Department Strategic Plan and SANDF Reserves’ briefings

Meeting report

DEFENCE PORTFOLIO COMMITTEE
15 March 2005
Department STRATEGIC PLAN AND SANDF RESERVES’ BRIEFINGS

Chairperson: Professor K Asmal (ANC)

Documents handed out:
Department Strategic Business Plan 2005/06 – 2007/08 (Draft 5)
PowerPoint presentation on Department Strategic Business Plan
Department Military Legal Services Division presentation
Department Joint Support Division Reserves presentation
Department Joint Support Division Reserves submission
University Reserve Training Unit submission
Navy Reserve submission
Air Force Reserve submission
Reserve Force Council submission
Army Reserve submission
SANDF Reserve Force submission
Strategy for Development for the Reserve Force document
Ceasefire Campaign document
Status of SANDF Reserves submission

SUMMARY
The Committee was briefed by the Department on its Strategic Plan and risks identified for each Department programme. Funding for four risk management options was outlined as well as budget requirements and allocations. The Chief of the SANDF Defence Reserves also outlined the broad strategy for transforming the Reserves and each Reserve division presented their respective implementation plan. The main challenge was recruiting and training new personnel while developing an exit strategy for older Reserve staff. Members asked about the implications and solutions for the Department risks, discussed the decentralisation of the Reserve Force plan, and asked for clarification on overall figures for Reserve personnel and budgets.

MINUTES
The Chairperson said that last week’s meeting had dealt with the budget, and some questions had been raised at that meeting that would be responded to now. He had received the legislative programme for ‘Outstanding Bills’ and the Committee awaited the six relevant bills. He asked the Department representatives to clarify some obscurities in the strategic plan, and present how this year’s strategic plan differed from last year’s. He hoped this was a final draft.

Department briefing
The Department was represented by Mr January Masilela, the Secretary of Defence; Mr Antonie Visser, Chief Director: Strategic Management; and Mr Jack Grundling, Chief Financial Officer (CFO). The presentation was supplementary to a previous budget meeting and the Strategic Plan had been previously distributed to Members. The timeline and cycle of funding was outlined as well as recent Department background. Mr Visser outlined the Department’s nine programmes and the risks identified for each programme. In total, 316 risks had been identified and the top four had been prioritised and developed into funding options. These four options were Ammunition Disposal, Maintenance of Facilities, Integration of SDP Navy Vessels and Health Legislation. The presentation included Medium-term Expenditure Framework (MTEF) requirements and allocations for 2005/2006.

Discussion
The Chairperson said that ‘risks’ were issues that needed priority treatment. The word ‘risk’ connoted serious or catastrophic consequences, so they should be careful about using that term.

Mr O Monareng (ANC) said that the document mentioned the National Security Strategy, but that the presenters had alluded that they had no documentation on it. He asked for any available documentation on that and on the Parys Resolution.

Mr M Sayedali-Shah (DA) asked for clarification on design specifications for SDP vessels and what SITA and DIDTETA were.

Dr S Pheko (PAC) asked for clarification on what "statutory prescription" meant and what unfunded risks were.
The Chairperson said that they would not use the term ‘statutory prescription’ anymore, but would say ‘ the implementation of ministerial policy.’

Mr S Ntuli (ANC) asked for further clarity on Option One. The document said that the ammunition would be disposed of though a conventional manner at approved demolition ranges, but there was no dedicated disposal plan, so he asked what the risks were. He also asked to what extent the current budget spoke to the restructuring of the Defence Force and whether they could restructure or if the budgetary constraints prevented them.

Mr Masilela said that elements of the National Security Strategy had been developed, and they hoped to come out with a draft document on it by the end of July 2005. There was a document available on the seven resolutions reached in the Parys Resolution.

The representative from the Navy said that there were three categories of shortcomings in the Navy, and these were in regards to original user specification, support facilities and annual repetitive checks in order for vessels to qualify and be accepted into service. New combat equipment was being added to vessels and had to be qualified through contracted trials to ensure its quality. The Navy was taking a leap in technology for the Patrol Corvettes (SPCs) but did not have the training infrastructure to ensure that they could fully train people for the future. In the past, the Department or the Navy itself could decide on what the competency standard should be, but the Defence Act transferred that responsibility to the Minister, so the Department had to implement his policies, which required additional funding. This was what statutory prescription meant.

