Department of Defence Annual Report (Day 2)

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Defence and Military Veterans

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

The Department of Defence continued with the presentation of its Annual Report for 2007/08, dealing with the programmes 3 to 7, as well as the financial statements. Members held extended discussions over the skills loss and shortages, and skills retention, noting that the loss of scarce skills to the private sector, and even to other militaries, caused grave concern. The same applied to vacancies in key areas.

Similar to concerns expressed on the previous day, Members showed concern about the state of readiness of the South African National Defence Force, specifically the capacity of the Air Force to protect South African airspace. It was felt that with the Cheetah withdrawals and the Grippen not yet in place, the country may be vulnerable. The Department was reluctant to deal with readiness issues during the session, and asked that these be deferred to the readiness  meeting scheduled for the following week. Members also raised questions around maintenance, deterioration of facilities, and backlog elimination in that regard. A discussion of the Status of the SANDF Reserve highlighted the popularity of service in the Reserves, with constraints identified as a lack of funding for the continuation of training. The role of the Reserves in rejuvenating the SANDF was clarified. Deployment in other African countries, and assistance to their militaries, was interrogated, and some Members were of the view that certain agreements were detrimental and unfair to the SANDF, calling for an audit on deployment expenditures, to determine whether assistance was rendered by the African Renaissance Fund, for instance. Further questions related to the establishment of the SA Defence Related Industry Strategy, to co-ordinate and promote local defence industries, and who would drive the process.

The reports of the Audit Committee and Accounting Officer were interrogated. The Committee urged the Department again to prioritise the need to improve the financial reporting and try to achieve a clean audit report, as also to establish internal controls. The session was concluded with a discussion of interdepartmental co-operation between the SANDF and the SAPS to provide security at the 2010 FIFA  World Cup tournament.


Meeting report

Annual Report 2007/08: Briefing by Department of Defence (DOD) (Day 2)
Mr Tsepe Motumi, Acting Secretary of Defence, noted that aspects of Programme 3, Air Defence, would come up for discussion again the following week, when Defence readiness would be discussed.

Programme 3: Air Defence
Mr Motumi noted that the newly integrated Lynx helicopter was established on the Operational support Information system (OSIS). Exercises had been conducted with the US Navy and German Air Force. The implementation of reviewed technical incentives met with some success.
Human Resource (HR) transformation included an increased number of black candidates for training. A possible Private Public Partnership was being considered for the commercial co-use of AFB Ysterplaat, and the co-use of AFB Overberg. The B707 and the Cheetah aircraft were phased out, and 3 Alo 111 (Maritime) were withdrawn. 

Programme 4: Maritime Defence (set out in Annual Report pages 135-141)

Mr Motumi noted that four Frigates and two out of the three new Submarines were in service. Exercises were held with the navies of Brazil, France, Germany, Ghana, Kenya, Netherlands, Tanzania and the USA. The SAS MANTHATISI became the first submarine internationally, to be classed in terms of  Germanischer Lloyd’s submarine rules. The Military Skills Development System (MSDS) programme enabled the rejuvenation of both Regular and Reserve components. Representivity in terms of race and gender was progressing well. A Public Private Partnership (PPP) for the Sea Safety Training Centre was also progressing well, with a possible new PPP for the new Naval HQ.

Programme 5: Military Health Support (set out in Annual Report, pages 143-154)

The South African Military Health Services (SAMHS) reviewed its approach to the recruitment and training of healthcare practitioners, and instituted a new drive to increase benefits to healthcare professionals. Strong cooperative relations were forged with countries in Africa, with assistance rendered to the DRC, Burundi, Cote d’ Ivoire, and Sudan. The SAMHS was part of the establishment of a Border Integrity Intelligence Centre.

Programme 6: Defence Intelligence (set out in Annual Report at pages 155-159)
Mr Motumi noted that assistance was rendered to other African countries. A foreign intelligence course was presented, attended by 24 participants from 17 countries. The Defence Intelligence (DI) was part of the establishment of a Border Integrity Intelligence Centre. He said also that collection of information had improved.

Programme 7: Joint Support: Command Management Information Services (set out in Annual Report, pages 161-175)
Mr Motumi noted that a Disaster Recovery Plan for the corporate ICT equipment systems was developed and tested. The requirements were largely met. There was participation in joint/multinational exercises, Exercise Combined ENDEAVOUR.

