Special Appropriation Bill: Presidency briefing on funding for ICJ case

Meeting report

The Chairperson welcomed all the Members, and requested that the Committee adopt the minutes while waiting for the Presidency delegation to arrive. 

He congratulated all the Members for their respective speeches during the sitting the previous day, and stated that they had made powerful contributions. The highlight was that the Committee had asserted Parliament’s work across party lines.

The minutes of the meetings from 15 to 20 November were adopted.

Presidency briefing on the Special Appropriations Bill [B19-2024]

Mr Rory Gallocher, Chief Operating Officer (COO), Office of the Presidency, and Mr Khathutshelo Mashapha, Acting Chief Financial Officer (CFO), provided a comprehensive briefing on the Special Appropriations Bill. This Bill proposes an allocation of R17.359 million for the appointment of legal representatives,  interpreters, translators and professionals to pursue South Africa's legal case at the International Court of Justice.

Mr Gallocher said that the Director-General's committee had approved a standard operating procedure (SOP) and interdepartmental memorandum of agreement (MOA) which regulates and guides the daily operations of the government team, the main departments involved in this project, the performance management firm (PMF), as well as ensuring compliance with all the legal prescripts to be adhered to by government and other stakeholders whilst handling and managing this matter. The risk officers had been appointed from the main departments to continuously monitor all risks associated with the case. The MOA and SOP address the cost-sharing process by the three departments, and this clarifies how costs were to be shared amongst these departments.  

Mr Gallocher alluded to the role of the PMF. He said that considering the complexity of the case, there was a need for the procurement of the International Court of Justice (ICJ) project management firm. The PMF had been appointed by Department of International Relations and Cooperation (DIRCO). It had the responsibility for managing and coordinating the work of the team of legal counsel representing South Africa in the matter, and managing all administrative matters related to the case, including travel arrangements. 

He said that National Treasury had earmarked the R17.359 million in additional funding in the 2024/25 financial year to Vote 1: Presidency for the International Court of Justice. It was therefore specifically and exclusively appropriated for the ICJ case only, and could not be used for any other purpose. 

Mr Mashapha indicated that virements in the Presidency had been implemented in terms of section 43 of the Public Management Act of 1999. This administrative transfer of funds between programmes and economic classifications was due to several factors including, but not limited to:

• Movements from the compensation of employees to transfer and subsidy (households), due to unplanned leave gratuity payments for employees who vacate their positions before the pension age during the financial year.
• The alignment of the budget spent with the Standard Chart of Accounts (SCoA) due to the reprioritisation of funds.
• Realignment of budget and expenditure to accommodate accruals and commitments.

 

All movements in the 2024 Adjusted Estimates of National Expenditure (AENE) process ensured that the Department was aligned with the Standard Chart of Accounts classifications, and avoided negative projected expenditure in other items. The measures to minimise the shifting of funds included realistic estimates for resignations and retirements, improved management of accruals and commitments, and revision of the Presidency baseline budget.

See attached for full presentation

Discussion

Mr K Wakelin (DA) said that the briefing by the Presidency was narrow, and asked if he could submit further questions related to other matters.

The Chairperson agreed, stating that the briefing was narrow because they were in the processing phase of the Special Appropriations Bill. He wanted the Presidency to account for the appropriate forum. 

Dr M Burke (DA) questioned if the lawyers and their delegates were flying to the Netherlands in business class, and if they were, he wanted to know why.

Mr M Lekganyane (ANC) wanted to know if there was a difference between the position of the Chief Operating Officer (COO) and the Director-General (DG), Ms Phindile Baleni, in the Presidency. If there was a difference, he wanted to know what it was regarding accountability. Concerning the amendments to the Public Service Amendment Act, he wanted to know what the implications were, because he had seen that there were suggestions for additional responsibilities for districts.

Ms N Gcaleka-Mazibuko (ANC) said she appreciated the work done by the Presidency to assist the Committee. She asked about the social impact that the ICJ case would have, and how it had affected diplomatic relations globally. 