Mr Masilela said that they would supply the document on the Parys Resolutions rather than run through the PowerPoint presentation on it. SITA stood for State Information Technology Agency and DIDTETA was the Defence and Intelligence Training Authority. ‘Risks’ were issues needing attention that they had identified, but did not mean that there was a sudden crisis. There had been some misinterpretation in terms of training and the management of strategic defence packages, making it seem that risks were unmanageable. These were in fact issues that Department was always dealing with and had chosen to draw attention to them as risks.

Mr Visser said that budget holders presented budgets that laid out what they could and could not do to make clear their needs and risks. The Department had to examine all of their challenges in restructuring to get the best value for money. Out of R22 billion, R8 billion was for salaries and R7 billion was for the strategic defence packages, so their flexibility for manoeuvring was very low.

The Chief of Logistics said that the funding for the acquisition of the plant for weapons disposal was not the problem and that they would acquire the plant through the National Industrial Participation Credits. The funding mentioned was for the preparatory phase, because they needed to send all unstable ammunition there.

The Chairperson said that it was not worthwhile for the Committee to visit this location because they knew how terrible conditions were there. The idea of a private partnership for the plant had begun three years ago, and he asked how far they had gone with it and what stage they had reached.

Mr M Booi (ANC) said that they had asked the Department to cost the process of transportation of ammunition to this new facility and wanted to know whether that was part of the budget process. The Committee needed to be able to see the Department’s business plan in terms of end goals and what could ultimately be expected. He wanted to know what the National Security Plan would cost and whether there was an exit plan for members. He asked what the Department was expecting from the Committee in terms of assistance before they approached the Treasury because none of the plans included interaction with the Committee.

Mr V Ndlovu (IFP) asked whether the Department was stable financially in spite of the risks. He also asked what was meant by the non-compliance with health legislation and the lack of operational readiness and service delivery in facilities.

Adv H Schmidt (DA) said that a mitigating factor identified for some of the issues were reprioritisation and asked how something like health status and age profile could be reprioritised. Issues such as the deterioration of HQ and hospital buildings was not new, and he asked if there was any indication of the SANDF reducing its footprint or if that was contained in another document.

Mr Masilela said that at the last meeting, he had promised to bring a detailed plan on the facility for weapons disposal, and would make that available. They had been working on it for three years, had set up a task team, had done feasibility studies and had begun on plans for disposal. The feasibility study was available, the new location had been assessed and the plan indicated that they would need between R600 to 800 million to carry it out. The Department had been engaged with Germany and Sweden in negotiations for investment. Construction should start in 2006 and should run for eight years, during which time most of the material would be disposed of. Every year, the Department needed to commit itself to R80-100 million for transportation of ammunition to the plant. They had been given R5 million and were using that for initial stabilisation and security.

The Chairperson said that at DR, the Central Depot, every year until the end of apartheid, 10 000 tonnes of disused material had been dumped into the sea, but they could not do this anymore. This was the reason for the new facility.

Mr Masilela said that it was not the responsibility of the Department to come up with the National Security Strategy. Other agencies were driving that process, but the Department was participating in workshops and seminars because their own defence strategy had to be located firmly in that strategy. The question of where the Department was going in terms of policy shifts was the essence of the Parys Resolutions. They were dealing with the update of the Defence Review and the White Paper on Defence in order to firmly locate their policies within the government vision for 2014. There were seven Parys Resolutions, including looking at how force design and structure led to the funding and allocation gap. In the White Paper process they were addressing the critical challenges facing defence and were working with the Committee on all of the issues they were evaluating. The exit mechanism was one of the 316 risks, but they had decided to pursue only the four. It had not been highlighted or brought to Treasury, but they were dealing with it within the broader context of Human Resource Strategy 2010 to address the health and age profiles and representivity. They were engaged with the DPSA because they had looked at the broader exit mechanism for the public service, and already knew how much it would take to exit one person. On 12 April 2005, there would be a presentation on that. In terms of whether the Department was financially stable, the government had defined its vision for 2014 and all of the departments had to align themselves with that. This question would be fully answered when they adopted the new Defence Review and White Paper because that vision would be clearly laid out. The Department faced problems with health facilities because they had to comply with occupational health and safety legislation for their buildings. They underwent inspections and were dealing with challenges in conjunction with the Department of Public Works. There was a ten-year master plan that the Chief of Logistics could submit.

