Hansard: Second Reading debate: Higher Education and Training Laws Amendment Bill [B 23 – 2012]
House: National Assembly
Date of Meeting: 29 Oct 2012
No summary available.
TUESDAY, 30 OCTOBER 2012
PROCEEDINGS OF THE NATIONAL ASSEMBLY
The House met at 14:09.
The Deputy Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
REMARKS REFLECTING ON CHARACTER, INTEGRITY AND HONOUR OF HON LEKOTA
The DEPUTY SPEAKER: Hon members, before we proceed with the business of the day, I would want to make these rulings. During the debate on the Lonmin tragedy on Tuesday, 21 August 2012, the hon Minister of Mineral Resources made the following statement:
I must also indicate, Mr Lekota, that this government never calls soldiers to attack communities. During your era as Minister of Defence, in Khutsong, you called soldiers to attack. You are the one who is more brutal than the ANC.
After the hon Lekota had denied the allegation, the hon Minister of Water and Environmental Affairs rose and said the following:
Hon Deputy Speaker, I would just like to enlighten the House. I am a living witness to the events to which the hon Ministers have referred. Former Minister Lekota did that; I was there with him.
The hon Kilian, on a point of order, asked the presiding officer to study the Hansard and rule whether the statement by the Minister of Mineral Resources was out of order. Having studied the Hansard, I wish to rule as follows. In terms of the Rules, the Chair is duty-bound to adjudicate on statements or remarks that reflect on the character, integrity and honour of members.
The hon Minister's statement clearly offends hon Lekota's character, integrity and honour, by accusing him of calling soldiers to attack and being brutal. In both instances, the statement ascribes characteristics and values to Mr Lekota that cannot be sustained in the absence of a substantive motion. The statement is thus out of order.
I am doing this, hon members, knowing, as I have been advised, that the Minister is not in the House. I feel, however, that the business of the House has to proceed. As soon as the Minister is in the House and I am in the Chair, I will ask her to withdraw these remarks. I have tried to get the Minister here, but obviously she is not. I had stressed that this ruling had to be done today.
Furthermore ... [Interjections.] ... can you just wait for me? Thank you very much. Hon Minister Molewa's remarks are also out of order, as she essentially repeated the affront to hon Lekota's character, dignity and honour by claiming to be a witness to hon Lekota calling soldiers to attack and of being brutal. [Interjections.] Even though she didn't say that verbatim, the statement she was supporting meant that. I am also advised that the Minister is not present in the House. In fact, I received an apology as I was coming here. I therefore rule that the Minister must also withdraw her remarks. As soon as she is in the House and I am in the Chair, I will ask her to withdraw those remarks.
Those were the two rulings that stood over from 20 September.
ALLEGATIONS MADE BY HON LEKOTA AGAINST THE PRESIDENT UNPARLIAMENTARY
The DEPUTY SPEAKER: Hon members, there is another ruling for 23 October. During Members' Statements, on Tuesday, 23 October 2012, the hon Chief Whip of the Majority Party rose on a point of order to ask, with reference to the statement made by the hon Lekota, whether it was parliamentary for a member of the House to make unsubstantiated allegations about the President, rather than to bring them to the House by way of a substantive motion. I asked for an opportunity to consider the statement and report back to the House. Having now had an opportunity to study the unrevised Hansard, I wish to rule as follows.
The hon Lekota indeed made allegations against the President that can only be made by way of a substantive motion, consisting of a properly formulated charge and prima facie evidence, as required by the Rules. He said, among other things, that the President "is illegally refusing to be bound by section 165(5) of the Constitution, which binds all persons to obey a judicial order". He also said that "Cope requests the Speaker that impeachment procedures against the President be instituted for defying a lawful judicial order".
The hon Kilian correctly quoted Rule 105 as entitling a member to address the House on any matter. She omitted, however, to mention Rule 63, which governs unparliamentary language and which includes, through rulings and practice, the prohibition on reflections against the integrity and character of members of the House.
What concerns me about this incident, in addition to its disruptive effect on the proceedings of the House, is that in the recent past the hon Lekota was admonished about exactly the same transgression of the Rules and practices. The hon Lekota is a long-standing member of this House, a former presiding officer who administered similar rulings in the NCOP, and a former Cabinet Minister, no less, who, as a senior politician, is alive to the consequences of his conduct and speech. In addition to the ruling made with reference to his remarks, he will therefore also be aware of the numerous occasions over the years when precisely the same ruling was given by other presiding officers.
In view of all of this, it is difficult not to conclude that the hon Lekota is deliberately acting in defiance of the Rules and established practices of the House, and is challenging the authority of the Chair. Such contraventions of the Rules have consequences. Therefore, I will appeal to the hon Lekota to adhere to the procedures of this House. The President, though not a member of the House, enjoys the same protection under the Rules. Should he consider the issues he referred to in his statement as important, he will have to use the correct and applicable Rules to bring them before this House.
Finally, for the reasons outlined above, I rule that the allegations by the hon Lekota were unparliamentary, and I ask him to withdraw his statement that the President acted illegally by refusing to obey a court order. Hon Lekota, would you please withdraw the statement?
Mr M G P LEKOTA: Madam Deputy Speaker, this matter is now before the courts, as you know. We have a matter coming up before the courts on 29 November, precisely because the ruling you made against me previously was not only unconstitutional, but contrary even to the Rules of this House. To ask me to withdraw on a matter that is before the courts is to ask me to go ahead of the outcome of the court proceedings. I am not in a position to do that, because it would amount to the fact that I must withdraw my case in the courts. [Interjections.] I can't do that.
Also, I find it very significant when the Ministers on the other side of the House abused me as they did and as you have also correctly ruled now, that it has taken this long to wait until I acted in a certain way for it then to become convenient to do it, so that you enable yourself to rule against me and compel me to go against sub judice issues. I am not prepared to do this. All of us must be equal before the law. [Interjections.] It cannot happen in this way. I am sorry. [Applause.]
The DEPUTY SPEAKER: Hon Lekota, I am asking you to withdraw what you said. It is not connected to what the Ministers said. You are entitled to your opinion. I am asking you to ... and you are not saying that you did not say what you said. Could you please withdraw what you said? I understand what you are saying about the case.
Mr M G P LEKOTA: Madam Deputy Speaker, I confirm indeed that I said what I said. As you know now, in fact, in that statement I said we are tabling a substantive motion in this House on that issue. I am not withdrawing it. There are facts to back up what we are talking about. That too is a matter before the courts of the nation. [Interjections.] I am not prepared to ...
The DEPUTY SPEAKER: Hon Lekota, all I am saying is that you were supposed, as you know very well, to bring what you said then in a substantive motion, which you didn't do, and I have been asked to rule, which I am doing. Please will you withdraw the remarks?
Mr M G P LEKOTA: No, Madam Deputy Speaker. That would be tantamount to asking me to withdraw the case that I have brought against your ruling in the courts. [Interjections.] I am not doing it. I cannot do it.
The DEPUTY SPEAKER: Hon Lekota, some of the issues raised may indeed be before the courts. However, the Rules and practices of the House, as they obtain currently, must be upheld, until a different decision is made. At the moment, the court hasn't heard the case, and I am sure that I can say equally what you are saying. So, please, I am asking you to withdraw the remarks. [Interjections.]
Mr M G P LEKOTA: Madam Deputy Speaker, I don't want to appear to defy you. I must just submit. I will not repeat this again, but I am not able and I am not prepared to withdraw what I said. [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, because I think I have asked you to withdraw the remarks four or five times, could I request you to leave the Chamber? [Applause.]
Mr J H VAN DER MERWE: Madam Deputy Speaker, may I kindly address you on this issue? The hon Lekota says that the matter is sub judice in the courts. Could you not postpone your final decision until after the court case? [Interjections.]
The DEPUTY SPEAKER: No, I cannot, hon Van der Merwe. Hon Lekota, I have asked you to leave the Chamber please, so that we can proceed with the matter.
Mrs J D KILIAN: Madam Deputy Speaker, may I please address you on the matter? We find it very inappropriate for the matter relating to the Minister of Water and Environmental Affairs and the Minister of Mineral Resources to have been placed on the backburner for several weeks; yet you come here before the National Assembly and you rule on a matter that was before the Assembly last week. You are acutely aware, and your advisers are acutely aware, of the fact that this matter is sub judice at present before the courts. So, we would like to request you to reconsider. You have given your ruling on the matter, but we want to ask you to please pend the execution thereof until the court has made its finding on the unconstitutionality of the ruling, as we presented it to the courts. [Interjections.]
The DEPUTY SPEAKER: Hon member, I hear what you are saying. Just as a courtesy, let me respond to the delay about the ruling on the Ministers' remarks. This House is quite aware that part of the ruling I made some weeks ago in early September. The fact that the two Ministers' rulings were not made is, as I said in this House, that I could not do the ruling in their absence. This is why I have said today that whether they were here or not, I was going to do the ruling. It was done so many weeks ago. Other people who spoke on that very topic withdrew. Now, the Ministers are not here. I am unable to drag them to the House. This is why I am doing it in their absence today. As far as the court is concerned, there would be chaos in this Chamber if the Rules were not upheld, court or no court. It is definitely not only me who understands that the hon Lekota took me to court. It should be the hon Lekota himself who abides by the Rules until the court makes a decision. [Interjections.] He hasn't done that. Why must it be the Chair who now has to say that the Rules can be messed with until the courts decide? Please, I am not entertaining any discussion on this. I took a considered view, after looking at all aspects of this. If Mr Lekota is not able to withdraw the remarks, which is simple ... because now he has even brought a substantive motion, which means that he knew when he was doing that that he was supposed to do it only by way of a substantive motion. If he is unable to withdraw, he knows what must be done. If you defy the Chair's ruling, you leave the Chamber. Please, Mr Lekota.
Mr M G P LEKOTA: Madam Deputy Speaker, I am not prepared to withdraw the statement. You yourself would have known that you are before the courts of the land, because you made this very selfsame ruling you are making now. What you are now doing, in fact, is to say that ...
Mr J H VAN DER MERWE: Madam Deputy Speaker, on a point of order ...
Mr M G P LEKOTA: ... whether the courts have ruled or not, you will do the same thing that is before the courts. You are not prepared to wait to get the ruling of the courts on the matter. But when it comes to these Ministers – they have not been here for more than a month - you were not making a ruling on the matter.
Mr J H VAN DER MERWE: On a point of order ...
The DEPUTY SPEAKER: I am not going to take the point of order, hon member. Sorry.
Mr M G P LEKOTA: Now, it suits you to make this ruling regarding me. That is why you did it when they are not even here. I have been pleading with you. I have been going to your office, because my reputation is at stake. You did nothing. The law says that only the President can deploy the armed forces. I told you about that. You are not saying anything about it. You are not commenting on the fact that I could never, as a Minister, deploy the armed forces. You found the President doing so.
Mrs M T KUBAYI: On a point of order, Madam Deputy Speaker, I think this is really abuse of the House.
Mr M G P LEKOTA: I am not prepared to accept this. I am sorry.
The DEPUTY SPEAKER: Hon Lekota, could you please leave the House? [Interjections.] I am not going to take ...
The CHIEF WHIP OF THE OPPOSITION: Madam Deputy Speaker, could I address you, please?
The DEPUTY SPEAKER: I am not going to take any point of order.
The CHIEF WHIP OF THE OPPOSITION: May I address you, please?
The DEPUTY SPEAKER: You are not going to address me. I am not going to entertain this.
The CHIEF WHIP OF THE OPPOSITION: I am not rising on a point of order; I am asking to address you.
The DEPUTY SPEAKER: No, I am not going to entertain this matter. If it is on this matter, I am ...
The CHIEF WHIP OF THE OPPOSITION: Is there no freedom of speech in your House, then? [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, could you please leave the Chamber?
The CHIEF WHIP OF THE OPPOSITION: Madam Deputy Speaker, I have requested to address you on this matter.
The DEPUTY SPEAKER: Hon Watson, I have not allowed you to address me.
The CHIEF WHIP OF THE OPPOSITION: Therefore, I ask you: Are you now causing freedom of speech to be dismissed in this House?
The DEPUTY SPEAKER: However you interpret that, I am not entertaining it.
The CHIEF WHIP OF THE OPPOSITION: No, no.
The DEPUTY SPEAKER: Hon Lekota, please leave the House.
The CHIEF WHIP OF THE OPPOSITION: I have the right to address you, Madam Deputy Speaker. [Interjections.]
The DEPUTY SPEAKER: Hon Lekota, please leave the House. Is there a Serjeant-at-arms in this Parliament? Could you please lead Mr Lekota out of the House? [Applause.]
The member thereupon withdrew from the Chamber.
NOTICES OF MOTION
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House –
(1) notes that –
i. on Tuesday, 23 October 2012, the hon M G P Lekota, during members' statements stated that, "On Friday last week the President's Office defied an order by the Supreme Court of Appeal to hand over the abbreviated transcripts of the terms that permitted criminal charges to be dropped or withdrawn against him";
ii. the Supreme Court of Appeal did not make such an order or any other order to produce any record or documents against the President ...
The DEPUTY SPEAKER: Hon Chief Whip, there is a point of order.
Mrs S V KALYAN: Madam Deputy Speaker, I would like clarity on what aspect of the Order Paper we are on now.
The DEPUTY SPEAKER: It is Notices of Motion.
Mrs S V KALYAN: But it would appear that the Chief Whip is making a statement. A notice of motion is normally two or three lines for debate.
The DEPUTY SPEAKER: Continue, Chief Whip.
The CHIEF WHIP OF THE MAJORITY PARTY:
(a) the Supreme Court of Appeal did not make such an order or any other order to produce any record or documents against the President of the Republic or the Office of the President; and
iii. in the case of the Democratic Alliance and others v the Acting National Director of Public Prosecutions and others (288/11  ZASCA), the court directed that the Acting National Director of Public Prosecutions ...
Mrs S V KALYAN: Madam Deputy Speaker, may I address you on a point of order, please? I submit that this is not a notice of motion. It is a member's statement. I would ask you to rule on that. [Interjections.]
The DEPUTY SPEAKER: Hon Kalyan, look at your Rules. On many occasions we have allowed members from both sides of the House to give a notice of motion that is almost like a resolution. Just look at your Rules on motions. They can ... [Interjections.] Check your book.
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, the House has a presiding officer who is enjoined by the Constitution to make rulings. So, I am not going to allow anybody else to do so. I am going to repeat this.
(a) the Supreme Court of Appeal did not make such an order or any other order to produce any record or documents against the President of the Republic or the Office of the President; and
(b) in the case of the Democratic Alliance and others v the Acting National Director of Public Prosecutions and others (288/11  ZASCA), the court directed that the Acting National Director of Public Prosecutions produce and lodge with the Registrar of the Supreme Court of Appeal the record of the National Prosecuting Authority's decision to discontinue its prosecution of Mr J G Zuma, the President, and that there was no order by the Supreme Court of Appeal against ...
The DEPUTY SPEAKER: Hon Chief Whip ... [Interjections.] There is another point of order. After that, could you please conclude?
Mrs S V KALYAN: Deputy Speaker, you asked me to look at the Rule and I am looking at it now. It says that a member may propose a subject for discussion. The Chief Whip has made a long statement about a court ruling, and I submit that he has made a statement and not given a notice of motion. Madam Speaker, I would ask you to please relook at this and rule on it.
The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, maybe I should mention that this ... [Interjections.]
The DEPUTY SPEAKER: No. I will attend to that later. Could you conclude?
The CHIEF WHIP OF THE MAJORITY PARTY: Thank you, hon Deputy Speaker. I am concluding as follows:
... that there was no order by the Supreme Court of Appeal ...
Mrs M T KUBAYI: Deputy Speaker, on a point of order: Honestly, this cannot be allowed in this House. [Interjections.] Members must allow the Chief Whip to speak. They must give him space. If they read the Rules, there are motions, there are substantive motions and there are proposals of motions for censure.
If they allow the Chief Whip to finish, they will understand the nature of the motion he is proposing. They must read the Rules. I suppose that they were going to do that. We can't have members of this House using the Rules when it suits them. When it doesn't suit them, they throw them out of the House. That is completely out of order. [Interjections.]
The CHIEF WHIP OF THE MAJORITY PARTY: Thank you, hon Deputy Speaker, for allowing me to conclude.
... there was no order by the Supreme Court of Appeal against the President or his Office to produce any record or documents;
(2) believes that –
(a) hon Lekota has misled the House by making a statement that is factually incorrect; and
(b)hon Lekota's statement undermines the dignity of the Office of the President; and
(3) resolves to –
(a) condemn the actions of hon Lekota;
(b)censure hon Lekota for misleading the House; and
(c) call upon hon Lekota to withdraw his statement and to apologise unreservedly to the President and the people of South Africa for his actions.
[Interjections.] The message has gone through. Thank you very much, Deputy Speaker. [Applause.]
The DEPUTY SPEAKER: Is there any other notice of motion? [Interjections.] No, I was still asking. I didn't ask anybody to speak. I am hoping that what happened on this side of the House – the banging of chairs - is not a precedent to what this House will be like. It would be ... [Interjections.]
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker, on the strength of your wise ruling and precedent, I hereby give notice that on the next sitting day of the House I shall move with pride on behalf of the IFP:
That the House -
(1) debates the necessary measures which need to be taken to re-establish freedom of speech in this House which has been so grossly, so outrageously and so unashamedly curtailed on this, as on previous occasions, so that we may fulfil our constitutional duty and obligation to have the same freedom of speech in this House that people have outside this House, and so that we can fulfil our duty to voice the concern, the disappointment and the anger of the people of South Africa, rather than being censored every time we dare criticise the executive;
(2) deletes from our Rules the obsolete, misinterpreted and misunderstood notion of the need for a substantive motion every time the opposition holds the executive accountable;
(3) adopts the original interpretation of the Rules of this Parliament, for that requirement was merely a notice requirement and was never in the constitutional history of South Africa held as a form of censorship as it is now applied in this House ...
The DEPUTY SPEAKER: There's a point of order, hon Ambrosini. What's your point of order?
Mr G J SELAU: The point of order is that there is an intention for the House to debate. There is no debate now. Thank you. [Interjections.]
The DEPUTY SPEAKER: Continue, hon Ambrosini.
Dr M G ORIANI-AMBROSINI: I am acting on the same strength as the Chief Whip did, and therefore on that strength, I further move that the House -
(4) adopts a resolution that considers such grounds a gross constitutional violation of the practices of this House; and
(5) re-establishes for the sake of South Africa and the freedom and liberties of all the Members of this House the freedom of speech which we must enjoy.
The DEPUTY SPEAKER: Thank you. Are there any other notices of motion?
Mrs S V KALYAN: Madam Deputy Speaker?
The DEPUTY SPEAKER: Hon Kalyan?
Mrs S V KALYAN: I was on my feet before the hon Ambrosini spoke and I wish to address you on the so-called motion that the Chief Whip of the Majority Party put forward.
Firstly, Madam, it is my considered opinion that it was not a notice of motion. Secondly, it was not a substantive notice of motion, and the DA objects to this. May I respectfully ask you to please look at the Hansard and revert to this House with a ruling as to what exactly the Chief Whip proposed this afternoon? Thank you.
The DEPUTY SPEAKER: Thank you, hon Kalyan. Hon Nzimande?
The MINISTER OF HIGHER EDUCATION AND TRAINING: Madam Deputy Speaker, I respect the comments we have made, but I don't think it's strong enough. Maybe you need to make a ruling on the behaviour of members banging chairs in Parliament. It's completely unacceptable. I think we need to have a formal ruling from your side that it is unacceptable, because if we allow this to happen, then this House shall have no proper meetings. Thank you very much. [Interjections.]
The DEPUTY SPEAKER: Thank you, Hon Nzimande. Hon member?
Ms M A MOLEBATSI: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the House debates paying respect to former President Thabo Mbeki, who served the African National Congress from 1997 to 2007.
The DEPUTY SPEAKER: Thank you, hon member. Can we now come ... Hon member?
Mr N SINGH: Hon Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:
That the House debates the importance to our economy of developing business co-operatives and SMMEs in rural areas and the processes in place to simplify their access to funding.
Madam Deputy Speaker, I trust that this motion does not get constipated in the corridors of Parliament.
Mr S B FARROW: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That the House -
(1) debates, as a matter of urgency, the abuse of Rules in this House; and
(2) comes up with the means to hold the Chief Whip of the Majority Party to account and return to the House the decorum and respect that is its due.
Adv T M MASUTHA: Deputy Speaker, on a point of order with regard to that issue: I think an accusation levelled against the Chief Whip that he is abusing the Rules of the House ... [Interjections.] ... is inappropriate in respect of a fellow member of the House, and I urge that the relevant member withdraw that comment. [Interjections.]
Dr C P MULDER: Hon Deputy Speaker, may I address you on that point of order?
The DEPUTY SPEAKER: No, no, no. Wait.
Mr J H JEFFERY: Deputy Speaker, the rules are quite clear. In terms of Rule 94, Nature of Motions:
A member may propose a subject for discussion ...
Which is what the DA seems to think everybody should be doing.
... or a draft resolution for approval as a resolution.
That is what the Chief Whip of the Majority Party was doing.
The CHIEF WHIP OF THE OPPOSITION: No, he did not.
Mr J H JEFFERY: In terms of Rule 98, Notice of Motion:
When giving notice of a motion, a member should read it aloud and deliver at the table a signed copy of the notice.
That is what the Chief Whip did.
The CHIEF WHIP OF THE OPPOSITION: No, he did not.
Mr J H JEFFERY: I would appeal that the hon members of the opposition read the Rules, and when they talk about decorum, they maybe think about banging their desks as not being part of the decorum of the House. [Applause.]
The DEPUTY SPEAKER: Okay.
Mrs S V KALYAN: May I address you on that point of order, Madam?
The DEPUTY SPEAKER: No, no, no. Hon member, are you fine? Okay. [Interjections.]
Mrs S V KALYAN: Madam, with regard to the comments made by the hon Jeffery, a draft resolution has to be approved by this House. You did not put the question to this House and this House did not agree to the resolution. So, that is my interpretation of what the hon ...
Mr J H JEFFERY: Hon Deputy Speaker, I think Mrs Kalyan does not know what she is talking about. She is talking about a motion without notice that the House agrees to. Could she kindly spend some time and read the Rules and save us all wasting a lot of time. [Interjections.]
Mrs S V KALYAN: Will the hon Jeffery also stop wasting my time? I am reading from the Rule Book - and I can read. [Interjections.]
The DEPUTY SPEAKER: Okay. Hon member?
Ms H N MAKHUBA: Hon Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:
That this House debates the problem of counterfeit products entering via our ports and how to enforce stringent legislative measures to curb it.
Mr M WATERS: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That this House debates the state of children in South Africa.
Mr G G BOINAMO: Hon Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That this House debates the current living conditions of the residents of Lindelani, including a lack of access to basic services and no scholar transport and solutions to improve the situation.
Mr C M MONI: Madam Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That this House debates assessing the Setas' role in ensuring implementation of commitments made on the National Skills Accord by all stakeholders.
Mr J R B LORIMER: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That this House debates illegal mining and solutions to stop it, or where feasible, formalise it under a revised Mineral and Petroleum Resources Development Act.
Mr J M MATSHOBA: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That this House debates supporting and strengthening local government in the areas of air quality and waste management.
Dr H C VAN SCHALKWYK: Voorsitter, ek gee hiermee kennis dat ek op die volgende sittingsdag van die Raad namens die DA sal voorstel:
Dat die Huis 'n debat voer oor of die gebruik van hul moedertaal Lede van die Parlement in staat sal stel om hul taak as Parlementslede met groter selfvertroue en doeltreffendheid uit te voer.
(Translation of Afrikaans notice of motion follows.)
[Dr H C VAN SCHALKWYK: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf on the DA:
That this House debates whether the use by Members of Parliament of their mother language enables them to carry out their duties as Parliamentarians with more confidence and efficiency.]
Mrs M WENGER: Madam Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:
That this House debates government proposals to reduce the number of catchment management agencies and measures to ensure the effective function of these bodies.
Mr X MABASA: Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That this House debates opening up regional markets for South African goods and services and for imports from the region.
Ms G S SINDANE: Madam Deputy Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That this House debates strengthening and supporting local sport and recreation councils.
REQUEST FOR CLARITY ON NOTICES OF MOTION
The DEPUTY SPEAKER: Hon members, there are members who have asked for clarity on the Rules governing notices of motion. As is said in the Rule Book, Rule 93, notices of motion take essentially two forms, namely draft resolutions and subjects for discussion. A draft resolution is generally motivated to enable the House to have sufficient information on the matter before it. Having said that, I will come back to the House to provide clarity on the questions that were asked regarding this particular item.
PROFESSORS SALIM ABDOOL KARIM AND DIANE MCINTYRE ELECTED AS FOREIGN ASSOCIATES TO INSTITUTE OF MEDICINE
Mrs M T KUBAYI: Madam Deputy Speaker, I hereby move without notice:
That the House -
(1) notes that on Monday, 15 October 2012, Professor Salim Abdool Karim and Professor Diane McIntyre were elected to the Institute of Medicine as foreign associates in recognition for their pioneering contribution to research into HIV prevention and treatment;
(2) further notes that Professor Karim is the Director of the Centre for the AIDS Programme of Research in South Africa funded by the Department of Science and Technology and President of the Medical Research Council, and Professor McIntyre is the South African Research Chair in Health and Wealth at the University of Cape Town;
(3) acknowledges that election to the Institute of Medicine is considered one of the highest honours in the field of medical sciences, health care and public health and recognises individuals who have demonstrated outstanding professional achievement and commitment to service;
(4) recognises that once again South Africa has demonstrated that we have leading scientists in the area of medical research; and
(5) congratulates Professor Karim and Professor McIntyre on their achievements.
CONDOLENCES EXTENDED TO VICTIMS OF HURRICANE SANDY
The CHIEF WHIP OF THE OPPOSITION: Madam Deputy Speaker, I hereby move without notice:
That the House -
(1) notes with sadness the destructive effects of Hurricane Sandy on the populations of the United States, the Bahamas, Cuba, Haiti, the Dominican Republic, Puerto Rico, Jamaica and Canada;
(2) further notes that Hurricane Sandy, assumed to be one of the largest storms to hit the eastern United States, has caused widespread damage estimated at billions of dollars, displacing and impacting on millions of individuals, both in the affected areas and abroad;
(3) acknowledges the efforts by the relevant governments, emergency services and persons in either individual or collective capacity to alleviate the effects of Hurricane Sandy within their respective countries; and
(4) extends its heartfelt condolences to the embassies of those countries for the loss of life and destruction of property caused by the storm.
FOURTH INTER-FAITH ACTION FOR PEACE IN AFRICA EVENT TAKES PLACE ON 30 OCTOBER 2012 IN CAPE TOWN
Mrs M T KUBAYI: Deputy Speaker, I hereby move without notice:
That the House -
(1) notes that on 30 October 2012, the 4th Inter-Faith Action for Peace in Africa event takes place at the Good Hope Centre in Cape Town;
(2) further notes that IFAPA will be marking its 10-year anniversary since it was founded;
(3) acknowledges that IFAPA is an inter-faith organisation made up of the seven major faith groups of Africa namely: African Traditional Religions, the Bahá'i faith, Buddhism, Christianity, Hinduism, Judaism and Islam;
(4) further acknowledges the addition of Voodooism, Rastafarianism and Karaism by IFAPA;
(5) recognises that the IFAPA event is organised under the theme "Nation-building through Social Dialogue: The Role of the Interfaith Movement in Conflict Resolution, Peace Building and Development" and will bring together representatives of civil society formations, business leaders, Chapter Nine institutions, the religious community, traditional leaders as well as ordinary South Africans to converse with one another about their shared values, aspirations and a vision for South Africa; and
(6) encourages all citizens to engage on thematic issues that are affecting peace within the continent.
WESTERN PROVINCE RUGBY TEAM WINS CURRIE CUP FINAL
Mrs S V KALYAN: Madam Deputy Speaker, I move without notice:
That the House -
(1) notes that on Saturday, 27 October 2012, the Currie Cup final was contested between the Sharks and Western Province in Durban;
(2) further notes that Western Province beat the Sharks 25-18 after leading 16-12 at halftime;
(3) recalls that the last time Western Province won the Currie Cup was 11 years ago; and
(4) congratulates Western Province coach Allistair Coetzee, the rest of the management team and all the players in the Western Province team on their victory.
75TH ANNIVERSARY OF THE SABC'S AFRIKAANS RADIO SERVICE
Mnr N J VAN DEN BERG: Agb Adjunkspeaker, namens die DA stel ek sonder kennis voor:
Dat die Huis -
(1) die SABC hartlik gelukwens met die viering van die 75ste verjaardag van die Afrikaanse Radiodiens;
(2) kennis neem dat die SABC in 1936 gestig is ingevolge Wet No 22 van 1936, wat bepaal dat daar ook in Afrikaans uitgesaai moet word en dat die Afrikaanse Radiodiens die volgende jaar op 27 Oktober 1937 begin uitsaai het;
(3) voorts kennis neem dat die Afrikaanse Radiodiens oor 75 jaar heen telkens van naam verander het en tans Radio Sonder Grense heet, 'n aanduiding van 'n transformasieproses wat RSG vandag die Afrikaanse radiotuiste van alle Afrikaanssprekendes maak; en
(4) die gelukwensing van die Parlement oordra aan die bestuurder van RSG, Magdaleen Kruger, en al die personeellede, vir hul harde en getroue werk.
(Translation of Afrikaans Draft Resolution follows.)
[Mr N J VAN DEN BERG: Madam Deputy Speaker, I move without notice
That the House –
(1) congratulates the SA Broadcasting Corporation on the celebration of the 75th birthday of the Afrikaans Radio Service;
(2) notes that the SABC was founded in 1936 in terms of Act No 22 of 1936, which provides that broadcasting must also take place in Afrikaans and that the Afrikaans Radio Service started to broadcast in the following year, on 27 October 1937;
(3) further notes that over 75 years the Afrikaans Radio Service has changed its name repeatedly and is currently known as Radio Sonder Grense which is indicative of the process of transformation that has now made RSG the Afrikaans radio home of all Afrikaans speakers; and
(4) conveys its congratulations to the manager of RSG, Magdaleen Kruger, and all members of staff, for their hard and dedicated work.]
PETROSA IN JOINT EXPLORATION AGREEMENT WITH COHYDRO SARL IN DRC
Mr G J SELAU (ANC): Hon Deputy Speaker, the Petroleum Oil and Gas Corporation of SA Ltd, PetroSA, made a brilliant and admirable move, once again, when it signed a joint exploration co-operation agreement with Cohydro Sarl from the DRC on Tuesday, 23 October 2012. This happened in the presence of President Jacob Zuma of the Republic of South Africa, President Joseph Kabila of the DRC, and 20 Ministers from both countries.
The agreement includes activities such as pre-exploration, exploration, and the development and production of hydrocarbons. Notwithstanding the fact that the benefits of this venture will be realised in the medium to long term, we are pleased by this, because of the critical demand for liquid fuels in our country.
The ANC applauds PetroSA on its historic path to become a global player, on the one hand, and its endeavours to ensure a sustainable supply of energy for the country's social and economic needs, on the other. We hope that this House is reading from the same page as we are. Thank you.
DA OUTRAGE AT COSTLY UPGRADE TO PRESIDENT ZUMA'S NKANDLA HOME, AND LACK OF
The LEADER OF THE OPPOSITION: Madam Deputy Speaker, the nearly R250 million in public money, which will be spent by the Department of Public Works on the upgrade of President Jacob Zuma's home in Nkandla, is a scandalous abuse of taxpayers' money. The decision by the executive to hide behind some of the draconian provisions of the National Keypoints Act to avoid answering questions casts a dark shadow over this entire project. It undermines the integrity of the Office of the Presidency.
Yesterday, I announced that the DA would submit amendments to the National Keypoints Act and the Executive Members' Ethics Act directly to the Speaker, following the ruling of the Constitutional Court on private members' Bills. The DA will also push for the completion of the Ministerial Handbook review by the end of this year. This must include provisions to ensure that nobody is allowed to ignore the R100 000 limit placed on private security expenditure for the executive.
Lastly, this House must urgently establish a committee to oversee the Presidency. We cannot allow for a situation in which the President, elected by this Parliament, remains unaccountable to its members.
Madam Deputy Speaker, you have rejected my debate on a matter of public importance about the Nkandlagate scandal. While you may not think it is important enough, the people of our country do. That is why we will continue to fight until we get to the bottom of this scandal. I thank you. [Applause.]
LAUNCH OF VETERAN SOCIAL WORKERS FORUM
Mrs N M MDAKA (ANC): Deputy Speaker, the ANC welcomes the recent launch of the Veteran Social Workers Forum owing to the challenges faced by the profession with regard to the departure of many social workers from the public sector to take up more favourable options in the private sector or in foreign countries. This initiative represents an attempt to halt the decline and negative effects faced by this profession.
The lack of social workers has had a huge impact on the poor and vulnerable, who urgently require the important services of social workers. Thus, there has been a need to bring on board our retired social workers in order to offer their experience and institutional memory in order to uplift the profession itself and the way services are delivered to our people. The establishment of this forum will provide young and newly appointed social workers with an opportunity to learn from their veteran counterparts who have years of experience in the field. It offers an opportunity for these new social workers to build working relationships with veterans and to benefit from their wealth of knowledge.
In order to ensure that the impact of this initiative is felt where it is most needed - at grass-roots level - the Department of Social Development has called for the establishment of dedicated and efficient structures in provinces. We believe that social workers play a central and critical role. Thank you. [Time expired.]
EXPANSION OF SOUTH AFRICAN INDUSTRIES INTO REST OF AFRICA
Dr M G ORIANI-AMBROSINI (IFP): Madam Deputy Speaker, I wanted to make a statement in respect of the Minister of Economic Development, relating to the International Monetary Fund's vindication of the IFP's position on reform of the monetary system, but the Minister is not here. Perhaps somebody could tell him that I will make a statement on this issue the next time he is here. I have sent him the documentation.
Since the Minister of Trade and Industry is here, I would like, through you, Madam Deputy Speaker, to address him following what the Minister of Finance has pointed out to us, and what the Minister of Trade and Industry has pointed out to us several times. This point is that there is great room for the expansion of South African industries in the rest of Africa. There is our hinterland – that is where our industries go – and yet that is where we have the least amount of market access, and the greatest tariffs and nontariff barriers.
We have easy access to the European and American markets for our products, goods and services, but not to the rest of the African markets.
Therefore, I would like to invite our Minister of Trade and industry to tell us in specific terms - and not in general terms, as he has done thus far in our committee - what he and the Minister of Foreign Affairs intend to do in the next few years to ensure that our industries will have full, unfettered and equal access to all the markets within the African countries. Thank you very much.