She noted the figures and environments presented by the Presidency. She questioned whether it had considered other forms of funding for the legal case, and what implications this could have on the sovereignty of the country. 

Ms M Bartlett (ANC) questioned how the adjustment of the budget prioritisation for the legal case impacted other critical expenditure items in the medium term. She further questioned how the ICJ case would impact national interests, excluding government's guiding documents. 

The Chairperson questioned whether other states could contribute to the ICJ case within the African Union (AU), or for international solidarity. He said that when looking at the budget of the Presidency in its broader sense, the G20 chairmanship and the deployment of troops were linked to the Foreign Service Act, and within this Act, there was reference to multilateralism, which contrasted with many domestic issues South Africa faced. He said that when the country fights an international case, it loses out on other domestic programmes. He questioned whether international issues were weighed against domestic issues when it came to the overall budget of the Presidency. 

Responses

Mr Gallocher responded to Dr Burke’s question regarding business class travel. The class of travel was governed by policy, and it was the same as the class of vehicle that officials were awarded for ground travel. The policy indicated that even if a government representative qualified to travel by business class, they may elect to travel at a cheaper class instead. On long international trips, the Presidency often requests that they travel economy instead because of the cost containment measures implemented. The legal team travelling to the Netherlands usually went straight into preparatory meetings upon landing, which resulted in the trips being procured at a business-class level. He added that it was more valuable for money to pay for business class than to fail to argue a case before a panel of judges. However, government officials usually flew using the economy class.

He responded to Mr Lekganyane’s question, and said that the span of control of the DG in the Presidency was linked to being the Head of the Department. The DG was also the Chairperson of the Forum of South African Directors-General (FOSAD), which meant she was responsible for all DGs because all DGs were appointed by the President, and his senior official overall was the DG in the Presidency. Within this, one of the departments was Presidency Vote 1, which was where the Accounting Officer was the COO. The responsibility for financial affairs and managing the staff was the job of the Accounting Officer, which had been structured in this way for many years. 

Regarding the question related to the amendments to the Public Service Amendment Act, Mr Gallocher said that the amendments were very significant because they would establish the Head of Public Administration. There has been adequate coverage of the shortcomings of government’s performance and the coordination of the different departments. Since 2022, they have utilised the Professionalisation of the Public Service Framework which had been approved by Cabinet. The amendment in the Act enabled the establishment of the Head of Public Administration, who would be the DG in the Presidency.

Regarding Ms Gcaleka-Mazibuko’s question regarding the social impact of the ICJ case and diplomatic relations, he asked to defer the diplomatic relations questions to the Department of International Relations and Cooperation (DIRCO). Regarding the social impact, and the administration’s priorities, the notion of multilateralism and a world that was fairer, more balanced, more just and more peaceful, was a theme that continued to underpin the Presidency, and had been emphasised by the President.

Responding to the question about considering other forms of funding for the legal case, he said that other sources had been considered, but there was a hesitancy to accept them due to the sensitivity of the matter. Taking other donors and sources may affect the accurate intent of the country.

Mr Gallocher responded to Ms Bartlett’s question. He said that although the budget allocated was R17 million, and was approximately R95 million overall, this was finite, which meant that choices needed to be made. He added that the budget allocated was important, as it aligns with Section 9 of the National Development Plan (NDP), and was linked to the medium-term strategy. 

He said other countries had wanted to join forces with South Africa regarding the legal case, and the legal team had always given guidance on this because in the ICJ, legal matters were argued using international law, and common sense could not be used to guide it due to its tactical nature. In the early stages of the case, South Africa had held off on other states coming in as contributors, but this may change due to the advanced stage of the case. 

Mr Gallocher responded to the question regarding multilateralism in contrast to the domestic pressures on the budget. He stated that the way to see this was to view it as an “and” and not an “either/or,” because in the medium term development plan (MTDP), all aspects were prioritised. Both were accommodated because both were important.

