Department of Defence Annual Report 2007/08

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Defence and Military Veterans

17 November 2008
Chairperson: Mr G Koornhof (ANC)
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Meeting Summary

The session commenced with an analysis of the Department of Defence’s  Annual Report for 2007/08 by the Parliamentary Research Unit. This analysis produced incisive questions, which anticipated some of the key issues interrogated by the Committee after the Department had made its presentation. Issues raised included the need to interrogate the underspending of the Maritime Defence budget; the relationship between the Department and military unions, and the readiness of submarines.

The Department of Defence presentation commenced with a report back on key issues raised by the Defence Portfolio Committee for the previous financial year of 2006/07. These were, among others, skills loss and skills development, the modernisation and renewal of Landward Defence, and the South African National Defence Force (SANDF) withdrawal from borderline control.

The Department then proceeded to report on the Annual Report for 2007/08, concentrating, as requested by the Committee, on its Programmes 1, 8, and 2. Under Programme 1 (Administration) the issues of Ministerial and Departmental Direction, the SANDF
Command and Control, the work of  Legal Services, and Defence Reserve Direction were raised. .
Programme 8 comprised Force Employment, and Programme 2 comprised Landward Defence.

The presentation concluded with a report on challenges and corrective actions. These included human resources, the relationship between the Department and the unions, and skills retention.

Members discussed the presentation extensively. The relationship between the Department and the unions received special attention. The non-functioning of the Military Bargaining Council (MBC) and the Military Arbitration Board (MAB) caused grave concern. Members further questioned the delays with the promulgation of legislation prohibiting mercenary activity, the staffing, readiness of submarines, and Maritime Defence under-spending. The Department indicated, however, that issues of readiness would have to stand over until a meeting scheduled for the following week. Concerns were also expressed at the lack of progress with the construction of a Military Intelligence Headquarters Building. However, the Committee was at pains to express appreciation of the progress made by the Department, and congratulated it on the quality of its Annual Report. However, the failure to obtain an unqualified audit for six years running could not be lost sight of. The Committee assured the Department of a willingness to assist with this issue, as well as with the funding problems it had highlighted.

Meeting report

Department of Defence (DOD) Annual Report 2007/08: Research Unit Analysis
Ms M van Niekerk, Parliamentary Research Unit, noted that the reporting by the Department of Defence (DOD) was improving. Unachieved targets were being reported, and oversight roles were clarified. The problem was that very few new issues were reported on. In addition, the Department had received a qualified audit report.

Ms van Niekerk proceeded to interrogate some issues reported on in the DOD Annual Report.

The statement on p 40, that changes in legislation dealing with mercenaries could impact on DOD intelligence, was not clear.

On page 51 it was reported that the South African Navy had spent only 44.2% of its budget, due to non-acceptance of equipment, and she said that it needed to be stated what kind of equipment was being referred to.

On page 52, it was reported that Air Defence had spent 65.3% of its budget, with the stated reason being non-delivery of main equipment by Denel, and once again she suggested the Members should ask what kind of equipment was referred to.

In regard to page 65 of the Annual Report, she suggested that questions be asked as to what were the reasons for the non-functioning of the Military Bargaining Council (MBC), and the Military Arbitration Board (MAB.

Ms van Niekerk said that there was also a need to enquire why boards of inquiry for two major aircraft accidents had not been concluded yet.

She noted that the figures on page 126 stated that only 42 out of 68 pilots on courses had qualified, and four out of 12 basic navigator learners, and it was necessary to ask what the impact of this would be on Air Defence capability.

Regarding Air Defence services scaled down, as listed on page 133, it was noted that the Cheetah aircraft was phased out because it was too expensive to operate Grippen and Cheetah services simultaneously. She said there was a need to find out when the Grippen programme would become operational. She also referred to the media reports that South Africa no longer had the capability to protect its own airspace, read with page 133 of the Report.

She referred also to media allegations that Maritime Defence could not even man a single submarine, and said that this begged the question whether two submarines could be counted upon to be operational.

Ms van Niekerk noted that the loss of skilled personnel in Defence Intelligence was cause for concern. A drive to obtain new advanced intelligence technologies had been stalled on the instruction of the Minister of Defence but no reason was given for this.

She further noted that Defence Intelligence had been involved in a partnership process for the construction of a new Defence Intelligence Headquarters building, and she enquired why this process had been halted.

Ms van Niekerk then referred to recent media reports about suspensions of personnel. It appeared that 43 members had been suspended, and there was a need to enquire why were they still on the DOD payroll, when the costs incurred ran into millions.