ROAD SAFETY, BUS DRIVERS AND BUS OWNERS
Mr S Z NTAPANE (UDM): Madam Deputy Speaker, the UDM received with mixed feelings the news that Mr Sisa Nonama, the bus driver of the unroadworthy nonluxury coach that killed 23 people in an accident that took place in May 2010, has pleaded guilty to 23 counts of culpable homicide. At the time of the accident the bus was travelling from the Eastern Cape to Cape Town.
The UDM agrees with the fact that this is a victory for road safety and that this sends a clear message to bus and public transport operators that road safety is not negotiable. We also appreciate the remorse shown by the bus driver for the unnecessary loss of life. However, we are concerned that the bus owner takes no responsibility for allowing a nonroadworthy vehicle that had a number of faults, ranging from brake problems, poorly insulated wiring to malfunctioning lights, to operate on our roads.
The UDM believes that it is about time that the owners of public transport vehicles are also held responsible for allowing their unroadworthy vehicles to operate on our roads. I thank you, hon Deputy Speaker.
IRREGULAR EXPENDITURE, MISSING ASSETS AND UNDERSPENDING IN WESTERN CAPE
Mr J P GELDERBLOM (ANC): Deputy Speaker, the ANC has noted with concern the Auditor-General's report on the millions of rand in irregular expenditure, missing assets and underspending in Premier Helen Zille's office and the Western Cape provincial legislature. The Western Cape provincial legislature underspent by R10 million under its administration section, while the Office of the Premier cannot locate R3,7 million's worth of assets listed in its asset register. [Interjections.]
Furthermore, an amount of R22,8 million was irregularly spent, and there were also several lawsuits about alleged unfair labour practices. The DA is quick to point fingers at the ANC government, and opportunistic sound bites are produced to cast themselves as the sole purveyors of justice and good governance. But when they are entrusted to oversee just one province, then this is the grim picture which emerges. [Interjections.]
The DA opportunistically accuses government departments and entities of incompetence in the filling of existing vacancies, but the increase in the vacancy rate in the Western Cape legislature depicts an employer which cannot retain its employees, nor fill funded vacant posts. The DA cannot govern the one province it endlessly lays claim to, but wants South Africa to entrust it to rule the country. [Time expired.]
POOR STATE OF HOSPITALS IN NORTH WEST
Mr I S MFUNDISI (UCDP): Deputy Speaker, the UCDP knows that health services are a real cause for concern and that, if we are not alert to the situation, we shall soon be faced with an inevitable collapse of services. That is if the circumstances around the Brits Hospital and other hospitals are not kept in check.
Parts of the Brits District Hospital in the North West province operate in poorly ventilated prefabricated buildings that are being used as wards whilst the new structure is being built. The hospital does not have a mortuary, resulting in massive delays before corpses are removed. It is not uncommon to see corpses lying in the casualty ward for hours, posing a health risk to other patients, whilst waiting to be moved to a mortuary. Some wards operate as storage room for gas cylinders, which are placed too close to beds, posing a fire hazard.
Last year, the North West department of labour threatened to close down the facility after it had failed health and safety measures. The facility's management was given until 15 November 2011 to rectify the situation, but nothing has happened and, not surprisingly, the labour department hasn't gone back to follow up on its findings. Key official posts remain vacant, such as the clinical manager, accountant and assistant director.
Even more worrying and unsettling are the allegations that workers at the hospital are being harassed and threatened with dismissal by the hospital's management as they are being accused and suspected of whistle-blowing. With conditions like this in our hospitals, it is no wonder that a number of people decide to die at home peacefully. [Time expired.]
NDDP REFUSES TO HAND DA SO-CALLED SPY TAPES
Mr J SELFE (DA): Madam Deputy Speaker, on 20 March this year, the Supreme Court of Appeal ordered the National Director of Public Prosecutions, NDPP, to hand to the DA "documents and material relevant to the review" of the decision to discontinue the prosecution against Jacob Zuma taken in April 2009. Since the decision to stop the prosecution was ostensibly based on the so-called spy tapes of conversations between Leonard McCarthy and Bulelani Ngcuka, it follows that these documents and material relevant to the review must include these tapes.
Despite the Supreme Court of Appeal ruling that the documents and material should be handed over within 14 days, both the NDPP and President Zuma's lawyers have stubbornly refused to do so. This makes them in contempt of court. It is a shocking indictment of the NDPP that it ignores an order of the Supreme Court of Appeal. Further, President Zuma's lawyers now hide behind so-called confidentiality and the supposed vagueness of the court order for refusing to hand over the tapes.
The court order could not be clearer if it tried. The NDPP took the decision on valid legal grounds. They will have nothing to hide, and we demand that they hand over the tapes immediately. But what is becoming clearer by the day is that the decision to stop the prosecution had nothing to do with the spy tapes. It had nothing at all to do with the merits of the law. It was a straight political decision to let Mr Zuma off the hook, and we will pursue this matter through the courts. Thank you. [Time expired.] [Applause.]
INNOVATIVE LOW-COST HOUSING PROJECT IN MANGAUNG
Mr J M MATSHOBA (ANC): Hon Deputy Speaker, an ANC councillor in the Mangaung metro has devised an innovative low-cost housing project using tyres. Mr Thabo Olivier, who was once voted one of the best councillors a few years ago, has developed a plan to build low-cost houses with old used tyres. He is the founder of the Qala Tala initiative whose main aim is to do away with corrugated iron shack informal settlements. The Canaan project, a spin-off of the Qala Tala initiative, received its first donation of 400 old tyres and the first tyre house will be built in Olivier's backyard.
This programme will be rolled out to poor families and the houses will cost less than a current subsidised house. The house will be 100% green, with only sustainable and waste products being used as building material. It will have solar panels, a dry-compost toilet system and water tanks for reusable water. The community will be expected to build the houses themselves and the plans to build the houses will be available on DVD in 11 languages to help the facilitators of the project.
In addition to this roll-out of low-cost housing, there will be a programme for poor families to cultivate their own vegetables. This objective is to teach communities to cultivate their own vegetables, be employed and generate an income. The ANC believes that such innovative ideas and solutions to the housing backlog will go a long way towards ensuring that there is shelter for all. [Applause.]
SADTU ACTING IN OWN INTERESTS WHEN ENCOURAGING STRIKES
Prof C T MSIMANG (IFP): Madam Deputy Speaker, the SA Democratic Teachers' Union, Sadtu, has proclaimed its "commitment to quality learning and teaching campaign and to improving quality public education by defending the education budget". Yet, Sadtu undermines this very commitment they make by sometimes encouraging teachers to go on strike during crucial exam times in order to try to force government to bend to their demands.
Sadtu's links to the ruling party may have given the union a sense of self-importance that it uses to hold the education sector to ransom and to try to take over the department's role. Like other unions in our country, their claims of representing the interests of their members are a disguise they use to protect their own interests. The pupils feel these strikes acutely because they either sit in class with no teachers, or are forced to stay at home due to the sometimes violent disruptions allegedly caused by Sadtu members. One wonders how many children's education has been sacrificed at the altar of unionist interests. I thank you.
IMPROVEMENT IN ROAD INFRASTRUCTURE IN NORTH WEST
Mr S G MMUSI (ANC): Deputy Speaker, the ANC acknowledges that 58% of South Africa's roads are gravel roads and that 70% of existing roads require urgent repair. Thus, the latest initiative to improve road infrastructure in the North West province over the next six months must be welcomed. An amount of R280 million is to be spent on road construction projects over the next 18 months, and the roads prioritised for rehabilitation are the Coligny to Klerksdorp and Rustenburg to Thabazimbi.
Even more promising is that these projects will not only be giving local contractors an opportunity to participate, but will also create about 600 jobs. The second phase of the Madidi Access Road Community Development Initiative Project will commence next year to rehabilitate another five kilometres and add storm-water drainage in the village. I thank you, Deputy Speaker. [Applause.]
Apartheid LEGACY OF POOR EDUCATION
Mr G G BOINAMO (DA): Madam Deputy Speaker, 18 years after the end of apartheid, the legacy of poor education lives on. Millions of South Africans remain without access to decent schooling, textbooks are not delivered, school buildings are crumbling, and teachers often do not have the required skills. Many young South Africans who manage to finish their schooling discover that they lack the skills needed to find jobs - they are outsiders.
The DA is working hard to enable every child to access quality education and reverse the apartheid legacy, to allow every child a chance to become an insider. In the Western Cape, where the DA governs, we have reduced the number of underperforming high schools from 78 to 30. We have increased the number of learners who make it to matric from 46, under ANC governance, to 56. The DA in national government will ensure that every child has a textbook in every core subject. We will set academic targets for each school and closely monitor performance. Principals will be held accountable for school performance. We will not allow the legacy of apartheid education to keep people trapped in poverty. A good education is the best way to get a job. [Time expired.]
VISIT TO ORANGE FARM BY MINISTERS
Mr S J NJIKELANA (ANC): Madam Deputy Speaker, on 23 October Ministers Bathabile Dlamini and Bongi Ntuli accompanied by MEC Nandi Mayathula-Khoza visited Orange Farm where they met with more than 2 000 beneficiaries of social security benefits, about 20 NGOs and a number of practitioners such as home-based caregivers, councillors and social workers. A few projects were visited by the Ministers and the MEC to give them an idea of what was happening on the ground.
The visit gave these leaders a vivid illustration of the challenges that are faced by this community and the work done by those working on the ground. Amongst the outstanding benefits from this visit was the decision to form a social security forum that will include NGOs that operate in the social security sector. Local councillors, community activists and all three spheres of government will be part of this forum.
Let me also share with you that this was the beginning of what Orange Farm regards as a social security campaign for the needy and vulnerable in the area. If anyone needs to bear testimony of working together, as driven by this ANC-led government, no one ought to go beyond this event. The community of Orange Farm is obviously very thankful for this initiative, and one can confidently indicate that this has triggered more determination to reverse the frontiers of poverty as committed to by the ANC. Thank you. [Applause.]
FAILURE TO ADDRESS SCHOOL INFRASTRUCTURE BACKLOG
Dr W G JAMES (DA): Deputy Speaker, the Department of Basic Education must explain why it lost a R7,2-billion grant to address the school infrastructure backlog. This money was intended to replace mud schools, but the department has failed to spend it. This is as much an utter calamity for the learners as it is a pitiful disgrace for South Africa. Learners all over our country are still taught in structures that are damp, that are cold and that do not have basic necessities such as water, electricity and hygienic toilets.
I have personally visited these mud schools numerous times. In February this year, the department made a commitment to replacing 49 mud schools with new buildings by August. They missed this deadline and extended it to November. Much like the department missed the delivery of textbooks in Limpopo, so it is missing the deadlines for building school classrooms. The question is how we can reverse the legacy of apartheid education if this government cannot spend its money on giving all our learners the opportunities they need to succeed in life.
Minister Motshekga, in a recent address to Sadtu, said: "We are prepared to boil the ocean for better education." Minister, we do not expect you to do something as monumental as boiling the ocean. All that we ask of you to do are things as simple as building schools and delivering textbooks to the children whose only wish is to learn under circumstances of human decency. [Applause.]
EXPANSION OF HEALH SERVICES TO SCHOOLS
Mrs P C NGWENYA-MABILA (ANC): Deputy Speaker, the ANC welcomes the recent joint initiative between the Departments of Basic Education, Health, and Social Development to deliver a comprehensive programme of on-site health education and service to primary and secondary schools. The ANC has long recognised and ensured that education and health are key priorities and, as such, it is committed to improving our public health and education systems.
The comprehensive service offered by this joint initiative consists of health screening, on-site service provision, health education and referral to local health clinics for assessment and treatment, and the service will be rolled out to all learners over the next five years. The government's National Health Insurance focuses on the prevention and promotion of health care services in an affordable and equitable manner for all South Africans.
The National Health Insurance will ensure quality health care through, amongst other things, major improvements in infrastructure; ensuring compliance with basic standards of health care management; the centralisation of national health care insurance in primary health care; the re-engineering of school health services which includes the expansion and strengthening of school health services; and, district clinics in specialities. The initiative will be known as the Integrated School Health Programme. Thank you.
LAUNCH OF VETERAN SOCIAL WORKERS FORUM
The MINISTER OF HIGHER EDUCATION AND TRAINING: Madam Deputy Speaker, I am rising to welcome the statement by the hon N Mdaka on the launch of the Veteran Social Workers Forum and also to point out that in government's own training strategy, retired professionals can play a very important role in training and nurturing younger professionals, especially in cases in which, in some of the professions, we have fewer people qualifying.
It is very important that these retired professionals are also given a role, especially to supervise younger workers and to accelerate work-placement training programmes. This is part of a very important strategy of my department and in terms of working with the Department of Social Development to accelerate the production of professionals in order to overcome the apartheid problem of black people having been prevented from accessing certain professions. Thank you very much.
EXPANSION OF SOUTH AFRICAN INDUSTRIES INTO REST OF AFRICA
The MINISTER OF TRADE AND INDUSTRY: Deputy Speaker, I would like to take advantage of the invitation offered to me by the hon Oriani-Ambrosini to explain a few things about how we see trade with the African continent and its relationship to industrialisation. The first point is that we do believe that emerging markets, all of them, now have to turn to their domestic markets as a source of growth and development in the years that lie ahead.
The problem that we have in Africa is that colonialism divided us into 54 different countries and, as individual countries - particularly South Africa - we just have too small an internal market to support industrial development. But as large swatches of the continent, we do start to hit the numbers required. In fact, South Africa's flagship programme on the African continent at the moment is the negotiation of the tripartite SADC-Comesa-East African Community free trade area. I am pleased to say that these negotiations have reached a point at which there is understanding about what the content will involve. We will not seek to renegotiate the trade agreements that we have within each of the regional communities, but will focus on extending those to the other countries. So, in our case, we will be negotiating with the non-SADC members of Comesa and the East African Community.
We have also found that tariffs are not the main issue in interregional trade and particularly trade in value-added products. There are many other barriers in place. Some of these are regulations, but there is also inadequate infrastructure. And, in practice, we do not see a Great Wall of China between hard and soft infrastructure problems. We see the two as linked, and that is why we are championing things like the North-South Corridor, which we think is very important infrastructure development across that particular region.
The next phase, of course, will involve the negotiation of the continental free trade agreement, which is being championed by the AU, which we are supporting as well. That will create a market with a population of over 1 billion people and a combined GDP of $US2,6 trillion. That is where we are focusing our attention. That is our number one priority, and we believe that that work is proceeding and advancing, and we are committed to ensuring that that work goes ahead. Thank you.
APARTHEID LEGACY OF POOR EDUCATION
The DEPUTY MINISTER OF BASIC EDUCATION: Deputy Speaker, I have four responses to statements that have been made. The first is in relation to the quality of education in the Western Cape, and certainly we would celebrate with the Western Cape when they do well. Just the year before last, Gauteng surpassed the Western Cape in terms of its achievements. Last year, the Western Cape did better. To us, it does not matter whether it is Gauteng or the Western Cape. We would want all our provinces to do well.
But the reality, in terms of the system of education, lies in the fact that there is disproportionate development across the provinces; that you cannot compare the Eastern Cape in terms of infrastructure with either Gauteng or the Western Cape. For very obvious reasons, Gauteng and the Western Cape would do better. Therefore we have a particular responsibility to ensure that we promote equity as far as possible and bring about parity in the system of education.
We want to share with the House the fact that we work extremely well collaboratively. There are no difficulties or contestations between the Ministry and the MEC for Western Cape. In fact, the national strategic learner achievement plan is adopted by all provinces. Fifty-two million workbooks are distributed to all learners, including the Western Cape. The challenges of learners in relation to literacy and numeracy are not peculiar to other provinces, but include the Western Cape.
Indeed, when one looks at the Western Cape, you surely are going look at the disparities between Rondebosch and Khayelitsha. These are realities that we have to collectively address, and therefore we do not want to politicise this. What we can say to you is that the department has indeed, as I have indicated, produced more than 52 million books on literacy and numeracy. Every child from Grade R to Grade 9 receives a book in the official language on literacy and numeracy. In addition, there are textbooks on science for Grades 10, 11 and 12 and, in fact, we are working towards the provision of mathematics and science books in the intermediate phase, as well as the senior phase.
We also have the annual national assessment, which involves more than 7,220 million learners, including each and every learner in the Western Cape. This means that the problems and the challenges that we face are not peculiar to other provinces, excluding the Western Cape. They are, in fact, generic in nature. Indeed, the Western Cape has done better than many of the other provinces.
With regard to the other ...
The DEPUTY SPEAKER: Deputy Minister, your time has expired.
The DEPUTY MINISTER OF BASIC EDUCATION: I have four responses, hon Deputy Speaker. Is it one? Okay.
INNOVATIVE LOW-COST HOUSING PROJECT IN MANGAUNG
The DEPUTY MINISTER OF HUMAN SETTLEMENTS: Deputy Speaker, I want to thank hon member Matshoba for the statement he made on the South African who is building houses using old tyres. We welcome that initiative, but, at the same time, I hope that the National Home Builders Registration Council, NHBRC, has been called on board for quality assurance. We support every initiative. We are saying that houses cannot be built by government alone, but we can do so in partnership with all our stakeholders.
This initiative is all the more welcome because it is also the people's housing process; that the people in the community are involved in building the houses. We also welcome, in particular, the issue of local economic development, because this initiative also includes people growing their own vegetables. So, it is really a South African partnership in action. We welcome this approach. Thank you, Deputy Speaker.
DA OUTRAGE AT COSTLY UPGRADE TO PRESIDENT ZUMA'S NKANDLA HOME, AND LACK OF TRANSPARENCY
The MINISTER OF PUBLIC WORKS: Deputy Speaker, if the hon Mazibuko believes in the rule of law, as she claims, then I think she needs to understand that any law, as long as it hasn't been repealed, still remains the law which must be applied. That is the first point. Secondly, the ANC believes that if they come up with any amendment, we would be ready to engage on any outdated apartheid law. We are ready for that engagement. I must say, hon Mazibuko, if you are honest and consistent – not selective – talk about all outdated apartheid laws, not just about some and leave out others.
You also need to understand that what was done is beyond the Ministerial Handbook. There is the National Key Points Act. There is also the Defence Act which applies to this particular security arrangement of the President. So, talk about all those issues; do not be selective.
Lastly, the review of the Ministerial Handbook is something we have long been seized with as the Cabinet, and you will get those results. [Interjections.] So, don't even call for it.
I expected something new, because this was just a repeat of what was said in the newspaper by the hon member. There was nothing new. Thank you.
IMPROVEMENT IN ROAD INFRASTRUCTURE IN NORTH WEST
The MINISTER OF TRANSPORT: Deputy Speaker, I would like to thank the hon member who spoke about the improvements in the North West province. I would also like to share with the House that the Department of Transport is working very closely with the nine MECs to improve road infrastructure in rural areas and in urban areas. I thank you.
Mr J H VAN DER MERWE: Madam Deputy Speaker, may I address you on a point of order?
The DEPUTY SPEAKER: Yes, hon Van der Merwe.
Mr J H VAN DER MERWE: I wish to refer to the events earlier today in this House. I am sure that tonight we will hang our heads in shame when we see on television what happened today. Parliament cannot be seen to be doing nothing about this. Therefore, I propose that the matter be referred to the Chief Whips' Forum to urgently address this so that never again do we have such events in this House.
The DEPUTY SPEAKER: Do you have a point of order, hon Minister?
The DEPUTY MINISTER OF BASIC EDUCATION: It is not a point of order, but may I address you on a similar point, Madam Deputy Speaker?
The DEPUTY SPEAKER: Yes.
The DEPUTY MINISTER OF BASIC EDUCATION: I endorse the sentiment expressed by the hon Van der Merwe. I think the decorum of this House is critical and necessary, and the integrity of the Chair has to be respected.
I would urge that the hon Chair looks at Hansard very carefully, because there was a clear imputation of bias and partiality on the part of the Chair. The suggestion that was made by the hon Lekota was that the response or the findings of the hon Chair, in relation to previous concerns that had been raised were deliberately and consciously delayed in order to embarrass the hon Lekota.
Now, that in itself suggests a particular lack of integrity on the part of the Chair. I do submit, with respect, that if indeed Hansard does reveal a particular allegation of bias and an erosion of the integrity of the Chair, an appropriate committee should be established in order to investigate the matter and deal with the matter appropriately, including the issue of an appropriate sanction. Thank you very much, hon Deputy Speaker.
The DEPUTY SPEAKER: Thank you very much, both hon Van der Merwe and hon ...
Dr M G ORIANI-AMBROSINI: Madam Deputy Speaker ... Madam Deputy Speaker ...
The DEPUTY SPEAKER: Hon Ambrosini, when you stand up and ask to speak, you wait until the Chair acknowledges you and says you can speak. Please! These are some of the things that really disrupt the House. Do you want to speak on a point of order?
Dr M G ORIANI-AMBROSINI: Yes, Madam Deputy Speaker.
The DEPUTY SPEAKER: You stand up or raise your hand and say that, and the Chair allows you to speak. That is the Rule.
Dr M G ORIANI-AMBROSINI: That's exactly what I have done.
The DEPUTY SPEAKER: You can speak now.
Dr M G ORIANI-AMBROSINI: That is exactly what I have done. I said, "Madam Deputy Speaker" and I kept silent, waiting for you to acknowledge me. Thank you for acknowledging me. I am rising on a point of order. I want to point out that what the Deputy Minister did, requires a substantive motion. It was totally out of order to infringe on the credibility and the conduct of a member who is not even in this House.
The DEPUTY SPEAKER: Thank you, hon member. I take it, hon Van der Merwe, that these issues are supposed to be discussed at the Chief Whips' Forum. You are right. I hope they will be discussed. At times I wonder what the Chief Whips' Forum is discussing, other than making sure that the decorum of this House is maintained and that the House runs smoothly. I think we have a serious challenge if, at times, the people who are disrupting this House are the Chief Whips themselves. I appreciate your input. I think it must be discussed there. Thank you very much. [Interjections.]
And end the never-ending comments. This is by no means an attempt to stifle debate, but I think, hon members, we are really overdoing it. I don't know if all of us sitting here don't see on television the circus that we are in, in this House. I hope all those issues will be addressed.
HIGHER EDUCATION AND TRAINING LAWS AMENDMENT BILL
(Second Reading debate)
The MINISTER OF HIGHER EDUCATION AND TRAINING: Hon Deputy Speaker, Cabinet colleagues, hon chair of the portfolio committee and hon members, let me thank the portfolio committee for the processing of this piece of legislation. This Bill has several aims. Firstly, it puts in place measures to ensure the proper governance and administration of higher education institutions where this is not happening. In too many of our institutions we have uncovered serious instances of poor governance, maladministration or serious corruption.
As the Minister, I have the responsibility of ensuring that higher education institutions are able to discharge their constitutional obligations in terms of the provision of quality educational services, and to conduct research and other university functions. These obligations are compromised, from time to time, by a breakdown in the governance and management structures at educational institutions, prompting interventions by our department to restore good governance and management.
Since the inception of the Department of Higher Education and Training, I have been compelled to intervene at five higher education institutions by appointing independent assessors to investigate allegations of poor governance and financial maladministration that seek to undermine the effective functioning of our institutions.
This Bill institutes measures to strengthen the Minister's authority to intervene effectively where institutional authorities fail to ensure proper governance and administration. These measures are necessary, because the law, as it stands, appears to have certain limitations in that it can be open to interpretation that makes it difficult if not impossible for the Minister to intervene in some cases in which there is evidence of maladministration, corruption or poor governance.
The amending Bill provides me, as the Minister, with the authority to issue a directive to members of the boards of national institutes and councils of universities to take action where there are serious allegations of financial impropriety or mismanagement, and where action has not been taken, taking into account due processes, to appoint an administrator. There have been instances in which some university councils have not acted even when instructed to do so. This piece of legislation aims to compel institutions to be able to act where there are very serious allegations of maladministration or corruption.
The Bill further empowers an independent assessor to have access to information during an investigation. The powers of the independent assessor have been too weak; sometimes one could not even ask and be supplied with the relevant documents or any other proof that may be required.
I know that there have been some objections to the proposed amendments, claiming that I want to have extensive powers and undermine institutional autonomy. There is no such thing. We must always balance institutional autonomy against public accountability. Universities are public institutions funded by the taxpayers' money. Thank you very much. [Applause.]
Mr M I MALALE: Hon Speaker and members of this august House, the portfolio committee considered the Bill that was referred to it. All political parties that constitute our portfolio committee, as well as the interested and affected stakeholders that came to the public hearing convened by the committee, participated actively and constructively.
As the Minister has already alluded to, some of the contents of the Bill empower him to issue written directives to the boards of a national institute of higher education or whatever other institute that he may decide to establish in terms of the law. The directives will be aimed at correcting the morass that may be associated with these public entities, to deal with matters of financial impropriety or any other mismanagement, including unfair action or discriminatory practices that may be out of sync with the sacrosanct doctrine of legality.
One aspect that is very important in this respect is that, if a council refuses to execute a written mandate by the Minister, the Minister, in terms of this Bill, will be obliged to dissolve this belligerent public institution, such as a council. On this aspect, Dr Lotriet of the DA, of course, expressed concerns that it would seem this sanction is very strong, but we feel we cannot protect a corrupt council. If a council is corrupt and is unable to address the issues as would be raised in the directives, such council only deserves to be dissolved and a competent team of people appointed to continue with the mandate of this public entity. That is the only point on which we differed and I thought she would obtain the support of the head of the organisation.
One aspect raised in the Bill is that the tenure of the administrators can be extended. The Minister is permitted to extend the tenure by six months if the administrator cannot conclude his business within the original period of two years, as stated in the principal Act. The remuneration and allowances of the administrator will be determined by the Minister with the ratification of the Minister of Finance.
In this connection, there is an aspect which the committee included, which is that members who are complicit in illegality will be prohibited from serving in any other council so that these corrupt council hoppers do not have another opportunity. That is what the committee has actually put in there. Before the Minister takes such a step, there will be representations taken from the council so that they are able to express their concerns in relation to the Promotion of Administrative Justice Act of 2000.
The other aspect that the Bill introduces is to enable the independent assessor to go beyond the informal procedure of investigating whatever morass there may be, or allegations that might be raised against a council. The independent assessor may cause recalcitrant witnesses to adduce evidence before him or her under oath or affirmation, and may enter premises and secure evidence for purposes of exposing whatever corrupt practice that may exist in the institutions. It also places a legal duty on the independent assessor to afford an opportunity to any person whose good name and reputation may be adversely affected by the contents of the report of the independent assessor.
One other point which I must mention is that this Bill will also permit the Minister not only to establish these national institutes, but also disestablish them. So, when they are not needed in the future, disestablishing them is a simple exercise; there is no need for members to come back to Parliament to enact a law for that purpose. The Bill further amends the National Qualifications Framework Act in order to align the annual reports of the SA Qualifications Authority with the Public Finance Management Act for the purposes of accounting. So, they will begin to report on 31 August each year.
As I have said, all parties, that is, the ANC, Azapo, Cope – which is leaderless now because they walked out - and the IFP supported this Bill. The only basis for the DA not supporting this Bill is not because they do not agree with the substantive content of this Bill, but because Dr Lotriet and Dr Bosman required permission from their party because their party has obstructive tendencies.
They profess to be people that are committed to quality education in this country, yet when there are these progressive legislative improvements that we would like to introduce as Parliament, they disagree with everything. They think that we, South Africans, cannot see that they are not prepared to work together with any party that introduces things that will improve the lives of our people. It is on this basis that I would chastise the DA. Otherwise, however, the DA members who are in the committee are very progressive people. They work with us and make good proposals, but as for the party itself ... Thank you very much. [Laughter.]
Dr A LOTRIET: Hon Speaker, I would like to thank the hon Malale for saying that we are very progressive; we believe that. We do believe, however, that this piece of legislation is not that progressive. The Higher Education and Training Laws Amendment Bill will provide the Minister of Higher Education and Training with additional powers to establish national institutes of higher education and to intervene in the higher education sector. It is important to note that these powers will also be of a far-reaching nature.
It has to be kept in mind that this Bill could have a significant impact on the relationship between the government and higher education institutions. And although it has to be acknowledged - as the Minister has indicated – that there are certain higher education institutions where governance and management have been problematic, the question has to be asked whether the extensive amendments are indeed required to address the problems. Does the existing legislation not provide the Minister with sufficient mechanisms to deal with these problems?
Another point of concern relates to the haste with which this Bill has been rushed through. This was also raised by some of the institutions that made submissions to the portfolio committee. No reasons were provided for the haste and one can only assume that it had something to do with the judgment in the Central University of Technology case. Hastily dealt with legislation is, however, not the best way to deal with this matter.
The Bill has to be analysed in the context of the relationship between government and higher education institutions and especially in relation to the main findings of the Council on Higher Education's report of the independent task team on Higher Education, Institutional Autonomy and Academic Freedom, in which it states that:
... government's steering of higher education has in recent years ... grown more directive, less consultative, and occasionally prone to a hierarchical decree ... Emphasised are the need to distinguish between constitutional imperatives and higher education policy choices; a renewed commitment to generally co-operative means of policy-making and implementation; a mode of regulation that is multilateral, engaged and iterative; and increased attention by government to processes that facilitate negotiated outcomes with individual institutions as part of the planning and funding of an integrated yet differentiated higher education system.
If one looks at the amendments proposed in this Bill, it becomes clear that these amendments make way for a more directive relationship between government and these institutions. The fundamental notions of co-operative government and institutional autonomy and the steering by government of the higher education sector, as envisaged in the White Paper, are being replaced by direct control and intervention.
It is also clear that the strong control and intervention approach will be applicable to the National Institute for Higher Education, as well as to all public higher education institutions. The following is an example of this problematic intervention. It can be found in the new section 49A. This refers to intervention by the Minister.
According to this, the Minister may issue a directive to the council of a public higher education institution to take such action specified by the Minister according to a number of actions as set out in the Bill. And, if the council fails to comply with the directive within the stated period, the Minister must - not may, must - dissolve the council and appoint an administrator to take over the functions of the council.
The problem is that these directives will be based on actions specified in section 49A(1), some of which are open to subjective interpretation by the Minister. For example, if the public higher education institution has acted unfairly, in a discriminatory or inequitable way towards a person to whom it owes a duty under this particular Act, then the Minister may issue a directive. This will be left in the hands of the Minister to interpret. An example could be that if a disgruntled staff member were to raise objections because he or she had not been promoted, the Minister could intervene in terms of this provision as the council "has acted unfairly or in a discriminatory or inequitable way towards a person to whom it owes a duty under this Act". This intervention could then give rise to a situation in which the Minister must, in terms of section 49A(1), dissolve the council.
The reality is that section 49A(1) will provide the Minister with extensive powers of control and intervention; in effect, directing every facet of governance, management and administration of the public higher education institutions. This will only encroach on the autonomy of higher education institutions. It cannot be in the interest of the public higher education sector and the country that the Minister has such extensive powers to control, intervene and direct. The DA will not support the Bill. Thank you. [Applause.]
Mr B M BHANGA: Speaker, Cope distances itself from this Bill because, amongst other things, the ANC has introduced a different kind of Minister in our country who shoots first and aims later. It is not true that what the Minister has been doing, in terms of putting administrators in universities, is working. At all the universities that he claims he has introduced administrators to, the administrators still continue to fail our universities.
He lost a case against the Central University of Technology in the Bloemfontein High Court. This Minister does not understand the concept of co-operative governance in terms of which Ministers like Bhengu, Pandor and Asmal respected the institutions, as the ANC wanted to promote co-operative governance amongst stakeholders.
The Minister introduced administrators to manage the administration of universities for two years, with no stakeholders participating in running governance. It was this ANC that introduced that; this kind of Minister. He is so vindictive because he differs with certain institutions in this country. He continues to appoint unqualified council members who are unable to do oversight in the universities. He comes to this Parliament and requests to be given the authority to intervene and disrupt universities.
The whites of the past - the National Party, which used to sit this side of the House - did the same thing to suppress the independence of knowledge in this country. This is very dangerous. What is being done here is that we are giving Minister Blade Nzimande – when he doesn't agree with philosophy that is independent of institutions – the power to disband universities and disband councils. We cannot accept that. This will haunt us.
In the past, the apartheid regime used these institutions which claimed that they did not want the apartheid government to intervene in their programme of educating students. The apartheid government, like Minister Blade Nzimande today, interfered and rejected black students. This kind of Minister will take us in that direction.
It is this Minister who continually undermined ... It is true that some members in our executive undermine the laws of this country. It was this Minister who even marched in Rosebank and undermined the courts of this country when they were dealing with an issue. It is predominant in this Parliament that many of you are forgetting what Mandela fought for: freedom of speech. As Cope, we are not going to stop reminding you that this country does not belong to you. [Time expired.] [Applause.]
Mr N SINGH: Hon Speaker, I am not in the fighting mood the hon Bhanga is in. My colleague the hon Mpontshane serves on this committee and has been part of the consideration of this Bill at that level. He is away on oversight, and my brief is to support the Bill on behalf of the IFP. [Applause.] However, there are a few issues that I wish to raise on his behalf, which I think he raised in the committee as well.
On the face of it, the Bill seems to allow the Minister to step in and assist universities that may have lost their way. Yet, one has to question the extent to which the power to intervene in the day-to-day running of the universities is placed in the hands of the Minister. This can, we believe, jeopardise the independence of the institutions if the Minister acts on incomplete or inaccurate information, as demonstrated in the recent court case involving the Central University of Technology in the Free State.
The aim of this Bill must not threaten the autonomy of the institutions, but enhance the pursuit and practice of excellence in academic work. When serious breaches of procedure and financial management plague an institution, the Minister is bound by the Bill to intervene.
The placing of institutions under administration begs the question of what went wrong to cause the councils to become dysfunctional in the first place, thereby precipitating the intervention of the Minister. The root cause of dysfunctional councils may either revolve around cadre deployment or the employment of the wrong people to posts they are unqualified for. This undermines the governance and management of institutions. If council members do not know what they are doing, hon Minister, they are setting up the institutions, especially formerly disadvantaged ones, to fail.
The hon Minister must ensure that the lessons learnt from a dysfunctional institution are proactively applied to other more stable institutions to ensure that they do not go down the same road to terminal dysfunctionality.
The IFP believes that the Bill will give the Minister the capability of ensuring greater adherence to the education policies of our country. But the hon Minister must ensure that any intervention is absolutely necessary and not used as a political tool to disrupt institutional autonomy. Thank you. [Applause.]
