National Conventional Arms Control Bill [B45-2008]: Department of Defence response to submissions

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Defence and Military Veterans

20 August 2008
Chairperson: Mr F Benghu (ANC)
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Meeting Summary

The Department of Defence gave its responses to the public submissions made on the National Conventional Arms Control Bill. There were general themes running through the submissions, relating to reporting, transfer of ownership and the level of disclosure required. The composition and need for the Scrutiny Committee also came under scrutiny. In relation to trade and possession of controlled items, it was agreed that sub-contractors should be exempted from the restrictions, and clause 13 of the Bill would be amended. In respect of transfers, the amendment would also be reworded. The Department said that the National Conventional Arms Control Committee (NCACC) would have the capacity to do monitoring of sale of armaments.  The Scrutiny Committee, contrary to fears by the Ceasefire Campaign, would not take over the function of the NCACC and its relationship with it was explained. It was suggested by the Department that the Scrutiny Committee would become a permanent, rather than transient committee. In regard to reporting, the NCACC would provide reports to Parliament but the Department cautioned that certain information should be limited. Other issues included that the NCACC proposed that “dual-use” items should not be controlled as stringently as items that were intended for military use only, and that certain exemptions should apply in respect of End User Certificates. Controlled items would be placed on a list, ideally updated each six months. The time period proposed by the South African Catholic Bishops Conference was not needed. In respect of exemptions for the defence force and police, these were necessary to avoid compromising national security. The Department agreed that the scope of the Bill be expanded to include “all the affairs” of the NCACC. In regard to submissions  by the defence industry, he noted that multiple export and import permits would be dealt with in regulations. He explained that permits would apply to destruction of equipment. Re-exports would be dealt with as first-time exports. Penalties would apply to the defence component of company structures. The organisational structure of NCACC would be defined by regulations, and the Minister of Defence, although exercising oversight, would not issue permits.

Members asked questions about the necessity for quarterly reports, feeling that these must be kept in place. Several members noted that the Bill must carry financial implications, contrary to what it stated. They expressed concern that limitations of disclosure in certain contracts might affect the ability of the NCACC to report to Parliament, which was vital. Several Members criticised past reports for not having been made on time, in sufficient detail and for withholding certain information. They asked that the transfer of ownership be qualified in the Bill, and the apparent loophole for illegitimate export must be closed. Several Members questioned the capacity of the NCACC, especially in light of the time taken to issue permits. They asked how often auditing would take place, the status of the Military Assistance Act, the organisational implications, the function of the Scrutiny Committee and why it did not simply have a Constitution, and stressed the necessity for Parliament to be fully informed.

Meeting report

National Conventional Arms Control Bill (the Bill) Responses to public submissions by Department of Defence (DoD)
Mr S Dumisani Dladla, Director of National Conventional Arms Control Committee, Department of Defence, and the rest of the team from Department of Defence, consisting of Col Nigel Apsey (Deputy Director Arms Governance), Ms Mamoloko Kubushi (Chief of Defence Legal services, DoD), Mr Siviwe Njikela (Director: Legal Support, DoD), together with Mr Theo Hercules (State Law Advisor, Office of the Chief State Law Adviser) presented their feedback on the public submissions received on the Bill.

Mr Dladla noted that he would respond to the common issues raised in the public submissions. The first related to the arms industry, relating to trade and possession of controlled items. He agreed that sub-contractors should be exempted from the restrictions while under the direct control of the company (Armscor, for example). Clause 13 (2) of the Bill should then be amended to include this. In respect of transfers, the definition should be amended to include the words “where ownership changes hands”, otherwise equipment sent for refurbishment or repair to outside contractors would have to be registered as well, even though ownership had not been transferred. ]

Mr S Ntuli (ANC) asked how the National Conventional Arms Control Committee (NCACC) would control and monitor sale of armaments, such as Armoured Personnel Carriers (APCs), for example.

Mr Dladla said that the NCACC did have the capacity.

The Chairperson was not entirely satisfied that the NCACC had the capacity to maintain and control the asset register and sought assurance on that point.

Mr Dladla did not answer the questions directly, but continued to give his Department’s feedback on the submissions by way of answer.