The Chief of Logistics said that they could not approach government without coming up with some solutions. They had identified some army bases that would lend themselves to private/public partnerships and others that were being under-utilised in order to plan a strategy to optimise use. They had also developed a strategy to limit lease facilities because they were paying R150 million for leased infrastructure.

The Chairperson asked if they did their own maintenance in their buildings.

The Chief of Logistics said that maintenance was done via Public Works, but 18% of that allocation went to consultants, which limited the funding available for the actual maintenance.

The Chairperson said that the consultants would be those who put in a plan for rehabilitation and would state what needed to be done and how. It seemed that the Chief of Logistics was hostile to spending 18% on consultants.

The Chief of Logistics said that he was very hostile about the current set-up because they were not getting value for their money. They had to pay for whatever work needed to be done and in some cases it was repetitive.

The Chairperson said they would soon meet with Public Works, and asked the Department to come prepared with their reaction if Public Works did not carry out tasks they were supposed to do. He asked who decided on the priorities for maintenance and rebuilding and whether it was possible to build up expertise for minor repairs.

Mr Masilela said he did not wish to make any statements because Public Works was not there to speak for themselves. Low morale and operational readiness were highlighted as implications if they did not address some risk issues effectively. In terms of reducing their footprint, once Department had finalised their strategy, capabilities and mission, they would do a review of how many bases they needed to carry that mission out.

Dr G Koornhof (ANC) said that when the business plan was tabled on 1 April, it would cover the current financial year as well as the two outer years. Given the nature of the Department and the military, he suggested that it should cover three or five outer years. He asked where in the business plan there was reference to the need for new equipment for the land forces. There was reference to a capital acquisition master plan and he asked for that to be unpacked.
Mr Ntuli asked how the budget took into account the restructuring of the Defence Force.

Mr Booi said that there was funding for the servicing of Memorandums of Understanding (MOUs) but could not find this mentioned in the strategic plan and asked for more information on which MOUs they were servicing and how. The Department received money to deal with the deterioration of facilities, and he asked what they were improving and how that would improve capacity.

Mr Monareng said that a task team had been appointed to look into the resuscitation of the military justice system and asked for an update.

The Chairperson said that the budget for legal services was R80 million and asked how much of that was paid to external attorneys and advocates and how much was spent internally. Defence Foreign Relations received R51 million this year and R54 million in two years, but the Reserve Force division, which actually carried out the Department’s activities, only had a budget of R10 million, showing a lack of proportion. He asked how many attaches they had and how many reports they received each year from these attaches.

Mr Grundling said that last year the National Treasury began an initiative to set up budgets and strategic plans for five-year periods that corresponded to the life of Parliament, but he was unsure of where they had got with that initiative. The estimate prepared for 2005 was still based on the three-year plan. The consequence of this was that outside the three years given, a window of opportunity began for funding to recapitalise the army. Their capital plan extended to twenty years, but that was not reflected in the three-year strategic plan.

Mr Masilela said that the National Treasury and the DPSA were looking at amending the PFMA to include a longer planning cycle. He said that in terms of restructuring, this budget would be implemented by 1 April, so they would have to make the necessary budget adjustments in the coming financial years and the full scope of restructuring would not be felt until 2006/2007. There was a Ministerial Task Team to look into the entire legal system that had made twenty-one far-reaching recommendations that were being implemented. The Department would soon go back to the Minister and engage MPs on the matter.

Mr Visser said that the Defence budget made provision for legal fees payable to the state for services rendered. The budget for this in 2005 was R6.2 million, for 2006 it was R6.5 million, and for 2007 it was R6.8 million.

Mr Masilela said that they would come back to answer questions on expenditure on litigation. There were different levels of MOU participation for the Department, which included binationals and Defence Co-operation Agreements that covered training exchanges, joint research and development and technology transfers. All of these MOUs needed to be serviced and the budget covered expenses such as staff meetings and the Joint Permanent Commission on Defence and Security with countries bordering on South Africa, which had committees and programmes that needed to be supported. South Africa also participated at the level of the SADC and the AU.