The SPEAKER: I thank the hon member. I now wish to invite the hon Chili to the podium. Ms Chili will be making her maiden speech. You have the floor, hon member. [Applause.]
Ms D O CHILI: Hon Speaker, Ministers and Deputy Ministers, members, ladies and gentleman, the Higher Education Act has established councils as the highest decision-making bodies of public higher education institutions. These councils are responsible for the good order and governance of institutions and for their financial policy, performance, quality and reputation.
The role of a council should be like that of a captain of a ship, who will ensure that he or she steers the ship in the right direction to reach its destination, even during extreme weather conditions. It is the responsibility of the councils to see to it that the institutions of higher learning are well governed to achieve their strategic objectives and the country's national development goals. A council should always discharge its statutory responsibilities without favour or prejudice and hold the executive management accountable.
The findings of the independent assessors in the majority of the cases have pointed to the inability of councils to discharge their strategic and fiduciary responsibilities. At the Walter Sisulu University, the findings were that the council failed to influence, in any tangible way, the deteriorating financial situation of the institution; it failed to hold management accountable for failing to implement its resolutions; and it also failed to resolve the crisis in respect of the Student Representative Council constitution. At the University of Zululand, both the assessor report and the Higher Education Quality Committee audits found that the council interfered with the day-to-day running of the institution and had taken charge of matters that were ordinarily senate matters.
It is also not of assistance if councils are aware of their statutory responsibilities, but are not discharging them accordingly. If the core business of the institutions – teaching and learning, research and community engagement - is undermined by the ineffectiveness of councils, the Minister has to intervene.
As already alluded to by the chairperson of the committee, the hon Malale, the Bill before us also seeks to give the Minister the power to intervene in the case of poor or nonperformance or maladministration by a public higher education institution; to provide for the dissolution of the council as well as procedure for such dissolution; and to extend the powers of an administrator to temporarily take over the management, governance and administration of the council of a public higher education institution.
We have noted the proposal made by some stakeholders during the public hearings. Some proposed that the council should be suspended, not dissolved. We are concerned that some council members served more than one term in some of the institutions that are under administration and were aware of the continuing challenges, but failed to resolve them. Thank you. [Time expired.] [Applause.]
The SPEAKER: I wish to thank the hon Chili for her maiden speech. Madam, after your maiden speech, you cease to be a maiden. You become a veteran Member of Parliament. Thank you. [Applause.]
Mr K J DIKOBO: Hon Speaker, hon members, there have been concerns emanating from the higher education sector about what they consider to be the centralisation of too much power in the hands of the Minister, which could result in the erosion of institutional autonomy.
As Azapo, we have seen a bit of that with regard to previous pieces of legislation. We do not see that in this Bill. While we fully support institutional autonomy, we believe that public higher education institutions have to account for money that comes from the taxpayer.
University councils cannot be a law unto themselves. They have to abide by the statutes of their institutions and the laws of the land. The Bill introduces measures and steps that the Minister has to follow when giving directives. The Bill also gives more power to the independent assessor.
Azapo is satisfied that the powers given to the Minister are not unfettered; they are subject to the Promotion of Administrative Justice Act and other laws. Azapo also supports the restriction of council members who were implicated in wrongdoing in dissolved councils being appointed to other institutions.
Azapo will therefore support the Higher Education and Training Laws Amendment Bill. I thank you. [Applause.]
Mr G S RADEBE: Mr Speaker, hon members, Deputy Ministers, Ministers, I would like to express appreciation for the opportunity that I have just received. I have noticed that the hon Bhanga has a talent. He must go to Jika Majika, because he always dances when he is at the podium, which is actually a debating platform.
It is true that the Vice Chancellor, Prof Mthembu, whined and tried to hide through the newspapers the maladministration and the dysfunctionality of the institution. Also, he was not running the institution properly. That is why all the reports of the independent assessors appointed by the Minister - KPMG and Adv Lube – said clearly that the institution could not function properly, and that it had failed. That is why this amending Bill will be of assistance.
One of the principles of White Paper 3 on higher education is to promote equal access and fair chances of success for all who seek to realise their potential through higher education, while eradicating all forms of unfair discrimination and advancing the redress of past inequalities.
Nawe Ndvuna, wati kahle kutsi kuletikhatsi letendlulile emanyuvesi abekhona kuto tonkhe tindzawo, kodvwa eMpumalanga naseNshonalanga Kapa kuphela kwetifundza lebetite emanyuvesi. Ngako-ke, loku ngiko lokutawuhlangabetana nalesidzingo , njengobe sekunaletakhiwomsebenti tesive temfundvo lephakeme, sekutaba lula kutsi tisitakale letifundza letimbili. Kodvwa-ke, lesikufunako kulesikhatsi sanyalo, kutsi kwakhiwe tinhlaka letitakwati kusebenta ngetindlela letifanele, tikwati kuchaza ngalokucacile kutsi tisetjentiswe kanjani timali tahulumende lebetabelwe letinhlaka. (Translation of Siswati paragraph follows.)
[Even you, Minister, know quite well that universities were everywhere in the past, but Mpumalanga and Northern Cape were the only provinces without them. Therefore, this will meet the need, since there are public higher education and training institutions in place now, it will be easy for these two provinces to get assistance. However, what we presently need is the erection of structures that will be able to function properly and to give account of how the government funds allocated to them were spent.]
It is very important that we take note of the fact that all these disadvantages were because not all the learners that came from other provinces - Mpumalanga and the Northern Cape - had equal opportunities to get an equal education. I normally call them "migrant students", because they come from other provinces. This costs a lot of money for their parents.
When the National Institute for Higher Education was established, the Higher Education Act did not make provision for the Minister to intervene in the event of the need to address governance and management and the related challenges of these institutions. The proposed amendments of the Higher Education and Training Laws Amendment Bill will address the inadequacy of this function. Clauses 38J to 38O of the Bill before us today seek, among other things, to empower the Minister to intervene where necessary, by issuing a directive to the board of the National Institute for Higher Education to take action specified by the Minister; to appoint an administrator; to dissolve the board of the national institutes; and to disestablish the national institutes.
The Minister would not be able to do all this if he was not given legal provision provided by this Bill. That is why, Minister, it is very important that I give you all the support necessary so that you are able to make sure these institutions are accountable for the public monies that they have been given.
The ANC welcomes the support and the extension of the powers of the Minister to issue directives to the National Institute for Higher Education. This amending Bill will go a long way towards resolving the challenges before they escalate to the point at which they would warrant investigation by the independent assessors, and, consequently, the appointment of an administrator.
Siyacaphela-ke, Ndvuna, kutsi lokubalulekile ngulokutsi akukafaneli kutsi nakunesidzingo sekusita, lusito lwentiwe ngesikhatsi sekunetikinga. Kodvwa kufanele kutsi, titsi tisacala nje tinkinga kuveta inhloko, lusheshe lungenele lusito kuletakhiwomsebenti tesive, kuze lukwati kucatulula letinkinga tisavela. Ngobe, lokutsi lucale kungenelela ngesikhatsi letakhiwomsebenti setivele tonakele kudla lenyenti imali yahulumende. Ngako-ke, kubaluleke kakhulu, Ndvuna, kutsi Lomtsetfosivivinyo ukunike onkhe emandla lowadzingako. (Translation of Siswati paragraph follows.)
[We are noting, Minister, that what is important is that, when a need to address issues arises, we shouldn't wait until the challenges have escalated. But we must immediately nip them in the bud because addressing them, once they have escalated, is very costly to the government. It is therefore very important Minister, that the Bill should give you all the powers that you need.]
This Bill must give you the support that you need. And, all the other progressive organisations have given you their support. That means that your early and timely intervention will make these institutions respond accordingly.
We also take note of what some of the stakeholders raised, in that they are concerned that this might give you, Minister, too much power to micromanage these institutions. But we know that, with your intellectual and Marxist analysis capacity, you will not be able to do so, because you are too highly intelligent to go and want to intervene in institutions just because of political hunger. You are not politically hungry. You are not like other people who don't want to swallow their pride and apologise in this august House. People should stop coming into this august House just to politicise issues; they should understand issues.
It is very important to take note that the hon Blade Nzimande, the Minister, has been given this responsibility because he is an intellectual. We believe that he will not encroach on the autonomy of these institutions and encroach on academic freedom. We know all these things because this is a democracy, and you are trying to ensure that we establish democratic institutions that will address the current status, unlike the institutions that were established by the former apartheid regime, which managed to segregate other provinces by not giving them opportunities for higher education and learning. In summary, the ANC supports the Bill. Thank you. [Time expired.] [Applause.]
The MINISTER OF HIGHER EDUCATION AND TRAINING: Hon Speaker, I would like to thank all the parties that supported this amending Bill. I also need to point out that this amending Bill further provides for the establishment of national institutes with a specific scope or application. It also aims to accommodate the establishment of, amongst other things, the planned national institute for humanities and social sciences, as the current legislation makes no reference to any such provisions.
Hon Wilmot James, I hope you will be pleased about this intervention because the correct emphasis on science, technology, engineering and maths has had an unintended consequence in our institutions. There is not enough attention being paid to strengthening the social sciences. In fact, in many institutions, social science, research and the teaching of social sciences are in decline, yet social sciences are very fundamental to the development of our country, our national identity, the development of culture and the promotion of critical thinking skills.
I would also like to say, though, that the DA cannot have their cake and eat it. They can't say that we are rushing this legislation through because of the Central University of Technology matter. I thought they would be taking credit because it was the DA that raised this matter. They can't, at the same time, then be celebrating that we lost in court, especially in the face of a very damning report by the independent assessor about the extent of maladministration in that university.
Again, as I said, they can't blame me for problems in our universities, but not want legislation that will give me power to effectively intervene. I have no interest in micromanaging universities. I also have no interest in closing space for there to be academic freedom and autonomy. I know knowledge production requires the freedom to think, but, at the same time, we can't be powerless Ministers unless the DA approves of what we do. We don't account to the DA; we account to this House.
The DA is silent about instances of abuse of autonomy in order to pursue antitransformation measures by some universities, because autonomy is not inherently progressive. It's progressive only if it is used to advance academic freedom, not to defend corruption, which some institutions do.
Engifuna ukukusho kwilungu uBhanga wukuthi akuve kubuhlungu uma iqabane selilahlekelwe yipolitiki. Ayivalelisi ipolitiki uma seyihamba. [Ihlombe.] Zolo lokhu uBhanga ubesho zonke lezi zinto esizishoyo kodwa ngoba useku-Cope namhlanje, ipolitiki isihambile, usekhuluma izilimi kuhle kwalaba bantu ababephuze leliya wayini uJesu aliphendula lingamanzi. [Uhleko.]
Siyabonga kakhulu niseseke kulo Mthethosivivinywa. Ngiyabonga. (Translation of isiZulu paragraphs follows.)
[What I want to say to hon Bhanga is that it is indeed sad for the comrade to lose political principles. When political principles leave you, they do not say goodbye. [Applause.] Not long ago hon Bhanga shared the same sentiments as us, but now that he is with Cope, the political principles are gone; he now speaks in tongues like those people who were drinking the wine that Jesus turned from water. [Laughter.]
Thank you very much for supporting this Bill. Thank you.]
Bill read a second time (Democratic Alliance, Congress of the People and Independent Democrats dissenting).
CONSIDERATION OF SEVENTEENTH REPORT OF COMMITTEE ON PUBLIC ACCOUNTS ON REPORT OF AUDITOR-GENERAL - ANNUAL REPORTS AND FINANCIAL STATEMENTS OF DEPARTMENT OF SPORT AND RECREATION FOR 2010-11 FINANCIAL YEAR
CONSIDERATION OF EIGHTEENTH REPORT OF COMMITTEE ON PUBLIC ACCOUNTS ON REPORT OF AUDITOR-GENERAL - ANNUAL REPORTS AND FINANCIAL STATEMENTS OF BOXING SOUTH AFRICA FOR 2010-11 FINANCIAL YEAR
CONSIDERATION OF NINETEENTH REPORT OF COMMITTEE ON PUBLIC ACCOUNTS - REPORT OF AUDITOR-GENERAL ON ANNUAL REPORTS AND FINANCIAL STATEMENTS OF DEPARTMENT OF ARTS AND CULTURE FOR 2010-11 FINANCIAL YEAR
CONSIDERATION OF TWENTIETH REPORT OF COMMITTEE ON PUBLIC ACCOUNTS - REPORT OF AUDITOR-GENERAL ON ANNUAL REPORTS AND FINANCIAL STATEMENTS OF NATIONAL ARTS COUNCIL FOR 2010-11 FINANCIAL YEAR
CONSIDERATION OF TWENTY-FIRST REPORT OF COMMITTEE ON PUBLIC ACCOUNTS - REPORT OF AUDITOR-GENERAL ON ANNUAL REPORTS AND FINANCIAL STATEMENTS OF SOUTH AFRICAN HERITAGE RESOURCES AGENCY FOR 2010-11 FINANCIAL YEAR
CONSIDERATION OF TWENTY-SECOND REPORT OF COMMITTEE ON PUBLIC ACCOUNTS - REPORT OF AUDITOR-GENERAL ON ANNUAL REPORTS AND FINANCIAL STATEMENTS OF PUBLIC SERVICE SECTOR EDUCATION AND TRAINING AUTHORITY FOR 2010-11 FINANCIAL YEAR
Mr N T GODI: Mr Speaker, comrades and hon members, from the onset let me thank my comrades in the committee and our dedicated staff for their revolutionary committee spirit displayed consistently when dealing with our work. There is much to do, and only collective effort has seen us through. We are presenting to the House reports on the Departments of Arts and Culture, Sport and Recreation, Boxing SA, the National Arts Council, the SA Heritage Resources Agency, and the Public Service Sector Education and Training Authority.
The recommendations we are making mark a substantial departure from previous practices, in that they introduce the element of continual monitoring, which was not there before, that is a requirement for quarterly progress reports on corrective measures. This, however, places an obligation on the House and the committee to be able to monitor compliance with timeframes.
From our side, as the Standing Committee on Public Accounts, Scopa, we have done all our planning to monitor compliance, but will still look to the Speaker's Office for leadership and guidance. From our side, we have every intention of coming back to the House in case departments and entities fail to comply with the stated timeframes.
The Public Service Sector Education and Training Authority got a disclaimer of audit opinion and has ongoing issues of concern, as its liabilities exceeded its assets by R19,9 million - and there is a lot more that is not going right.
Boxing SA, the National Arts Council and the SA Heritage Resources Agency all received qualified audit opinions. Transversal issues in these entities include material losses, expenditure management challenges, compliance with laws, irregular expenditure, and fruitless and wasteful expenditure.
Those of the Departments of Arts and Culture, and Sport and Recreation are all unqualified, but with emphasis of matter. Issues of concern to Scopa include expenditure management; irregular, fruitless and wasteful expenditure; supply chain management issues; and asset management.
We are particularly looking forward to the report of the Special Investigating Unit on the investigations into the Department of Arts and Culture. This department has unauthorised expenditure of R41,7 million and irregular expenditure of R64 million.
Even though those of the departments are not qualified, as Scopa we are concerned that many of our national departments remain in the space of unqualified with emphasis of matter. There is no movement towards clean audits. In the past financial year, only three departments got clean audits, with 30 departments in the space of unqualified audits with emphasis of matter.
We want to urge that there should be structured co-ordination between ourselves as Scopa and the portfolio committees to ensure that officials are held accountable for noncompliance with legislation and regulations. We thus present to this House our reports, and thank members in advance for their anticipated support. Thank you.
There was no debate.
The ACTING DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move:
That the Reports be adopted.
Declarations of vote:
Dr D T GEORGE: Speaker, the first thing that comes to mind when a report from Scopa is tabled in this House is: So what? Will it make any difference to the way in which the people's money is managed? The sad reality is that the answer is no. Report after report sets out failure in the public financial system. That failure is systemic and not easy to resolve.
When a system starts to break down only a bold intervention can restrain the breakdown and start to reverse the process. That is what Scopa is meant to do. It must identify what has failed, make recommendations to remedy the failure, and ensure that those responsible for mismanaging the people's money face the appropriate consequences.
For the financial management of a department to operate effectively, it needs to have the basic building blocks in place; it needs to have a clear financial management procedure; it needs to have a robust internal auditing function that monitors compliance with financial procedures; and it must have an effective audit committee that receives regular reports from the internal audit unit so that it can alert management to any financial management problems before the annual audit is conducted by the Auditor-General. These basic and simple principles are not in place, and the result is that the people's money is being squandered fruitlessly, wastefully and irregularly by cadres who simply don't care and are not held accountable.
At a time when our economy has been battered by the perfect storm of fallout from the global financial crisis, incoherent economic policy and creeping systemic rot in the public financial system, Scopa should be at the forefront of holding the executive to account for financial mismanagement.
As a committee, Scopa has identified its problems in receiving the required improvement reports from the departments that appear before it. These reports remain backlogged in the Speaker's Office, if indeed they are submitted at all. An innovation to receive quarterly reports is a welcome step in the right direction, but this must happen and must happen very soon.
There should be no confusion about the role of Scopa. It does not compete with other committees as those who seek to further extract its teeth would suggest. Scopa is Parliament's committee specifically dedicated to public accounts. It has oversight over all of the people's money, irrespective of where in the system it happens to be spent or when it was spent. Scopa must pursue financial justice for the most vulnerable members of our society who feel the gravest consequences from a system that is already leaking over R30 billion per annum according to the Special Investigating Unit.
There should be no confusion that executive accountability to Parliament by Scopa is political and that Ministers must be held to account. They should be monitored and evaluated on their attendance of Scopa hearings; and, if they fail, the Cabinet must be held collectively accountable. And if that tomfoolery continues, the President must be held to account. Scopa needs to up its game and it needs to start now. Thank you. [Applause.]
Mr N SINGH: Hon Speaker, first of all I would like to associate my remarks on behalf of the IFP with the report that was tabled by the hon chairperson of the committee, the hon Godi. I would just like to indicate to this House that sometimes people mistake the role of Scopa. Scopa is a committee that actually deals with issues after the fact. At the moment we are processing some 300 financial reports and statements of public entities and government departments. Those reports ended on 31 March and were tabled only recently.
So, therefore, I endorse what the hon chairman of our committee has said in that the role of portfolio committees in doing oversight of their respective departments is extremely important. What we have noticed of late and which is very encouraging is that portfolio committees are taking a keener interest in the financial issues as they relate to their own departments, which they have oversight over.
And, I think, what is also quite encouraging is that in the past 18 months or so a number of Ministers have been attending Scopa hearings, and this is very encouraging. When I look here to my right to the hon Minister of Health, I must say without fear or favour that the hon Minister of Health was one of the Ministers that conducted himself in an absolutely wonderful manner when he appeared before Scopa in terms of answering questions and knowing exactly what his department was about. [Applause.] Now that is the kind of intervention that we need from the hon Ministers, because as the IFP we believe that the buck for accountability stops with the executive authority.
Also, although our legislation - the Public Finance Management Act - provides that a director-general or head of department is responsible for financial matters, I think this House needs to look very closely at the Public Finance Management Act and amend it to ensure that the buck stops with the Minister. A Minister or a Deputy Minister cannot sit idly by and watch governance in his or her department go down the tubes. Ministers have the responsibility to ensure that they rule from the top.
We also suggest that this House and all Members of Parliament take a very keen and active interest in the reports of Scopa, because it is through this mechanism that we can hold the public service to account. It is quite a tragedy - like a Shakespearian tragedy - that 18 years into our democracy the Auditor-General is still picking up issues of noncompliance by officials: not keeping invoices, not following supply-chain management rules and regulations. This has to stop, and we have to move to a situation in which we are looking at value-for-money audits. We need to know that the taxpayer is getting value for taxpayers' money and not just that a department is complying with accounting requirements. So, I do trust that hon members of all portfolio committees and this House will assist Scopa and assist us in ensuring that we hold the public service accountable for what they do or what they do not do correctly. Thank you, hon Speaker.
Motion agreed to.
Seventeenth Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of Department of Sport and Recreation for 2010-11 Financial Year accordingly adopted.
Eighteenth Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of Boxing South Africa for 2010-11 Financial Year accordingly adopted.
Nineteenth Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of Department of Arts and Culture for 2010-11 Financial Year accordingly adopted.
Twentieth Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of National Arts Council for 2010-11 Financial Year accordingly adopted.
Twenty-first Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of South African Heritage Resources Agency for 2010-11 Financial Year accordingly adopted.
Twenty-Second Report of Committee on Public Accounts on Report of Auditor-General on Annual Reports and Financial Statements of Public Service Sector Education and Training Authority for 2010-11 Financial Year accordingly adopted.
THE CURRENT CRISIS IN THE MINING SECTOR AND THE DETRIMENTAL EFFECT IT HAS ON SOUTH AFRICA
(Subject for Discussion)
The SPEAKER: Order! The last item on the Order Paper is a subject for discussion in the name of the hon J H van der Merwe on the current crisis in the mining sector and the detrimental effect it is having on South Africa. I am advised that Mr Mncwango will take charge of the motion.
As members are aware, there is currently a commission of inquiry into the Marikana matter. Members are requested to please be sensitive to this matter and not pre-empt the outcome of the commission. I now invite the hon Mncwango to the podium.
Mr M A MNCWANGO: Hon Speaker, the IFP has actually asked this House, through its Chief Whip, to discuss this subject of national importance, that is: The current crisis in the mining sector and the detrimental effect it is having on South Africa. There are many causes and reasons for the widespread crisis within the mining sector. They reflect the causes and reasons of the much wider crisis within the rest of the country.
One of the causes relates to something that the IFP has been predicting for 15 years. We have created a monstrosity which is undermining the very fabric of the Republic. In a well-functioning democracy and open society, independent trade unions perform the function of an essential check and balance.
In the past weeks, there have been many calls for government intervention, or complaints about government's failure to intervene. These calls, in my view, are ill-conceived and misplaced. They arise out of the fact that the trade unions have been placed in a position of not performing their fundamental institutional function. Owing to the Labour Relations Act, which the IFP strenuously opposed, and the political arrangement between the ruling party and Cosatu, trade unions are now part of the government, part of management and part of the ownership of the mines.
How can we possibly think that they can represent the interests of the workers, and that the workers can legitimately feel protected by those who sit in the armchairs of government, in the shareholders' meetings of their industrial opponents and in the boardrooms of their employers against which they are advancing their claims? It is absurd indeed. It is unnatural, and it is bound to lead segments of workers into despair, extremism and radical action. Given enough time, the failure of trade unions to do their job has ushered in the present climate of lawlessness, violence and rebellion.
We need to redress the entire system by reforming the Labour Relations Act, and by empowering a government that is no longer caged and held to ransom by trade unions. We need to have new trade unions that do not own shares in any of the businesses in respect of which they are supposed to represent workers. Unless this is the case, it would be natural for workers to feel that trade unions are fornicating with them, in terms of the consent of the king, as far as they are concerned.
The present climate of tension and unreason within our mining industry will lead to the genesis of conditions out of which our own home-grown "perfect storm" will emerge, and its direct and indirect effects will have devastating consequences on our country.
Government must go back to the drawing board, and this mould of self-enrichment first and public benefit second must be stamped out at its point of origin. Our country can ill afford the merciless enrichment of the few at the expense of the many; a case in point being the few elites at the head of the ruling party's gravy train. Our people may be poor, our people may be ignorant for lack of access to education, our people may lack exposure to all that which is worldly and sophisticated, but our people are not stupid.
Our people have seen through the charade of black economic empowerment, á la the ANC, and they are now angry about the squandering of vast state and private resources to enrich a few undeserving, incompetent and corrupt leaders. The mines are a case study of a much broader state of failure and corruption within black economic empowerment.
Huge amounts of private resources belonging to the mines have been set aside, and, to compensate for part of their value, public resources have also been set aside and both have been transferred to a small clique of undeserving black diamonds, with no benefit for the many communities who are bearing the daily brunt of the harsh conditions of one of the world's worst forms of employment.
By necessity or negligence or omission, mining pollutes the environment, threatens the health of vast communities and separates families across vast distances because of the migrant nature of its workers.
All this imposes untold human suffering on hundreds of thousands of people who not only need to carry their cross in silence, but must also bear the humiliation of seeing undeserving politicians, trade unionists and useless managers becoming richer and richer by the day because of so-called black economic empowerment. No wonder that they are as angry as hell. Who wouldn't be? I thank you.
Mr M F GONA: Hon Speaker, hon Ministers and Deputy Ministers present here, and hon members, firstly, let me convey our deepest condolences to the families of all those who passed away as a result of the recent tragedy at Lonmin in Marikana.
Sithi kwiintsapho zabo akuhlanga lungehlanga, lalani ngenxeba mawethu. [We send our condolences to the families of the deceased; may you be consoled.]
The ANC is entering this debate mindful of the fact that His Excellency President Jacob Zuma acted swiftly after this tragedy by immediately establishing a judicial commission of inquiry to probe all aspects of the Marikana tragedy. He further formed an interministerial committee to intervene in that situation. The Commission for Conciliation, Mediation and Arbitration, CCMA, was also brought in to facilitate the resolution of the labour dispute. It helped the parties to end the violence through conclusion of the peace accord on 5 September 2012. We therefore call on all South Africans and interested parties to give this judicial commission of inquiry space and time to conduct its investigation without fear or favour.
The mineral resources in South Africa are common heritage and the endowment of all people of South Africa. The state has as its obligation to leverage the mineral resources to address the historical legacies of apartheid towards the full enjoyment of the benefits of the mineral resources for all South Africans, especially those whose labour was abused under the pretext that the fact that they were black and women automatically qualified them to be exploited.
If the goal of equitable access and the sharing of our mineral wealth is to be attained, then we require an honest and objective diagnosis of the crisis in the mining sector so that in our understandable expressions of horror and haste to address this problem, we do not, in fact, find that we are seized with mere manifestations of the problem. Perhaps we must begin our inquiry with the implementation of the Mining Charter by the mining industry.
The situation obtaining currently in the mining industry has to be viewed in the light of the abject poverty that is prevalent among communities surrounding the mines and in the light of income disparities in the industry. Critical interventions need to be made to transform the lives of miners, their labour-sending communities and the communities in the immediate surroundings of the mines. Many of the challenges in the mining industry would have been long resolved were it not for the reluctance of the mining bosses to execute the requirements of the charter, not the labour movement, hon Mncwango. The mining bosses need to rededicate themselves to implementing the charter, instead of investing their energies in undermining the established collective bargaining framework and protocols of the country. Let the mining bosses not offer and grant wage increases outside of the bargaining structures that are established through the collective bargaining system. Let us reflect briefly on what the Mining Charter seeks to achieve.
The Mining Charter is an important tool to effect transformation in the mining sector. Ten years ago, during this month, the charter was signed after consensus had been reached on its objectives. The objectives of the Mining Charter give expression to the equality aspirations which are enshrined in section 9(2) of the Constitution of the Republic of South Africa, Act 108 of 1996. They are enunciated in section 100(2) of the provisions of the Mineral and Petroleum Resources Development Act.
The objectives of the charter may be summarised as follows: firstly, to promote equitable access to the nation's mineral resources for all people of South Africa; secondly, to meaningfully extend opportunities to the historically disadvantaged individuals including women in order to benefit from the mineral endowment of the country; thirdly, to leverage the existing skills base for the empowerment of the historically disadvantaged individuals; fourthly, to expand the skills base for the benefit of the communities; fifthly, to promote employment and improve socioeconomic conditions of mining communities and their major sending areas; and, lastly, to promote beneficiation.
The charter sets crucial goals for transformation. For example, it targets 26% black ownership of mining assets by 2014. As with all other tools of the democratic state which are aimed at improving the lives of the historically disadvantaged individuals, it is to be expected that the implementation of the Mining Charter will continue to meet with resistance. The resistance will take different forms at different stages of the development of the transformation trajectory. It may even take the form of mining bosses exploiting the current mining instability to undermine the objectives of the charter.
Perhaps, this could take the form of rolling back the gains of the strategic stakeholder partners in the transformation path by sponsoring the emergence of new role-players. In all of this, we should not be distracted from addressing the seriously inadequate conditions which persist in the mines. Certainly, we should resist attempts by all and sundry to now find a new-found zeal and commitment to be voluntary shop stewards of the workers, often to the detriment of the collective gains of the established bargaining processes of the country.
It is common knowledge that the living conditions of the mineworkers are far from adequate. Even in instances in which the workers could use their meagre living-out allowance to choose relatively better accommodation, they tend to spend the allowance as part of their overall income and instead swell the ranks of shack-dweller communities with those that are eligible to join the housing lists of the promised state-funded housing, such as Reconstruction and Development Programme, RDP, housing.
Closely related to this is the phenomenon of the skyrocketing debt of the workers which is largely brought about by the high interest-bearing loans from unregulated "skoparis" and "mashonisas" [moneylenders] whose practices heap misery on those they purport to help by, amongst other things, withholding the identity documents of the borrower employees.
The recent strikes have not helped the situation as the workers have further sunk into debt as a result of their not earning an income over a considerable period of time. All of these are manifestations of a deeper underlying problem, namely that the salaries of the mineworkers - they who are the backbone of our economy - require serious attention. Of course, this too is not the essence of the problem. We all know the self-feeding orientation of the capitalist system. The following is an illustration of the minimum wages in the mining sector by commodity, as well as the average wage gap between the mining chief executive officers, CEOs, and the mineworkers as at 2012.
I hope that you will listen very carefully. When mineworkers talk of a poverty wage, they mean exactly what we are going to demonstrate to you. In the gold sector, the average salary earnings is R4 222 a month; in the coal sector, the average earnings of a general worker is R4 852; in the diamond sector, the average earnings is R6 540; and in the platinum sector, the average earning is R5 396 per month. Therefore, that gives you the average industry earning levels at R5 252. Meanwhile, the average earnings level of CEOs is R20,183 433. [Interjections.]
It doesn't matter whether net or gross; you can look at the disparities that we are pointing out here. As a further illustration of this point, the Lonmin rock drill operator, after the negotiations, earns a mere R11 078 a month. This translates to R132 936 per annum compared – listen very carefully - to a whopping R17 million received by the CEO in the year 2011 only. We can further demonstrate to you that the CEO of Anglo American Platinum earned R21,5 million in 2011 – one year. The CEO of AngloGold Ashanti in 2011 earned R27,8 million, and Goldfields' CEO earned R37,7 million. This is seriously obscene. That's why even the Gini coefficient has proclaimed us to be the most unequal society when it comes to earning levels.
We will continue to work towards greater alignment between the departments which experience job leakages in intersector flows. In this regard, we will realise better articulation and strategy co-ordination between the Department of Mineral Resources and the Department of Trade and Industry. Equally, we will work towards coherent mineral governance between the various departments including the Departments of Mineral Resources, Trade and Industry, Public Enterprises, Science and Technology, and Economic Development. We will continue to explore existing best practices for effective, inclusive and accountable management of the procurement of mining rights. This will include consideration for professional granting, monitoring and evaluation of mineral concessions, which includes licensing. We will continue to conduct scientific research to assess the environmental impact of the prospecting operations.
In conclusion, we must commit to continually assessing the implementation of the charter, as we recently did. We must not hesitate to invoke the country's emerging policies, some of which I have cited above. We must insist on the full-scale implementation of the Mining Charter with consequences for noncompliance. We will invoke existing legislation to improve the conditions of miners, sending communities, as well as the South African community in general.
All these tools have the capacity to change course from the triple challenges of poverty, inequality and unemployment that we face in society in general and in the mining sector in particular. We will resist all attempts to be sidetracked by Johnny-come-lately, self-appointed spokespersons of the mineworkers of this country. We congratulate the labour unions, under the leadership of the National Union of Mineworkers, NUM ... [Applause.] ... for having concluded a number of agreements with the Chamber of Mines that are aimed at adjusting the salaries of mineworkers and the reinstatement of the dismissed workers. We trust that these actions will bring about the necessary stability to the mining industry.
I think we must raise this in the House. Those who agree perhaps with what the hon Mncwango has raised here – that the unions are organisations that are self-centred that pursue their own narrow interests ... This is as a result of people who want to erase history; who have a short memory. If you understand where mineworkers come from ... during the dark days of apartheid even before the formation of the NUM, then you will know that they were treated more like dogs by the industry. They were not even paid starvation wages, but a slave's wages. Their conditions of employment were quite appalling, and the work of the unions, especially after the formation of the National Union of Mineworkers in 1982, resulted in their dignity being restored as human beings in this country. [Applause.]
We must say that we must not have a short memory; even today, the mineworkers are earning much better than other workers in other sectors - comparatively speaking, I must emphasise - as a result of the toiling work that has been undertaken by the trade unions that are operative in the mining industry and their federation, Cosatu. I thank you. [Applause.]
The LEADER OF THE OPPOSITION: Mr Speaker, I must place on record my disappointment in Minister Shabangu for not attending this debate. Our colleagues were speaking earlier about decorum in this House - how we need to preserve it.
I don't believe decorum in this House flows from whether we shout or not, or even whether we make frivolous motions or not. It stems from whether or not the government takes Parliament seriously enough by coming here when we are debating issues of national importance, to engage and to interact with Members of Parliament.
Nevertheless, the human cost of the Marikana tragedy and the continuing collapse of South Africa's mining industry are almost impossible to put into words. At Lonmin mine 44 people were killed and 78 wounded. This amounts to 128 families affected, 44 that no longer have fathers, uncles, brothers and sons. This means that 528 family members may permanently lose a source of income because of death, and a further 936 are vulnerable because of the ill health of the breadwinner. In the aftermath, 15 000 miners have been fired following wildcat strikes at a series of other mines. This has left 180 000 people vulnerable, again, without access to an income.
Marikana represented a failure of leadership on a massive scale - from the President all the way downwards. And we have to be honest with ourselves: this Parliament failed as well. The truth is that the tragedy at the Lonmin mine exposed far more than its proximate cause of union unrest. It also revealed the raw tissues of a broken society.
Ours is a President, after all, who craftily announces that his Cabinet's salaries will be temporarily frozen in response to the current crisis, and yet refuses to halt the R250-million upgrade of his private home. This is the time to speak the truth boldly and plainly, Mr Speaker. Our President's lack of moral urgency is a blot on the conscience of South Africa.
The Marikana tragedy was not, as some have suggested, just a random event. It forms part of a larger story of human loss. Adcorp has forecast that 200 000 jobs will be lost in the mining sector over the next decade. Two hundred thousand jobs! This will leave just under 2,5 million people vulnerable to life without access to an income. This doesn't even take into account the loss of dignity which accompanies being without work.
Since 1986, employment in the mining sector has declined by almost 38%, from just under 840 000 workers to just over half a million over a period when production has flat-lined. In a negative domino effect, the recent strike-related revenue losses have reached R3,3 billion. This equates to lost tax revenue of over R1,1 billion.
