or that we question the ability of staff with LLBs to draft the report? The Auditor General's office has indicated it will report back by the end of June. We are saying that the report should not be an ANC or DA or party-political report.

Mr Beukman (NNP): This is a technical matter. It is up to our committee to evaluate the ministers' testimony. Some documents are classified. Two specific documents should be declassified to assist us to respond to the ministers. We must be able to use all the pieces of the puzzle.

Chairperson Woods: I respect that right, but I do not think it must happen right now for us to move forward. Do you need to release those documents to release the DA? It is not an issue that holds up the process at this stage.

Mr Smith: I go by that ruling.

Ms Taljaard: I will be distributing documentation to all committee members.

Chairperson Woods: This meeting is being taped.

Mr Fakie: I would like to touch on a point by Mr Smith. The team is looking at all the allegations and concerns raised by SCOPA in its Fourteenth report. It would be very helpful if you specifically indicate what SCOPA's needs are, rather than leave it to our interpretation.

Chairperson Woods: We indicated in the Fourteenth report that we would issue a brief, but we were subsequently advised that we cannot instruct these agencies. The initiative would have to result from an invitation from the Auditor General.

Mr Fakie: What are SCOPA's concerns that the Auditor General's office should address?
The Parliamentary legal advisor has this morning already referred to the dangers of vague wording.

Ms Taljaard: We need to look at the Parliamentary Law Adviser's interpretation, the Deputy President's letter, and the ministers' views, but not necessarily in that order.

Mr Smith: In terms of sequence, the Fourteenth report lists point by point. We can then identify the points.

Ms Taljaard: The problem we would have is that not all areas of the Fourteenth report became contentious. If we take it up paragraph by paragraph we will not be following the pattern of the ministers.

Mr Koornhof: The logical procedure would be the three main issues. If we go through the report paragraph by paragraph, we may create the impression of rewriting it. We have identified eight issues. It would be more logical to address the Deputy President's letter and the ministers.

Mr Gumede: I support Mr Koornhof fully, and understand why. If we entertain the DA's position, we will complicate matters.

Chairperson Woods: I understood the UDM to be supporting the DA.

Mr Smith: We do not have to fight on this issue. We want a thorough working. We are quite comfortable.

Chairperson Woods: Do we now agree?

Mr Smith: Yes, on the Deputy President's letter, the ministers' views, the Law Adviser's interpretation, and any other matters.

Mr Kannemeyer: Plus any other issues identified months ago.

Chairperson Woods: Are there any issues on the first page of the Deputy President's letter?

Ms Taljaard: The introductory comment of the Fourteenth report should be flagged for the summary.

Chairperson Woods: Are there comments on the paragraph one page three of the Deputy President's letter [we find it strange that a parliamentary committee (SCOPA) considers expenditure for the acquisition of defence equipment as a "major diversion of public resources…" requiring to be balanced by a "social payback".]

Ms Taljaard: It was the Executive's desire to have a social payback through DIPS and NIPS [defence industrial participation schemes and national industrial participation schemes], and the acquisition package was marketed to the country especially on its impact on job creation.

Mr Koornhof: It relates to SCOPA's work and its constitutional powers. We must respond to the Deputy President.

Mr Feinstein: An expenditure of R30 billion is a major diversion of public resources, and that is what I believe we intended to say.

Mr Kannemeyer: The decision to purchase the armaments was made by all parties. There is a constitutional imperative to purchase arms. Certain evidence was placed before us that Parliament had agreed. Our report did not express itself on policy. The emphasis must be on value for money.

Ms Taljaard: Constitutional issues arise from a line-by-line approach out of context with the tone of the letter.

Chairperson Woods: Do we respond that we had not intended the Deputy President's interpretation?

Mr Nair: Our task is to ensure value for money, not to question the colossal expenditure. We should say that we are not taking issue with the Cabinet decision.

Chairperson Woods: Does our report say what the Deputy President says, or does it not?

Mr Nair: We are co-responsible for the colossal expenditure. We cannot criticise it now given the constitutional need for defence.

Mr Kannemeyer: We argued that what made the expenditure acceptable was the social paybacks through NIPS and DIPS, and that we needed to monitor the offsets. We need to reassure the Deputy President we were not undermining the constitutional obligation to defend the state, and the decision to purchase arms.

Chairperson Woods: The critical issue in this regard is that SCOPA states it is interested because of experiences of fraud and corruption. The ministers' suggested that there are no instances of dishonest arms dealings.