Joint Support: Logistic Agency (set out in Annual Report, pages 161-176)
Mr Motumi noted that the Council for Scientific and Industrial Research (CSIR) was appointed to assist in compiling a strategic plan for immovable assets. A logistic intervention and repositioning programme (LIRP) was established to manage gaps in logistic support performance.

1213 tons of unexploded dangerous ammunition was demolished in Mozambique, and 280 tons of old ammunition was destroyed in Uganda. The De Aar ammunition demolition range was re-qualified to conduct disposal through open demolition.

Challenges consisted of a maintenance backlog of facilities; the asset accounting management system not being fully compliant with Generally Recognised Accounting Principles (GRAP); a backlog in the disposal of redundant and unserviceable ammunition; a lack of specialist logistic personnel; the deteriorating facilities and lack of equipment in the DOD Air Supply unit, and 51 buildings designated as unsafe.

Corrective plans were in place as part of the Repair and Maintenance Project (RAMP).

The development of the new Defence Intelligence Headquarters was handled as a PPP project.
Progress had been made with the appointment of a transaction advisor. Work on an environment assessment would commence on 01 December 2008.

Joint Support: Military Police
The backlog of 7 521 cases from the previous year was reduced to 6 788.

The first DOD Anti-Crime Conference was opened by the Deputy Minister of Defence.

The Nodal Point on Anti-Criminality was established at the MP Divisional HQ.

Mr R Shah (DA) pointed out that the loss of technical personnel in the Air Force was a challenge, seeing that it impacted on new air systems and operational capabilities. He referred to statements Mr Motumi had made the day before, relating to mitigatory actions: it was stated that allowances had been increased to retain air crews, through matching market related salaries. He asked what progress had been made and what specific measures were taken here. He drew attention to the fact that only 42 out of 68 trainee pilots had qualified, and 4 out of 12 navigators. This could impact on combat readiness and service. He felt that this was not a healthy situation, and he asked to know also how candidates were being inducted and what were the selection criteria.

Mr Shah asked how much progress had been made with the Grippen programme. He asked about the security of airspace, now that the Cheetah were phased out, and wanted to know if South African airspace had become vulnerable.

Ms P Daniels (ANC) referred to page 136 of the Annual Report, and noted the efforts of Maritime Defence to facilitate training for members. She asked if there was a move towards tightening  contracts, to prevent qualified people from leaving the force at will.

Ms Daniels also drew attention to page 128 of the Annual Report, where it was stated that a shortage of personnel caused scheduled servicing of aircraft to fall behind. She was concerned that this could lead to accidents. She asked for specific indicators of how this was being dealt with, within the budget.

Dr E Schoeman (ANC) spoke to the issue of vacancies. One out of four critical posts in Defence remained vacant. Among pilots the vacancy rate was 37%. Among navigators and air control the figure was 31%. Among technicians 26%; engineers 43%; medics 14%, and nurses 27%. He was very concerned about these figures. He noted that there were also deteriorating hospitals and operating theatres. He asked what would happen if sophisticated aircraft were not maintained. He feared that defence procurement could lead to disaster. He noted that employment in the Defence sector had to be made attractive. It would not do to just “buy” people and he asked what contingency plans were in place.

The Acting Chairperson referred Dr Schoeman to page133 of the Annual Report. He pointed out to him that his questions bordered on interrogation of the state of readiness of the Forces, which would be discussed the following week.

Mr Motumi agreed that the Defence Establishment, like the Public Service, was affected by a general skills shortage.

Lt General J Jansen van Rensburg, Chief of Corporate Staff, DOD, agreed that the situation of pilots and ground crews represented a challenge. The Chief of the Air Force had recently stated in the media that there was not only a loss to the private sector. The Australian Air Force were recruiting within South African ranks. The Australians claimed that they did not do so, but South Africans in Australia would draw in their friends. The Chief of the Air Force would deal extensively with that question the following week.

In regard to the qualification rates for pilots and navigators, Lt Gen Jansen van Rensburg  remarked that the Health Service did psychometric testing. He noted that flight standards could not be compromised. The 42 qualified pilots were in place, and these were of a sufficient quantity. There was capacity. He said that the aim of having a surplus of pilots had not yet been achieved.