The DA acknowledges that there are no easy policy solutions. We will support this government if it sincerely seeks to address the deep human underlying issues and, at the same time, adopts measures to increase productivity.
In framing a new vision for the mining industry, the President and his government must recognise the need for a structural shift. We believe that the most urgent intervention must be to review all legislation that underpins the system of oscillating migration in the mining sector. Simply put: we need to introduce a more humane system of labour to help rebuild families and communities. We need to ensure that cash remittances get back to the many families in need in rural South Africa. And we must mitigate health risks amongst mine workers, especially HIV and Aids infections.
For too long public policy has been disjointed. Today we call for the immediate establishment of an ad hoc parliamentary committee to find solutions to address the problems which ail South Africa's mining industry. Unless we find solutions to these industry challenges, we can't raise work participation and reduce absenteeism, and we cannot make mining a more attractive industry in which people want to work and investors want to invest.
So, with the fierce urgency of now, we must fix the migrant labour system. We must establish a capable state with appropriate infrastructure, and we must build a shared national platform around social solidarity with fair work and fair pay for everyone. Thank you. [Applause.]
Mr D A KGANARE: Hon Speaker, today's subject for debate does not require any philosophical interpretation. There is no argument about the impact of these wildcat strikes. What is disheartening is the loss of life which accompanied them. An environment in which everything is skewed towards what we can get rather than what we can give is at the core of the crisis. We are more concerned about wealth distribution than wealth creation. It is a given that the mining sector is going through a crisis, and pointing fingers will not, on its own, provide solutions. We are unable to talk about the crisis without untangling the context within which it is unfolding.
While the strikes have been spontaneous, violent and disruptive, the demands also seem to be ostensibly outrageous. This has created a collective bargaining regime in which it is becoming difficult to manage industrial relations within the existing legal prescripts. The loss of confidence by the workers in management and trade unions has created a space for cowboys within the workplace to try to display their short-sighted objectives in order to make themselves relevant.
We have seen religious leaders, traditional leaders and politicians, whose sell-by date has expired, converging all over the place where these unprotected strikes mushroomed. The impression that the government, the capital and the National Union of Mineworkers are colluding against the mineworkers is not far-fetched. These days it is difficult when one observes a meeting between employers and trade unions to discern whether it is a collective bargaining forum or a shareholders' meeting. Black economic empowerment has just been rendered nothing but an opiate for the people.
When ordinary South Africans, including mineworkers, watch television and see a well-connected lawyer and ex-convicts do what is called "a lot of political lobbying work" to acquire a mining licence for a big company, one wonders who was lobbied. Could it be the President, the Minister, the Deputy Minister, an influential member of the ANC's executive committee? Would the real lobbied person stand up?
When it is reported that these lobbying ex-convicts became directors of companies in contravention of section 218 of the Companies Act, which specifically disqualifies anyone who has been jailed for theft, fraud, forgery or perjury from being a company director - unless the High Court set aside the disqualification - and the government does not do anything to enforce the law, we have reason to believe that we are now an animal farm where some are more equal than others.
Mineworkers see Cynthia Carroll, the recently resigned CEO of Anglo American, get paid just more than R22 million for being the boss – an increase of 38%. As if that was not enough, she gets R850 000 for just being a nonexecutive director of British Petroleum, BP. To add insult to injury, she gets R770 000 from Amplats as a nonexecutive director. In the midst of this display of crass materialism, we are told that the workers' demands are outrageous.
Not to be left behind is the commander of "concomitant action", Mr Cyril Ramaphosa, who gets more than R600 000 from Lonmin. With this we now understand where the demand for concomitant action comes from. Whilst Cope does not support the violence which has accompanied these wildcat strikes, one is left to wonder why the call wasn't made when municipal strikers were destroying innocent people's property. Why was this call not made when patients were chased out of wards during the public sector strike? Why was this call not made when teachers were intimidating those who wanted to teach our children? I hope that the Minister of Mineral Resources and the Minister of Police will approach the Marikana commission to explain what the concomitant action entailed.
The only losers in this crisis are ordinary South Africans. Treasury states that these strikes have dented confidence in South Africa and have also lowered the growth prospects for the year. As a result, tax revenue had to be revised downwards. The wildcat strikes have cost the country more than an estimated R10 billion. On the other hand, foreign direct investment flows to South Africa are reported to have tumbled 43,6% in the first half of 2012. This is contrary to the trends on the continent. Whilst Africa is being viewed in a positive light, we are regressing. What are the reasons?
Ratings agencies Moody's and Standard & Poor say the reasons for downgrading South Africa are because of the government's diminished capacity to manage its political and economic challenges. I thank you. [Time expired.]
The SPEAKER: Hon Kganyago, as on previous occasions, I have doubled your speaking time. You now have two minutes. The floor is yours, sir.
Mr N M KGANYAGO: Mr Speaker and hon members, the labour unrest in Marikana that has now spread throughout the mining sector is simply compounding concerns that South Africa is a lawless country.
Mining plays an important role in the South African economy. For instance, last year it accounted for approximately 10% of the gross domestic product, GDP. The platinum and gold-mining sectors alone employ more than 300 000 people. Apart from the job-creating labour-intensive nature of mining-sector operations, gold and other minerals are by far the largest single source of foreign exchange.
These factors place the mining sector at the centre of our economic heartbeat. If the mining sector fails to perform at optimum levels, South Africa fails with it. Therefore, the labour unrest in the mining sector and the resultant production stoppages cause untold damage to the South African economy.
Furthermore, the labour unrest in the mining sector laid bare the superficial nature of transformation in the industry. It is now clear that the black economic empowerment beneficiaries in the mining sector only serve as government liaison officers. In addition to the superficial BEE deals, the ripple effect of the Lonmin Mine wage settlement will go beyond the mining sector, as the Marikana crisis exposed frustrations over poverty and the danger of inequality in South Africa.
Whilst we have already seen the first-round effects of the mining unrest in the form of downgrades, it will take us years to quantify the untold damage this has caused to investor confidence in South Africa. I thank you.
The SPEAKER: Hon Groenewald, your speaking time has also been doubled. You have two minutes too, sir. The floor is yours.
Mr P J GROENEWALD: Agb Speaker ... [Hon Speaker] ... I want to respond to the hon member of the ANC who complained about the huge salaries of CEOs in the mining industry, which is justifiable. But I want to say to the hon member of the ANC that there's at least one difference: in the mining sector the CEOs pay for their own houses. They don't use R250 million of taxpayers' money to build a house for the CEO of the ANC. That's a big difference.
Agb Speaker, ek wil ook sê dat dit 'n onhoudbare situasie skep as 'n vakbond deel van 'n regering is. Dit is tog net logies dat daar bevoorregting en bevoordeling vir sodanige vakbond sal wees. Dit is presies wat gebeur, ook in die mynbounywerheid.
As daar bevoordeling is, dan begin daar ongelukkigheid ontstaan by ander werknemers juis as gevolg daarvan, en dan moet die regering van die dag instaan en pa staan vir daardie probleme.
'n Ander aspek wat ons moet oorweeg, is dat die mynbounywerheid 'n beperkte leeftyd in Suid-Afrika het. Ek woon in Stilfontein en ek weet wat die impak is as 'n goudmyn in 'n gemeenskap sluit.
Alles is gesentreer op die mynbounywerheid. Dit het tyd geword dat plaaslike regerings ander nywerhede moet vestig om weg te beweeg van die afhanklikheid op die mynbounywerheid, anders ... en ek weet dat die ANC-regering daaraan gewoond is om met sy broek om die knieë gevang te word ... maar, hou op daarmee. Gee opdragte aan die stadsrade om ander nywerhede te ontwikkel sodat die mense nie die prys daarvoor moet betaal nie. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[Hon Speaker, I also want to say that an untenable situation is being created when a union is part of a government. Surely it is just logical that there will be favouring of and preferential treatment for such a union. That is precisely what is happening, and likewise in the mining industry.
If preferential treatment is given, then it leads to the start of unhappiness amongst other workers for that very reason and the government of the day has to intervene and accept responsibility for those problems.
Another aspect that we have to consider is that the mining industry has a limited lifespan in South Africa. I live in Stilfontein and I know what the impact is when a goldmine in a community closes down.
Everything is centred on the mining industry. The time has come for local government to establish other industries in order to move away from dependence on the mining industry, otherwise ... and I know that the ANC is used to being caught with its pants down ... but that has to stop. Issue directives to the city councils to develop other industries so that the people do not have to pay the price for it. I thank you.]
Mr M E NCHABELENG: Hon Speaker, I must say that I am disappointed with the previous speaker – who, according to me, is a very important leader in his party – who said that it's justifiable that other people should earn millions when African labourers are earning something that cannot be compared to what they earn. It's really ridiculous. I must say that I am really disappointed, particularly when it comes from a person who was a beneficiary of the old system ...
Mr P J GROENEWALD: Agb Speaker, op 'n punt van orde. [Hon Speaker, on a point of order.]
The SPEAKER: There's a point of order.
Mnr P J GROENEWALD: Agb Speaker, ek wil weet of dit toelaatbaar en binne die Reëls is dat 'n spreker presies die teenoorgestelde sê van dit wat 'n ander spreker gesê het? Ek het gesê dit is "justifiable to complain about it". Dit lyk my die agb lid verstaan nie en ek wil weet of dit aanvaarbaar is? (Translation of Afrikaans paragraph follows.)
[Mr P J GROENEWALD: Hon Speaker, I would like to know whether it is permissible and in accordance with the Rules that a speaker should say exactly the opposite of what another speaker has said? I said that it was justifiable to complain about it. It appears to me that the hon member does not understand and I would like to know whether this is acceptable?]
The SPEAKER: Thank you very much. That is a point of debate, but it is noted. Proceed, hon member.
Mr M E NCHABELENG: I would like to invite the hon Groenewald to listen to a song called Stimela, composed by Hugh Masekela, which talks about the conditions that mineworkers in the past found themselves in. That song is relevant even today, because the compound system and the food that workers are eating are really out of this world, and actually unimaginable. This makes me think that the cold, dead hand of apartheid is still strangling our people. You see that very well in the mining sector.
Here I define apartheid as rule by monopoly capital with open-race terror, and those who had their eyes and ears open during the war for liberation in this country will know what I am talking about when I refer to open-race terror. [Interjections.]
The history of industrial relations in the mining sector is not a pleasant one by any stretch of the imagination. Whilst it can be argued that the mining sector in South Africa was the foundation on which this economy was founded and continues to be the backbone of the South African economy, the industry does not seem to have moved with the times. A number of commentators lament the fact that beneficiating our mineral exploits is nowhere near what it should be. The same could be said about the general industrial relations environment in the sector.
Despite attempts created by democracy to promote the democratisation of the workplace, the new political democracy in South Africa is not reflected in the workplace, particularly in the mining sector.
A survey, based on a sample of 23 000 South African employees, confirms that workplaces are still controlled by employers who are interested in profit and often couldn't care less about the wellbeing of employees. This was demonstrated well by the hon Gona, with the disparities in what workers earn and what the CEOs of these companies are earning. This shows that there are still poor working conditions, job insecurity and lack of employee involvement in decision-making processes.
The workplace is becoming exceedingly adversarial, with workers finding themselves in a perpetual fight for survival. This places an enormous amount of pressure on the trade unions. This pressure often leads to strikes, with or without the sanction of the trade union leadership. More and more workers consider a strike as their only weapon to counter the power of the employer. The tension between the interests of maintaining profitability and the demands of workers for a living wage has reached a critical point in the history of industrial relations in this country.
The South African mining industry is worth R357 billion, is the largest on the African continent, employs many people and contributes a sizeable portion to the gross domestic product, GDP. On the painful side, though, are the high levels of fatalities which continue to afflict South Africa. The commission of inquiry into safety and health in the mining industry, headed by Judge Ramon Leon, reported in 1995 that some 69 000 people were killed in South Africa's mining industry in the 20th century, with one million seriously injured, maimed and physically damaged workers.
Mr Godsell made the point that the mining costs to the country in blood and human life was so great that it deserved to be commemorated at the level of the Vietnam War Memorial in Washington. We should recognise each victim by name. This is not a story to be proud of, surely?
To answer the hon Mazibuko: the number of people who die in South African mines is very high, but we cannot forget those who died some years ago and only remember those who have died now. The loss of life is a very hurtful thing to us as the ANC, and we will never forget that there are people who died making the rich even richer in this country. [Interjections.]
Although the CEOs of South African mining companies have determined that 2013 will be the year in which South Africa's mine safety is brought on par with mine safety in industrialised countries like Canada, the US and Australia, the author of Falling Ground, a book on mining safety, Dr Philip Frankel, has expressed scepticism that the 2013 safety target will be attained, let alone sustained. We are still very far from this because there is no commitment from the mining magnates to make sure that peoples' working conditions are improved.
The lack of transformation and huge income inequalities as they exist in the mining industry make one cringe at the old doctrine in mining that says: Extract most at the least cost. You have shareholders who invest their money in mining operations, while workers risk their lives on the other hand. Some of these workers who work on the mines live in squalor and in shacks. If you go to Marikana, where I was a few weeks ago, you'll see that the people who work on the mines live in a shantytown. There is a squatter area just next to the mine and you can see, even when looking at the children who live in that area, that they are undernourished, health facilities ... I mean, people don't have access to anything that will make their lives better. This reflects on a line in Masekela's song which says: "Sixteen hours or more a day for almost no pay". [Time expired.] [Applause.]
The SPEAKER: I now wish to invite the hon Mfundisi. Your speaking time has also been doubled, sir. You have two minutes. The floor is yours.
Mr I S MFUNDISI: Hon Speaker and hon members, the absolute squalor in which miners live is not only an indication of the salaries they earn, but also of government's failure to realise the constitutional rights of the citizens, such as the rights to housing, clean water, sanitation and health care.
It is unfortunate that the present democratic government, just like the previous one, promotes the notion of cheap unskilled labour. The latest BankservAfrica Economic Transaction Index, released last week, shows that the ongoing strikes are pushing the South African economy closer to recession, much against what we were told last week by the Minster of Finance when he presented his Medium-Term Budget Policy Statement, in that the issue of recession would not take place here. But watch out!
The strikes are symptomatic of a larger, more systemic fault line within the South African political economy. However, the larger issue is that business is going to find itself increasingly dealing with frustration and often unrealistic demands, which may actually reflect something much larger that their immediate work circumstances.
South Africa's economic inequality shows up repeatedly as amongst the worst in the world, and it is getting worse instead of better. The situation will increasingly put pressure on government, labour and business to come up with a long-term social contract for South Africa. The mining crisis requires all stakeholders to put aside their narrow interests and to focus on a more sustainable socioeconomic model. Let us hope that at the end of the day, the threesome will come together and find one another. I thank you.
The SPEAKER: I now wish to invite the hon Mphahlele. Hon Mphahlele, your time has also been doubled. You have two minutes. Please proceed, sir.
Mr L M MPHAHLELE: Hon Speaker, Marikana was a timely wake-up call for the country. There will always be these outbursts of discontent if political power is not complemented with economic power. Who owns the means of production in this country? Who manages the wealth of Azania and in whose interest? Surely, the indigenous Africans are spectators in the game of the economy in general, and mining in particular.
Those with political connections are flaunting their wealth with obscenity as they bid for buffaloes and build palaces amid grinding poverty. This political connectedness has even poisoned the labour movement as some unions think they are more equal than others - the curse of a republic gone bananas.
The PAC believes now is the time to redistribute the wealth, mines included, in favour of the African majority, especially the African youth.
Kumaqabane am aphetheyo e-ANC, yekani ukukhala nokukhalaza. Nathi mhla nigaya iivoti nathi nifuna ukuphatha eli lizwe. Niliphethe njani xa nikhalaza kunye namaqela aphikisayo? Nikhala ngamaGosa aziNtloko zesiGqeba nemivuzo yawo, nikhala ngokuthi abantu bayahlupheka, kanti la mandla ezopolitiko nenza ntoni ngawo? Nenza imfeketho ngala mandla ezopolitiko? Nifana namacephe aphethe ukutya kanti aphethwe ngokuba amandla ezopolitiko asingomandla okuhombisa njengokuba nihombisa ngawo. Enkosi. (Translation of isiXhosa paragraph follows.)
[To my fellow comrades from the governing party, the ANC, I say, stop moaning. When you campaigned for votes, you said you wanted to rule this country. How can you be in power and yet complain in the same vein as the opposition parties? You complain about the salaries of chief executive officers and the fact that people live in poverty: What are you doing with the political power you have been given? You are misusing it. You are like puppets on strings because the political power you wield is for window-dressing. Thank you.]
The SPEAKER: I now wish to invite the hon Dikobo. Your speaking time has also been doubled, hon member. You have two minutes.[Interjections.] Order, hon members! Order!
Mr K J DIKOBO: Hon Speaker, hon members, Azapo wants to be sure what crisis we are talking about. For us the crisis did not start in the past few months. The problem we have is that mineworkers continue to be exploited. They work under unbearable conditions. They live and stay in subhuman conditions. To top it all, they are still being paid starvation wages. Mineworkers have by and large been abandoned by their trade unions, as trade union leaders are involved in the kind of politics that have nothing to do with the wellbeing of workers.
We have read and heard about union leaders colluding with mine bosses in deciding how to deal with the workers. Collective bargaining has taken a knock, because workers have lost confidence in their own leaders and they have created parallel leadership structures. That is the crisis that we have in the mining sector. The strikes that we have now are a response to the problem that mineworkers have faced from time immemorial.
Azapo condemned and continues to condemn the violence that has accompanied some of the strikes, including the cold-blooded murder of workers at Marikana.
The Good Book tells us that we will eat from the sweat of our own brows. The bosses are eating from the sweat of the workers. The workers are singing now: Asiyifuni i-ajenda yama-capitalist. [We do not want the capitalist agenda.] The workers are singing now: Kudala sisebenzela amabhunu, basebenzi masihlanganeni [We have worked so long for the Boers, let us unite as workers.].
The bosses might have become darker, but some of them are equally ruthless. That is the crisis we have. The crisis we have is that communities that have mines around them are poor and they don't benefit from the wealth that is in their communities. That is the crisis. Now the strikes that we see are just a sign of what has been happening. That is not the crisis in our view. We thank you.
Mr J R B LORIMER: Mr Speaker, if we are to end the turmoil in our mining industry, we need a proper conversation as to why it came about. If we are to send our people home with pay packets rather than termination notices, we need to understand what went wrong and we need to fix it.
Instead of accepting that we need to change the way things work, some major role-players, as we heard from the government this afternoon, currently seem to be intent on doing what they did before, only more of it.
I have three points that I believe should be part of this conversation that we should be having. Firstly, the cosy relationship between a big government, big mining and big unions doesn't work. It ignores different circumstances at different mines, it stops pay increases for skilled workers because a pay increase then has to be given to everybody else, and it crushes minority unions and stirs rivalry because the system is one where the winner takes all.
Secondly, the culture of striker impunity must end. There must be consequences for violent lawbreaking. For too long striking Cosatu workers have had an effective licence to kill. People who have chosen not to go on strike have been murdered and nobody gets arrested.
The police appear reluctant to act against Cosatu, perhaps because to do so would be a career-limiting move. This was amply demonstrated when the DA marched on Cosatu House. Cosatu members threw rocks and the police shot teargas at the DA.
Significantly, the first time there was a major use of force by the police against strikers was at Marikana when those strikers were not acting under the instruction of Cosatu.
Thirdly, all three components of the tripartite alliance continually tell people that the mine owners are evil capitalists who do not pay mineworkers more money because they are greedy. If, like ANC members on the Portfolio Committee of Mineral Resources, you accuse mining companies of raping South Africa's resources and if, like the National Union of Mineworkers, NUM, you accuse mining companies of genocide and of not paying them fairly, then is it any surprise that the workers eventually say the agreements their union signed with management are illegitimate? They then go on strike and they are prepared to back that strike with force.
We are only just beginning to see the full, sad consequences of all this. New investment has stopped, jobs are being lost, and more will be lost. South Africa is not seen as a good place to put your money in mining.
Government spokespersons can wail all they want about what The Economist magazine said, but that is an international perception. And, I believe, The Economist was spot on when it said: "Marikana should be a wake-up call to the government, but South Africa's leaders, engrossed by factional infighting, are deaf." How can we have a conversation if government is not listening? [Applause.]
Mr A J WILLIAMS: Speaker, hon Ministers, hon Deputy Ministers, hon members, guests and friends and, most importantly, my fellow South Africans, this Fourth Parliament cannot talk on the tragedy that occurred at Marikana other than to offer our sincere condolences to the families of all those who lost their lives.
Three hundred and sixty years ago, my ancestors arrived in this beautiful country, and some of them got it into their heads that the minerals that lay beneath our soil were more important than the loved ones that lived above it. Some of you may think that the thing that divides us as South Africans is the colour of our skin. The truth is that there are only two types of people in this wonderful country: the haves and the have-nots.
Che Guevara said:
The true revolutionary is guided by a great feeling of love. It is impossible to think of a genuine revolutionary lacking this quality. We must strive every day so that this love of the living humanity will be transformed into actual deeds, into acts that serve as examples, as a moving force.
The fact that we, as South Africa, moved from an apartheid regime into a democratic country, without a civil war, illustrates fundamentally that all South Africans have a great love for one another. Love conquered hate, but love did not conquer the lust for wealth and power. It is the lust for wealth that has created material conditions in our beloved country, where millions of husbands, wives, sisters, brothers, sons and daughters believe that they have nothing to lose. It is the lust for power that has enabled individuals to try to gain political points through the suffering of others. These individuals are prepared to risk desperate people's lives for their own gain, and should not be trusted.
Many changes have occurred within South Africans since 1994. All of these changes relate to how we see each other as South Africans; how we relate to one another as human beings. Love conquers hate. The only change the people who lust for wealth have made is partial compliance with legislation. There has been no real effort made by them to build our glorious country. It is business as usual. People who lust for wealth have not contributed in any way to the South African moral authority which stems from the love we have for one another as human beings.
What are we, as South Africans, going to do about employers that risk their workers' lives by not adhering to safety legislation? Are we going to just sit around and do nothing when employers undermine communication mechanisms, like collective bargaining and collective agreements, in the hope that it will make them a few extra bucks? Are we going to continue pretending that all is well and, by doing so, leave the situation for our children to fix?
Section 10 of the Bill of Rights states, "Everyone has inherent dignity and the right to have their dignity respected and protected." We are at a crossroads not of our making. It is time to unite our love of humanity into a moving force that will change the real conditions on the ground so that everyone can live with dignity.
Annually, South Africa produces around 2,7 million ounces of platinum at a selling price of around R13 500 per ounce. That translates into a staggering value of platinum being at around R35 797 million in one year. One wonders why it is then that the communities around where this valuable resource is mined are underdeveloped. To focus only on the platinum producers, however, would be unfair. So, South Africa, ask yourselves why it is that throughout the country, where those who lust for wealth make their biggest profits, most of the workers that do the actual work live in adverse conditions.
Now, I know that some of you are thinking that the government must fix this; that you pay your taxes and that that contribution should be enough, because this situation is not really your problem. The truth is that this situation is everyone's problem. As South Africans, we are a collective. We are the ones who are the custodians of our children's future. If we blunder and abandon our responsibility to create a caring society, our children will suffer.
Those that put the lust for wealth above the love of humanity are letting us down, and they are threatening our future. It is time for them to realise that we have a stable democracy that allows their lustful pursuit of wealth to flourish, but it will not last unless everyone flourishes.
As one tribe, we South Africans must ask: Why is there such a big gap between the rich and the poor? Why are members of our South African tribe suffering with underdevelopment and inequality, while others are benefiting from human exploitation?
It was on our watch that the tragedy at Marikana occurred – not just government, not just business. We, as a society, must take responsibility. It is our collective South African fault that circumstances allowed a tragedy of this magnitude to happen.
South Africa, the time to act is upon us; the time to show through practical deeds that our love for one another can and will defeat the lust for wealth. To build a caring society, society must care. We, as South African society, must express our caring by acting in an exemplary way for the benefit of all. We, as one South African tribe, need to change the way some of our brothers and sisters are treated.
Tomorrow, let us all lead by example, and begin the transformation of our society into a caring one. Let us make it so that the tragedy in the mining sector will be seen by our children as the beginning of a better life for all, because working together we can do more. I thank you. [Applause.]
Mr M A MNCWANGO: Mr Speaker, hon members, I do want to thank each one of you who participated in this debate on this very important matter. Indeed, it is clear from your input that this country is actually in a crisis as far as the mining industry is concerned.
Mines are oases in which billions of rand in precious metals and other mineral resources are being produced. Yet, they are surrounded by oceans of poverty and squalor, as many of you have confirmed, which none of the black economic empowerment, BEE, programmes has yet addressed. The country is on fire, and we think we are able to extinguish these fires merely by talking about them in Parliament.
It would be normal for one to close a debate of this nature by patting Parliament on the back on how good we have been to spend an hour of our time speaking about the sufferings of others. However, if that is all we do, we will have but added insult to injury. Too often, this Parliament thinks it can satisfy its responsibility of addressing our country's worst problems merely by talking about them or passing a resolution. None of this is enough at all. If the closing of this debate is the end of this Parliament's commitment to addressing the issues debated today, Parliament will have failed all those who have placed their expectations on our collegial leadership.
We must expect the Portfolio Committees on Minerals and Energy, Labour, Police, and Trade and Industry to take heed and guidance from this debate and formulate legislative measures and administrative guidance capable of going to the root of the problems. This they can do by urgently reforming our Labour Relations Act, our black economic empowerment, our Police Service training and the procedure they apply for crowd control, the regulatory conditions which guarantee the health, safety and welfare of miners, and the entire system of migrant mineworkers.
The IFP reiterates and supports the call for a mining commission to be established to assess and review the working of all the mines in South Africa, focusing on the role of the investors, the economic contributions and the socioeconomic conditions of miners, and also to enhance the working charter on the issues of transformation. Ngiyabonga. [Thank you.]
The House adjourned at 17:35.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
FRIDAY, 26 OCTOBER 2012
1. BUDGETARY REVIEW AND RECOMMENDATIONS REPORT OF THE STANDING COMMITTEE ON FINANCE ON THE PERFORMANCE OF THE NATIONAL TREASURY, DATED 25 OCTOBER 2012
The Standing Committee on Finance, having assessed the performance of the National Treasury for the 2011/12 financial year, reports as follows:
In terms of section 5(2) of the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009, committees must annually submit budgetary review and recommendation reports for tabling in the National Assembly for each department. A budgetary review and recommendation report must provide an assessment of a department's service delivery performance given available resources, an assessment on the effectiveness and efficiency of a department's use and forward allocation of available resources, and it may include recommendations on the forward use of resources.
2. The Mandate and Role of the Committee
The Standing Committee on Finance was established in terms of section 4(1) of the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009. The mandate of the Committee is conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including consideration and report on the following:The national macro-economic and fiscal policy; Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills; Actual revenue published by the National Treasury; and Any other related matter set out in the Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009.
Furthermore, the mandate encompasses the committee's function to legislate, conduct oversight on the Executive's actions and its entities. The Money Bills Amendment Procedure and Related Matters Act No. 9 of 2009 make provisions for a procedure for this committee to amend money bills.
In complying with section 5(2) of the Money Bills Amendment Procedure and Related Matters Act, Act No 9 of 2009, the Standing Committee on Finance held a meeting on the 2011/12 Annual Reports of National Treasury. The Office of the Auditor-General was also invited to give input during the budget review and recommendation report process. The report therefore reflects key issues that were identified by the Committee.
4. Mandate and role of National Treasury
The National Treasury is responsible for managing South Africa's national government finances, and draws its mandate from Chapter 2 of the Public Finance Management Act, Act No 1 of 1999, together with Chapter 13 of the Constitution, 1996. National Treasury continued to monitor the impact of the global financial crisis and was able to find appropriate responses (interest rates were cut five times, increased the pace of government expenditure etc).
The budget process was enhanced as a result of the Money Bills Amendment Procedure and Related Matters Act, (Act 9 of 2009) and National Treasury's capacity was increased by creating a division handling international and regional economic policy.
The legislative mandate of the National Treasury includes developing and prescribing measures to ensure equitable resource allocation and proper expenditure control in each sphere of government, as well as to ensure that this function is executed in a transparent manner. The National Treasury does this by advocating and ensuring adherence to the following guidelines and procedures:
· Generally Recognised Accounting Practice.
· Uniform Expenditure Classifications.
· Uniform treasury norms and standards.
As the custodian of state funds, the National Treasury is therefore responsible for coordinating departments' budgets in all spheres of government. The Treasury's role in this regard is to ensure that appropriated funds are transferred to departments for implementation of government priorities, and that government expenditure is continuously monitored.
5. Strategic Overview of National Treasury
The National Treasury is responsible for managing South Africa's national government
Finances, and draws its mandate from Chapter 2 of the Public Finance Management Act, together with Chapter 13 of the Constitution.
National Treasury contributes directly to outcomes 4 (Decent employment through inclusive economic growth), 9 (A responsive, accountable, effective and efficient local government system) and 12 (An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship).
During the reporting period, National Treasury continued to respond to the 2008 recession with appropriate fiscal and other measures to promote sustainable growth. A framework was also developed which provided for a shift in expenditure planning so that budgeting occurred by function rather than by department.
One of the main focus areas of National Treasury is to promote greater accountability and transparency in government. National Treasury developed fraud detection guidelines and issued instruction notes strengthening supply chain management practices.
Macroeconomic forecasts projected GDP growth of 2.7 per cent in 2012, set to rise to around 4 per cent by 2014. The International Monetary Fund (IMF) latest growth forecast is 2.6 per cent this year and 3.0 per cent next year. Inflation moderated during the course of the year and is expected to remain within the target band. Investment was supported largely by government and public corporations.
Two credit rating agencies have downgraded South Africa's sovereign rating citing concerns relating to the sustainability of the growth trajectory due to the slow pace of policy implementation and growing income inequality. These agencies kept SA on a negative outlook.
South Africa's fiscal policy was anchored on the principles of counter-cyclicality, sustainability and intergenerational fairness. The current financial year will see a bigger focus on value for money and the shifting of resources from consumption towards infrastructure investment, and support for economic competitiveness. There remains a need to strengthen efficiency in public spending, eliminate wastage, improve the alignment between allocations and policy priorities, and root out corruption.
6. Analysis of Expenditure Reports and Budget allocation
The National Treasury indicated that the total appropriation for the Department amounted to R23.8 billion (2010/11: R50.2 billion) and is divided into operational budget, transfers and payments for financial assets. The National Treasury's operational budget amounted to R1.5 billion (2010/11: R1.4 billion) and comprised of R601 million (2010/11: R553 million) for compensation of employees, R899 million (2010/11:R810 million) for goods and services and R21 million (2010/11: R16 million) for acquisition of capital. The transfer budget of R21.6 billion (2010/11: R28.1 billion) includes transfers to provinces, municipalities, universities, departmental agencies and foreign institutions, as well as payment of post-retirement benefits for specific category of former employees and members of the liberation movement.
A virement of R58.2 million from programme 2: Economic Policy, Tax, Financial Regulation and Research (R18 million) and programme 5: Financial Systems and Accounting (R40.2 million) was made to curb programme 6: International Financial Relations expenditure for transfer payments for the Common Monetary Area Compensation.
The total appropriation for the Administration programme amounted to R281 million (2010/11: R277 million). Expenditure incurred on compensation of employees was R117 million (2010/11: R109 million), goods and services R129 million (2010/11: R134 million), transfers R2.4 million (2010/11: R1.5 million) and capital expenditure R6 million (2010/11:R4 million).
The total appropriation for the Economic Policy, Tax, Financial Regulation and Research programme amounted to R210 million (2010/11: R106 million). Expenditure incurred on compensation of employees was R56 million (2010/11: R51 million), goods and services R63 million including a once-off adjustment to the payment of bank charges to the South African Reserve Bank (2010/11: R21 million), and transfers of R20 million due to an increase in the annual funding of Economic Research Southern Africa (2010/11: R13.5 million) and capital assets R408000 (2010/11: R351000).
The total appropriation for the Public Finance and Budget Management programme amounted to R210 million (2010/11: R187 million). Current expenditure incurred totalled R196 million (2010/11: R160 million) and mainly comprised compensation of employees R131 million (2010/11: R110 million) and goods and services R30 million (2010/11: R18 million). Transfers amounted to R35 million (2010/11: R31 million).
The total appropriation for the Asset and Liability Management programme amounted to R826 million (2010/11: R20.8 billion). Total expenditure incurred amounted to R822 million (2010/11: R20.8 billion) and mainly consisted of compensation of employees R53 million (2010/11: R47 million), goods and services R18 million (2010/11: R19 million) and payments for capital assets R289 000 (2010/11: R598 000). Payments for financial assets amounted to R750 million (2010/11: R20.8 billion).
The total appropriation for the Financial System and Accounting programme amounted to R608 million (2010/11: R639 million). Current expenditure incurred totalled R505 million (2010/11: R559 million) and comprised compensation of employees R126 million (2010/11: R108 million) and goods and services R304 million (2010/11: R386 million). Capital expenditure amounted to R1 million (2010/11: R2 million). Transfer payments amounted to R73 million (2010/11: R62 million).
The total appropriation for the International Financial Relations programme amounted to R877 million (2010/11: R565 million). Total expenditure incurred amounted to R858 million (2010/11: R559 million) and comprised of compensation of employees R18 million (2010/11: R16 million), goods and services R8 million (2010/11: R10 million). Transfer payments amounted to R832 million (2010/11: R532 million) for economic research
The total appropriation for the Civil and Military Pensions, Contributions to Funds and Other Benefits programme amounted to R3.8 billion (2010/11: R2.7 billion). Expenditure for the period under review amounted to R3.3 billion (2010/11: R2.7 billion) which comprised of civil pensions and other contributions R3.1 billion (2010/11: R2.5 billion) and military pensions and other contributions R181 million (2010/11: R165 million). Compensation of employees amounted to R1 million (2010/11: R0) and goods and service amounted to R64 million (2010/11: R38 million).
The total appropriation for the Technical Support and Development Finance programme amounted to R4.6 billion (2010/11: R13.3 billion). Expenditure for the period under review amounted to R2.9 billion (2010/11: R10.5 billion) which comprised of compensation of employees R36 million (2010/11: R34 million), goods and services R118 million (2010/11: R67 million). Transfer payments amounted to R2.7 billion (2010/11: R10.4 billion).