The Acting Chairperson thanked Ms van Niekerk and urged the Committee to be positively critical towards the DOD delegation that would join the meeting shortly.

He advised the Committee to try to move towards recommendation, wherever possible, and to stay mindful of a unity of purpose shared with the Department.

Department of Defence, Annual Report presentation
Mr Tsepe Motumi, Acting Secretary of Defence, introduced his delegation. He requested that the matter of Reserves stand over until the next day, when the Chief of Reserves would be present.

The Acting Chairperson emphasised the importance of the presentation. It was expected of the Department of Defence (DOD) to report on what had been achieved against the business plan. He noted that the Committee had requested a presentation on programmes 1, 8 and 2 during the session, as well as Chapter 10 of the Annual Report.

The Acting Chairperson complimented the DOD on the Annual Report, which he rated as the best ever, from the point of view of the oversight that this Committee must do, which was appreciated. Business targets were realistic. However, he noted that it was some cause for concern that the Department had received a qualified audit from the Auditor General, for the sixth year running. Only a few other departments had a continuing history of qualified audits. There had been a commitment to eliminating this. The Committee had to interact with the Department, over and above the Standing Committee on Public Accounts (SCOPA) and he asked how this Committee could assist to get “Operation Clean Audit” running.

Mr Motumi thanked the Chairperson for the compliments. He agreed that there had been improvements, in spite of another failure to obtain a clean audit. The approach adopted for the report would be to report against the strategic business plan of 2005/6 and 2007/8 and to make comparisons

Report on Key Issues raised by the Portfolio Committee on Defence in respect of the 2006/07 financial year.
Mr Motumi presented his report under a number of headings. In brief, he noted that the reduction of flying hours in this financial year had been due to under-funding. In respect of the skills loss, he explained that this was due to uncompetitive remuneration being offered by the DOD, against the background of an international skills shortage. There had, however, been efforts to develop a military remuneration system. Monetary incentives were contemplated, and for the future there would be a look into non-monetary incentive strategies.

In respect of the DOD Works regiment, he reported that a project team engaged with the private sector. One hundred candidates had commenced training, and a further 200 would start in 2009.

In respect of the DOD budget issues, he said that the interaction with the National Treasury continued, with Treasury members visiting sites. There were briefings on Defence capacity. The government budget process was used to obtain funding for assistance in Burundi and the Central African Republic, and the Public Service strike. R225 million had been requested, with R45 million actually received. R240.8 million was requested from the African Renaissance Fund for Burundi.

In respect of infrastructure he said that the Repair and Maintenance Project (RAMP) was being developed, in co-operation with the Department of Public Works (DPW). Three military hospitals were acquired. In respect of Military Health Service (MHS) he said that health professionals had been acquired, and a help desk was established to aid the dispensing of generic medicines, instead of brand names. The legal expenditure had risen this year, from R72 million in 2005/6 to R76 million in 2006/7.

In respect of the structure, he said that the SANDF was to retain its conventional core growth capacity. There were currently 10 000 Military Skills Development System (MSDS) members and the budget allocated in this year had been R700 million, with investment in continued training. The current strength stood at 14 infantry companies. Decentralised recruitment and training were introduced. 1 629 recruits were trained. Regional employer liaison committees were established.

He touched again on issues around the staff. He said that market forces beyond the control of the DOD impinged on staff retention. A skills drain was occurring, with the best people often lost to the private sector. Scarce skills occupations were being identified, with a view to providing incentives.

The role and functions of the Secretary of Defence, and the Chief of the SANDF had been identified as the management of a disciplined force; the provision of training; encouragement of affirmative action, and the maximising of an African Standby Force.

He then said that an Anti-criminality Nodal Point was being established. The Military Police had to provide a crime risk service in DOD facilities.

In respect of Public Private Partnerships (PPP) he said that it was intended that a PPP be used for the construction of a Defence Intelligence Headquarters building.

He then touched upon the withdrawal of the SANDF from Borderline Control, explaining that the borders with Swaziland and Mozambique would become the responsibility of the SAPS.

The Acting Chairperson thanked the Secretary of Defence for the comprehensive report, and requested that he proceed to the current Annual Report.