Further discussion

The Chairperson disagreed with Mr Gallocher’s response to the question regarding multilateralism in contrast to the domestic pressures on the budget. The fiscal position South Africa found itself in compelled it to make choices. For clarity, he also wanted to know if there was no funding by Iran in the legal case, to put an end to the uncertainty regarding this issue. 

Mr Wakelin raised the question as to why three departments were sharing the legal costs, despite the Department of Justice being the main driver. He added that an adjustment would have been a better methodology than a special appropriation, and queried why this was not the preferred outcome. 

Dr Burke stated that from an online scan, the cheapest business class option for a flight scheduled for the end of the month to Amsterdam and back was R75 000, whereas an economy class flight was less than R20 000. He added that the cost for a decent hotel in a European city for a day early would not exceed R5 000, so an economy class ticket and a good hotel option would cost around R25 000, which was three times less than a business class ticket at R75 000. He expressed his concern that early childhood development grants were being paid at R17 per day, yet people were flying business class at R75 000, which did not reconcile ethically.

The Chairperson agreed with Dr Burke, but pointed him to the Executive Members’ Ethics Act, where the appointment policy governed travel, and suggested he could better address these matters with their legal team. 

Mr Lekganyane said that different delegates had different options to fly, either through direct flights or connecting flights. He added that the Minister of Finance should track whether this happens with delegates only at the national level, or also at the local government level.

His concern lay with the balance between what was done domestically compared to elsewhere. He said there was a need to follow money allocations and monitor whether it goes to officials or prioritise services. This issue of flights would continue into next year, because there was an upcoming conference to be held in the Caribbean, which would need to be monitored to avoid such issues of excessive expenditure. 

The Chairperson said that austerity, like justice, needed to be done as well as seen. Leaders needed to behave symbolically and translate those values to the rest of the institutions.

Mr Gallocher said that this was an ethics issue, that there was an ethics committee in the presidency, and that this same matter had been addressed on the International Day of Anti-Corruption. The example used was that of not having enough money to purchase incubators in public hospitals for premature newborns. The request from the Presidency was for the government to cut down on hotel stays and lavish expenditure, and if these expenses were totalled, it could pay for the incubators at hospitals. He added that the leaders needed to lead by example.

Regarding the number of delegates, the list of the officials who travelled had been reduced, as officials who were not required to be there were not permitted to travel. 

Regarding flying economy and then staying at a hotel for an extra night, Mr Gallocher said that they were committed to making cheaper arrangements where it was possible. Paid officials and support teams were often asked to downgrade to flying economy, and in some instances, this was the case. Concerning the legal team, this would not be very simple, as they often left the courtroom and started preparing as soon as they landed. He also stated that it could be important to work with the CFOs to try and ensure that measures were implemented to limit costs. 

Regarding Mr Wakelin’s question regarding the three departments paying legal costs, Mr Gallocher said that they had a big legal team with varied expertise that represented South Africa well. Different portions of the legal team had been appointed by different departments. Their services were procured by the State Attorney's Office and billed back to the departments. 

He said Iran was not paying anything towards the legal case, adding that all donations were disclosed. 

Mr Mashapha said that the Presidency was open to suggestions regarding the issue of a special appropriation or adjustment of the budget, and was also open to different methods that would efficiently assist in the allocation of funds.

The Chairperson said that economy flights should be prioritised, and only those with special conditions, with proof, would enable permission for business flights to be granted. 

Member's redeployment

Ms Gcaleka-Mazibuko said that today was Ms Bartlett’s last day as a Member of Parliament. She had been redeployed to Sol Plaatje in the Frances Baard District Municipality in Northern Cape as the Executive Mayor. 

Ms Bartlett expressed her thanks to the Committee for the time that she had worked in Parliament. She reflected that she had  sat on many committees during her time and learned a lot during her first time in Appropriations from the Chairperson, the officials and colleagues. 

The Chairperson said it was a great privilege to serve with her on the Committee.

The meeting was adjourned.