Lt Gen Jansen van Rensburg conceded that the Grippen project was still in its early stages. Readiness was scheduled for March 2012. However, 5 air crews were in training for the craft, and 2 Squadron had been set aside as a site for the programme.

In answer to Ms Daniels, around tightening of contracts, he said that there was a commitment to doing exactly that, especially in Military Health Services. In the USA, it was the norm to do as she suggested. Contracts there made it very difficult to simply buy out of commitments.

General Mgwedi (CHR) remarked that there was a constitutional aspect to contracts that tie people down. To bind people through legislation, might be regarded as violation. The Department would return to the Committee on the issue.

General Jansen van Rensburg returned to Air Force issues. He referred to press releases about cooperation between the Air Force and Denel being formalised. That, and the matter of vacancies that Dr Schoeman had alluded to, would be carried over to the state of readiness meeting the following week.

Lt Gen Derrick Mgwebi, Chief:Human Resources, SANDF,
pointed out that for a qualified medical professional, the question remained why one this person had to be in uniform. Deployment was not profitable for such persons. Conditions of service had to be improved.

Dr Schoeman said that his question had not been entirely clear. He quoted an authority as saying that the situation with medics in Simonstown was such that in the event of a major accident, the Navy would not be able to cope. He asked about vacancies among pilots and engineers, and if a contingency plan existed. If new equipment had to be stored away because there were not sufficiently skilled people to operate this equipment, this was a cause for concern, especially for concern around what would happen in the event of a catastrophe.

General Radebe, DOD,  stated that there was indeed a capacity to deal with emergencies. 2 Military Hospital in Cape Town could be utilised. Military Health Services had helped during the strike the previous year. But, as Lt Gen Jansen van Rensburg had pointed out, human resources in the health field was an international problem.

Lt General Jansen van Rensburg added that a Medical Batallion, Reserve Unit, was also locally available. The Minister of Health had signed that provincial hospitals be available for military purposes.

Mr Shah referred to the response that the Grippen was only scheduled for readiness in 2012, and asked whether the Department could inform him about Air Force capability at that moment.

Lt General Jansen van Rensburg replied that it would be preferable to attend to that in a closed session.

The Acting Chairperson suggested that the Committee’s concern with skills loss be registered in the Report. He agreed that it was worrying to have Australia recruiting in a naval town. He suggested that perhaps the Department of Foreign Affairs could be approached about that. He noted that the DOD could also of course approach the Committee with problems of legislation, and the Committee could make recommendations to Parliament.

Ms Daniels asked about the establishment of the Navy HQ in Simonstown, asking why the Navy had been moved around the waters of South Africa, and what the position was of the DOD.

Mr Motumi replied that it had been a decision based on a considered appreciation.

Lt General Jansen van Rensburg added that Simonstown was intended to be the operational Fleet HQ. He agreed that it had been chosen as part of a military appreciation around various issues. The crucial factor had been resource availability, since constraints had barred other options from being considered. The matter would be returned to in the readiness session.

Mr Motumi added that that there should have been a base in Durban, but it was currently only a station. The same applied to East London and Port Elizabeth. In terms of the size and centrality of its harbour, Durban had been the best option, but there were other constraints.

Mr N Fihla (ANC) pointed out the threat of piracy and asked if South Africa was not vulnerable with unprotected harbours.

Mr Motumi replied that plans were in place. Maritime Defence was operationally active as far south as the Antarctic, and Marion Island. There were regular exercises conducted. Submarine measures were in place. The DOD had been making agreements with others, and there were joint exercises with friendly navies in the Indian and Atlantic oceans, notably Brazil.

The Acting Chairperson reminded the Committee that Naval readiness would be discussed the following week. He assured the DOD that the Committee would support its Navy initiatives. He suggested that the Department refer to Simonstown as the Fleet HQ in its presentations, to avoid confusion.

Mr Shah commended SAMHS, and expressed sympathy for its predicament. He enquired about press statements that SAMHS health facilities had been opened to the public. The Committee had heard about mitigating actions, like nursing programmes, on the previous day before. He noted that nurses were being trained to dispense medicine, and asked if the training they were given was sufficient.