Department of Defence Annual Report for the Period 1 April 2007 to 31 March 2008
Mr Motumi commenced with an overview of the period. The DOD had successfully executed most of its missions, namely the provision, management, preparation and employment of defence forces. Despite some slippages in the new weapons systems for the Air Forces and the Navy, elements of progress had been made. However, once again, loss of scarce and costly skills to the private sector remained a cause for concern. He outlined the DOD organizational structure by way of slides  (see attached presentation for detail)

After an outline of the DOD organisational structure, he proceeded to an overview of the various programmes.

Programme 1 – Administration: Ministerial Direction (See Annual Report, page 21)
Mr Motumi said that the DOD had focused on enhancing and maintaining the capabilities of the SANDF, and had promoted regional security through participation in peace missions and defence foreign relations.

The DOD had adopted a defensive posture that, in accordance with international and domestic legal imperatives, guided defence in pursuit of its constitutional obligation.

He noted that the Departmental Direction was outlined on pages 22 and 23 of the Annual Report. The Defence Update had been reviewed to position the DOD to be compliant with the new Long-Term Strategic Framework of Government as defined at the January 2008 Cabinet Lekgotla.

Measures had been implemented to address the issues that led to a qualified audit in the previous financial year, together with Action plans, and to ensure the staffing of key vacant posts in the Defence Secretariat.

In respect of the SANDF Command and Control, more fully described on page 28 of the Annual Report, he said that six each of Peace support operations and general military assistance missions were engaged in. There were three internal deployments. Intensive Defence Diplomacy included external engagements with the DRC, France, Spain and Sudan.

He said that in the Defence Legal Service the shortage of skilled military legal practitioners and trained interpreters hindered performance.

The Defence Reserve Direction was described on pages 81 to 84 of the Annual Report. He noted that 14 Reserve infantry companies and 2 Engineer troops were deployed internally and to the DRC and Burundi. In the Operation BATA – “One Force Core Force” concept 4300 SA Army Reserves were called up.

The Chairperson reminded Mr Motumi of time constraints, and he merely tabled, but did not read through the Programme 8 report, on Force Employment, to be found on pages 89 to 100 of the Annual Report.

In respect of Programme 2 on Landward Defence, as found in pages 103 to 116 of the Annual Report, he noted that the Army had met most of the required force levels. Approximately 4 200 Infantry members within several rotations were deployed externally. The rejuvenation of the SA Army was being achieved through the intake of MSDS members. The January  2007 intake completed force prep cycle with Exercises SEBOKA and YOUNG EAGLE. He noted that the Army also provided training assistance to the DRC. Training had been provided for Infantry; Armour; Artillery; Air Defence Artillery; Engineers, and Intelligence.

Mr Motumi then went on to identify the main challenges and corrective actions in the field of : Human Resources. He said that the main challenges identified were the loss of expertise in key musterings / corps; inadequate numbers joining the Reserves, and the health and age-rank profile.

In addition, the Military Bargaining Council (MBC) and Military Arbitration Board (MAB) were currently not functioning, resulting in a breakdown of communication between the DOD as employer and the two major military unions.

Skills retention remained a problem. Incentive schemes and a new remuneration dispensation were being investigated. Scarce skills were being addressed through special marketing and recruitment drives. The incentive schemes had helped stabilise the rate of resignations, however resignations in key musterings and scarce skills remained problematic.

Discussion
The Chairperson suggested that clusters of questions and comments be taken, to which the Department could respond fully.

Ms P Daniels (ANC) referred to the Defence Update. It seemed that the DOD kept moving the goalposts. Parliament had not seen it, yet Cabinet had. The DOD had promised that it was engaging with the matter, and now it was reported that it was with Cabinet. She asked what was causing the delay and why Parliament had not yet had sight of the Update.

The Acting Chairperson added that it was imperative for the Committee to be informed, seeing that it had to know what to do in terms of costing.

Mr Motumi responded that there had been no 2010 update. The 2014 update had been an attempt to envisage what Defence would be like in 2014. Inputs had been made by the Cabinet Lekgotla and other clusters. 2025 represented the planning figure that was used to work towards.
The Minister had adopted the position of wanting to appraise Cabinet colleagues before proceeding to Parliament. There had been an appraisal of major finance implications, and equipment acquisition. That had taken time to accomplish. There was also the issue of costing, and engaging with the Treasury.

Ms Daniels then requested discussion about the relationship between the DOD and the unions, and asked the Department to detail exactly what had been done. 

Dr E Schoeman (ANC) also referred to the matter of the Military Bargaining Council and the Military Arbitration Board not functioning. He asked what were the reasons, and also wanted to know what was being done to alleviate tensions between the unions and the DOD.