The Chairperson asked for a list of the MOUs that the Department was party to.

Mr Masilela said that they would deal with the issue of deteriorating facilities in the joint meeting with the Department of Public Works.

Mr Grundling said that he could not answer on the issue of attaches but could answer the legal questions. In the medium term, expenditure on legal services would grow because of growing administration of military justice in the Department. In the previous Annual Report, they had set out the offences being committed within the Department and the growth of those offences. The legal division also assisted in matters of representation, litigation and advice to the SANDF and deployed commanders with respect to laws in countries of deployment and laws of conflict. This programme did not pay for legal fees, the work of the State Attorney or for claims and losses. Under the Joint Support Programme was a sub-programme called Departmental Support which contained a provision for expenditure related to obtaining legal opinions, representation and litigation. This expenditure had declined significantly from 1994. Most of this budget went to the State Attorney, and the rest went to correspondence for cases being dealt with in other areas and to counsellors the State Attorney appointed.

The Chairperson said that in other countries, departments did not have their own lawyers, and that when legal problems arose, they went to the Attorney-Generaleral, but South Africa did not have an Attorney-Generaleral. The session on Reserves would follow and upcoming meetings would include proposals from consultants on the Military Ombud and small arms proliferation. The Department had until 1 April 2005 to rewrite the Strategic Business Plan, and the Chairperson outlined some areas that needed revision. He pointed out the use of concepts such as ‘onslaught,’ ‘general war,’ ‘customers’ and the sole responsibility for command and control resting with the Chief of the SANDF. The ANC had to be part of the process of transparency and had to scrutinise the Department to establish if it was carrying out the objectives of the Constitution. Sometimes answers were used for partisan purposes, which was an abuse of the function. He complemented the Department on taking tough issues and confronting them and said that the Committee would assist them where they could but would fight against them if necessary.

SANDF Reserve briefings
The Committee heard from a number of representatives from the SANDF Reserve Force. The delegation was led by Lieutenant-General Matanzima, Chief of Corporate Staff, and included Major-Generall Anderson, Chief of Defence Reserves; Dr Job from the Reserve Force Council, Major-General Mokoape from SA Army Reserves; Brigadier-General Masters from SA Air Force Reserves; Rear-Admiral Penzhorn from SA Navy Reserves; Brigadier-General Cilliers from SA Military Health Services; Lieutenant-Colonel Thulare from the University Reserve Training Unit; and Brigadier-General Jelliman of the Joint Support Division.

Major-General Anderson outlined the Reserve Force strategy for the development of a transformed and viable Reserve Force that would enable sustainable defence capabilities for South Africa. There had been no strategy on how to accomplish this, so they launched Project Phoenix in September 2004, which was accompanied by implementation instructions and was being implemented by all services and divisions. This involved budgeting, structuring, staffing and training, required a policy and legal framework and incentives for employers and reservists. They also faced problems in attracting new members to the Reserve Force, particularly in leadership positions but this was being fostered through the University Reserve Training Unit. Each area represented outlined their work towards the implementation of this strategic plan, providing figures on budget and on personnel strength.

Discussion
Dr Koornhof said that he hoped that the Minister had approved the strategy. Each of the services had been decentralised, so there was no comprehensive sense of the total size and budget being worked towards. It would help the Committee to have that overall sense and he asked what was being done in units on the ground to enable them survive, operate and retain their core group until the plan took effect.

Mr P Groenewald (FF+) asked what would happen if critical success factors were not achieved and whether the conventional Reserves would continue to play a role since the ATR did not exist anymore. Criteria had been established for the closing down of the Commandos and he had just been notified that nine Commando units were being closed down. He asked whether the obligations of the Reserve Force Council had been met as far as those closures were concerned, because it seemed that there was a lack of co-ordination between the Reserve Force and other role players.

General Anderson said that the Minister had been briefed on the strategy and that the Deputy Minister was focusing on Reserve Forces. The strategy had been presented to him and his comments were incorporated. The Reserve Force had been decentralised because budgeting and authority rested with each division, but the implementation instructions said that the Defence Reserves Office had oversight, so the plans for each service will be monitored. Consolidated figures could be made available. No army unit was receiving less than R300 000, but the resources had been spread too thinly in the past, so the Council had decided to give preference to the infantry. The non-infantry units had taken some strain, but it was better to focus and get results. The country would be put at risk if the strategy failed because the Reserves were the country’s insurance policy.