The total appropriation for the Financial Intelligence and State Security programme amounted to R3.8 billion (2010/11: R3.5 billion) which comprised of transfers made to the Secret Services R3.6 billion (2010/11: R3.3 billion) and Financial Intelligence Centre R137 million (2010/11 R181 million).
The National Treasury indicated that the Department under spent by R2.5 billion mainly due to the Employment Creation Facilitation Fund. Reasons for under spending include the following:
· The Jobs Fund requires the submission of project proposals (applications) over the term of the project. Upon receipt, all applications are assessed on a competitive basis against the Fund's funding criteria;
· The Jobs Fund operates as a Challenge Fund as it has an open architecture and predetermined assessment criteria;
· Grants are allocated by an independent Investment Committee only if the application is competitive and the funding criteria are met;
· The Fund cannot predetermine with accuracy how many applications it will receive; nor can it determine the quality of the applications; the value of the requests; nor the disbursement schedule associated with these projects;
· Funds cannot be transferred to the Development Bank of Southern Africa (DBSA) before projects have been approved by the Investment Committee; and
· Grants cannot be disbursed to applicants until they have met the conditions precedent set by the Investment Committee and until they have signed contracts with DBSA.
The National Treasury reported that the total revenue received during the reporting period amounted to R3.4 billion (2010/11: R3.3 billion) and consisted of sales of goods and services of R71 million (2010/11: R51 million) fines, interest and dividends of R2.9 billion (2010/11: R2.6 billion) and other recoveries amounting to R0.5 million (2010/11: R0.7 million). The report further cited that the local and foreign assistance received in cash during the reporting period amounted to R6 million (2010/11: R11 million). Expenditure incurred amounted to R4 million (2010/11: R12 million). Other funds amounting to R0.2 million (2010/11: R34.2 million) were transferred to external spending agencies on behalf of the Reconstruction and Development Fund.
The appropriation statement includes a summary of information in the Appropriation and Adjusted Appropriation Acts, which relates to the allocations of the various programmes and sub-programmes and is classified between current payments, transfers and subsidies, payment for capital asset as well as a summary of economic classification.
An analysis of National Treasury's Appropriation statement, which includes all programmes, indicated that there was marginal under spending in all programmes.
There appears to be cases of virements for the 2011/12 fiscal year. As explained by PFMA, this means cases occurred during the year where National Treasury utilised savings in the amount appropriated under main division within its vote towards defrayment of expenditure under another main division of its vote. The following programmes experience a shift in virements:
· Administration - R21 000 from the payment for capital assets classification;
· Technical Support and Development Finance Programme - R21 000 to the payment for capital assets classification;
· Economic Policy, Tax, Financial Regulation and Research - R18 million from current payment classification;
· Financial System and Accounting programme - R40.2 million from current payment classification; and
· International Financial Relations programme - R58.2 million to transfers and subsidies classification.
Table 1 below represents National Treasury's expenditure per programme.
Table 1: Expenditure per programme: 2011/12
2. Economic Policy, Tax, Financial Regulation and Research
3. Public Finance and Budget Management
4. Asset and Liability Management
Transfer to Land Bank
5.Financial Systems and Accounting
6. International Financial Relations
3, 012, 028
2, 775, 985
1, 597, 899
1, 363, 188
22, 241, 572
19, 998, 860
2, 242, 712
Operational vs Transfer
7.2 per cent
6.8 per cent
10.5 per cent
7. Civil and Military Pensions, Contributions to Funds and other Benefits
3, 776, 909
3, 314, 173
8. Technical Support and Development Finance
4, 641, 940
2, 863, 296
1, 778, 644
4, 463, 350
2, 694, 236
9. Revenue Administration
8, 653, 573
8, 653, 573
10. Financial Intelligence and State Security
3, 755, 021
3, 755, 021
23, 839, 471
21, 362, 048
2, 477, 423
Source: National Treasury (2012)
7. Programme Analysis
It is in the interest of good ethical reporting to present accurate, fair and correct information regarding the National Treasury's annual performance against its planned objectives as set out in the different documents to Members of Parliament and the public at large. The purpose of this section is to draw attention to targets that were not met during the 2011/12 fiscal year. The focus is on output performance, targets, actual performance and reasons why the targets were not met.
7.1 Economic policy, tax, financial regulation and research
Within the Financial Sector Policy sub-programme, National Treasury had set a target to implement the proposal published in the February 2011 policy document entitled "A safer financial sector to serve South Africa better". This target was not achieved. However, the interagency committee is currently drafting a roadmap document, which clarifies technical components of the reform. The Department has also not achieved the target to submit a Carbon Tax policy paper to Cabinet for approval in September 2011. The annual report has indicated that the policy paper is being finalised but will only be submitted in the new financial year.
7.2 Public Finance and Budget Management
Within the Intergovernmental Relations sub-programme, National Treasury had set a target to finalise the amendment to the Municipal Fiscal Powers and Functions Act (No. 12 of 2007). However, this process has not commenced. The Annual Report has further set a target to prepare background research work in terms of annual reporting of municipal non-financial information, with specific focus on quality and scope. The research work is still under way and no timeframe has been provided.
7.3 Assets and Liability Management
Within the State-owned Entity Financial Management sub-programme, National Treasury had set a target to determine a benchmark for appropriate target structure for 12 State-owned Enterprises (SOEs). This target was not met; as the Department only piloted 6 SOEs.
7.4 Financial Accounting and Reporting
Within the Supply Chain Management Policy sub-programme, National Treasury had set a target to roll out strategic sourcing principle to 42 medium-capacity municipalities. There is no report-back on this target, instead the Department indicates an achieved target relating to the training of officials on the strategic sourcing principle, which is not related to the target. The Annual Report has indicated further that the department had set a target to develop Terms of Reference for the comprehensive review in consultation with the National Economic Development and Labour Council. The target was not met as the Department has only commenced with the consultation with the relevant stakeholders. In addition, the Department had set a target to renew 32 transversal-term contracts. However, only 3 transversal-term contracts were renewed, 1 service contract was extended and 12 pharmaceutical contracts were transferred to the national Department of Health.
7.5 International Financial Relations
Through this division, National Treasury made significant strides in advancing the interests of SA in bilateral and multilateral engagements, with a strong focus on economic development of the African continent. Some of the highlights in 2011/12, included:Engagements dominated by an uncertain global economy, especially the euro debt crisis; Actively engaged in a lobby for the reform of the international financial architecture; Strengthened the operations of the SA, Nigeria, Angola constituency in the World Bank, and of the African constituency in the IMF; Strengthened cooperation with other departments to enhance advancement of SA policy imperatives in BRICS and G20; Forged relations with a selected number of BRICS, G20, African and Nordic Finance Ministers; Engagement in Africa premised on economic opportunities, institutional reform; and outreach; Participated in development of regional economic integration strategies and infrastructure financing mechanisms; Negotiated changes to SACU revenue sharing formula with BLNS countries; Supported AfDB constituency office, and facilitated the opening of a Regional Resource Centre of the AfDB; and Strengthened PFM outreach programmes through CABRI.
7.6 Technical and Management Support and Development Finance
Within the Technical and Advisory Support sub-programme, National Treasury had set a target to fund 100 Neighbourhood Development Partnership Grant Programmes. This target was not met and only 95 Neighbourhood Development Partnership Grant Programmes were funded during the period under review.
Within this programme provides leadership, strategic management and administrative support is provided to National Treasury department.
National Treasury managed to increase awareness on risk management and corruption. National Treasury was the first national department to close its financial books for the year. Strategic sourcing and its economies of scale was yielding desired cost reduction and through a secured environment, National Treasury ensured there were no leakage of economic or financial policy matters
8. Human Resources
National Treasury had a total staff complement of 1 150, of which 55 per cent were female, and 80 per cent black. At senior management level, 57 per cent were black and 43 per cent were female.
National Treasury highlighted that the key challenge was to reduce the vacancy rate and improve turnaround times for the recruitment process. The current vacancy rate was at 9.5 per cent (121 positions) with a recruitment turnaround time of 20 weeks. In addressing the challenge around improving the turnaround time, discussions were held with the South African Qualifications Authority (SAQA) to address the verification process that takes longer than expected. The termination rate has also increased compared to the previous financial year, which has had an impact on the vacancy rate and the replacement rate.
Of 239 offers made, 223 accepted while 16 declined, with reasons for declining offers relating to salaries, counter offers, and other developmental career choices.
National Treasury filled a total of 125 critical skills positions during the financial year. In partnership with Disabled People South Africa, National Treasury was increasing attraction of candidates with disabilities. National Treasury achieved 1.04 per cent of the 2 per cent target.
National Treasury's employee lifestyle management programme was utilised by 87.3 per cent of employees, with 68 per cent of directors and 85 per cent of Chief Directors participating in the Leadership development programme.
National Treasury also highlighted that the focus shifted to internal hiring with 34 per cent of positions being filled by National Treasury employees. The other challenge is to increase gender representation of female to meet the national target of 50 per cent, as well as the recruitment of employees with disabilities, which is currently 1.3 per cent vs. the 2 per cent national target.
9. Report of the Auditor General
The Auditor-General expressed an unqualified audit opinion with the following findings on the financial position of the Department:
9.1 Material impairments
The AG's report indicated that the National Treasury had receivables for other debtors (as a result of beneficiaries investigated by independent consulting firms on Programme 7: Civil and Military Pensions, Contributions to Funds and Other Benefits) totalling R17, 165 million at 31 March 2012. This amount was disclosed as irregular expenditure in the prior year's financial statements.
9.2 Material under spending of the vote
The AG's report indicated that the department has materially under-spent the budget by R2.477 billion.
9.3 Report on other legal and regulatory requirements
· Predetermined objectives Usefulness of information
The framework for Managing Programme Performance Information (FMPPI) requires that the time period or deadline for delivery be specified. A total of 42 per cent of the targets relevant to all programmes were not time bound. Even though management was aware of the requirements of the FMPPI, they did not apply the principles contained in the FMPPI correctly.
9.4 Compliance with the laws and regulationsStrategic planning and performance management
The AG's report indicated that the strategic plan did not include measurable objectives, expected outcomes, programme outputs, indicators (measures) and targets of the institution's programme 8, including sub-programmes and activities, particularly the Employment Creation Facilitation Fund (i.e. Jobs Fund) as required by Treasury Regulations 5.2.3(d).Annual financial statements, performance and annual report
The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 40(1)(a) and (b) of the PFMA. Material misstatements of current assets, liabilities and disclosure items identified by the auditors were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion.Procurement and contract management
The AG's report cited that the employees of the Department performed remunerative work outside their employment in the Department without written permission from the relevant authority as required by section 30 of the Public Service Act (No. 103 of 1994). The report further indicates that sufficient appropriate audit evidence could not be obtained to prove that goods and services of a transaction value above R500 000 were procured by means of inviting competitive bids, and that deviations were only approved by the Accounting officer if it was impractical to invite competitive bids, as required by the National Treasury Regulations 16A6.1 and 16A.6.4.Human resource management and compensation
The AG'S report cited that a Human Resource Plan was not in place as required by Public Service Regulation 1/III/B.2(d).
9.5 Internal ControlLeadership
Management did not adhere to internal policies and procedures and as a result there were instances of non-compliance with the PFMA and TR. In addition, no guidance was given on the development and implementation of an Annual Performance Management System, which contributed towards the targets in the Strategic Plan not being time bound.Financial and performance management
The AG report cited that the financial statements contained material misstatements that could have been avoided had there been effective review processes in place. This is a recurring matter and the action plan in place to address this matter seems to be inadequate, as management is not monitoring the effectiveness of this action plan.Investigations
The AG report indicated that a forensic investigation was conducted by Internal Audit and an independent consulting firm into allegations received from the Public Service Commission (PSC). The investigation was initiated based on the allegations of procurement irregularities, use of public resources for private purposes and leave irregularities. The official was suspended and disciplinary processes were followed. Disciplinary processes concluded that the official was guilty of these allegations, and the official was dismissed with effect from 20 February 2012. A criminal case has been opened with the South African Police Services (SAPS).
An investigation is being conducted by the PSC based on an allegation received relating to the irregular appointment of service providers by the National Treasury. The National Treasury has supported the investigation, which is still with the PSC. The investigation was still ongoing at the reporting date.Performance audit
During the year under review, a performance audit was conducted on the readiness of government to report on its performance. The focus of the audit is on how government institutions are guided and assisted to report on their performance, as well as the systems and processes that they have put in place. The audit is currently in the reporting phase and the findings will be reported in a separate report.
Following the interaction with the National Treasury, the Standing Committee on Finance made the following comments:The Committee noted the training of councillors as one of National Treasury's major achievements. The Committee wanted to know if there was follow-up training, and whether it was sufficient, and if there was an assessment tool. The Committee noted that National Treasury targeted 100 partnership development grant programmes, but had met only 95, and wanted to know what happened to the other five programmes. The Committee wanted to know the progress of National Treasury's intervention in the provinces, and when National Treasury intended to withdraw. The Committee wanted to know how far had National Treasury progressed in its focus on value for money and shifting of resources from construction to infrastructure. A question was raised to ascertain whether the procurement office was now established. The Committee noted that the debt service costs of 2.6 per cent of the GDP was a worry, and wanted to know how much of this 2.6 per cent was used to service the 'borrowed loan'. With reference to the establishment of the Government Technical Advisory Centre, the Committee wanted to know how this centre was different from the technical and management support and development finance that was already in place within National Treasury. The Committee raised concern with reference to the deviations and virements on the payment for capital assets of R21 million under Programme 8, and wanted to know why the virements were made to the capital assets. The Committee noted that South Africa was declining faster than the rest of the world, especially as to the sustainability of the state finances as reflected by the credit ratings downgrade, and wanted to know National Treasury's approach to the credit ratings. The Committee wanted to know what bail-out mechanisms existed for South Africa, if any. The Committee noted that South Africa was growing at only 2 per cent and wanted to know what measures were in place to accelerate this growth. The Committee noted hold-up of the youth wage subsidy at NEDLAC, and wanted to know why this particular proposal need consensus, as other proposals emerged from NEDLAC without consensus. The Committee noted the detail given on the under spending on the jobs fund, and noted the cost per job was slightly higher, but it was still relatively good value. Of concern, however, was that National Treasury underspent by R2.5 billion on this item. The Committee noted, in terms of the framework for managing programme performance, 42 per cent of targets were not time-bound, and expressed concern as it came from a department like National Treasury. In terms of the R15 billion guarantee for the Development Bank of Southern Africa (DBSA), the Committee wanted to know how long this guarantee was in place. The Committee also wanted to know what the risk was if the R15 billion guarantee might be called upon from National Treasury. The Committee wanted to know, as to the Alexkor contingent liability of R1.19 million, would National Treasury give guarantees to private mining companies that competed with Alexkor. The Committee noted the R60 billion loan to Eskom, of which R20 billion was added last year, and wanted to know if this amount was recoverable. In terms of investment by government and public corporations in infrastructure, the Committee requested whether National Treasury could provide detailed figures in this regard. The Committee asked for more information in terms of the R2.4 billion under spending. The Committee noted that there had been interventions in terms of Section 216(2) of the Constitution, whereby the funds of municipalities could be withheld in terms of the Division of Revenue Act (DoRA) allocation, and commented that it would be strengthened even further by the establishment of the procurement office. The Committee noted that there was a draft construction procurement standard for use by provincial treasuries to improve compliance by implementing departments, and wanted to know what time frames there were for implementation. The Committee noted that within human capital, there was a need to account for youth employment in the percentages, as well as the number of women and the number of blacks employed. The Committee noted that the inability to meet the target of 2 per cent of people with disabilities, and wanted to know why it was so difficult to employ people with disabilities.
11. Responses by National Treasury
With regard to questions raised and comments made by the Standing Committee on Finance, the National Treasury responded/commented as follows:National Treasury reported that the Limpopo intervention had worked from a financial point of view, and that the provincial treasury now had a new head of department. There were some new staff members appointed in key positions, but some staff still needed to be appointed, to ensure proper cash management and budgeting. The Minister offered to give the Committee, together with the National Council of Provinces (NCOP) Committee, a more comprehensive report in due course. National Treasury indicated that it would not withdraw from Limpopo, because current situation was not sustainable. There were about 30 cases with the South African Police Service (SAPS), where charges had been laid. There were another 30 cases where disciplinary action needed to be taken. Over the past three years National Treasury had gone quite far in introducing the concept of savings, of reprioritisation within departments, and of contributing to a pool from which other programmes could actually be serviced. Work was being done by the National Treasury and the Presidency: Department of Performance Monitoring and Evaluation to establish which would indicate what programmes in Government could be slowed down, which programmes could be cut, and which programmes could be deferred. National Treasury indicated that the 2.6 per cent of GDP for the debt service cost was in line with projections. As the debt levels rose, as projected, then the debt service cost would increase. Foreign investors provided support; currently they took up about 32 per cent of the bond portfolio, and this had helped to drive down the cost of borrowing. When Moody's Investors Services downgraded South Africa's credit rating, the interest rate increased by about 20 basis points. This pushed up the cost of debt. Fluctuations or weaknesses of the exchange rate increased the cost of servicing foreign debt. There was also a floating rate portfolio which was linked to inflation. In terms of the procurement office, National Treasury indicated it had done an internal reorganisation. The central procurement office was not being created from the very beginning, but it was required to serve a very different purpose from what National Treasury had for some time. National Treasury reported that the Infrastructure Delivery Improvement Programme (IDIP) was part of the Public Private Partnership (PPP) that provided support and financial management programmes. In terms of the capital assets, National Treasury had not taken money from capital assets, but it was a shift. Money had been taken from Programme 1 – Administration and moved to Programme 8. It was purely a matter of reprioritisation within the National Treasury. In terms of training of councillors, National Treasury indicated that it would give councillors a file on the Municipal Finance Management Act (MFMA), and a guide on what to do and what not to do. National Treasury recognised the need for an intense programme of training and induction. In terms of follow-up, the National Treasury had a MFMA Coordinators Forum, which was placed in each of the treasuries. National Treasury indicated that it took the issues raised by the Auditor-General very seriously. National Treasury had responded to each of the issues raised, in terms of ensuring that they were addressed going forward. National Treasury reported that it was not a big capital-spending department, and that the bulk would be transfers. The greater part of the under spending related to what were small project. In terms of Eskom, National Treasury indicated that the R20 billion allocated last year was part of the R60 billion allocation. The loan was drawn down in three phases of R10 billion, and a further R30 billion in 2010/11; and then the final R20 billion in 2011/12. These loans could be described as a R60 billion subordinated loan, which meant that it would rank behind Eskom's other debt that it had issued. In the event that Eskom was liquidated, the other bond issuers would be paid out first, and only thereafter the subordinated loan. In terms of the R15 billion in respect of the DBSA, this referred to an increase in the callable capital. This was done to improve the DBSA's capacity to lend. The R119 million for Alexkor was a contingent liability, not a guarantee. It had arisen because there was a land claim on Alexkor's assets. A deed of settlement had been agreed between the community, Alexkor, and Government. In respect of that there was a settlement that had to be made. In the 2012/13 budget National Treasury had made allocations to Alexkor to settle this outstanding liability as well as other outstanding amounts owed by Alexkor or Government. In terms of credit ratings, South Africa did not extend borrowing frivolously, it did so to ensure that the country did not suffer the worst when the recession hit. South Africa would not have borrowed this money as it had a 5 per cent growth rate, revenue was flowing in, and Government could not spend all the money that it had in 2008 before the recession hit. In terms of the Youth Wage Subsidy, National Treasury indicated there were political processes under way. It would compromise both business and labour simply to go ahead and implement the Youth Wage Subsidy. Government preferred the route of consensus. National Treasury indicated it would be useful for the Committee to receive a briefing on the matrices and methodologies of the credit rating agencies.
12. Conclusion and Recommendations
Based on the deliberations with the National Treasury, the Standing Committee on Finance recommends that the Minister of Finance should ensure that:
12.1 The National Treasury provides the House with a report on loans, guarantees, contingent liabilities, callable capital, promissory notes, and other forms of financial assistance extended to the parastatals, and the effect on state debt if they are called-in in their entirety, within 90 days of the adoption of this report by the House.
12.2 The National Treasury provides the House with a comprehensive report on their interventions into provinces within 90 days of the adoption of this report by the House.
12.3 The National Treasury provides the House a report with proposals to strengthen National Treasury's human resource system within 90 days of the adoption of this report by the House.
12.4 The National Treasury provides the House with a detailed report on interventions to rectify errors highlighted by the Auditor General, including:The fact that 42 per cent of targets are not time bound in the Framework for Managing Programme Performance Information; The finding that employees performed work outside without written permission; The insufficient evidence that bids were used for tenders of R500 000.00; That the human resource plan is not in place; The non-compliance with Public Finance Management Act (PFMA) and Treasury Regulations; and That the Annual Financial Statements had material misstatements that could have been avoided if there was an effective review mechanism in place.
This report should be submitted within 90 days of the adoption of this Report by the House.
12.5 The National Treasury ensures that all programmes have measurable objectives and expected outcomes.
12.6 The Standing Committee on Finance further recommends that the Minister of Finance and the Minister in the Presidency: Performance Monitoring and Evaluation, ensure that the National Treasury and Statistics South Africa (Stats SA), report on a quarterly basis the progress made in reprioritising programmes within all national departments to indicate which programmes slowed down and which programmes were deferred.
Report to be considered.
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3. Budgetary Review and Recommendation Report of the Portfolio Committee on Communications on the Department of Communications, dated 23 October 2012
The Portfolio Committee on Communications (the Committee), having assessed the performance of the Department of Communications, reports as follows:
1.1. Mandate of the Committee, including provision of Section 5 of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009.
According to Section 5 of the Money Bills Amendment Procedure and Related Matters Act, the National Assembly, through its Committees, must annually assess the performance of each national department. The Committee must submit an annual Budgetary Review and Recommendation Report (BRRR) for each department that falls under its oversight responsibilities for tabling in the National Assembly. These should be considered by the Committee on Appropriations when it is considering and reporting on the Medium Term Budget Policy Statement (MTBPS) to the House.
The Portfolio Committee on Communications considered the Budget of the Department of Communications on 13 and 24 April 2012. The Committee considered the Department's Annual Report 2011/12 on 11 and 16 October 2012.
2. The Department of Communications
2.1. Mandate, Vision and Mission
· To create a vibrant ICT Sector that ensures that all South Africans have access to affordable and accessible ICT services in order to advance socio-economic development goals, support the African Agenda and contribute to building a better world.
· South Africa as a global leader in the development and use of Information and Communication Technologies for socio-economic development.
· Build a better life for all through an enabling and sustainable world-class Information Communications Technologies.
The aim of the Department is to develop ICT policies and legislation that stimulate and improve the sustainable economic development of the South African first and second economies and positively impact on the social wellbeing of all South Africans. The Department also aims to oversee the performance of state-owned entities within its portfolio.
2.2. Strategic Priorities and Measurable Objectives of the Department
The Department's core functions are to:
· Develop ICT policies and legislation that create conditions for an accelerated and shared growth of the South African economy, which positively impacts on the well being of all our people and is sustainable;
· Ensure the development of robust, reliable and affordable ICT infrastructure that supports and enables the provision of a multiplicity of applications and services to meet the needs of the country and its people;
· Contribute to the development of an inclusive information society which is aimed at establishing South Africa as an advanced information-based society in which information and ICT tools are key drivers of economic and societal development;
· Contribute to e-Skilling the nation for equitable prosperity and global competitiveness;
· Strengthen the Independent Communications Authority of South Africa (ICASA), to enable it to regulate the sector in the public interest and to ensure growth and stability in the sector;
· Enhance the capacity of, and exercise oversight over, State-Owned Enterprises (SOEs) as the delivery arms of government; and
· Fulfil South Africa's continental and international responsibilities in the ICT field.
2.3. Strategic Outcome Oriented Goals of the Department
The strategic outcome oriented goals of the Department are to:Enable the maximization of investment in the ICT sector for socio-economic development; Ensure that ICT infrastructure is robust, reliable, affordable and secured to meet the needs of the country and its people; Create new competitive business opportunities for the growth of the ICT industry; Accelerate the socio-economic development of South Africans by increasing access to, as well as the uptake and usage of, ICTs through partnerships with business and civil society and three (3) spheres of government; Contribute towards building a developmental state including improvement of public services and strengthening democratic institutions; Enhance the role of ICT state-owned enterprises as the delivery arms of government and support the regulator; Contribute to the global ICT agenda prioritizing Africa's development; and Facilitate the building of an inclusive Information Society to improve the quality of life development.
3. Departmental Allocations and Expenditures 2011/12
During the 2011/12 financial year, the Department was allocated R2,002 billion, which is made up of a baseline of R1,889 billion and adjusted estimates of R113,8 million. The adjusted estimates include a rollover of R112 million (R109,9 million for Sentech, roll-out of Digital Terrestrial Television infrastructure and R2,4 million for projects that were in progress) and a rollover of R1,5 million for salary adjustments.
The total spending for the period under review amounted to R1,792 billion, representing 89, 5 % with the under-spending of R210,9 million (10, 5 %). The under-spending is made up as follows: (i) R21,6 million for compensation of employees due to the organisation review and staff resignation; and (ii) R187,6 million for goods and services mainly for 112 Emergency Call Centre and Broadband, which emanated from the delay by National Treasury in providing the department with approvals on the project feasibility on 112 Emergency Call Centre and the delay by the Departmental Bid Adjudication Committee in approving the tender for Broadband.
The Department had appointed technical advisors for feasibility study on 112 Emergency Call Centre project during the 2011/12 financial year and tender was advertised towards the end of March 2012 so that this project can be implemented as early as possible in the 2012/13 financial year. The Department has also engaged Sentech in the implementation of the broadband project.
Furthermore, a request was made in terms of chapter six of the Treasury Regulations to rollover R4,250 million for completion of the Broadband Penetration, Speed and Coverage Study project which is underway.
The Department's programmes comprise: (1) Governance and Administration; (2) ICT International Affairs and Trade; (3) ICT Policy Development; (4) Finance and ICT Enterprise Development; (5) ICT Infrastructure Development and; (6) Presidential National Commission. Over the period under review the Department has not altered its programmes. However, the restructuring exercise that started in the 2010/11 financial year once completed will result in a new structure for the Department. This will see changes especially in the top structure of the Department and, changes are geared towards ensuring that the Department has the capacity to deliver.
3.1. Programme 1: Governance and Administration
The purpose of this programme is to provide strategic support to the Ministry and overall management of the Department. It is divided into the following five sub-programmes: The Ministry; Deputy Ministry; management; operations; and property management.
Out of the total programme budget allocation of R168 million, R156 million or 92, 9 per cent was spent, which leaves R12 million or 7, 1 per cent in unspent funds. The under-spending is mainly under compensation of employees. This is due to the moratorium held in the Department. The Department only started with the filling of the positions towards the end of the financial year hence the under-spending in this programme.
3.2. Programme 2: Information Communications Technology (ICT), International Affairs and Trade
The purpose of this programme is to ensure alignment between South Africa's international activities and agreements in the field of ICTs with South Africa's foreign policy. It is divided into the following two sub-programmes: international affairs; and ICT trade/partnerships.
Out of the total programme budget of R42 million, R41,6 million or 99, 5 per cent was spent, which leaves R210 000 in unspent funds.
3.3. Programme 3: ICT Policy Development
The purpose of this programme is to develop ICT policies, legislation and strategies that support the development of an ICT sector, which creates conditions for the accelerated and shared growth of the economy and to develop strategies that increase the uptake and usage of ICTs by the majority of the South African population, thus bridging the digital divide. It is divided into the following six sub-programmes: ICT policy development; Economic analysis, market modelling and research; ICT uptake and usage; Intergovernmental relations; SABC – Community Radio Stations; and SABC programme production.
Out of the total programme budget of R88 million, R81 million or 92, 1 per cent was spent, which leaves R7 million or 7, 9 per cent in unspent funds. The under-spending is on goods and services and due to the market study on Broadcasting that was not conducted as planned, the finalisation of the Electronic Communications Amendment Bill and a study on the alternative funding model were delayed. No projects were rolled out in the update and usage due to the chief directorate not having warm bodies.
3.4. Programme 4: Finance and ICT Enterprise Development
The purpose of this programme is to oversee and manage government's shareholding interest in public entities and to facilitate growth and development of Small, Micro and Medium Enterprises (SMMEs) in the ICT sector. It is divided into the following two sub-programmes: Public entity oversight; and Small Medium and Micro Enterprises (SMMEs).
Out of the total programme budget allocation of R1,4 billion, R1,4 billion or 100 per cent was spent.
3.5. Programme 5: ICT Infrastructure Development
The purpose of this programme is to promote investment in robust, reliable, secure and affordable ICT infrastructure that supports the provision of a multiplicity of applications and services. It is divided into the following three sub-programmes: applications and research; 112 Emergency Call Centre; and .za Domain Name Authority.
Out of the total programme budget allocation of R259 million, R67 million or 26, 2 per cent was spent, which leaves R192 million or 73, 8 per cent in unspent funds. The bulk of the under-spending is goods and services as a result of the non-implementation of 112 Emergency Call Centre due to the delay by National Treasury in providing approval on the project feasibility and also on Broadband allocation due to the delay by the Department Bid Adjudication Committee in approving the tender.
3.6. Programme 6: Presidential National Commission (PNC)
The purpose of this programme is to facilitate development of inclusive information society by promoting the uptake and usage of ICT for improved socio-economic development and research. It is divided into the following four sub-programmes: planning, coordination and evaluation; information society and development cluster; e-applications; and PNC operations.
Out of the total programme budget allocation of R41,6 million, R41,3 million or 99, 3 per cent was spent which leaves R307 000 or 0. 7 per cent in unspent funds.
During the presentation of the Strategic Plan on 11 March 2011, the Department reported that the name of the PNC will change in the 2011/12 financial year to Information Society Programme (ISP). However, during the presentation of the 2011/12 annual report, nothing was reported by the Department regarding this change.
4. Virements and Shifting of Funds
Though section 43 of the Public Finance Management Act (No 1. of 1999) makes provision for virements and the shifting of funds from one programme to another, as well as the movement of funds within a programme, there are certain requirements that need to be met by an accounting officer. These conditions are as follows:
Section 43(2) of the Public Finance Management Act provides that "the amount of a saving under a main division of a vote that may be utilised in terms of (1) may not exceed 8 per cent of the amount appropriated under that main division." Moreover section 43(4) states that this section does not authorise the utilisation of a saving if: (i) an amount is specifically and exclusively appropriated for a purpose mentioned under a main division within a vote; (ii) an amount appropriated for transfers to another institutions; and (iii) an amount appropriated for capital expenditure to defray current expenditure.
Virement was effected from programmes 2 and 5 to programmes 1, 2, 4 and 6 on all items to defray excess expenditure. Virements were in accordance with section 43(1) of the PFMA.
5. First Quarter Expenditure Report for 2012/13 Financial Year
During the first quarter of the 2012/13 financial year, the Department's total planned expenditure and projected cash flows amounted to R350,8 million which is equivalent to 20, 5 per cent of the total available budget. However, the Department managed to actually spend R348 501 million which is equivalent to just 20, 35 per cent of the total allocated budget of R 1,7 billion.
Although the expenditure of the first quarter of 2012/13 is higher (20, 35 per cent) compared to the previous financial year of 17, 7 per cent financial year, however, this expenditure means that the Department has repeatedly spent far less than the general expenditure benchmark of 25 per cent per quarter. It is also important to note that most of the economic classification categories have reported under-expenditure in the first quarter with the over-expenditure on programmes 1 and 6 at 32, 7 per cent 35, 5 per cent respectively. Lower-than-expected spending is mainly due to the following: non-submission of drawback schedules; broadband ICT tender process and delays in the implementation of projects awaiting approval by the Director-General.
The under-spending by the Department emanated from the following programmes:
Programme 2: ICT International Affairs and Trade: Actual expenditure for the first quarter was three times the projections for the first quarter of 2011/12. Actual expenditure amounted to R14,9 million or 36, 6 per cent of the R40,9 million allocated funds as compared to projections of R4.4 million. Over-expenditure under this programme is due to membership fees to international organisations which were paid earlier than projected. It was projected that the fees would only be paid late in the second quarter. However, the invoice was received in May and hence the payment was made to avoid penalties.
Programme 3: ICT Policy Development: Actual expenditure amounted to R12,3 million as compared to projected expenditure of R15, 4 million, representing under-expenditure of 20, 2 per cent. By the end of the first quarter only R12,3 million was spent from the total voted funds of R94,7 million. The Department cites internal administrative processes as the reason for under-expenditure.
Programme 4: ICT Enterprise Development: Projections for the first quarter of 2011/12 financial year were R 307,2 million compared to the actual expenditure of R254,5 million. This means only 19, 7 per cent was spent. The reason for non-expenditure is due to the non-submission of drawdown schedules by the South African Post Office (SAPO) and the Universal Service Access Fund (USAF).
Programme 5: ICT Infrastructure Development: The programme managed to spend only R8, 5 million from the R45,2 million projected expenditure for the first quarter. The under expenditure of 81, 3 per cent is mainly due to the delays in implementation of 112 Emergency Call centre projects and broadband ICT tender as a result of tender processes.
Programme 6: Presidential National Commission: Out of the voted funds of R34,7 million, R6,1 million was spent or 14, 5 per cent, while the programme had anticipated spending R8,9 million for the first quarter. The main reason for this under-expenditure is internal administrative processes.
6. Auditor-General's Report of 2011/12
The Committee notes with concern the general findings of the AGSA in relation to the regression of the Department and its entities with the exception of Telkom. In expressing his opinion, the Auditor-General indicated that the financial statements of the Department present a fairly, in all aspects, financial position of the Department as at 31 March 2012 and its financial performance and its cash flows for the year then ended, in accordance with the Departmental Financial Reporting Framework prescribed by the National Treasury and in line with the requirements of the Public Finance Management Act (PFMA). The Department obtained an unqualified opinion with findings in the 2011/12 financial year with the following matters needing urgent attention:
6.1 Fruitless, wasteful and irregular expenditure
The Auditor-General has found that as disclosed in note 30, irregular expenditure was incurred as proper procurement procedures were not followed. An amount of R20 054 000 was incurred in the current year and R 95 485 000 was incurred in the previous year but identified in the current year.
As disclosed in note 31, fruitless and wasteful expenditure to the amount of R764 000 was incurred due to duplicate air tickets, damaged car rentals, and international calls by hackers. An amount of R12,7 million was incurred in the previous financial year but identified in the current year.