He said that the Scrutiny Committee, contrary to the concerns voiced by the “Ceasefire Campaign” was not in danger of taking over the function of the NCACC. Its function was envisaged as facilitating the working of the NCACC. Companies applying for permits would lodge applications with the Defence Secretariat, which monitored compliance with the various regulations and then reviewed applications by seeking input of the relevant government departments. The Secretariat then collated all inputs into a booklet, which it submitted to the NCACC. The Scrutiny Committee would not be a new entity but would merely formalise an existing process. It would not remove the decision-making power from the NCACC. The proposal arose from the Auditor General (AG) who made the suggestion after completing an audit on the NCACC. Mr Dladla proposed, therefore, that the sub-section granting the NCACC the power to form sub-committees be amended to allow the Scrutiny Committee to be a permanent, rather than transient committee. Guidance was, however sought from the Portfolio Committee on the matter.

The Chairperson wondered why Mr Dladla had not foreseen this need three years ago when the AG first interrogated the functions of the Scrutiny Committee.

Mr Dladla continued to deal with the submissions, referring to the issuing of reports by the NCACC. He was satisfied that the NCACC was prepared to provide any kind of information required by Parliament. However, it was necessary to distinguish between what information was made available to Parliament and what was made available to the wider public. It was necessary to ask the question what damage to national security could be caused by adopting a high level of disclosure, as practised by some European countries. He agreed that the NCACC should be consistent with what was required by the Promotion of Access to Information Act (PAIA), but  certain limitations would be imposed by security, commercial and foreign relations concerns. It would also be administratively very difficult to disclose information like the ownership of companies involved, simply because these companies were often part of complex holding companies.

Mr Dladla proceeded to detail what he termed “editorial” issues, dealing with them one by one. He noted that the NCACC proposed that “dual-use” items should not be controlled as stringently as items that were intended for military use only. He also stressed that certain exemptions in respect of End User Certificates (EUCs) were necessary, as if component parts had to be certified this would lead to an onerous administrative burden. It was sensible to require systems to obtain EUCs but not to require this of component parts.

With reference to controlled items Mr Dladla said that these would be placed on a list, which would ideally be updated every six months. It would not be realistic to update the list for shorter periods. He also suggested that the NCACC could engage with the Portfolio Committee on Defence and the public regarding the items on this list, but this might be self-defeating as the aim was to be consistent with international practice.

Mr Dladla then turned to the submissions raised by the South African Catholic Bishops Conference. He noted that the suggested 90 day time period for compiling a list of controlled items set the NCACC up for non-compliance, and was of the opinion that a timeframe was not needed. In respect of the exemptions which were exclusively applicable to the South African National Defence Force (SANDF) and South African Police Service (SAPS), he said that disclosure in these cases would compromise the operations of the two forces and could compromise national security.

Mr Dladla was confident that most of the issues raised by the Ceasefire Campaign had been dealt with sufficiently. He was in agreement that the scope of the AG be expanded to include “all the affairs” of the NCACC. The Foreign Military Assistance Act could proceed independently of the National Conventional Arms Control Bill, as it was necessary that the Bill be closely scrutinised before being put into force.

The defence industry submissions were then dealt with. The question of multiple export and import permits would be dealt with in regulations. The destruction of equipment would require a permit in the case of complete systems. Re-exports could be dealt with as if they were exports. Annual reports were not appropriate in the arms industry, as the mandatory reporting to Parliament would serve the same purpose. Mr Dladla agreed that any penalties be confined to the defence-related component of a company, rather than the holding company. The organisational structure within the NCACC would be clearly defined by regulations and the Minister of Defence would exercise oversight. He or she, would, however, not issue permits as this was the responsibility of the NCACC.

The Chairperson thanked Mr Dladla, remarking sardonically that the last point was particularly interesting as the Minister himself served on the NCACC.

Mr M Schoeman (ANC) thanked Mr Dladla for clarifying many issues. He expressed concerns with the Scrutiny Committee and the fact that quarterly reports would be done away with. The lack of financial implications also seemed at odds with Mr Dladla’s refrain that there was a lack of capacity in the secretariat.