Mr Jambat: The choice of words was unfortunate, and we had no intention of accusing our government, albeit that the industry is prone to corruption.

Mr Kannemeyer: I accept that the characterisation of the arms industry should alert us to where taxpayers may suffer through impropriety. There is a body of evidence which gives character to the arms industry. The Deputy President asks on what evidence.

Ms Taljaard: This strays into a constitutional area. The letter is contrived upon a press release from the ministers. Non-compliance to NIPS and DIPS are equally problematic. The Deputy President also attacks SCOPA's methodology in his second letter. It is unprecedented that the Executive attacks the methodology of SCOPA's work.

Mr Kannemeyer: The Deputy President is not expecting us to report back to him, but his second letter refers to the second report from SCOPA to Parliament. We are not going to write to the Deputy President.

Mr Feinstein: I am concerned that the Deputy President's letter had been copied to foreign governments and companies. How do we deal with notifying them of our response?

Chairperson Woods: I do not think that we are finding each other. For myself, I reject this remark. It is more than contrived. The references to the committee's work are inadequate, and we owe it to Parliament to defend what is in our report.

Mr Smith: We agree that we must defend the defensible. Would you put your view on the table? You Chair, were a prime author of the report. The drafters might then have a way forward.

Chairperson Woods: The ministers' and Deputy President's accusation rests on international arms trade experience. The executive has contrived to misrepresent this to criticise SCOPA's work. The criticism of the armaments industry is well documented. Any minister can check the internet, and it is odd that the minister claim not to know this. Indeed, it is extraordinary.

Mr Kannemeyer: I concur with everything you say.

Mr Feinstein: The two people who gave most time to the report were Gavin and myself. We were subsequently questioned by the Committee in detail. We need to avoid creating the impression that committee members were deprived of information. The World Bank input document details the corrupt practices.

Mr Makwetla: It is important for members to own the report publicly and otherwise, and not to isolate Andrew. But we need access to that information.

Chairperson Woods: The Speaker has some of the information.

Mr Kannemeyer: In the adoption of this report, certain aspects were questioned. I raised the c2i2 part [c2i2 is a company which has complained to the AG about being excluded from one of the sub-contracts]. The haste to conclude the report before closure of Parliament was such that we adopted it the first time it was presented to SCOPA without members having had full details.

Chairperson Woods: The adoption of the report was no different from any other report. The difference with this now is because the report is being challenged. Please identify what you have not been given?

Mr Smith: Could we not highlight key issues? This discussion will not allow us to complete a report by July. What can we do differently? We have time constraints

Ms Taljaard: I highlighted particular constitutional issues. It will be incredibly difficult to take this forward before we resolve the constitutional responsibility. Vincent highlighted media concern about an ANC rewriting of the report. I want this flagged.

Chairperson Woods: Our work was challenged. It will be a long drawn out process. I wonder why the Don Gumede option isn't the way to go by way of a vote. Otherwise, I do not know where we will find the time.

Mr Makwetla (ANC): Could I suggest four or five people to table a paper at the next meeting on what should be included?

Ms Taljaard: A key problem to a drafting committee will be the constitutional issue. The committee cannot be a screening process. The Parliamentary Law Officer's interpretation, the Deputy President's letter, the ministers', the costs. The drafting committee will be gridlocked from birth. It must have a particular mandate approved by Plenary to give a drafting sub-group a way forward.

The committee agreed to this proposal. Mr Koornhof will represent the UDM, Ms Taljaard the DA and Chairperson Chairperson Woods the IFP. The ANC will nominate two representatives. Ms Taljaard remarked that the ANC representatives should have an "institutional memory" of the Fourteenth report processes, implying that Mr Feinstein must be one of the ANC representatives. Mr Kannemeyer commented Feinstein is a member of the ANC.

A proposal of a brief ANC selection caucus was turned down by Chairperson Woods, who told the ANC to advise him that afternoon who the ANC representatives would be.

The meeting was adjourned.
Kannemeyer. That's all he said --c2i2 is a company which has complained to the AG about being excluded from one of the sub-contracts.

Meyer meant that "definite inclusion" was too vague to be definitive.

I have corrected these plus a few typos, and attach a new copy. Oh, Pierre ? is Pierre Gerber.

I am leaving now to attend the SCOPA meeting at 11:00.