The Acting Chairperson noted that the Committee Chairperson had written a letter to the Department about Military Health Services being opened to the public.

Mr Motumi acknowledged receipt of the letter. A response would be forthcoming at the state of readiness meeting. 

Lt General Jansen van Rensburg said that the issue had been misinterpreted in the media. There was a drive afoot to get provincial hospitals to support the military.

Mr Motumi insisted that the issue be held over until the following week.

General Radebe said that 38 nurses had been trained to dispense medicine, according to standard procedures employed in pharmacies. They would not be prescribing medicine independently.

The Acting Chairperson noted that the questions on Defence Intelligence were deferred to the following week.

Ms Daniels had a question about challenges to the collection environment by technological advances that required expensive solutions. The Treasury had made funds available for acquisitions, but the project was stalled on the instruction of the Minister of Defence.

Dr Schoeman was concerned about vacancies in Defence Intelligence, and the stalling with the Defence Intelligence HQ project.

The Acting Chairperson initiated interrogation of Programme 7: Joint support Logistic Agency.
He asked for an update of progress with the De Aar demolition range. He also referred to the maintenance backlog for facilities.

Mr Shah asked about the Repair and Maintenance Project and the Works Regiment. He enquired if this would be a shared undertaking with the Department of Public Works, and what would be the relationship between the two departments.

General Nkonyane, Chief of Logistics- DoD, ascribed the backlog to an absence of response capacity from the Department of Public Works (DPW), which had been building up from year to year, around RAMP. Facilities had continued to deteriorate, with a lack of DPW intervention. There could be no transfer function from the DPW to the DOD until a meeting could occur. The intention was to start with minor maintenance issues, and to work up. He noted that the incinerator needed for the De Aar demolition project, had not yet been acquired. There were plans for the construction of an ammunition demolitions plant. Department of Defence was currently only capable of open demolition. The backlog of unserviceable ammunition had to be addressed.

Mr Zondi, Department of Defence, added that there was the capacity to dispose of ammunition, but the methods involved were not modern, and not in line with environmental concerns. The state of the art demolitions plant being planned for had reached a stage of visibility. Contractual issues were being discussed with a construction company. Planning had commenced in 2006 to have this plant in use, but environmental studies were still running. The commissioning of the plant should happen within two years.

General Jansen van Rensburg noted that PMP, a subsidiary of Denel, could handle the destruction of small arms no longer in use. That process could commence forthwith.

Ms Daniels asked about the Disaster Recovery Plan for corporate ICT equipment.

Mr Motumi replied that a presentation was being prepared for the following year. There was legislation to be negotiated.

The Acting Chairperson commended initiatives to address the backlog on facilities. However,  the works regimen was not adequate. He recommended that the Committee be presented with a report on the state of facilities and backlog elimination.  The Committee needed to see a plan. The DPW and the Treasury were involved, and it was easy to blame one another. Instead, he would like to hear how the Committee could specifically assist. He said that the Committee had visited the De Aar ammunitions dump in 2006, and he was not pleased to hear that there was still nothing substantial in place, even though the Department had stated two years previously that the issue was crucial. Now it was scheduled for 2010. The Committee wanted a report. There had been talk of an incinerator, and of sponsors, but no figures had been placed on the table. He asked what was destined to happen to the intended plant after it had been used.

Ms Daniels remarked that the Committee had been asked to educate members of the Department to deal with grievance procedure.

Dr Mary Ledwaba, Chief Director, HR policy, DOD, replied that the Department had come up with an electronic grievance procedure. The software had been finalised. This would enable the DOD to monitor grievances. It would become possible to see who was delaying grievances without responding.

The Committee then indicated that it would proceed to the status of the SANDF reserves.

Mr Shah affirmed the critical role of the reserves for the SANDF, and said that his concern lay around the funding. There had been a target of 10 000 members, for which R700 million had been requested. The budget had been forthcoming, and he wanted to know why then the targets had not been met. He noted that the Armoured Car targets had not been met because the reserves were inadequate in that division. He asked about the status of the Military Skills Development System, and asked what had happened there.

Mr L Diale (ANC) called for a Reserve Force membership breakdown, and asked why the database did not distinguish between male and female members.