Mr M Shah (DA) also thanked Mr Dladla for addressing many of his concerns with such clarity. He was not convinced that the functions of the Scrutiny Committee needed to be legislated; however, it seemed to him that the NCACC should be able to enforce compliance without asking for power from the legislature. Mr Shah was also concerned that the limitations of disclosure in certain contracts might affect the ability of the NCACC to report to Parliament. Hence the Committee would be required to exercise oversight over certain matters in which all the facts were not available. The reports provided in the past by the NCACC were not timeous, and their lack of detail was “an insult” to Parliament. Mr Shah required an assurance that they would be more detailed in future. The issue of the transfer of ownership must also be qualified in the Bill. Finally, there seemed to be a loophole for the illegitimate export of weapons to undesirable destinations through the medium of peace-keeping operations outside South Africa.

Ms P Daniels (ANC) asked whether the NCACC had the capacity to keep up with EUCs, as Mr Dladla had complained about a lack of capacity. She also asked why it would be a problem to have Ministers and professionals involved in the defence industry sitting on NCACC.

Dr E Koornhof (ANC) asked why the NCACC had simply not considered drafting a constitution for the Scrutiny Committee, instead of resorting to legislation. He also then referred to the lamentable reporting of the NCACC in the past and noted that this aspect was the core of the Act. The withholding of information from Parliament could not be allowed, no matter what the level of sensitivity of that information. In his opinion, the issue was how to deal with the information, not whether it should be made available to Parliament. Dr Koornhof also urged Mr Dladla to air any problems that existed, as the NCACC took too long to grant permits, which suggested capacity constraints were a reality. Any delays resulted in a loss to both the industry and the country. Finally, he wanted to know if the Military Assistance Act had been implemented as it had been promulgated in 2001.

Mr L Diale (ANC) asked how many times a year would auditing take place.

The Chairperson added that he would also like clarity on the matter of the organisational implications of the Bill and could not see how there could be no financial implications. He stressed that absolutely everything must be disclosed to Parliament; the question was merely how this should be done.

Ms Kubushi replied that the DoD would provide Parliament with any information it required. In the past the NCACC was guided by existing legislation but it would now comply with future legislation.

Mr Shah was not at all satisfied, as Parliament required that all information be disclosed, without having to ask for specific items.

The Chairperson concurred that the NCACC should not look for excuses not to disclose information because of how legislation was interpreted in the past. The public could not be expected to trust Parliament if it were to be denied access to certain information.

Ms Kubusli agreed that Parliament should be fully informed. It merely remained to formalise how this would be done.

Mr Dladla added that the NCACC intended to improve the process of communicating fully with Parliament. He then responded generally to the other questions.

Mr Dladla responded that whether the Scrutiny Committee was empowered by law or regulations was a moot point. He noted that capacity constraints existed in the Secretariat before the current legislation was proposed; the reality of the matter was that the arms industry had grown and the capacity of the NCACC must be increased to enable it to deliver on its obligations. Currently the Secretariat had only eleven staff.

The audits of the NCACC would take place annually, though it would perhaps not be possible to audit every company in the industry annually.
He said that the use of peace-keeping missions to cloak illegal exports was unlikely, as the existing mechanisms and institutions were good enough to monitor the movement of armaments, the NCACC merely performed an additional checking function.

Mr Dladla said that the impression that reporting would be downscaled in the Bill was incorrect; indeed, the aim was to increase reporting. Information may be classified but not to the exclusion of Parliament.

Dr Koornhof asked what exactly would the function of the Scrutiny Committee be and how exactly it would be composed, in the light of clauses 7(a), (b) and (c) of the Bill. He insisted on clarity whether the NCACC would continue to report on a quarterly basis or not.

Mr Schoeman asked for a compelling reason why quarterly reports should be done away with. If they were retained this would greatly help both the NCACC and Portfolio Committee on Defence in fulfilling their oversight functions.

Mr Dladla replied that quarterly reporting would not reflect reality because of how quickly things changed in the arms industry. Some delay was required to allow for finalisation. He was prepared to respond to the wishes of the Committee, but he suggested that reporting twice a year would be the most expedient.

The Chairperson asked at this point whether agreement could be reached on submitting quarterly reports so that it would be possible to agree on the exact timing of the reports.

Mr Dladla responded that it would be possible, but there would need to be an agreement on the format of the reporting, with the understanding that great detail could not be provided.

The Chairperson noted that there was too little time to continue with all matters. He noted that by Wednesday 27 August he hoped that there would be agreement on the proposed amendments so that the deliberations could be finalised.


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