In addition to irregular, fruitless and wasteful expenditure, the Auditor-General has also emphasised other recurring matters in his reports on the Department. These include:
(i) non-compliance with legislation – the Department consistently failed to adhere to the requirements of the PFMA, Treasury Regulations and Public Service Regulations;
(ii) irregular expenditure has been a result of the Department's failure to follow proper procurement procedures. Despite the fact that the Auditor-General has highlighted irregular expenditure as an issue of concern, the Department still incurred irregular expenditure amounting to R115,5 million which was reported in the 2011/12 Annual Report. This includes R95,48 million that was incurred in the previous year but identified in the current year, and R20 million incurred in the current year;
(iii) fruitless and wasteful expenditure has been a result of interest on late payments to American Express (2010/11), cancellation of trips and duplicate payments to service providers. Despite the fact that the Auditor-General has highlighted fruitless and wasteful expenditure as an issue of concern, the 2011/12 Annual Report indicates that the Department incurred fruitless and wasteful expenditure amounting to R764 000 for duplicate air tickets, damaged car rentals, and international calls by hackers. In addition, an amount of R12,7 million was incurred in the previous financial year but identified in the 2011/12 financial year;
(iv) human resource management and compensation procedures – Overtime compensation of over 30 per cent of salaries and appointments made to posts that have not been approved and funded. This was reported in both the 2010/11 and 2011/12 Annual Reports;
(v) senior managers, including the Director-General, did not sign performance agreements for the current financial period, which is in contravention of Public Service Regulation iii A;
(vi) appointments were made to posts which are not approved and funded as per requirements of PSR 1/III/F(a) and F(d). This was raised for the second consecutive time by the Auditor-General (2010/11 financial year); and
(vii) funded posts were not filled within 12 months as required by Public Service Regulation 1/VII/C.1A.2. As at September 2011, the Department's vacancy rate stood at 29, 7 per cent, with 40, 4 per cent of these vacancies falling between salary levels 11 and 12, while the vacancy rate within Senior Management Service was 33, 8 per cent.
In the 2010/11 financial year, the Auditor-General found that funded vacant posts were not advertised within six months after becoming vacant and were not filled within 12 months after becoming vacant as per the requirements of PSR 1/VII/C. 1A.2.
During the Portfolio Committee on Public Service and Administration meeting on 30 May 2012, the Public Service Commission presentation, under priority area three (Use our people better through improvements in Human Resource Management), revealed that the Department of Communications has a vacancy rate of 38, 7 per cent in the professionally qualified and experienced specialist and mid-management, as well as in the Senior Management Service (SMS). In addition, the Department had a vacancy rate of 36.2 per cent in the rest of the occupational bands and it was mentioned that the Department had an average period of vacant posts of 31, 1 months which is equal to 2 years and 6 months.
In addition, the Auditor-General identified the following internal control deficiencies:
i. Leadership - decisive leadership action was not taken in response to the risk of non-compliance with supply chain management regulations highlighted by internal and external audit findings over the period under review, by implementing controls to prevent the occurrence of irregular expenditure;
ii. Decisive action was not taken to address appointment of employees who are outside the HR structure;
iii. Inadequate implementation by HR management to ensure that adequate and sufficiently skilled resources are in place and that performance is motivated; and
iv. Financial and Performance Management - manual controls are not designed to ensure that all transactions and performance information are completely recorded and accurately classified.
6.2 Predetermined objectives
Although no material findings on the usefulness and reliability of performance information were identified in the annual performance report, the Auditor-General drew attention to the following matters:
6.3 Achievements of Planned targets
Annual Report 2011/12 - of the total number of planned targets, only 69 targets were achieved during the year under review. As a result 70 per cent of the total targets were achieved during the year under review. This was due to the vacancies at the Department.
6.4 Compliance with laws and regulations
6.4.1 Procurement and contract management
Goods and services with a transactional value below R500 000 were procured without obtaining the required price quotations, as required by the Treasury Regulation 16A6.1.
Goods and services with a transactional value above R500 000 were procured without inviting competitive bids as required by the Treasury Regulation 16A6.1.
6.4.2 Expenditure management
The Auditor-General found that contrary to section 38(1)(f) of the PFMA and TR 8.2.3, payments to creditors were not always settled within 30 days from receipt of an invoice.
The accounting officer did not take effective steps to prevent irregular and fruitless expenditure as required by section 38(1)(c)(ii) of the PFMA.
7. Consideration of Reports of Committee on Public Accounts
The Department did not appear before the Committee on Public Accounts.
8. Consideration of Reports of Standing Committee on Appropriations
The Standing Committee on Appropriations (SCOA) was established in terms of section 4(3) of the Money Bills Amendment Procedure and Related Matters Act, No.9 of 2009. The Act requires SCOA to consider and report on spending issues, and on actual expenditure published by the National Treasury. SCOA has adopted a tradition of inviting both the National Treasury and the affected departments to account on government spending. This consultative approach gives SCOA an opportunity to interrogate departments on their spending with a view to identify and strengthen gaps in public spending. SCOA is established as a strategic centre to flag issues which might impact negatively on service delivery through scrutiny of government spending. As such, it agreed during its business planning session to move swiftly towards balancing its expenditure monitoring with actual performance.
The Department appeared twice before SCOA during 2011/12 to present its 2nd and 3rd quarter expenditure reports. In the 4th quarter, an invitation to appear before SCOA was sent to the Department, but the Department indicated that the date on which it was supposed to come before SCOA fell on the same date as its pre-arranged meeting with entities.
The Department was allocated an amount of R2 billion for the 2011/12 financial year. The Department's third quarter expenditure projection for the 2011/12 financial year was R1,6 billion and the actual expenditure was R923,9 million. Based on its projection, the Department has under-spent by R676,1 million (or 42, 3 per cent). This slow spending occurred as result of a lack of spending on a number of programmes which are discussed in the following section.
8.1 Expenditure per programme
The Department's budget comprised the following six programmes: Administration, Information Communication Technology (ICT), International Affairs and Trade, ICT Policy Development, ICT Enterprise Development, ICT Infrastructure Development, and Presidential National Commission. Of these programmes, only two Administration, and ICT International Affairs and Trade spent relatively well at 76, 3 per cent and 73, 2 per cent, respectively.
The only concern with Programme 2 was the recorded 0, 08 per cent transfer of its allocated R3,7 million to non-profit institutions such as the New Partnership for Africa's Development E-Africa Commission (NEPAD e-Africa Commission) which expected a transfer of R3, 5 million. The reason for the 0 per cent transfer was due to the non-submission of the necessary documentation by the NEPAD e-Africa Commission. This was a cause for concern given South Africa's continued endeavour to position itself as a strategic player in the overall development of the African region.
Programme 4 spent only 49, 05 per cent or R686,4 million against an available budget of R1,4 billion. This was a cause for concern given that this was the first departmental priority programme accounting for 70 percent of the Department's budget. This Programme spent below 50 per cent across all economic classification except for payments for capital assets.
Transfers and subsidies virtually accounted for the entire budget of the programme with an allocation of R1,386 billion or 99 per cent of the programme's budget. However, only R680,3 million or 49, 07 per cent was transferred. The reasons for the slow expenditure were as follows: (i) the changes in the Digital Terrestrial Television (DTT) standards which resulted to non-transfer to Sentech and Universal Service and Access Fund (USAF); and (ii) the financial investigation that was underway at the USAF which affected the transferral of funds to the entity.
Programme 5 was allocated an amount of R282 million for the 2011/12 financial year from which only R32,4 million or 11, 5 per cent has been spent at the end of the third quarter. All these funds have been transferred.
Under Compensation of Employees an amount of R19,1 million or 59, 1 per cent has been spent against a budget of R32,3 million. Under Goods and Services only R11,8 million or 5 per cent has been spent against a budgetary allocation of R247,2 million.
The challenges related to the implementation of the 112 Emergency Call Centre projects and broad band ICT remained. The Department made an undertaking that the 112 Emergency Call Centre project would be operational during the 2012/13 financial year. The main reason for the under expenditure under goods and services and the programme as a whole were delays in the tender processes.
In the 2010/11 financial year, the Department improved from a qualified to an unqualified audit report from the Auditor-General with findings on compliance and predetermined objectives. The Department did, however, not monitor its spending on projects. This resulted in a significant under-expenditure (59 per cent) on its budget which in turn resulted in the service delivery not being met. The other issues were as follows: (i) contravention of supply chain management regulations which resulted in irregular expenditure; (ii) high level of employees acting (leadership vacuum) mostly in the strategic leadership positions; (iii) investigations related to fraud and other financial misconduct; (iv) lack of compliance with legislation; (v) irregular expenditure of R2,8 million (which was supply chain management related) excluding wasteful or fruitless expenditure of R1,4 million; and (iv) lack of governance with regard to risk management, internal audit and audit committee.
The expenditure of 46, 13 per cent against an available budget of R2 billion, means that the Department was the worst performing Department of all the 38 national departments during the period under review. For three successive financial years (2009/10, 2010/11, 2011/12) the Department has spent below 70 per cent of its total adjusted budget in the third quarter. There was a declining trend which began from 62, 5 per cent in 2009/10 to 45, 1 per cent in 2010/11 until the recent 46, 1 per cent.
With reference to the fact that transfers and subsidies were allocated the biggest proportion of the Department's budget, the Committee expressed concern at the ability of the Department to exercise oversight over the transferred payments to entities. The Department recorded a slow expenditure with regard to this economic classification under which 48, 4 per cent or R682,4 million has been transferred at the end of the third quarter against an available budget of R1,4 billion for the 2011/12 financial year.
The performance of the Department would impact negatively on the ability of South Africa to catch up with the rest of the world in terms of ICT. The Department responded that it was in the process of developing a turnaround strategy which the Committee requested to be submitted to the National Assembly subsequent to it being signed by the Minister of Communications.
9. Consideration of the 2012 State-of-the-Nation (SoNA)
In his State-of-the-Nation Address in February 2012, President Zuma stated:
"At the January Cabinet lekgotla, we decided to undertake a mid-term review, looking at progress from 2009 till now instead of the usual annual review. The mid-term review indicated steady progress in various areas such as health, education, the fight against crime, human settlements, energy, water provision, rural development and others. However, the triple challenge of unemployment, poverty and inequality persists, despite the progress made. Africans, women and the youth continue to suffer most from this challenge. For the year 2012 and beyond, we invite the nation to join Government in a massive infrastructure development drive."
During his fourth State-of-the-Nation Address (2012), President Zuma pronounced an infrastructure development-led economy as one of the priority areas. To manage this priority, Government established a high-level Presidential Infrastructure Coordinating Commission, (PICC), chaired by the President and assisted by the Deputy President, Kgalema Motlanthe.
The Department develops and implements ICT policy interventions that create an enabling environment to promote social and economic development within the country. In accordance with the outcomes-based performance management framework adopted by Government, the Department contributes to the development of an efficient, competitive, and responsive economic infrastructure network (outcome 6) by developing ICT policies and legislation as well as overseeing the operation of public entities within the sector.
In its infrastructure deployment to expand access to ICT services throughout the country, the DoC facilitates universal access to ICT networks and applications for schools, health and government centres. Therefore in Communications, the President noted vital ICT projects that should benefit from this investment, namely: (i) migrating to digital broadcasting; (ii) promoting cooperation on ICT issues with Africa and the rest of the world; (iii) promoting affordable and accessible financial services; (iv) creating opportunities within the economy; (v) using ICT to advance cultural and heritage objectives; (vi) the rollout of National Wireless Broadband countrywide as well as in other areas in which the ICT sector can also play an indirect but significant role; and (vii) the development of a broadband legislative framework.
10. Entities Reporting to the Committee
The Portfolio Committee on Communications has the following entities reporting to it:
10.1 South African Post Office (SAPO)
The SAPO was established in accordance with the Post Office Act (1958) as a government business enterprise to provide postal and related services to the South African public. It was granted a mandate to conduct postal services to South Africa by the Postal Services Act (1998). The Act makes provision for the regulation of postal services and the operational functions of the company, including its universal service obligations and the financial services activities of the Postbank.
The Post Office Act (1958) will be repealed and replaced by the Post Office Bill and the Postbank Bill, which have enacted into law by March 2012. With the imminent corporatisation of Postbank into a separate entity, more previously disadvantaged communities will have access to banking services.
The SAPO has a retail post office infrastructure of 2 487 service points, which deliver postal, courier, financial and Postbank services. To increase access to its services, 129 new service points were opened between 2008/9 and 2011/12, and the entity expects to open an additional 150 new points of presence by the 2014/15 financial year. Between 2008/9 and 2011/12, the South African Post Office rolled out more than 4,9 million new addresses. Between 2008/9 and 2011/12, the Postbank depositor's funds increased from R3,2 million to at least R3,9 million. The depositor's book is expected to grow to R5,2 million by 2014/15.
The SAPO has been allocated an amount of R180,442 million in the 2011/12 financial year.
The Committee noted that Minister has appointed the Post Bank Board, and that the GCEO for SAPO has been appointed and urged SAPO to finalise the appointments of Chief Financial Officer and Chief Operational Officer.
10.1.1 Auditor-General findings
The Auditor-General made the following findings:
10.1.1.1 Predetermined Objectives
Measurability: (i) a total of 40 per cent of the targets relevant were not specific in clearly identifying the nature and the required level of performance; (ii) the indicators or measures relevant to all targets were not well defined in that clear, unambiguous data definitions were not available to allow for data to be collected consistently.
These findings were similar to the previous year and could not be addressed during the current year as the new Shareholder Compact that rectified these issues was only submitted for approval towards the end of the current financial year.
Achievement of planned targets: Out of the total 52 planned targets only 29 were achieved during the year under review. This represents 45 per cent of total targets that were not achieved.
10.1.1.2 Internal control
Leadership: There were numerous acting positions in the current year in key leadership positions, namely acting Chief Executive Officer, Chief Financial Officer, Chief Information Officer, Chief Operating Officer, Managing Director: Postbank, Group Executive: Supply Chain Management, Business Support Services and Head of Properties. Although this had not negatively impacted on the audit process, the above positions should be finalised as it may impact on the strategic future of SAPO.
Investigations: An external investigation is currently underway following complaints of alleged contract and procurement irregularities at SAPO.
10.2 South African Broadcasting Corporation (SABC)
The SABC's mandate is set out in its charter and in the Broadcasting Act (1999), which require it to: (i) provide services to all South Africans in all the official languages; (ii) provide programming that informs, educates and entertains and which reflects the diversity of South Africans; (iii) and maintains freedom of expression and journalistic, creative and programming independence.
The corporation's service and broadcasting activities are regulated through the licence conditions issued by ICASA for each of its radio and television services. It reports to the authority quarterly to comply with licence conditions. The corporation is further bound to meet licence conditions set for its individual radio stations and television channels, and has to abide by regulations set by ICASA outlining minimum quotas and standards in areas such as local content.
The corporation became a limited liability company in 2004, with two operational divisions: public broadcasting services and commercial broadcasting services. As a national public service broadcaster, the corporation operates 18 radio stations and three television stations, reaching about 24 million people daily. The SABC continued preparations for the migration to digital terrestrial television which will allow the corporation to increase the number of channels it offers as well as enhance its public broadcasting services by offering content in areas such as children's programming, news, sport, regional content, youth, women and education, as well as more comprehensive services in all languages and to communities with disabilities.
The corporation continues to promote universal access to broadcasting services by switching on lower-power radio and television transmitters. These low-power transmitters broadcast television and radio signals at a very low cost to communities in historically marginalised communities and rural areas. Between 2008/9 and 2011/12, the corporation has switched on 1 216 low-power television transmitters and 557 low-power radio transmitters. During the 2008/9 financial year, the SABC faced a severe financial crisis alongside a serious corporate governance crisis. A guarantee of R1 billion was granted to the SABC. A monitoring task team continues to monitor performance of the SABC against the Government Guarantee targets.
In 2010, AGSA conducted a forensic investigation. After is conclusion, recommendations were submitted to the SABC. Some of the recommendations prompted further investigation by the Special Investigating Unit (SIU) to pursue civil and criminal charges against involved individuals.
Section 9(2) of the Broadcasting Act 4 of 1999 requires that the public and commercial services divisions must be separately administered and a separate set of financial records and accounts should be kept in respect of each such division.
The Committee noted that AGSA will be the SABC's auditor for the 2012/13 financial year.
10.2.1 Independent Auditor's Report
The independent auditor's report raised the following critical issues:
10.2.1.1 Predetermined objectives
There were no material findings on the performance of the SABC concerning the usefulness and reliability of information.
Achievements of planned objectives: Of the total 66 planned key performance indicators, only 20 were achieved during the year under review, which represents 70 per cent of the planned key performance indicators not being achieved.
Strategic planning and performance management: (i) In line with section 5(1)9a)(i) of the PFMA, read with TR 27.2.1, the SABC required to maintain an effective, efficient and transparent system of risk management. The risk management strategy, policy framework and risk register was approved by the accounting authority in February 2012; (ii) No formal policies and procedures were approved by the accounting authority and prepared in terms of section 51(1)(a)(i) of the PFMA, which describes how the SABC processes of performance planning, monitoring, measurement, review and reporting should be conducted, organised and managed; (iii) the shareholder's compact for 2011/2012 was only approved by the executive authority (Minister of Communications) on 20 April 2012 which was not in line with TR 29.2.1.
The following areas of non-compliance with the shareholder's compact were identified: (i) no evidence that quarterly reports on the SABC's compliance with the PFMA were prepared, approved and submitted to the Shareholder; and (ii) the accounting authority is required to assess, at least on a quarterly basis, the assumption that the SABC is a going concern and to develop procedures and mechanisms to fulfil this responsibility. This requirement enables the accounting authority to identify issues which may cause it to re-examine the going concern assumption. There is no evidence that this was assessed by the accounting authority on a quarterly basis except by management through their preparation of monthly management accounts.
Annual financial statements: (i) Section 55(1)(a) of the PFMA requires the accounting authority to keep full records of the financial affairs of the company and the annual financial statements should fairly present the state of affairs of the company, its business, its financial results, its performance against predetermined objectives, and its financial position as at the end of the financial year concerned. Material misstatements were identified during the audit, certain of these were corrected by management and those that were not are included in the basis for qualified opinion paragraph, and (ii) section 55(1)(d) of the PFMA requires the accounting authority to submit their Annual Report and Annual Financial Statements to National Treasury within five months after their financial year end. The company submitted its Annual Report and Annual Financial Statements for the year ended 31 March 2011 later than the prescribed dates, on 16 September 2011.
Audit Committees: Contrary to the requirements of Treasury Regulation 27.1.8 and the audit committee terms of reference, the audit committee did not conclude on all of its responsibilities in the following areas: (i) Self assessment questionnaires were circulated to the audit committee members but consolidated responses and feedback were not formally tabled to the committee for consideration; (ii) the effectiveness of internal controls was not adequately monitored by the audit committee for the period April to August 2011 to consider the impact of the findings and corrective action; (iii) financial and performance information upon which strategic decisions are based was not consistently evaluated by the audit committee throughout the year to assess the adequacy, reliability and accuracy of such information, as quarterly financial and performance reports where not consistently presented for consideration. The National Treasury pack was submitted without review by the audit committee; and (iv) evidence could not be presented that: (a) the audit committee had reviewed the processes and controls designed to ensure the communication of the codes of conduct and ethics to all SABC personnel, as well as the processes and controls designed to monitor compliance therewith, and (b) the controls designed to ensure that assets are safeguarded were monitored and reviewed by the audit committee.
Internal Audit: Contrary to Treasury Regulation 27.2.10, the internal audit plan for the 2012 financial year did not include planned work relating to operations in the form of a review of performance against predetermined objectives. As such the internal audit did not evaluate quarterly reports to management on performance against predetermined objectives in terms of Treasury Regulation 27.2.10(b).
Procurement and contract management: A group-wide procurement policy exists and a content commissioning and acquisitions policy has been developed and approved by the Board in terms of section 51(1)(a)(iii). However, the following areas of non-compliance with the policy were identified: (i) Instances of premature procurement (ordering taking place without the appropriate legal contracts with suppliers) and (ii) instances where sport acquisitions were broadcast before contracts could be signed.
10.2.1.2 Human Resource Management and Compensation
Vacancies at senior management level: Key management positions are vacant and filled by employees in an acting capacity amongst others by 31 March 2012 including Chief Operation Officer, Company Secretary, Group Executive: Content, Group Executive: Legal and Chief Technology Officer.
Declaration of interest: The policies require employees to disclose any and all business interests to the Group CEO. However, not all employees with business interests have signed declarations of interest forms, and no centralised register to track and monitor whether all employees have declared their interests was maintained by the SABC.
Schedule of outcomes of disciplinary hearings and criminal charges: In terms of section 85 of the PFMA and TR 33.3.1(a), (b) and (c), the accounting authority must, on an annual basis, submit to the executive authority, the National Treasury and AGSA a schedule of the outcome of any disciplinary hearings and/or criminal charges, the names and ranks of employees involved, and the sanctions and any further actions taken against these employees. The SABC did not submit such schedule.
Expenditure Management: The SABC currently has policies and procedures in place which will assist the prevention of irregular, fruitless and wasteful expenditure and losses. However, these policies and procedures were not always complied with during the 2011/12 financial year, and as such were not always effective. Financial statements containing fruitless and wasteful expenditure to the value of R22 120 000 was incurred during the period under review. This is in contravention of section 51(1)(b)(ii) of the PFMA.
Asset management and liability management: The following contraventions of section 51(1)(c) of the PFMA were identified: (i) No full asset stock counts were completed for the year under review; (ii) the automated programme, film and sports rights management system was not fully implemented. The programme, film and sports rights lists are currently maintained manually. Reconciliation between the manual listings and general ledger was only performed at year-end, and was in progress at the date of this report; (iii) the borrowing programme prepared and included in the corporate plan 2011/12 in accordance with the requirements of section 52(a) of the PFMA and Treasury Regulation 29.1.3 does not include all of the information required by Treasury Regulation 29.1.6(a)-(j).
10.2.1.3 Internal control
The following internal controls were highlighted: (i) Due to the poor ICT governance structure, the line managers are allowed to operate at their own discretion and thus compromise the ability to use the ICT systems to support accurate and reliable reporting; (ii) no effective oversight responsibility was exercised during the year regarding reporting on performance against predetermined objectives, compliance with laws and regulations, and the related internal control as this information was not always presented timeously to oversight bodies; (iii) human resource management to ensure that adequate and sufficiently skilled resources were in place and that performance was monitored was not always effective. Staff in various divisions within the company lacked capacity to perform their assigned roles and responsibilities, as monthly reconciliations were not performed timeously; (iv) regular reconciliations of programme. Film and sports rights to safeguard the assets of the SABC were not performed. This is due to the lack of implementation of proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available; (v) policies and procedures to enable and support the understanding and execution of internal control objectives, processes and responsibilities were not always established and communicated or reviewed and revised; and (vi) although the compliance with certain legislation is currently managed in various divisions throughout the organisation, the SABC did not have a centralised compliance control or process in place during the year under review. Accordingly, the SABC did not have effective process in place to review and monitor its overall compliance with applicable laws and regulations as required by section 51(1)(h) of the PFMA.
Other reports: The Special Investigating Unit (SIU) performed special investigations into interest in contracts, revenue matters, procurement of goods and services and the appointment of consultants. The company is still in the process of completing its evaluation of the outcomes and implementing the recommendations.
The SABC was allocated an amount of R126,137 million in the 2011/12 financial year.
Sentech Ltd is a state-owned enterprise established in terms of the Sentech Act (1996) and the Sentech Amendment Act (1999) and is listed as a schedule 3B public entity in terms of the Public Finance Management Act (1999). Its mandate is to provide broadcasting signal distribution for broadcasting licensees. In 2002, Sentech was awarded value-added network service licences for its multimedia and carrier of licences, thus allowing for converged ICT solutions. In 2009, these licences were converted to individual electronic communications network services and individual electronic communications service licences under the Electronic Communications Act (2005).
Sentech is responsible for migrating signal distribution infrastructure from analogue to digital in line with technological developments and agreements with the International Telecommunications Union for worldwide migration to digital. Sentech's activities will ensure that the digital terrestrial television network is ready in time to meet the December 2013 analogue switch-off deadline. Sentech's national wholesale broadband network develops innovative products, rolls out the national wholesale broadband network and extends social value projects.
Sentech has continued to exceed network performance (the quality of a signal product as seen by the customer) targets set over the past three years and ensured that it was possible to ensure overall network availability of the analogue terrestrial television broadcast network. This is despite interruptions caused by mains power failures and inclement weather.
Sentech was allocated an amount of R279 million in the 2011/12 financial year. An amount of R109,9 million was rolled over from the 2010/11 financial year for roll-out of Digital Terrestrial Television infrastructure and was transferred to Sentech during the 2011/12 financial year.
10.3.1 Auditor-General findings
The Auditor-General made the following findings:
10.3.1.1 Predetermined objectives
Achievement of planned targets: Of the total 39 planned targets only 19 targets were achieved during the year under review. This represents 51 per cent of the total planned targets that were not achieved. The accounting authority indicated the reasons for non-achievement of predetermined targets in their predetermined objectives report for the year ended March 2012.
10.3.1.2 Compliance with laws and regulations
Strategic planning and performance management: (i) Section 51(1)(a)(i) of the PFMA, read with Treasury Regulation 27.1.2, requires Sentech to maintain an effective, efficient and transparent system of risk management. The risk identification and management process has not been completed; and (ii) formal approved policies and procedures in terms of section 51(1)(a)(i) of the PFMA which describe how the entity's process performance planning, monitoring, measurements, review and reporting will be conducted, organised and managed, have not been prepared. This is in contravention of the National Treasury Framework for Managing Programme Performance Information.
Internal audit: The internal audit plan presented to the audit committee was not adequately linked to the entity's risks, as the risk identification process is not yet complete. This is in contravention to Treasury Regulation 27.2.1, read with Treasury Regulation 27.2.6, which requires the internal audit function, in consultation with the audit committee to prepare a three rolling internal audit plan.
The audit committee failed to evaluate, on an annual basis, the effectiveness of internal auditors in terms of Treasury Regulation 27.1.8(b).
Expenditure management: Section 51(1)(b)(ii) of the PFMA requires the accounting authority to take appropriate steps to prevent irregular expenditure which arises by not complying with the operational policies of Sentech. Although Sentech has these policies in place, they were not always complied with during the financial year and consequently were not effective in preventing instances of irregular expenditure.
Human resource management and compensation: Key positions at senior management level are vacant and filled by employees in acting capacities. These positions include the Chief Operations Officer; General Manager: Projects; Head of Supply Chain Management, Supply Chain Management staff and Chief Risk Officer.
The Committee noted that in the 2012/13 financial year, Sentech had appointed the Chief Operations Officer.
Annual financial statements: The financial statements submitted for auditing included material misstatements and were missing certain vital information. This was in contravention of section 55(1) and (2) of the PFMA, which requires the accounting authority to keep full and proper records of the financial affairs of the company. These misstatements and omissions were corrected during the audit.
10.3.1.3 Internal control
No effective oversight responsibility was exercised during the year regarding compliance with laws and regulations and related internal controls. Sentech did not have a centralised compliance control process in place during the year. Accordingly, Sentech did not have an effective process in place to review and monitor its overall compliance with applicable laws and regulations as required by section 51(1)(h) of the PFMA and staff in various divisions within Sentech lacked capacity to perform their assigned roles and responsibilities.
Investigations: (i) The accounting authority commissioned an investigation into an incident of misconduct, fraud and corruption in the supply chain management process specific to a single supplier. The investigation has been concluded and appropriate disciplinary action has been taken against the implicated Sentech staff, while the supplier would no longer be utilised by Sentech in future; and (ii) the accounting authority commissioned various investigations into alleged misconduct relating to fraud and misappropriation of company assets, alleged abuse of sick leave and overtime, corruption and interference in the suppliers / contractors resulting in the breach of company policy and procedures. The investigations were completed and if the allegations were found to be valid, disciplinary action was initiated. In some instances employees resigned during the disciplinary action proceedings.
Investigations on progress as advised by independent auditors: The accounting authority commissioned an investigation into an employee's alleged fraud and misconduct. The investigation relating to the criminal misconduct has not been concluded at the date of finalising this report and it is expected that the investigation will be concluded in the following year.
10.4 National Electronic Media Institute of South Africa (NEMISA)
NEMISA was established as a non-profit institute of education by the Department in terms of the Companies Act (1973). Formed as part of a government initiative in 1998 in response to the White Paper on Broadcasting Policy, the institute's main purpose is to train previously disadvantaged individuals, particularly women, to equip themselves with the necessary skills to play significant roles in the constantly changing broadcasting environment.
The institute offers hands-on training in electronic media, including content design and production, technical operations and content transmission. The institute provides skills training at an advanced level for the broadcasting industry. It offers national certificates and short courses. National certificates are offered in the areas of television production, animation and radio production.
Between 2008/9 and 2011/12, the institute trained 268 learners in strategic partnerships and special multimedia projects. The number of students trained in electronic media increased from 118 in 2008/9 to 131 in 2011/12 and is expected to increase further to 171 by 2014/15, driven by growth in demand for courses in the areas of television production, radio production, design and animation.
An amount of R33,473 million was transferred to NEMISA during the 2011/12 financial year.
10.4.1 Auditor-General findings
The Auditor-General made the following findings:
10.4.1.1 Predetermined objectives
Measurability: A total of 45 per cent of the targets relevant to the entity's selected strategic objectives were not specific in clearly identifying the nature and the required level of performance. This was due to the fact that information included in the Strategic Plan was not reviewed against the requirements contained in the Framework for Managing Programme Performance and Information (FMPPI).
Performance targets not measurable: The required performance could not be measured for a total of 45 per cent of targets relevant to the entity's selected strategic objectives. This was due to the fact that information included in the Strategic Plan was not reviewed against the requirements contained in the FMPPI.
Performance indicators not well defined: A total of 44 per cent of the indicators relevant to the entity's selected strategic objectives were not well defined in that clear, unambiguous data definitions were not available to allow for date to be collected consistently. This was due to the fact that information included in the Strategic Plan was not reviewed against the requirement contained in the FMPPI.
Achievement of planned targets: Of the total number of planned targets, only nineteen (19 of 45) were achieved during the year under review. This represents 58 per cent of total planned targets that were not achieved during the year under review.
10.4.1.2 Compliance with laws and regulations
Procurement: The preference point system was not applied in the procurement of goods and services above R30 000 as required by the Preferential Procurement Policy Framework and Treasury Regulation 16A6.3(b).
Strategic planning and performance management: The accounting authority did not ensure that the entity had and maintained an effective, efficient and transparent system of internal controls regarding performance management as required by section 51(1)(a)(i) of the PFMA.
10.4.1.3 Internal Control
Leadership: Procedures for collecting, collating, recording and reporting performance against predetermined objectives were not formally developed and approved by the accounting authority for implementation.
Financial and performance management: Internal controls developed and implemented by management did not adequately identify and prevent non-compliance with applicable laws and regulations.
10.5 Universal Service and Access Agency of South Africa (USAASA)
USAASA was established in terms of section 50 of the Electronic Communications Act (1999) as a statutory body. Its sole mandate is to promote universal service and universal access to electronic communications services, electronic communications network services and broadcasting services. The agency is responsible for managing the Universal Service and Access Fund.
In terms of the Act, the fund receives contributions from licensed telecommunications providers and broadcasters, which are used to fulfil universal access obligations in under-serviced areas. The agency plays a key role in facilitating the achievement of 100 per cent ICT penetration by 2020. Between 2008/9 and 2011/12, 54 access centres were established. In addition, 267 schools and 56 further education and training institutes were provided with internet connectivity over the same period. Over the medium term, the fund expects to deploy 600 cyber labs to under-serviced areas by 2014/15.
USAASA/USAF was allocated an amount of R344,098 million for the 2011/12 financial year.
The Committee noted that a board has been appointed, and accepted that the new board within a month must present its turnaround strategy on how to achieve its predetermined objectives for 2012/2013 and the governance issues, and also to present a detailed report on the payment of performance bonuses to its employees whilst it has not achieved its predetermined objectives for 2011/12.
The Committee also urged the board to conduct an audit on the operability of access centres and develop a clear rehabilitation strategy, whilst rolling out new ones.
10.5.1 Auditor-General findings
The Auditor-General made the followings findings:
Irregular, fruitless and wasteful expenditure: (i) As disclosed in Note 27 to the financial statements of USAASA, fruitless and wasteful expenditure amounting to R1 032 000 was incurred as a result of SARS penalties, offices not occupied while still paying rent, and a venue not used even though it was already paid; and (ii) as disclosed in Note 28 to the financial statements of USAASA, irregular expenditure to the amount of R19 492 000 was incurred in the current year as a result of non-compliance with supply chain management policies and R22 669 000 incurred in the previous year and discovered in the current year.
10.5.2 Predetermined Objectives
Reported targets not consistent with planned targets: A total of 67 per cent of the reported objectives, indicators and targets are not consistent with the objectives, indicators and targets as per the approved Strategic Plan. This is due to the fact that they did not have a system in place to accurately track the planned targets against actual performance.
The above is in contravention of Treasury Regulation 30.1.3(g) which requires that the strategic plan should form the basis for the Annual Report, therefore requiring consistency of objectives, indicators and targets between planning and reporting documents.
Changes to objectives / indicators / targets not approved: A total of 100 per cent objectives, indicators and targets reported in the Annual Performance Report were inconsistent with the objectives, indicators and targets as per the approved Strategic Plan. This was due to significant policy or mandate changes that were made but not included in the approved or adjusted budget approved by the executive authority.
The above is in contravention of Treasury Regulation 30.1.1 which requires that the Strategic Plan must be approved by the executive authority. Therefore, if the Strategic Plan is changed in-year due to significant policy or mandate changes, the updated plan has to be approved by the executive authority.
Achievement of planned targets: Of the total number of planned targets, only 9 per cent of the targets were achieved during the year under review. As a result 91 per cent of the total planned targets were not achieved. This was due to the suspension of projects when the executive management of USAASA was suspended.
10.5.3 Compliance with laws and regulations
Under-expenditure Management: The accounting officer did not take effective and appropriate steps to prevent fruitless expenditure as per the requirements of section 51(1)(b) of the PFMA.
Procurement: Contracts and quotations were awarded to suppliers whose tax matters had not been declared by SARS to be in order as required by Treasury Regulation 16A9.1(d) and the Preferential Procurement Regulations.
Goods and services with a transaction value below R500 000 were procured without obtaining the required price quotation as required by Treasury Regulation 16A6.1. Goods and services of a transaction value above R500 000 were procured without inviting competitive bids, as required by the Treasury Regulation 16A6.1
Annual financial statements, performance and annual reports: The accounting officer did not submit a report on performance information for auditing within two months after the end of the financial year as required by section 55(1)(c)(i) of the PFMA.