The Acting Chairperson agreed that the Committee had to be informed about the budget constraints impinging on the Reserves. He enquired about training, both leadership training, and the training of units. In the budget speech of the current year, mention had been made of the Reserves budget.

Maj General Roy Anderson, Chief of the Defence Reserve Force, DOD said, in response to Mr Shah’s query, that funding for the Military Skills Development System had been split from the funding of existing members. The understaffing in the Armoured Division was on account of the Infantry being favoured. The latter were deployed in peace support operations. Wits Rifles were currently deployed in the Sudan, along with two engineer corps. The MSDS members were staying in the regular force. 800 had exited in the previous year. Typically there were three regular companies. The United Nations required four, so a Reserve company would be attached. The R700 million could not address training for the existing 21 000. Ring fencing of the Reserves budget was under consideration, both in respect of training, and for deployment of the Reserves.

Gen Anderson said that the policy in the DOD was that 40% of an intake should be female. A case study revealed that among officers, there would be three black and two white, with one of those being female. Among non-commissioned officers, there were twenty two black officers to every white officer. Riflemen were all black. 

Gen Anderson noted that the MSDS could not adequately cope with training needs. The short term Army solution was to re-train selected Commando members. The Chief of the Army had ordered an investigation of the option of direct recruiting. The option was based on the premise that it was easier to take a trained mechanic and make a soldier out of him, than the other way around. He said that budget constraints implied a lack of funding to train existing people. Very few of the 9 000 called up could receive continuation training.

Gen Anderson then moved on to the state of Reserves readiness. In relation to leadership training, he noted that the Army had trained 400 young lieutenants and corporals over the preceding three years. There were efforts to build up a Student Reserve. Students would receive decentralised training, so that when they graduated, they would be officers. However, he admitted that there was a challenge around training continuation. For minimum training, R100 million per year was needed.

The Acting Chairperson expressed approval of what had been achieved. It was heartening to know that 21 700 volunteers were serving in the Reserves. He suggested that future Annual Reports should carry a chapter on the Reserves similar to the others, instead of an appendix dealing with them. The Reserves constituted a core component. This Committee would recommend more support for the Reserves to Parliament. He added that the Reserves would also receive more attention at the readiness session the following week.

General Anderson agreed that the Reserves should ultimately not be considered separately from the rest of the SANDF. They must be fully integrated into the Force.

The Acting Chairperson encouraged him to proceed in that direction.

A representative of the National Treasury noted that R80 million could be set aside for the training of the Reserves.

The Acting Chairperson requested that the Report of the Audit Committee be dealt with.

Mr Motumi noted the issues identified by the Audit Committee in the Annual Report. He said that there were qualifications in this report. Compliance with prescribed policies and procedures was lacking in certain instances. The Auditor General had also expressed his concern with skills retention within the DOD, related to the carrying out of its administrative and functional responsibilities. The level of vacancies and the time taken to fill them were expressed as an ongoing concern.

Mr Motumi noted that Information Technology architecture needed considerable investment.
The Acting Chairperson noted the poor attendance of some members of the Audit Committee at meetings, and asked for reasons.

Ms Dudu Mutloane, Acting Chief Financial Officer, DOD, explained that the member with the lowest attendance record had in fact resigned in the course of the year.

The Acting Chairperson said that the Members of the Committee insisted on better attendance at audit meetings. If a member had attended one out of five meetings, due to a resignation then this had to be indicated.

He asked if Mr Motumi had attended meetings as Acting Secretary of Defence, or as internal member.

Mr Motumi replied that he had attended in his previous capacity. The Secretary of Defence was not a permanent member. It would be recommended that the Secretary of Defence should in fact attend.

Report of the Accounting Officer (set out in the Annual Report at pages 217-246)
Ms Mutloane highlighted certain aspects of the report. She said that this was premised on the Apex of Priorities for Presidential Projects, and that strategic guidelines had been issued to ensure that Presidential Projects were captured in the DOD processes and reported on at regular intervals. The SA Defence-Related Industry Strategy had been completed to co-ordinate and promote local defence industries, in order to encourage economic growth and the widening of participation within the Defence Industry. During 2006 the Minister of Defence approved the Macro Structure of the DOD. The efficacy of the central staff component stood to be reviewed to improve effectiveness and accelerate service delivery. She noted that in respect of the right-sizing of the DOD, a service system emanating from the HR strategy 2010 was instituted to ensure that the rank : age profile of the SANDF was appropriate, that the Reserves could be rejuvenated, and that scarce skills could be retained. 