Lieutenant General Derrick Mgwedi, Chief of Human Resources, DOD, addressed the questions. He pointed out that there were two military unions, SASCU and SANDU. The latter was the stronger body, but it was involved in a leadership dispute, currently before the courts. The membership of SANDU stood at between 13 and 14000.

The DOD was averse to picketing in uniform, seeing that it challenged military regulations. To participate in the Military Bargaining Council, a union had to have a membership of 15 000, and SASCU could only muster 6 000. However, the Union had taken the DOD to court about the issue of AIDS testing during recruiting. The Court had decided in favour of the Union, and had asked the Department to revisit the matter.

The Department had wanted a single union, but the two unions were not interested in a merger. SANDU was the more active union. It had been involved in the picketing of Defence Headquarters, and had gone to Luthuli House about the relocation of 2 Batallion from Doornkop Base. The courts found in favour of the Department, and the Batallion had to move, although by order of the Court, the Department had to pay salaries for October and November.

Union activity had abated, but relations remained problematic. SANDU was divided on the leadership issue. The Military Bargaining Council would sit, and two Defence Force unions would arrive for the proceedings. He commented that there was not yet a readiness to play by the rules.

Dr Ledwaba elaborated on the DOD relationship with the military unions. The ideal was to have the Military Arbitration Council up and running and dealing with union issues like the recent 10.5% salary increase demanded for soldiers.  The Department was looking at the position of other militaries, with a view to putting structures in place that would not disrupt discipline. The Department of Justice remained unwilling to change the definition of military personnel as workers, which was viewed as in line with the Constitution.

Ms Daniels pointed out that the Bill had been signed by the President on the Prohibition of Mercenary Activities in December 2007, but it was not yet operational. She asked why were regulations so slowly enacted, especially since Parliament had urgently processed this legislation.

Dr Mary Ledwaba, Chief Director, HR Policy, noted the importance of the Mercenaries Act, alluded to by Ms Daniels. However, she said that  there were issues of regulation that had to be taken into account. The National Conventional Arms Control (NCAC) Act had to be amended first, and that Amendment had just passed through Parliament.

The Acting Chairperson asked when the regulations would be promulgated, seeing that the amendments had been passed by Parliament.

Dr Ledwaba continued that the Mercenaries Act had been integrated into the NCAC Act, so that these could be implemented. These were in the process of being finalised.

The Acting Chairperson requested a time estimate.

Dr Ledwaba gave an estimate of six months.

Mr Motumi qualified this to mean by the end of the financial year.
 
Ms Daniels also noted that challenges of lack of interpreters and trained legal staff were noted, but nothing was said about what the DOD was doing to address them, and she enquired how the Committee could help.

Adjudant-General Bailey Mmono of the Defence Legal Service responded that the Secretary of Defence approved interpreters as part of an oversight function. The employment of more military practitioners was envisaged.

Mr L Diale (ANC) referred to the proposed construction of a new Military Intelligence Headquarters building. He asked what progress had been made with this project, and whether there was a time frame. He pointed out that Military Intelligence was an important system, and delay was costly.

Gen van Rensburg addressed the issue of public-private partnerships (PPP). The Ysterplaat Air base had been earmarked for such initiatives, with a number of role players involved. The project had however terminated  by the Air Force until more facts were available.

General Gonyane spoke to the matter of facilities maintenance. Much depended on the meeting of the Minister with the Department of Public Works. A migration of maintenance functions towards that department was occurring. However, the Department could not manage maintenance on its own. The General related that  Advocate Schmidt had asked, some two years previously, when the first brick for the Military Intelligence HQ building would be laid. It was not yet in place. The Transactional Advisor issue had at least been concluded. The Department could not go around Treasury regulations, but some progress had been made.

The Acting Chairperson referred to Dr Schoeman’s comment about a backlog, and asked the leave of the Committee to recommend assistance to the DOD with that.

Mr V Ndlovu (IFP) expressed frustration about the fact that a Military Intelligence HQ building had been discussed for seven years, and all that existed yet was a structure resembling a taxi rank.

Mr Diale pointed out that according to media reports, the military was still in the DRC, and he asked for an update of what was going on there.

Mr N Fihla (ANC) referred to press reports about the Navy submarines. Doubts were expressed about their readiness. He asked if the submarines were staffed.

Mr A Visser, Chief Director: Strategic Management, DOD, pointed out that payment could only occur once on acquisitions, once performance had been approved. Denel was one provider who had failed to satisfy performance demands. The surface-to-air missile contractor could not deliver. This had led to non-reaching of milestones.