Strategic planning and performance management: The accounting officer did not ensure that the public entity has and maintains an effective, efficient and transparent system of internal control, regarding performance management, which described and represented how the entity's processes of performance planning, monitoring, measurement, review and reporting were conducted, organised and managed as required by section 51(1)(a)(i) of the PFMA.
10.5.4 Internal control
Leadership: (i) The accounting authority did not have controls in place to prevent non-compliance with procurement and contract management; and (ii) the accounting authority did not ensure that a performance management system and processes are in place before and during the Strategic Plan session to ensure that targets, objectives and measures are consistent with the Annual Performance Report.
Investigations: An investigation into alleged financial misconduct pertaining to various officials of the entity was carried out during the year under review and at the date of this report the investigation was still in progress.
10.6 Independent Communications Authority of South Africa (ICASA)
ICASA was established in terms of the ICASA Act (2000). ICASA makes regulations and issues communications licences in terms of the Electronic Communications Act (2005) and Postal Service Act (1998). In addition, ICASA enforces compliance with rules and regulations, protects consumers from unfair business practices and poor quality services, hears and decides on disputes or complaints brought against licensees and also controls and manages the frequency spectrum.
ICASA completed the conversion of licenses issued under repealed legislation to licences that comply with the prescripts of the Electronic Communications Act (2005). In the first year of this conversion, ICASA issued 189 licenses. Between 2008/9 and 2011/12, ICASA completed 4 538 inspections of distribution and sealing of electronic equipment. Over the same period, ICASA received, analysed and closed 11 464 spectrum licensing applications.
ICASA was allocated an amount of R313,378 million for the 2011/12 financial year.
For three financial years in a row ICASA received a qualified audit for 2011/2012. It has managed to achieve only 32 targets as a result 56 per cent of the total planned targets were not achieved during the year under review. However, despite this performance general managers received performance bonuses.
The AGSA report clearly illustrates the lack of leadership at the level of management, Chief Executive Officer and the Council on the following:
10.6.1 Usefulness of information
Presentation: All major variances between planned and actual achievements were not explained in the annual performance report for the year under review as per the National Treasury annual report preparation guide. This was due to documented and approved internal policies and procedures being inadequate to address reporting processes and events pertaining to performance management and reporting.
Measurability: Performance target not specific and not measurable: Management chose not to apply the principles contained in the National Treasury Framework for Managing Programme Performance Information (FMPPI), and as a result a total of 31 per cent of the targets relevant to selected objectives were not specific in clearly identifying the nature and required level of performance.
10.6.2 Compliance with laws and regulations
Strategic planning and performance management: The accounting officer did not establish adequate procedures for quarterly reporting performance to the executive authority to facilitate effective performance monitoring, evaluation and correction as required by TR 3.2 and section 38(1)(a)(i) of the PFMA.
Annual financial statements: The financial statements submitted for auditing did not comply with section 40(1)(a) and (b) of the PFMA.
Expenditure management: The accounting officer did not take effective steps to prevent irregular, fruitless and wasteful expenditure, as required by section 38(1)(c)(ii) of the PFMA and Treasury Regulation 9.1.1.
Leadership: The accounting officer did not: (i) exercise adequate oversight responsibility regarding financial and performance reporting and compliance and related internal controls; (ii) implement effective HR management to ensure that adequate and sufficiently skilled resources are in place and that performance is monitored; and (iii) establish an adequate IT governance framework that supports and enables the business, delivers value and improves performance.
The institution did not adequately establish and communicate policies and procedures to enable and support understanding and execution of internal control objectives, processes and responsibilities on predetermined objectives.
Financial performance: The institution did not: (i) implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting; (ii) implement controls over daily and monthly processing and reconciling of transactions; (iii) prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information; and (iv) design and implement adequate formal controls over IT systems to ensure the reliability of the system and the availability, accuracy and protection of information.
Management did not adequately review and monitor compliance with applicable laws and regulations.
10.7 .za Domain Name Authority (.zaDNA)
.za Domain Name Authority was established in terms of chapter 10 of the Electronic Communications and Transactions Act of 2002 to take responsibility for the .za Domain Name Space. The Department has been funding the .za Domain Name Authority since its inception.
.za Domain Name Authority was allocated an amount of R1.5 million for the 2011/12 financial year.
11. Other Sources of Information
11.1 Industrial Policy Action Plan (IPAP II)
11.1.1 Set-Top Boxes and Digital TVs
The Department envisaged to create over 151 000 jobs in the SMME ICT sector over the medium term through the Digital Terrestrial Television (DTT) in particular on set-top box (STB) manufacturing, distribution and installation. Furthermore, the telecommunications sector has committed to create over 1 million jobs in the sector by 2020.
According to the 2012 report published by the Department of Trade and Industry; progress report on implementation of the Industrial Policy Action Plan (IPAP) for the 2011/12 financial year. Progress has been registered with regards to other aspects of STBs and Digital Terrestrial Television. A standard for the manufacture of STBs was launched and a rebate on television monitors was approved by the Minister. However, the process of identifying the localisation requirement for the roll-out of STBs for low-income households met with delays during the period under review. Even though the Request for Proposals (RFP) was issued in July 2012 after long delays, there were no specifications for local content levels in the procurement of the STBs. This had the potential of undermining the process of leveraging public procurement for industrial development in the electronic sector. However, remedial interventions are in place.
The high cost of calls amongst other factors has been attributed to the high interconnection rates that operators charge to terminate calls on mobile and fixed line networks. Government has over the years made several attempts to liberalise the ICT market by introducing the Second National Operator, Neotel, another mobile operator, Virgin (other than Cell C, MTN, 8ta and Vodacom) and number portability. Furthermore, the problem with high communication costs is that they act as a tax on businesses, especially, small, medium and micro enterprises (SMMEs) and are an impediment to potential economic growth. Under such conditions the need to regulate the telecommunications industry is imperative if the country wants to attract investors and create 5 million jobs through the New Growth Path as an adopted government programme.
Significant strides have been made in this regard. Dominant mobile operators have agreed to reduce their interconnection prices from R1,25 per minute to 89 cents per minute.
The termination rate is set to fall further from the current R0,56 at peak time to R0,40 in March 2013 when both the Department and the authority complete the process of regulating sector prices in line with the requirements of chapter 10 of the Electronic Commutations Act, No. 36 of 2005.
However, the reduction in the call termination rate alone will not result in lower costs to communicate. The regulator will have to introduce other levers in order to ensure fair competition between new entrants and the dominant incumbents in the sector. To this end the Committee will hold public hearings late this year.
12. Committee Oversight Reports
During 2012, the Committee undertook oversight visits to the following provinces: Northern Cape and Western Cape (Springbok, West Coast and the City of Cape Town) from 17 – 20 January 2012; Limpopo from 5 – 8 February 2012; Mpumalanga from 18 – 23 March 2012; North West from 6 – 8 June 2012; and Gauteng from 18 – 22 June 2012, to execute its Constitutional mandate.
The oversight included visits to regional offices of the SABC, ICASA and Sentech,,SAPO outlets, MDDA projects, and USAASA projects. The purpose of the visits served as the measurement indicator against the service delivery commitments by the executive and enabled the Committee to conduct on-site visits to services delivered by public entities under the Department.
12.1 Committee Observations
12.1.1 South African Post Office
During the oversight visit to various Post Offices, the Committee noted the following: (i) In almost all branches visited, the Public Internet Terminals (PITs) were not operational, (ii) slow IT network response which contributes towards poor customer service and long queues on pension days, (iii) certain buildings are without compliance and occupational health certificates; (iv) increase in crime, armed robberies and burglaries; (v) retail postal agencies without a strongroom; (vi) security on pension days posed a challenge; and (vii) poor relations with key stakeholders in certain provinces and local government level.
During the oversight visit to Sentech's regional offices, the Committee noted the following: (i) unavailability of land (to install low-power transmitters and refusal by property owners to allow Sentech into their properties) to erect transmitters; (ii) bureaucracy or red tape involved in approval stages of the municipality are slowing the deployment of low-power transmitters; (iii) some municipalities view the low-power transmitter project from a commercial point rather than a public service mandate; and (iv) Sentech must have a national plan on DTT.
12.1.3 Independent Communications Authority of South Africa (ICASA)
During the oversight visit to ICASA's regional Offices, the Committee noted the following: (i) ICASA's offices and services are inaccessible to the general public, in particular in previously disadvantaged areas, and there is no effort to utilise Thusong Service Centres, (ii) the postal sector is not adequately monitored as per its mandate, (iii) ICASA does not perform regulatory impact assessments (RIAs) when embarking on regulatory processes, and (iv) no adequate monitoring equipment or resources.
12.1.4 Universal Service and Access Agency of South Africa (USAASA)
During the oversight visit to USAASA projects, the Committee noted the following: (i) Most of USAASA's sponsored projects throughout the country were not functional; (ii) the mandate of the agency, which had been relevant at the period of voice telephony needed to be reviewed in line with the modern broadband and data services; (iii) USAASA was paying Sentech and Telkom Internet connectivity fees despite telecentres not being connected on the network; (iv) staff morale at USAASA was at its lowest; and (v) some of the computer literacy training provided at Telecentres is not accredited.
13. Findings of the Committee
The Committee analyzed the Department's 2011-2014 Strategic Plan; the 2011/12 Annual Report of the Department of Communications and its entities; the 2011/12 Estimates of National Expenditure Reports; the Report of the Standing Committee on Appropriations; the Industrial Policy Action Plan, and Committee oversight reports.
The Committee noted with concern that:
(i) most of the issues that have been raised in the Auditor-General's report during 2011/12 were raised by the Committee during the Department's Annual Report presentation in 2009/10 and 2010/11;
(ii) many of the 2012/13 Strategic Plan and Budgets submitted before it, did not take into consideration the Committee's oversight recommendations;
(iii) all entities' audit committees were chaired by an independent person with the exception of the SABC and NEMISA;
(iv) the Department and its entities were not adequately following supply chain management processes when procuring goods and services as required by the Treasury Regulations;
(v) in spite of the Department and its entities being unable to achieve its set targets for the year under review, performance bonuses were nonetheless paid to senior managers and staff;
(vi) the ICT Enterprise Development branch is not adequately resourced to deal with public entity oversight;
(vii) the ICT Infrastructure Development programme has consistently under-performed;
(viii) the process to change the Presidential National Commission to Information Society and Development is still pending;
(ix) the assurance by the Department to fill critical funded vacant positions has not been achieved;
(x) the Department and its entities, with the exception of SAPO, do not have a Green Policy and supporting programmes to contribute towards lowering the nation's carbon footprint conserving resources and lowering costs;
(xi) the Department did not appear before SCOA to present its fourth term quarterly report;
(xii) the Department does not have evidence-based progress reports on the discussion which it was supposed to have initiated with National Treasury regarding the South African Post Office's universal service obligation subsidy which is coming to an end in 2012/13;
(xiii) section 9(2) of the Broadcasting Act, No 4 of 1999, requires that the public and commercial services divisions be separately administered and a separate set of financial records and accounts are to be kept in respect of each division;
(xiv) the SABC does not seem to be ready for DTT implementation due to capacity constraints, a non-established technology division, and non-qualified staff to handle the transition;
(xv) there is a disregard for corporate governance at the SABC and ICASA;
(xvi) the SABC is still not meeting the Government Guarantee conditions;
(xvii) the poor performance of the SABC Audit Committee and internal audit contributes towards the non-compliance with laws and regulations;
(xviii) the current funding model of the SABC contributes to its inability to fulfil its public mandate;
(xix) there was a high vacancy rate at executive management level across all the entities;
(xx) ICASA has a 0, 8 per cent employment rate on people living with disabilities;
(xxi) there was a lack of leadership at all levels at ICASA as well as the alleged mistrust between the Council and the Executive and between the Executive and the staff;
(xxii) ICASA organogram is not in line with section 14 of the ICASA Act of 2006;
(xxiii) the process to review the mandate of USAASA as per the Committee's recommendation during 2010/11 has not been undertaken;
(xxiv) the findings of the Auditor-General which refer to the ongoing investigations at USAASA, the SABC and Sentech as well as the independent auditor's investigations regarding the matter of Eco Park Post Office Building;
(xxv) the Auditor-General has raised a number of issues in the 2011/12 financial year as compared to 2010/11 regarding Sentech.
4. Recommendations of the Committee in respect of the Department
The Committee recommends that the Minister should:
(i) establish a Ministerial Task Team to address issues raised by the Auditor-General, in particular the recurring issues that have been raised in the past three financial years;
(ii) ensure that corrective and remedial measures are taken against the accounting officers and other senior managers for failing to comply with sections 38, 39, 40, 41 and 12 of the PFMA;
(iii) expedite corrective measures to ensure that issues raised during Committee meetings or oversight visits are adequately addressed;
(iv) urge state–owned entities to ensure that Audit Committees are chaired by independent people to enhance transparency, good governance and uniformity;
(v) ensure the filling of all vacancies with people that have requisite skills, including compliance with the 2 per cent representation of people living with disabilities and ensure that all financial controls are in place and are adhered to;
(vi) furnish the Committee with a detailed report on the process that was followed which led to the payment of performance bonuses to senior management and staff at the Department, USAASA and ICASA;
(vii) urgently capacitate the ICT Enterprise Development and ICT Infrastructure Development branches to ensure maximum achievement on service delivery;
(viii) expedite the finalisation of the process to change the PNC into Information Society and Development which has been underway since 2009/10, 2010/11 and 2011/12;
(ix) ensure that the Green Policy is embedded in the Strategic Plan of the Department and its entities;
(x) expedite the process of engaging with National Treasury regarding the possibility of extending the Universal Service Obligation subsidy of SAPO;
(xi) ensure that the SABC has the required capacity and financial resources to implement DTT;
(xii) investigate leadership challenges in the accounting authority of ICASA and the SABC;
(xiii) ensure that shareholder compacts are finalised timeously as per Treasury Regulations;
(xiv) ensure that the Performance Management System to monitor performance of the ICASA Chairperson and Councillors is implemented as prescribed by section 6Aof the ICASA Act;
(xv) institute a process with a possibility to review the funding model of ICASA and the SABC as well as reviewing the mandate of USAASA;
(xvi) ensure implementation of the recommendations of the investigations currently underway;
(xvii) ensure that the business model of the South African Post Office is reviewed; and
(xviii) upon receipt of the letter from the Speaker of the National Assembly communicating the Committee's recommendations in this report, provide the Committee with timeframes linked to her responses thereto.
Furthermore, the Minister must ensure that:
(i) the SABC complies with section 9(2) of the Broadcasting Act of 1999; and
(ii) the ICASA organorgram is in line with the provision of section 14 of ICASA Act.
Report to be considered.
MONDAY, 29 OCTOBER 2012
National Assembly and National Council of Provinces
1. The Minister of Justice and Constitutional Development
(a) Proclamation No R.53 published in Government Gazette No 35691 dated 21 September 2012: Referral of matters to existing Special Investigating Unit and Special Tribunal, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(b) Proclamation No R.54 published in Government Gazette No 35691 dated 21 September 2012: Referral of matters to existing Special Investigating Unit and Special Tribunal, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(c) Proclamation No R.55 published in Government Gazette No 35691 dated 21 September 2012: Referral of matters to existing Special Investigating Unit and Special Tribunal, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
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3. The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs on the Performance of the Department of Water Affairs for the 2011/12 Financial Year, dated 25 October 2012
The Money Bills Amendment Procedure and Related Matters Act, 2009, Act No. 9 of 2009 (the Money Bills Act) requires the National Assembly to review the Annual Report and conduct annual assessments of the performance of each national department with regard to the medium-term estimates of expenditure and the strategic priorities and measurable objectives of each National Department of government.
The Portfolio Committee on Water and Environmental Affairs (the Committee) having considered the Annual Report, reviewed and assessed the Strategic Plan, having received a briefing on the attainment of the Millennium Development Goals (MDG) in the water sector, and having assessed the service delivery performance and financial governance of the Department of Water Affairs (the Department), for the 2011/12 financial year, reports as follows:
The governance of water resources management in a water stressed country such as South Africa has had to contend with the legacy of skewed distribution of water that characterised the period prior to 1994. The emergence of a democratic system has allowed for the reform of the water sector in relation to policy, organisational structure, water rights and regulatory functions including the allocation of water resources, drinking water quality and public health, quality of effluent discharges and protection of the water environment. Important legislation that has been passed includes the National Water Act, No. 36 of 1998 and the Water Services Act, No.108 of 1997. The vision, mission and values of the Department has come to strongly embody the concept of people-centred service delivery, based on the strong underpinnings of transparency, respect and excellence.
Of primary importance in the South African context is the success of service delivery, and the extent to which institutions of service delivery are accountable to the citizens. Institutional changes, which ensure that service providers are accountable to all citizens, are an important political imperative. Undertaking such changes on a pilot basis is difficult enough, scaling it up across jurisdictions and sustaining it over time, is a daunting challenge. Yet, it is precisely the scaling up of institutional change that is needed to ensure that the goal of universal access to reliable basic services is realised. Whilst the Department has made immense progress in ensuring access to water to the citizens of South Africa, the financial performance and correlation of indicators to targets during this financial year requires further scrutiny.
The Committee, in reviewing the work of the Department in the 2011/2012 financial year placed emphasis on the following aspects:
· An overview and analysis of the Department's strategic priorities, measurable objectives, indicators and attainment of targets;
· An overview of the service delivery environment of the Department to contribute to the 12 Government outcomes;
· An overview of the overall performance of voted funds: Vote 38 and Water Trading Entity;
· Achievements and challenges in the service delivery environment;
· Committee observations; and
3. Department's Strategic Priorities
In the course and prior to the 2011/2012 financial year, the Department has grappled with and made some headway in addressing the following:
· Separating the responsibilities for the Main account and the Trading account to address inefficiencies in financial management;
· Addressing the aging computer network infrastructure;
· Facilitation of access to water services through the Regional Bulk Infrastructure Grant (RBIG) with a focus on rural communities in Limpopo, Kwazulu-Natal and the Eastern Cape;
· The implementation of the seven water resources infrastructure augmentation projects and maintenance of the existing national dams and conveyance projects;
· Policy adjustments related to the legislative review (National Water Act, Water Services Act, and Water Research Act), National Water Resources Strategy and the realignment of institutional arrangements to enhance water resources management and service delivery;
· Establishment of a rapid response unit for support on technical water-related emergencies for municipalities (for example, floods, droughts and pollution of water); and
· Implementation of proactive water services interventions.
To assist the Department in attaining its key priorities over the medium-term and to strengthen the Department's ability to carry out its functions, the Minister appointed a committee of experts in June 2011 to review and re-engineer the Department's business processes to ensure that functions are carried out efficiently. The Committee is expected to make recommendations on optimal approaches to restructuring the Department to address backlogs in the rehabilitation and refurbishment of national bulk water infrastructure, integrate bulk water infrastructure with reticulation infrastructure at the local level, support improvements in the management of wastewater treatment works within local government, and improve the financial position of the water trading entity.
4. Overview of the service delivery environment of the Department to contribute to the 12 Government outcomes
Within the outcomes-based performance management framework adopted by Government, the Department contributes to two critical outcomes: the development of an efficient, competitive and responsive economic infrastructure network (outcome 6), and the protection and enhancement of environmental assets and natural resources (outcome 10). The Department contributes to these outcomes by ensuring the maintenance and supply availability of the country's bulk water infrastructure, protecting and enhancing environmental assets and natural resources, and improving water quality and quantity of water resources.
During the year under review, the Department focused its service delivery programme on the following six strategic priorities, informed by the twelve government outcomes. Within the Main Exchequer Account and Water Trading Entity, the following priorities gave effect to Government outcomes:
4.1 Economic growth, rural development, food security and land reform
This priority was implemented with consideration of broad objectives outlined in outcomes 6, 7 and 9, which talk to the contribution of infrastructure to economic development, rural development and support to local government. During the year under review, the Department cumulatively created 4 505 job opportunities through the Regional Bulk Infrastructure Programme (RBIG). The programme completed five (5) bulk infrastructure schemes for the availability of water supply for domestic use. A total of 4 174 additional resource poor farmers had access to water while 598 776 additional people, as informed by the Municipal Infrastructure Grant (MIG) allocations, were provided with access to water. A total of 8 068 rainwater harvesting tanks were distributed, 6 308 of which were for access to water and 1 760 for food production.
4.2 To promote sustainable and equitable water resources management
This priority is driven by the programme that ensures that the country's water resources are protected, used, developed, conserved, managed and controlled in a sustainable manner for the benefit of the people and the environment through effective policies, integrated planning strategies, knowledge base and procedures. It further addresses government outcome ten (10) which ensures that the country maintains environmental assets and natural resources that are well protected and continue to update a range of strategies for water management. The following frameworks have been on the agenda of the Department during the year under review:
· The National Water Resource Strategy;
· The Pricing Strategy;
· Desalination Strategy;
· Ground Water Strategy; and
· Re-use Strategy.
4.3 Strengthening the regulation of the water sector
This priority is to address issues around the regulation, governance and control of the use, development, conservation and management of water throughout the value chain within the context of the relevant legislation. To facilitate access to water for historically disadvantaged groups a process of compulsory licensing was undertaken in a number of areas including Tosca, Jan Dissel and Mhalthuze. Reports have been completed which will lead to redistribution and final water use authorisations.
In an effort to improve the issuing of water use licenses to various water users, the Department has established a dedicated backlog eradication programme, known as Letsema. Since the inception of Letsema, 3 358 applications dating from 2001 to 2010 have been finalised, leaving a backlog of 549 applications.
The Department also facilitated the improvement of the regulation of drinking water quality through compliance, monitoring and enforcement. The Department of Water Affairs had in a previous financial year introduced incentive-based regulation in the form of the Blue and Green Drop Certification Programmes as a means to improve drinking water quality and wastewater service respectively. These programmes were designed and developed to inspire managers, specialists, and practitioners alike towards excellence; based on the simple principles of setting stringent criteria; subjecting municipalities to thorough auditing; ensuring improvement through consultative auditing; and revealing performance by means of annual publications.
4.4 Support local government to deliver water services
To contribute to Government Outcome 9, which facilitates a responsive, accountable, effective and efficient Local Government system; Programme 4 of the Department coordinates the Department's service delivery plan and strategic objectives at the regional level. The programme is also charged with supporting service providers to ensure the acceleration of providing water to communities.
5. Overview of attainment of targets to specific indicators
There is reasonable progress in some of the key projects and slow progress in other projects, as will be gleaned from below:
5.1 Regional bulk infrastructure programme (RBIG)
On infrastructure projects, the following progress was achieved:
· 91% of the Inyaka Water Treatment Works was completed against a target of 98%;
· On the Nandoni Water Distribution Network and Water Treatment Works, its achievement is 58% against a target of 79%; and
· On the construction of the Nandoni Pipeline, its performance is 20% against a target of 27%. For Hluhluwe, the Department's percentage progress exceeded the targeted percentage by 1% (93% versus the target of 92%).
The Department has also completed five (5) bulk infrastructure schemes out of a target of seven (7) schemes. The main reasons for the under-achievement vary from the delayed appointment of professional service providers to tender bids being awarded late.
5.2 Local government support
A total of 68 municipalities have been supported in implementing water conservation and water demand measures to reduce water losses against a target of 62 municipalities. The higher achievement is due to the interventions that were in place to support municipalities through the Department's Accelerated Community Infrastructure Programme (ACIP) and donor funding.
5.3 Water schemes
A total of 52 water schemes have been refurbished against a target of 51 schemes.
5.4 Water licenses
Although 93 water licenses were issued to Historically Disadvantaged Individuals against a target of 1 088 licenses, this is because licenses are demand driven and insufficient information from applicants delayed the evaluation process.
6. An overview of the overall performance of voted funds: Vote 38 and Water Trading Entity
6.1 Overview of financial statements on Vote 38 for the 2011/12 financial year
The spending focus over the medium term of the Department will be on developing bulk water infrastructure, to accelerate delivery of water services to households, agriculture and industry. The Department will also focus on strengthening economic regulation within the water sector.
Spending increased from R5.1 billion in 2008/09 to R9 billion in 2011/12, at an average annual rate of 20.6 per cent. This is driven by the increase in expenditure on the development of the bulk water infrastructure, which includes funds allocated for the construction of new dams and ancillary infrastructure, and rehabilitating and repairing existing bulk infrastructure in line with government's renewed emphasis on infrastructure development.
Transfers and subsidies expenditure increased from R2.7 billion in 2008/09 to R3.5 billion in 2011/12, at an average annual rate of 9.2 per cent, as a result of the development of bulk water infrastructure. These included funds allocated for the construction of the De Hoop Dam and ancillary infrastructure such as distribution pipelines for the Nandoni Dam, and the rehabilitation of repair and existing bulk infrastructure.
The table below reflects the spending trends of the Department over the current financial year.
Water Sector Management
Water Infrastructure Management
2 384 963
2 384 020
Regional Implementation and Support
4 774 145
4 375 501
Water Sector Regulation
International Water Cooperation
9 028 319
8 164 906
The Department had spent R8.1 billion of the total allocation of R9 billion, which represented 90.4% of the total expenditure of the Department. In terms of spending trends within the programmes of the Department, the following Programmes under spent on their allocations for the 2011/12 period. Programme 1: Administration by 11%; 40% on Programme 2: Water Sector Management, 8.4% on Programme 3: Regional Implementation and Support, 18.9% on Programme 4: Water Sector Regulation and 19.8% on Programme 5: International Water Cooperation.
The under expenditure in Administration related to an allocation of R34 million that could not be spent in respect of the Business Process Review (BPR) as the BPR Committee was appointed in the middle of the financial year. Unfilled vacant posts in Administration amounted to R12 million; goods and services amounted to R32 related to accrual and commitments, machinery and equipment amounted to R16 million while funds, in respect of the Learning Academy amounted to R2.3 million.
The under expenditure in Water Sector Management related to an allocation of R250 million for the response to Acid Mine Drainage (AMD) in the Witwatersrand, where unforeseen delays in finalising the detailed design for infrastructure resulted in under spending. A further R18 million could not be transferred to Bushbuckridge Water Board due to a decision taken not to transfer funding. Subsequent to this decision, the Department reconsidered the decision and a resolution was taken that the funding be transferred in order to refurbish the ailing infrastructure of the water board. Under this programme, were unfilled posts, including Occupational Specific Dispensation (OSD) posts amounting to R54 million and an under expenditure on goods and services amounting to R18 million due to accrual and commitments.
The spending on Programme 3: Water Infrastructure Management was at an acceptable level. The Programme managed to make use of its allocated budget, which reflected an insignificant variance.
The under expenditure in Programme 4: Regional Implementation and Support related to an allocation of R209 million not being spent on water services projects such as the Nandoni Pipeline, Hluhluwe and Inyaka. The approval of service providers took longer than anticipated. In respect of Moutse Bulk Water Supply, an amount of R20 million could not be spent as the payment could not be captured before the payment cut-off date. Unfilled vacant posts, including OSD posts amounted to R88 million. Material ordered for regional bulk infrastructure projects were not delivered at year-end. This amounted to R81 million.
The under expenditure in Programme 5: Water Sector Regulation was due to accruals and commitment amounting to R5 million in the Goods and Services subprogramme. Unfilled vacant post, including OSD posts amounted to R16 million.
The under expenditure in Programme 6: International Water Cooperation reflected an allocation of R3.7 million due to a number of planned international engagements not taking place. This was mainly attributed to political dynamics and postponements of certain activities in certain countries. Unfilled vacant posts amounted to R1.4 million in this programme.
6.2 Overview of financial statements of the Water Trading Entity for the 2011/12 financial year
The Water Trading Entity (WTE) performs two functions: water resource management and infrastructure management. Water resource management deals with the management of water quality, conservation and allocation of water through the catchment management agencies or proto- catchment management agencies (regional offices). Infrastructure management deals with the operation and maintenance of existing infrastructure as well as the development of new infrastructure. To fund the development of new infrastructure, the entity receives an allocation from the Department. Funding for operation and maintenance comes from revenue generated from raw water charges. Water resource management charges cover the operational costs of catchment management agencies.
The basis used to prepare the WTE financial statements differed from the processes used by the Department. The WTE changed its accounting framework from the International Financial Reporting Standard's (IFRS) Generally Accepted Accounting Practices (GAAP) to the Accounting Standards Board's (ASB) Government Regulated Accounting Practices (GRAP). The WTE adopted GRAP for the first time in 2011/12, which resulted in the re-classification and re-measurement of certain annual financial statement items.
The increase in revenue (24% compared to 2010/11) resulted primarily from increase in water consumption volumes from some of the Department's major customers and the annual tariff increase. There was a decrease in expenditure (11% compared to 2010/11) due to the following:
· Operating expenditure decreased by 6% due to the construction costs, which decreased by R20 million emanating from less spending on Nandoni replacement of GRP pipes due to delays in appointing PSPs. The pumping cost decreased by R23 million due to less pumping demand on the Vaal river system. Travelling costs also decreased by R33 million;
· There was an increase in employee costs (7% increase compared to 2010/11) due to annual salary adjustments; and
· A decrease in impairment on financial assets of 78% due to the management analysis that the historic plus current impairment provision on debtors is sufficient. This is perceived as a revenue turnaround plan.
There was an increase in total assets (2% compared to 2010/11), due to the following:
· Increase in cash and cash equivalents by 46% due to improvements in cash collections;
· Receivables from exchange transactions have increased by 30%. Although revenue from 'water sales' has also increased by approximately 30%, much work is still required to ensure that debt collection is improved;
· Property, plant and equipment increased by 1% (R925 million) primarily due to an increase in Asset under Construction of some R1.1 billion reduced by an increase in depreciation of R269 million compared to 2010/11; and
· Increase in total liabilities (1% compared to 2010/11, an amount of R236 million) resulted mainly from an increase of R160 million in the provision required for dam safety rehabilitation. There is still some work required to enhance the processes involved in the formulation of the dam safety rehabilitation. There was also a marginal increase in TCTA financial liability compared to the previous year.
7. Report of the Auditor-General
The Committee has noted with satisfaction that the Water Trading Entity has moved from a disqualification to a qualified audit with emphasis of matters. Based on the audit report of 2010/11, which highlighted 19 audit recommendations, management of the WTE implemented or devised alternative actions to resolve the prior year audit findings. Fifteen (15) recommendations are still in the process of being implemented.
The Department in its Main Account too has begun the process of improving on its financial management, and this may improve in the future years. In relation to the Main Account (Vote 38), the Department received a qualified audit on issues relating to expenditure for tangible assets and prepayments and advances, goods and services, irregular expenditure, commitments, immovable tangible capital assets, movable tangible capital assets, contingent liabilities, and loans. An emphasis of matter was given on material under spending of the vote and financial reporting framework.
In relation to the WTE, the Department received a qualified audit with emphasis of matters on the following:
· Inadequate review and monitoring of compliance with applicable laws and regulations;
· Poor review and monitoring to ensure accurate and complete daily and monthly financial and performance reporting; and
· No reliable evidence to support regular, complete and accurate financial and performance reports;
The WTE has a shared internal audit division with the Main Exchequer Account, the division did not have adequate personnel to carry out its mandate, and as a result, the internal audit function is not effective. Two audit committee members resigned and they have not been replaced.
The Committee was particularly concerned by the overview provided by a representative from the office of the Auditor-General. The particular emphasis was on the risks posed in the public sector if no effective checks and balances were systematically undertaken in the internal units. A number of issues in the Department should be dealt with proactively instead of reactively and these could be achieved if the Department committed to the submission of quarterly reports.
On Procurement, the Committee was extremely concerned at some of the flaws and risks identified in the procurement system of the Department. This entailed deviations from the procurement process due to lack of proper planning by project managers which lead to projects being outsourced through deviations from normal procurement processes. A deviation from procurement processes can facilitate the risk of utilisation of favourite service providers, and compromises the procurement process as the market and value for money is not properly tested. It can also disadvantage other companies who might want to enter the market.
On irregular expenditure, the Department showed a number of cases of irregular expenditure which resulted in poor/bad planning where appropriate approval is not sought. Lack of contract management skills in the Department and lack of accountability where non-Supply Chain Management practitioners perform Supply-Chain Management function poses major risks to the Department.
On the findings of performance against predetermined objectives, compliance with laws and regulations and internal control, the audit reflected the following:
· The reasons for major variances between the planned and reported (actual) targets are not adequately explained;
· In terms of measurability, the performance indicators are not well-defined;
· The performance indicators are not verifiable;
· Targets are not measurable;
· Performance targets are not specific; and
· The validity, accuracy and completeness of the actual reported performance relevant to 82% of Programme 1 and 4.
8. Oversight by the Department over its Entities
Due to time and other constraints, the Committee could not call each of the entities to the Budgetary Review and Recommendation Review hearings. The Department presented the relevant information to the Committee on the following entities:
· Trans-Caledon Tunnel Authority (TCTA)
· Water Research Commission (WRC)
· Catchment Management Agencies: The Breede-Overberg Catchment Management Agency (BOCMA) in the Western Cape and the Inkomati Catchment Management Agency (ICMA) in Mpumalanga
8.1 Trans-Caledon Tunnel Authority (TCTA)
The TCTA, for the financial year under review funded and implemented the following primary projects – the Lesotho Highlands Water Project (LHWP) in relation to the South African portion of the delivery tunnel, the Berg Water Project (BWP), the Vaal River Eastern Subsystem Augmentation Project (VRESAP), the Mooi-Mgeni Transfer Scheme Phase 2 (MMTS2), the Komati Water Scheme Augmentation Project (KWSAP), the Olifants River Water Resource Development Project Phase 2 (ORWRDP2), the Mokolo-Crocodile River Water Augmentation Project Phase 1 (MCWAP1), the Metsi Bophelo Borehold Project (MBBP) and issues relating to Acid Mine Drainage (AMD), which in the main, focused on the pump station and treatment plant on the West Rand.
In terms of the performance of the TCTA, the focus was on the deficit for the 2010/11 and 2011/12 financial years. The audited results for 2010/11 recorded a R24 million surplus and this had been restated to a deficit of R284 million in the current financial statements. The overall reason for the restatement was due to a change in accounting policies applied retrospectively to 31 March 2011, in accordance with the International Accounting Standards Presentation and Disclosures, related to construction assets, previously recognised as property, plant and equipment and intangible assets.
In terms of borrowing rates and/or credit rating, the TCTA had gained and maintained market credibility that enabled it to access off-budget funding for projects at excellent rates. The TCTA obtained a 'clean' audit report for the 2011/12 financial year.