Ms Mutloane reported that the Directorate of Risk Management had been established.

She then highlighted the progress made with Resolutions from the Standing Committee on Public Accounts (SCOPA).

Ms Daniels asked to be informed about reasons for SANDF deployment in the Central African Republic (CAR). She also asked if veterans were included in the SASSETA training.

Mr Motumi replied that an agreement had been reached in 2006 between the country Presidents, in terms of which South Africa would assist other armed forces. In the case of the CAR, this involved restructuring of their armed forces, and military advice.

General Mgwedi dealt with the SASSETA matter, stating that funding through SASSETA  during the current year had been done via the interim committee. R27million could be obtained. The military veterans issue had been raised, and employment could be arranged for them.

Mr Shah enquired about the Directorate of Risk Management.

Ms T Gamede, Chief of Policy Strategy and Planning, explained that the Directorate for Risk Management was a directorate for corporate risk. It was located within strategic management.

The Acting Chairperson requested an update of progress and decisions made regarding the implementation of GRAP accounting practices, and the National Treasury’s Integrated Financial Management Systems (IFMS).

Ms Daniels remarked that the DOD was claiming that it had insufficient funding, and yet assistance was granted, at a cost to the Department, to the CAR.

Mr Shah agreed that it amounted to an untenable situation. There was a shortfall of R98 million due to deployment in Burundi. Agreements were signed that were unfair to the SANDF. He believed that there was a necessity for an audit was needed, in which, for instance, it must be stipulated what the African Renaissance Fund was contributing.

Mr Motumi stated that CAR people had been trained in South Africa. Among those were paratroopers and mechanised infantry. Deployment of personnel outside of South Africa had been reported to the Speaker of Parliament.

The Acting Chairperson referred to the Defence Related Industry Strategy. He noted that there would be co-operation between the DOD and others, but asked who was responsible for driving the process.

Mr Motumi responded that the DOD would be the main drivers, but would be willing to workshop, in a process of interaction with other departments.

Mr Motumi stated, in regard to the Annual Financial Statements, that the Special Defence Account had received a clean audit. The problems were related to the General Account. The qualified audit opinion had been based on improper disclosure of tangible and intangible capital assets; employees benefit provision; accruals; lease commitments; contingent liabilities; revenue, and related parties. Although there were still qualifications, he noted that the number of qualifications had decreased; from 16 in 2006/07, to 7 in 2007/08.

The Acting Chairperson insisted that it was not the number of qualifications that counted. The real issue was a lack of internal controls. The DOD had failed to obtain a clean audit for the sixth consecutive year. The Committee wanted to encourage the Department, but stressed that what he had referred to as “The Clean Audit Project” had to be given priority. A focus on internal controls had to be present throughout. Even officers commanding smaller units had to be mindful of this

Ms Daniels enquired about co-operation with the South African Police Service (SAPS) to provide security during the FIFA World Cup Tournament in 2010.

General Jansen van Rensburg replied that this had some budgetary implications. General Matanzima had indicated that the SANDF would not be getting any funding from the police. Interdepartmental co-operation had commenced, but that took the form of joint exercises.

The Acting Chairperson said that the Committee would have to recommend that the DOD speak to stakeholders about funding. It would not be acceptable to come to the Committee for funding at a later stage.

General Jansen van Rensburg said that R20 million had been made available for chemical and biological shortcomings.

Mr Shah enquired about security funding.

Mr Motumi replied that the Minister was committed to raising the matter with his Safety and Security counterpart. He said that the exercises could be quantified.

The Acting Chairperson called for planning and costing to equip the SANDF for participation in issues around the World Cup Soccer tournament.

Mr Fihla said that, remaining with soccer terminology, the DOD had been “facing a relegation threat”. The Committee was willing to assist the Department in warding it off. The Department had been subjected to severe and detailed questioning, but this hopefully had been to good effect.

Mr Motumi thanked the Committee, in turn, for their continuing attention to all issues.

The meeting was adjourned.


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