General Matanzima said that there was a plan between the Chief of Joint Operations and the SAPS for closing down Commando units, and once Joint Operations indicated that the Police Commando unit should close down, that would be done. The members of the strategic planning team would also be in attendance to ensure that the correct steps were followed. They were not planning to deal with this topic in this meeting as the Commando issue that been previously presented to the Committee by Joint Operations and the Army.

The Chairperson said that they might have to have a session on the solution to the Commandos, because the current decision was subject to SAPS plans. Mr Groenewald had implied that the Commandos were locally based, but the conventional Reserves were not necessarily so. They would have to look at how satisfactory the arrangements were between Joint Operations and the SAPS and it may be that some elements of the Commandos should be incorporated into the conventional Reserves.

Mr Monareng said that there had been a presentation from the SAPS and the SANDF task committee on the Commandos at which time Mr Groenewald had raised the same questions, so they should not have to prepare for another session.

Mr Groenewald said that there was some new information presented in this meeting, such as legal obligations, that had not been mentioned before. He asked what the strategy was concerning territorial Reserves and said that there were people at the meeting who could answer his questions. It seemed as though the plan for closing the Commandos down had not been followed and the Committee had an obligation to look into it.

The Chairperson said that this delegation was here to deal with the conventional Reserves. There may have been miscommunication, but they could not ask them to answer questions they were not prepared for. The fact that there were deviations in procedure was a matter of opinion and the Committee could address this issue further in another meeting.

General Matanzima said that he was unaware of any deviations from the plan but said that Commissioner Groenewald was in attendance and could answer the question.

Commissioner Ben Groenewald said that in a previous presentation, he had come late and thus missed discussion of the roll-out of the implementation plan. It had been stated that 17 Commando units would be closed down in the 2004/05 financial year, followed by 55 the following year.

Mr Groenewald said that they had the names of the 17 units that would be closed by the end of March 2005, but that there would also be an additional nine to be closed down by 1 April, and asked if those nine were part of the first 17 or the 55.

Mr Ndlovu said that the Chairperson had said that they would debate taking this matter forward as a Committee and said that they should not discuss it further now.

The Chairperson said that they would not discuss it further because it was a matter of a difference of opinion and this presentation was about the conventional Reserves.

Mr Booi said that he supported Mr Ndlovu in taking up the issue in the next meeting.

Mr Monareng asked for clarification on whether there was an affiliation with NATO, about African military traditions and at what point they would have an integrated planning strategy that would have a bearing on the Reserve Forces.

Mr Shah asked what size of army they wished to see and when. It made business sense to have a larger Reserve army, but would be difficult in the absence of a viable exit strategy.

Mr Ntuli said that part of what led to Project Phoenix was the budget constraints and asked what proportion of the total army would be made up by the Reserve Force.

Dr Job said that the Reserve Force Council was a Member of the International Confederation of Reserve Officers, which was a Member of NATO, meaning that they could participate in certain workshops and competitions, but they hoped to create something similar within Africa.

General Anderson said that it was unusual to have a Reserve Force strategy in isolation, but that had been done because the military strategy did not address the Reserves properly. Planning was once again integrated and in time, the Reserve Force Strategy would disappear. Reserve Force officers had been put in all the key planning and budgetary positions so that when decisions were made, the Reserves would be represented. The split between Regular and Reserve Forces was unknown, but they were looking at a Reserve Force of 35 000 and would want to fully train a third of that force every year. The question was how to downsize the Regular Force to accommodate this. By 2008, they only expected to have 14 000 Reserve members, so it would take time.

Major-General Mokoape said that they were now looking at the review that would outline ultimate capability requirements and that the army had a vision for 2020 that would clarify those needs.

General Matanzima said that the Secretary of Defence had responded to issues of strategy. Rejuvenation of the Armed Forces was not easy because there was no mechanism in place, but they were working together to establish one.

The Chairperson said that the Reserve force was an essential element of the Forces and a civic responsibility. The responses given and solutions developed by the Reserve Force, however, seemed ad hoc and not well researched. Feasibility needed to be properly examined, well-planned and effectively resourced.

The meeting was adjourned.