The Acting Chairperson asked why only 44.2% for Maritime Defence had been spent. The target had been 95%.

Mr M Moatshe (ANC) enquired how this underspending impacted on the functioning of the Navy.

Mr Visser replied that the delay in performance acceptance of submarine and missile systems prevented cash flow.

The Acting Chairperson insisted on an answer to the question of impact.

Mr Visser responded that ships could still be used, even if all systems had not yet been installed.

Lieutenant-General J Jansen van Rensburg, Chief of Corporate Staff, DOD,  noted that the business plan had been drafted for three operational submarines. Two were operational and indeed fully staffed. A third craft was maintained.

He mentioned that the readiness of the Air Force and the Navy would be discussed at a session scheduled for the following week. He was prepared at that moment to state that the issue of equipment was being investigated.

The Acting Chairperson asked if the Committee would be informed.

General van Rensburg assured him that it would.

Mr Fihla, in regard to the handing over of border control functions to the SAPS, expressed doubt about the efficacy of police patrols, which would be conducted from vehicles. He insisted that army patrols on foot were the only way to monitor borders effectively. Countries like the United States had resorted to strategies like electrified fencing, to solve the problem of long stretches of border. He questioned whether the SAPS would be up to the task. 

Gen van Rensburg  stated that the DOD could not comment. No further requests had been received from the police. The operative principle was that of joint planning with the police, and for the Department to lend support when it was called for.

Dr E Schoeman (ANC) remarked that the budget needed for the Defence Force was an astronomical R12 billion. This need was unlikely to be met. He therefore wanted to know what would be the possible consequences of it not becoming available, and whether contingency plans were in place.

Dr Schoeman enquired about the mandate, function and timeframes of the Military Veterans Agency.

General Radebe said that the final form that the Military Veterans Agency must take was still being negotiated. It could be an organisation, an agency, or a ministry. The object was to deal with such matters as social welfare and support to families.

Mr R Shah (DA) spoke to the issue of modernisation and renewal of Landward Defence. He identified a lack of output and reversion to lower readiness states. There were critical equipment shortages, which hampered and challenged the armed forces. He referred to the deployment of infantry in peace support, and asked if security was taken seriously enough.

Mr Shah also asked if there was an equipment audit. There was not enough money for new equipment, but if new acquisitions were out of the question, there could at least be an effort to extend the shelf-life of what was already there, and he asked what the costs would be to rejuvenate.

General van Rensburg replied that part of the strategy 2025 initiative was to be a total stock check. Regarding the other issues, he suggested that these be responded to during the report on readiness status the following week.

The Acting Chairperson accepted the suggestion.

Ms Daniels asked about the threshold of unions. She maintained that in the context under consideration, rights had to be squared with limitations.

General Mgwedi replied to Ms Daniels that the threshold of 15 000 for the unions was in fact a low figure. If it was lowered, there would be a proliferation of unions.

Ms Daniels pointed out that she had asked about the regulations, and if an inability to reach the threshold could lead to a review of the situation.

Dr Ledwaba answered that if a union could not reach 15 000, the Ministry would suggest a merger with another union. Unions were aware of that.

The Acting Chairperson suggested that Parliament be taken on board as stakeholders.

Dr Schoeman remarked that SANDU had reached the threshold, but were divided, yet it had taken the Department to court. He enquired on what grounds was the union recognised by the courts.

The Acting Chairperson pointed out that the union managed to get a court ruling that they did meet the threshold. He asked if the Department had to pay the union.

Dr Ledwaba responded that an amount of R1 million had indeed been paid out.

General Mgwedi said that the union currently had fewer than 15 000 members, but the actual issue remained that of leadership.

Ms Daniels also enquired about the status of traditional law in the Defence legal departments.

A Department official noted that customs were recognised if these did not conflict with military culture. In matters such as hairstyle, for instance, there were standard military prescriptions and regulations. In case of conflict, it was accepted that the military culture would prevail.

Mr Ndlovu asked who was in charge of the Defence Evaluation Research Institute.

Mr Motumi responded that the Defence Evaluation Research Institute had not yet been established. Three Ministers of Defence and other departments had been instructed. Armscor had three entities, Department of Public Enterprises had Denel, and the Department of Science and Technology had the Council for Scientific and Industrial Research (CSIR). The shape, form and size of the projected Institute still had to be decided. Studies had been done, but it was still considered as work in progress. The Department would revert to the Committee about the Institute.

The meeting was adjourned.

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