8.2 Water Research Commission (WRC)
The Water Research Commission (WRC) derives its mandate from the Water Research Act, Act No. 34 of 1971. During the 2011/12 financial year, the WRC continued to leverage levy income by striving to obtain funds from other sources to support water research. During the year under review, the WRC managed 322 research projects at various stages of project life cycle, of which about 79% (259 projects) were active projects. In addition, 133 reports were published.
The WRC obtained an unqualified audit with matters of emphasis relating to IT systems and procurement.
8.3 Overview of Catchment Management Agencies
The National Water Act, 1998 mandates the Minister of Water and Environmental Affairs to establish Catchment Management Agencies (CMAs) for the management of water resources at the catchment level. In March 2012, the Minister of Water and Environmental Affairs approved the establishment of nine CMAs in nine water management areas and these have been gazetted for public comment. The Breede-Overberg CMA (BOCMA) in the Western Cape and the Inkomati CMA (ICMA) in Mpumalanga are the two operational CMAs in the country.
The BOCMA and ICMA have made significant and effective strides in positioning the entities to fulfil the mandate of protecting, using, conserving, managing and controlling water resources in and equitable and sustainable manner while appropriately involving all stakeholders in their WMA. Key strategic challenges of skills and capacity building are being addressed and overall the performance over the reporting period has been satisfactory. Both CMAs received unqualified audits with no matters of emphasis.
9. Committee's Observations
The Committee has noted a significant improvement, as stated in the report of the Auditor-General, in relation to the financial management of the Water Trading Entity and the Main Account of the Department. The Committee commended the Department's work towards attaining the Millennium Development Goals in relation to the water sector. The Committee acknowledged that institutional changes are in progress in the Department, and whilst an overview was provided, detailed briefings on an ongoing basis on certain issues would require further scrutiny by the Committee.
Variances in attainment of performance indicators/targets against specified indicators/targets
Concerns were raised on whether the targeted outcomes of the Department not being attained in the financial year resulted in the Department receiving an adverse, qualified or disclaimer audit. The methodology and criteria used by the Department on ascertaining specific performance indicators/targets during its planning and drafting of its strategic plan needed further scrutiny to aid in better management and assessment of performance.
The criteria and methodology at which the present performance indicators/targets are being arrived at need to be engaged with. A pre-audit is required to look at the usefulness of targets and whether they are meaningful, attainable and time-bound to meet the requirements set by the National Treasury. There needs to be a linkage between the strategic plan and the budget.
Human Resources Issues within the Occupational Sector Dispensation
The vacancy rate in the Department across all programmes is quite high, and of concern to the Committee. However, of particular importance is the unavailability of professional specialists (namely engineers, technicians, project managers, amongst others) within the Occupational Sector Dispensation. This impacts negatively on the implementation of projects, and may compromise the efficacy of attaining the Department's core objectives, that is, the provisioning of bulk water infrastructure for effective water service delivery. The Committee requested further details on the way in which the Department would address the issue.
Appropriate infrastructure delivery mechanism
The Committee urges further engagements with the Department on the appropriate and optimum mechanism or vehicle through which water infrastructure provisioning should take place. In this context, questions were raised about the transfer of assets from the Trans-Caledon Tunnel Authority (TCTA) to the Department and the ability of the TCTA, without assets on its books, to borrow from capital markets and financial institutions. The Committee would like to start a conversation with the Department on optimal funding arrangements for the TCTA.
The Committee noted that one of the principal weaknesses in the Department is in the area of procurement, and maintained that there should be appropriate checks, balances and protocols in place to prevent problems in this regard. With regard to the WTE, the Auditor-General could not ascertain whether full disclosure was achieved in terms of irregular expenditure. There were a number of issues that constituted irregular expenditure due to disclosure problems in relation to procurement.
The Committee requested a report from the Department on all problems related to procurement and the way in which the Department would handle these critical issues.
Financial controls responsibility of Chief Financial Officer (CFO)
A number of instances of financial accountability and irregularity in the regions were noted and this required immediate action. The Committee is of the view that all financial aspects in regions and other branches should have oversight from and be under the control of the national office. Therefore, the regional and other branch officials dealing with financial matters should be reporting to the Chief Financial Officer (CFO). The Committee wanted assurance from the Director-General (DG) that these issues would be addressed, and further requested that by the end of the year an implementation plan be presented to the Committee reflecting the implementation of these changes.
Water infrastructure and services for human and economic development
In South Africa, a major challenge concerning water infrastructure is to ensure sustainable water security for economic livelihoods, growth and development, as well as environmental protection. In light of the economic climate, the key focus must be on the effective utilisation, maintenance and management of existing infrastructure, as well as timely planning and development of new infrastructure. A key issue is the need to ensure the effective functionality and management of these schemes and associated infrastructure.
The key risk and/or success factors are timely planning, appropriate solutions, new and appropriate technology, skills and capacity (for effective project and operational management), appropriate institutional arrangements, as well as financing and financial management. In dealing with this, it is important to ensure effective use and management of water resources (water use efficiency), culture and attitude, as well as effective governance. Water security should cover the water resources management across the full value chain: from source to tap and tap/waste to source. This includes effective waste management and associated infrastructure. This approach has major implications on aspects of integrated planning, programme alignment; water services development planning and outcomes based management.
To address key risk and/or success factors extended partnerships with municipalities, and the agricultural, industrial (including mining), energy and business sectors is required. A core concern is the way in which some municipalities are managing infrastructure and associated grants. Other challenges faced by municipalities in relation to infrastructure relate to operational budgets for service delivery and funding to maintain the current infrastructure. In cases where municipalities have taken the additional infrastructure, the requisite skills to function effectively is limited due to limited technical staff. Another concern is the fact that some municipalities, after the demarcation process, are required to deliver, operate and maintain services across much larger areas than previously.
To address this, the Department has entered into a collaborative arrangement with COGTA, which includes work streams covering accelerated delivery, high-risk areas, debt recovery, and finance and skills development. It was noted that functionality of water infrastructure does not at present form part of the mandate of this arrangement.
Furthermore, the Department embarked on the development of a national water investment framework and the development of an interim basic service programme focusing on 24 priority district municipalities, mainly in Kwazulu-Natal, Limpopo and Eastern Cape.
Relevance of research undertaken by the Water Research Commission
On the relevance of the research undertaken by the Water Research Commission (WRC), the Committee requested clarity on whether the research produced was benefiting anyone apart from the academics who researched and published the research. While there was acknowledgement that the WRC was conducting some work of very high importance to the water sector, the Committee was of the view the WRC needs to increasingly reflect on the overall value of all its research to the South African water sector and determine methods that measure the usefulness of its research outcomes, especially for Government at all levels.
The Committee was of the view that the WRC should sit down with the Department to discuss performance indicators in the WRC's strategic plan. The South African Law Reform Commission may be a good example of the type of strategic research that can be provided to a Department. . The South African Law Reform Commission undertakes research on behalf of the Department of Justice and Constitutional Development. Research is aimed at problems being experienced in the justice system. The Water Research Commission could look at a similar process. This would assist when evaluating performance indicators at the end of the year and would give meaning and value to performance auditing.
10. Conclusions and Recommendations
The Committee acknowledges the successes attained by the Department during this financial year. Most notably, the movement of the financial statements of the Water Trading Entity (WTE) from a disclaimer over the last few years to a qualified audit is praiseworthy. Although, the financial statements of the main account of the Department remains a qualified audit, the Auditor General's assessment that the financial affairs of the Department has improved significantly, in some respects, is very encouraging and must be acknowledged. The improvement of the financial management system of both the Main Account of the Department and of the WTE, is a substantial step in the right direction in terms of sound financial management.
In light of the above, the Committee recommends the following:
· It was difficult for the Committee to assess the performance indicators/targets of the Department, as contained in the Annual Strategic Plan of the Department, as the Committee was not part of the process of determining these performance indicators/targets. The Committee needs to sit down with the Department and the Office of the Auditor-General to agree on the criteria for deciding the annual performance indicators/targets and to assess if performance indicators/targets for the current year were justified and relevant. Two days, in January 2013, will be set aside to deal with these issues and to discuss how best to work towards the determination of realistic performance indicators/targets for the Department;
· The Committee will convene a workshop, at the beginning of next year, of relevant Portfolio Committees (Human Settlements and Cooperative Governance and Traditional Affairs), with the Department of Water Affairs and the Department of Environmental Affairs, together with other relevant stakeholders and government Departments, like Departments of Human Settlements, Cooperative Governance and Traditional Affairs and Treasury, to discuss cross-cutting issues in water and environmental governance and service delivery;
· With reference to Goal 7 of the MDG relating to water services issues, performance indicators/targets are only made applicable to access to water infrastructure, whereas functionality of such infrastructure does not form part of the performance indicators/targets. Therefore, specific performance indicators on the functionality of water infrastructure should be developed for South Africa, for all levels of government. Furthermore, functionality of infrastructure must be reflected in the Department's strategic plan and reflected as part of the performance indicators/targets;
· The Department and the Department of Local Government have established a structure to process cross-cutting issues relating to water services and provisioning. The Committee proposes issues of functionality of water infrastructure should be included within the mandate of this structure;
· The Committee strongly recommends that the Department urgently embark on the drafting of a national water services strategy;
· The Department should create a facility/database to assess and monitor incidents of vandalism and destruction of water infrastructure and record the losses in each instance, and annually report to the Committee in this regard;
· The Committee expects a detailed plan on all procurement challenges faced by the Department. as well as the strategies to be followed by the Department to resolve these problems;
· A detailed report should be provided to the Committee on the way in which the WRC undertakes research on relevant, current and critical water issues facing South Africa, and how the WRC intends to measure the effectiveness of its research outcomes, including the establishment of relevant performance indicators/targets;
· The Department and TCTA must engage with the Committee on a possible appropriate infrastructure provisioning mechanism for the Department, including future funding models for the TCTA, and whether TCTA should have some capital assets on its books;
· A list of pending disciplinary cases involving senior staff needs to be provided to the Committee, along with recently completed disciplinary cases; and
· The Department in its reporting of oversight of entities next year should also include water boards and water user associations.
Report to be considered.
4. BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES ON THE PERFORMANCE OF THE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES, DATED 23 OCTOBER 2012
The Portfolio Committee on Agriculture, Forestry and Fisheries (hereinafter referred to as the Committee), having assessed the performance of the Department of Agriculture, Forestry and Fisheries (hereinafter referred to as the Department), reports as follows:
1.1. Mandate of the Committee, including provision of Section 5 of the Money Bills Amendment Procedure and Related Matters Act, 2009 (No. 9 of 2009).
According to Section 5 of the Money Bills Amendment Procedure and Related Matters Act, the National Assembly, through its Committees, must annually assess the performance of each national department. The Committee must submit an annual Budgetary Review and Recommendation Report (BRRR) for each department that falls under its oversight responsibilities for tabling in the National Assembly. These should be considered by the Standing Committee on Appropriations when it is considering and reporting on the Medium Term Budget Policy Statement (MTBPS) to the House.
2. The Department of Agriculture, Forestry and Fisheries
2.1. Mandate, Vision and Mission
The Department's legal mandate covers the agriculture, forestry and fisheries value chains: from inputs, production and value adding to retailing. The aim of the Department is to lead, support and promote agriculture, forestry and fisheries resources management through policies, strategies and programmes to enhance sustainable use and to achieve economic growth, job creation, food security, rural development and transformation. The Department also aims to oversee the performance of state-owned entities within its portfolio.
A leading, dynamic, united, prosperous and people-centred sector.
Developing and sustaining a sector that contributes to, and embraces: economic growth (and development), job creation, rural development, sustainable use of natural resources and food security.
2.2. Strategic Priorities and Measurable Objectives of the Department
2.2.1 The Government Priority Outcomes
The Government priority outcomes through which agriculture, forestry and fisheries sectors will play a role in addressing the country's broad national challenges in the medium term strategic framework (MTSF) are:
· Decent employment through inclusive economic growth (Outcome 4);
· Vibrant, equitable and sustainable rural communities contributing towards food security for all (Outcome 7); and
· Protect and enhance our environmental assets and natural resources (Outcome 10).
2.2.2 Strategic Goals and Objectives of the Department
The Department plans to contribute towards the achievement of the Government priority outcomes over the medium term expenditure framework (MTEF) through six key strategic goals as identified in the Department's 2011/12 Strategic Plan. Under each strategic goal, there is a number of strategic objectives (in bullets) through which the Department based and measured its programme performance.
These strategic objectives and goals are as follows:Increased profitable production of food, fibre and timber products by all categories of producers (subsistence, smallholder and commercial) Promote efficient production, handling and processing of food, fibre and timber Coordinate government food security initiative Improve production systems anchored in commodities with a competitive and comparative advantage in each province Comprehensive support towards rural development. Sustained management of natural resources
· Promote environmentally sustainable production systems
· Ensure the sustainable management and efficient use of natural resources
· Ensure protection of indigenous genetic resources
· Increase contribution to green jobs to improve livelihoods.Effective national regulatory services and risk management systems
· Promote safe food by managing the level of risks associated with food, diseases, pests, natural disasters and trade
· Establish and maintain effective early-warning and mitigation systems.A transformed and united sector
· Increase equity, ownership and participation of previously disadvantaged individuals (PDIs)
· Enhance systems to support the effective utilisation of assets
· Improve social working conditions in the sector
· Provide leadership and support to research, training and extension in the sector.Increased contribution of the sector to economic growth and development
· Increase growth, income and sustainable job opportunities in the value chain
· Increase the level of public and private investment in the sector
· Increase market access for South African and Africa agricultural, forestry and fish products, domestically and internationally
· Increase production of feedstock to support the manufacturing sector
· Promote the use of feedstock by production for renewable energies.Effective and efficient governance
· Establish and strengthen cooperative governance and functional relations with local and international stakeholders
· Strengthen policy, planning, monitoring, evaluation, reporting and sector information
· Provide effective audit, investigative and legal, human resources and financial risk management
· Improve departmental services excellence through implementation of quality standards, Batho Pele principles and the general legislative mandate
· Provide leadership and manage communication and information.
2.2.3 The Department's Programmes
The programme provides strategic leadership, management and support services to the department. The aim of the programme is to lead, support and promote agricultural, forestry and fisheries resource management through policies, strategies and programmes to enhance sustainable use; and to achieve economic growth, job creation, food security, rural development and transformation.
2.Economic Development, Trade and Marketing
To ensure value chain integration and facilitation of market access for agriculture, forestry and fisheries products in support of economic growth, job creation and development.
3.Food Security and Agrarian Reform
The programme facilitates and promotes food security and agrarian reform programmes and initiatives.
4. Agricultural Production, Health and Food Safety
The programme manages the risks associates with animal diseases, plant pests, genetically modified organisms and registration of products used in agriculture, promotes food safety and creates an enabling environment for increased and sustainable agricultural production.
5. Forestry and Natural Resource Management
The programme develops and facilitates the implementation of policies and targeted programmes to ensure management of forests, sustainable use and protection of land and water as well as managing agricultural risks and disasters.
The programme promotes the development, management, monitoring and sustainable use of marine living resources and the development of South Africa's fisheries sectors. Sustainable livelihoods will be achieved through aquaculture growth and fisheries economic development.
3. Analysis of Strategic and Operational Plans of the Department
The Department underwent major restructuring that resulted in the renaming and/or combining of some of its programmes and reprioritising of its budget. While the Department had seven programmes in the 2010/11 financial year, in the reporting for the 2011/12 financial year, the Department has six programmes (as indicated in 2.2.3 above), three of which with new names. The Department has done away with the former Programme 2: Production and Resources Management and Programme 3: Agriculture Support Services.
The sustainable use and protection of land and water mandate of the former Programme 2 and the disaster risk and management services mandate of the former Programme 3 have been added to the Forestry programme in the current medium term expenditure framework (MTEF) period. The rest of the activities of the former Programme 2, viz. agricultural productivity and infrastructure development now fall under the new Agricultural Production, Health and Food Safety Programme and the Food Security and Agrarian Reform Programme, respectively. The rest of the activities of the former Programme 3 are now split between the Administration; Trade Promotion and Market Access; as well as the Food Security and Agrarian Reform Programmes. These changes and how the budget was reprioritised presented a challenge in terms of continuity from the previous financial year, which was not explained in the Department's Strategic Plan but the National Treasury's Estimates of National Expenditure showed that there was a budget for these 'new' programmes in the 2010/11 financial year.
For all programmes of the Department, some strategic outcomes and indicators were not aligned with the strategic goals and/or objectives. These issues were also highlighted in the high level review of the Department's 2011/12 Strategic Plan by the Office of the Auditor-General. The indicators were either not relevant or specific to the stated strategic objective or outcome and some were not quantifiable. The highlighted issues raised concerns regarding the level of the Department's engagement in the strategic planning process and the people who were involved in the planning.
As an example, in the Food Security and Agrarian Reform Programme, under Strategic Goal 4, the strategic objective is to provide leadership and support to research, training and extension in the sector. This is assumed to be referring to extension personnel, research institutions/agencies and all categories of producers in the sector. The strategic outcome is increased production enabled by extension support and appropriate technologies and the outcome indicator, which addresses one aspect of both the strategic objective and outcome, is 2 000 extension personnel receiving targeted technical and generic training.
4. Analysis of the Annual Report and Financial Statements of the
This section provides the summary of expenditure and selected performance or non-performance areas for each programme in relation to key measurable objectives for the 2011/12 financial year as outlined in the Department's Strategic Plan and Annual Report for the 2011/12 financial year.
According to the Department's Annual Report for the 2011/12 financila year, out of the total number of planned targets, only 43 targets were achieved, this represent 51 per cent of the total planned targets that were achieved during the year under review. However, according to the Committee's analysis, the Department had a total of 114 targets and fully achieved 23 (approximately 20 per cent) of these. The Committee considered partial achievements, non-aligned and immeasurable targets as non-achievements. Various reasons that have been given for non-performance include budgetary constraints, lack of personnel, extensive Cabinet processes, and others. However, central among these was poor planning and the non-alignment of indicators, targets and actual performance with the strategic goals or objectives as previously highlighted. In the year under review (i.e. the 2011/12 financial year), the Department planned to review and table in Parliament five pieces of legislation, but none of these were tabled.
4.1 Budget Overview and Expenditure
Table 1: Total Budget Appropriation and Expenditure
Variance (under spending)
Source: Annual Report (DAFF), 2011 and 2012
The Department was appropriated a total amount of R4.96 billion in the 2011/12 financial year, which was R1 billion more than the R3.9 billion that was appropriated in the 2010/11 financial year (see Table 1 -above). Despite not achieving most of its delivery targets, the Department spent 99 per cent of its appropriated budget in the 2011/12 financial year, which is 2 per cent more than the 97 per cent expenditure that it achieved in the 2010/11 financial year. Slightly more than half of the Department's budget was spent between two programmes, namely, Programme 1, Administration (27 per cent) and Programme 3, Food Security and Agrarian Reform (25 per cent) – see Table 2. Approximately 80 per cent (R1 billion) of Programme 3's allocation was spent on Comprehensive Agricultural Support Programme (CASP).
An amount of R1.65 billion (33.7 per cent of total appropriation) was transferred to provinces for conditional grants and R1 billion (20 per cent of total appropriation) was transferred to public entities. Two thirds (75 per cent) of the transfer to public entities was to the Agricultural Research Council (R755 million) and 20 per cent to the Marine Living Resources Fund (R201 million). The Department paid R1.2 million to the Public Service Education and Training Authority in respect of training. The Department also transferred an amount of R37.3 million to public corporations (i.e. Ncera Farms (Pty) Ltd, Forest Sector Charter Council and Land Bank). Approximately 80 per cent of the allocation to public corporations was transferred to the Land Bank.
The Department failed to spend an amount of R36 million (associated programme shown in brackets -below), which it attributed to:The procurement of IT equipment worth R3.3 million that was not concluded in the year under review (2011/12) (Administration Programme). The procurement of mobile veterinary clinics as part of the Primary Animal Health Care Programme worth R18.8 million that was not concluded in the year under review (Agricultural Production, Health and Safety Programme). Transfer payments (purpose not explained) of R6.7 million that were not made due to Memoranda of Understanding (MoUs) not finalised during the year under review (Food Security and Agrarian Reform Programme). Transfer payments of R3.4 million to international organisations that could not be concluded during the year under review (Economic Development, Trade and Marketing Programme). The procurement of capital assets for forestry operations worth R2.1 million that was not concluded in the year under review (Forestry and Natural Resources Management Programme). Other minor payments for capital assets across all programmes, to the value of R781 000.
The unspent amounts (above) add up to R35.1 million, leaving an unspent amount of R1.1 million that was not accounted for. The Department claimed that this was a miniscule amount considering that the circumstances mentioned above, worth R35 million, were beyond their control. This is true as it is far less than R27 million that was not accounted for in the 2010/11 financial year. However, for a Department that could not fully achieve 80 per cent of its targets where in some cases lack of funds were cited as a reason, any unspent and unaccounted for funds means a lot. In addition, the circumstances that resulted in under spending, which the Department claims were beyond its control, could have been prevented with proper planning, monitoring and evaluation; as well as by ensuring that activities are initiated from the very first quarter instead of the last two quarters of the financial year.
The Department's revenue increased to R177.4 million in the reporting year compared to the 2010/11 financial year of R156.9 million, due to increases in sales of goods and services.
Also included in the revenue was an amount of R28 million that was a refund received from provinces for unspent conditional grants. The latter represents an increase of 90 per cent from the previous year's R2.7 million worth of conditional grants that were unspent by provinces. This is a very serious concern as conditional grants play a central role in supporting subsistence and smallholder producers that are the focus of the Department.
4.2 Programme Performance and Expenditure
Table 2: Programme budget and expenditure
% of Total Vote Actual Expenditure
Economic Development, Trade and Marketing
Food Security and Agrarian Reform
Agricultural Production, Health and Food Safety
Forestry and Natural Resources Management
1 345 746
1 254 360
1 339 756
1 249 371
4 964 449
4 928 273
Source: Annual Report (DAFF), 2012
Programme 1: Administration
Out of 39 targets that were supposed to be achieved under this programme, only six were fully achieved without any conditions. Of the 6 achieved targets, only one is new and directly linked to service delivery or national outcomes, that is, the development of a Wholesale Financing Facility Model through the Land Bank. Others are continuous Departmental standard operating procedures.
In terms of farmer development and support, one of the targets was to have 10 000 smallholder farmers accessing financial services, which was also an exact target for subsistence farmers, although the Department has never given a distinct difference between the two or a proper definition of each. The vague difference that was given to the Committee was that subsistence farmers were poor farmers that were supported through Ilima/Letsema (mostly agricultural starter packs not financial services) and the smallholder farmers were supported through the Comprehensive Agriculture Support Programme (CASP) and the Micro-agricultural Financial Institutions of South Africa (Mafisa).
In reporting how the target of 10 000 farmers accessing financial services was achieved in each case, the Department reported that 72 856 smallholder farmers (Annual Report, page 31) were supported through CASP and Ilima/Letsema grants, notwithstanding that the latter was supposed to be supporting subsistence farmers. The true reflection of the target's performance, which was not achieved, was 5 310 clients that received Mafisa loans during the 2011/12 financial year. A similar arbitrary figure of 47 818 subsistence farmers receiving support through CASP and Mafisa was also reported, details of which were not included as they were supposed to be available in June 2012.
The Department also did not achieve one of its most important targets that of reducing its vacancy rate to 12 per cent. Instead, its vacancy rate increased to 13.4 per cent during the 2011/12 financial year. This was a concern considering that in some of its programmes where the Department did not achieve its targets, lack of capacity was cited as a reason. The Department cited delays in qualification verification by the South African Qualifications Authority (SAQA), as well as citizenship and criminal checks by the State Security Agency (SSA) as reasons for the inability to fill vacancies.
The Department failed to organise at least 8 per cent of farmers into producer associations. This was also an arbitrary target as the Department did not explain which category of farmers were going to be organised into producer organisations and what was the total number of those farmers on which 8 per cent was based. Commercial farmers, whether developing or developed, were already affiliated to producer organisations, some of which were working with subsistence farmers.
The Department planned to finance and support 284 distressed farmers but only reported that R24 million was transferred to the Land Bank for this purpose but did not say whether the money was used for the purpose or not, and if it was, how many farmers were assisted. The Department mentioned that provinces provide the assistance but do not necessarily report to the Department, which happens to provide the funding. This clearly shows the lack of an effective monitoring and evaluation system within the Department.
Programme 2: Economic Development, Trade and Marketing
The programme had 16 targets for the 2011/12 financial year and, only three of the 16 targets were fully achieved. Other targets were partially achieved, vaguely reported or not achieved. Of the three targets that were achieved, two were vague, for example, the Department planned to establish 90 cooperatives and the achievement was that 91 cooperatives were registered. In the 2010/11 financial year, the Department failed to establish and support 3 cooperatives but instead assisted 241 cooperatives to register - it is assumed that these were the same 241 cooperatives that make the baseline for the 2011/12 financial year.
Another target under this Programme was to align the Department's agroprocessing plans and strategies with that of the Department of Trade and Industry (DTI) and Economic Development Department (EDD). The reported actual performance was the completion and approval of one Agroprocessing Strategy by Departmental Executive Committee (DEXCO), which was reported to be aligned with the DTI and EDD programmes.
Programme 3: Food Security and Agrarian Reform
The Department had 13 targets under this programme. In essence, only two of the 13 targets were achieved. The Committee is of the view that the explanations given or the reported information in some cases were not necessarily linked nor do they directly measure the planned target.
As an example, the Department planned to have at least three Colleges of Agriculture have their norms and standards approved by Heads of Departments (HODs). In the 2010/11 financial year, three colleges were reported to have achieved this and even implemented their norms and standards. These colleges were Glen (in Free State), Taung (in North West) and Fort Cox (in Eastern Cape). Interestingly, the Department again reports as an achievement of the target for the 2011/12 financial year, Taung, Glen and Tsolo (in Eastern Cape). This essentially means that only one new college, Tsolo, has been added in the reporting year.
The Food Security Policy and the Zero Hunger Strategy, that were supposed to be approved in the 2011/12 financial year, were temporarily withdrawn. A Policy on Mechanisation Support Model could not be approved and the Department reported that it will be finalised in the first quarter of the 2012/13 financial year. However, tractors and other farming equipment have been distributed in some provinces since June 2011, without the Policy. During a Committee meeting in September 2011, a representative from developing farmers' organisation confirmed that the tractors that the Department was buying on their behalf without consulting them, were not what the farmers wanted.
The Department is responsible for the Agrarian Transformation pillar of the Department of Rural Development and Land Reform (DRDLR)'s Comprehensive Rural Development Programme (CRDP), which should be covered in this Programme and under Outcome 7. However, the Department had no set targets or even specific collaborative projects with the DRDLR (for all three sectors) that have been budgeted to ensure that Outcome 7 is realised. Where the Department was specifically involved in the CRDP in some provinces, it was through provincial personnel initiatives, otherwise in most provinces its involvement and contribution to the CRDP was haphazard.
The Department signed service level agreements (SLAs) with the Agricultural Research Council (ARC) on targeted and priority research in the 2010/11 financial year, which were supposed to be implemented in the 2011/12 financial year. This was not achieved; instead, the Department recycled the target and reported about engagements with the National Agricultural Research Forum and further developments of SLAs with the ARC to carry out the research and development projects.
Programme 4: Agricultural Production, Health and Food Safety
This programme only used 97.9 per cent of its allocated budget and had an unspent amount of R19 million (Table 2 -above), which was meant for the procurement of mobile veterinary clinics. Of the 15 targets that were planned for the 2011/12 financial year, the Department fully achieved three, or possibly, four.
The fourth achievement was questionable since the target was the issuing of 32 000 animal identification marks and the Department managed to issue 23 273 identification marks. The reason given was that the 32 000 target was predicted outside the control of the Directorate (Veterinary Public Health) that was involved with the issuing of animal identification marks, which does have the correct predictions on applications for identification marks. This emphasises the issue that has been highlighted regarding the Department's strategic planning process and setting of targets.
Programme 5: Forestry and Natural Resources Management
The Department did not fully achieve any of its seven set targets for this programme. Lack of funds or limited budget and unverified information (e.g. 2 898 supported small growers but only 71 verified) were cited as some of the reasons for not achieving some of the targets. Poor reporting and verification structures and processes between the Department and the provinces have also been highlighted as a challenge in the 2010/11 financial year and these have also been consistently raised by the Auditor-General.
In one instance, the indicator was a number of irrigation schemes revitalised for smallholder farmers and the target was given as 0.5 per cent. Unfortunately, the actual performance of two irrigation schemes that were revitalised (Makhathini in KwaZulu-Natal and Taung in North West) does not mean anything as there was no number of irrigation schemes on which the 0.5 per cent was based.
This programme used an amount of R5.6 million on seven consultants for a period of 575 working days. The consultants were used for the assessment of forestry transport infrastructure requirements (six consultants for R1.55 million) and an environmental impact assessment (EIA) in the northern Eastern Cape (one consultant for R4.1 million).
Programme 6: Fisheries Management
It has to be clarified that the Branch plans and reports as both an entity Marine Living Resource Fund (MLRF) and a Programme within the Department on relatively similar targets. There were some difficulties in measuring performance because some deliverables reported as being delivered by the Branch are actually delivered by the MLRF. The way the targets were structured in both the Strategic Plan of the Branch and the MLRF were different. For example, the Branch would group similar activities under one target, while, in the MLRF, each activity would be a stand-alone target.
This programme had 24 targets set for the 2011/2012 financial year from which the Branch had to deliver. The nine achieved targets (38 percent) include, among others, the establishment of aquaculture development zones and producer associations, implementation of the Working for Fisheries Programme (WFFP), implementation of the fish stocks recovery plan, feasibility studies on two new fisheries, and scientific recommendations on catch limits for 22 fishery sectors. The reasons cited for failure to deliver include delays from compulsory consultation processes, expiration of vessel's management contract, supply chain processes and decisions to move some targets to the following financial year.
Most of the functions of the Branch were funded through the MLRF, while the compensation to employees was funded by the Department. The Branch had an increase in the appropriated budget from R303.6 million (DAFF Annual Report 2011) or R259.1 million (DAFF Annual Report 2012) in 2010/2011 to just under R352 million in 2011/2012. The expenditure of both financial years was approximately 100 percent because under-spending did not even amount to 0.1 percent of the final appropriation. It has however been noted that, for successive years, the Branch has maintained the highest overtime expenditure in comparison to the other programmes within the Department. The amount increased from R6.7 million during the 2010/2011 financial year to just over R7.1 million during the 2011/2012 financial year. The Branch did not fully recover all the monies which were as a result of irregular expenditure.
4.3. Human Resource Management
The Department's vacancy rate, which was reduced to 11 per cent in the 2010/11 financial year, has increased to 13.4 per cent by the end of the fourth quarter in the 2011/12 financial year. The figure represents 949 vacancies excluding the Minister and the Deputy Minister. The Department's key challenges were the loss of key personnel due to an absence of an effective retention strategy and delays in appointments, particularly at Senior Management Service (SMS) level; as well as the inability to fill vacancies timeously.
In its organogram that was presented to the Committee, the Department had nine key branches headed by nine Deputy Director-Generals (DDGs). Of the nine DDGs, only three have been appointed and six were in the acting positions. The DDGs in acting positions has been the case since the finalisation of the Department's restructuring process in 2010.
The majority of the acting DDGs generally act in one position for 3-6 months before they are either removed or transferred to act as DDGs in another branch. The same with the Chief Directors, particularly in the Fisheries Management and the Agricultural Production, Health and Food Safety programmes where a number of positions are vacant with no acting person.
In Fisheries, about five people (including the current acting DDG) have acted as DDGs since its transfer to the Department in July 2009 from the Department of Water and Environmental Affairs (DWEA). Two of those DDGs acted in the year under review. Of the five that acted, only one had the background and experience in Fisheries and has since been removed as acting DDG in the Branch.
From 2009, the Department did not have an appointed accounting officer, i.e. the Director-General (DG) until late 2010. Various personnel have acted in this position until the appointment of the DG in September 2010. The DG has been suspended in June 2012 and the DDG Cooperate Services was acting in this position.
This implied that since 2009, the Department had never had a permanent accounting officer to present and account on its annual report. During the presentation of the annual report for the 2010/11 financial year, the appointed DG, who is currently on suspension, could not account on theaAnnual report as he was not in the position for the full period. Unfortunately, in the financial year under review, given that the same DG who was appointed in 2010 has been suspended, an acting DG presented the annual report.
Without the ability to appoint accountable persons in such key positions, there can be no stability and progress in terms of service delivery in the Department irrespective of how much budget is allocated.
It should be noted that during the period from the 2009/10 financial year to date, the Department has been losing some key and experienced personnel to provinces and other state departments. Some personnel are suspended and reinstated without charges being laid against them.
4.4. Virements and Shifting of Funds
Although Section 43 of the Public Finance Management Act, 1999 (No. 1 of 1999) makes provision for virements and the shifting of funds from one programme to the other, as well as movement of funds within the programme, there are certain requirements that need to be met by an accounting officer. These conditions are as follows:
Section 43(2) of the Public Finance Management Act provides that "the amount of a saving under a main division of a vote that may be utilised in terms of (1) may not exceed 8 per cent of the amount appropriated under that main division." Moreover section 43(4) does not authorise the utilisation of a saving in:
(a) An amount is specifically and exclusively appropriated for a purpose mentioned under a main division within a vote;
(b) An amount appropriated for transfers to another institution and; and
(c) An amount appropriated for capital expenditure to defray current expenditure.
Virements of R25 million were approved in Programme 5: Forestry, sub-programme Forestry Oversight; from goods and services to compensation of employees. Shifting of funds approved by the Accounting Officer amounted to R12 million (see National Treasury's Expenditure Report for the fourth quarter of the 2011/12 financial year).
4.5. Auditor-General's Report
In expressing his opinion, the Auditor-General (AG) indicated that the financial statements of the Department present, in all aspects, a fair financial position of the Department as at 31 March 2012 and its financial performance and cash flows for the year ended, in accordance with the Departmental Financial Reporting Framework prescribed by the National Treasury and in line with the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999). However the AG in his report drew attention in respect of the following matters:
4.5.1 Usefulness of the informationReasons for major variances not explained: A total of 46 per cent of major variances between planned and actual achievements were not explained in the annual performance report due to a limited review of the presented annual performance report by the management. Reported indicators and target not consistent with planned indicators and target: The annual performance report submitted did not include the actual performance of 56 per cent of all planned indicators and targets as specified in the Strategic and Annual Performance Plan for the year under review, as required by the PFMA. This was due to lack of monitoring of the completeness of reporting documents by management.
4.5.2 Compliance with laws and regulationsNon-compliance with regulatory and reporting requirements (PFMA and Treasury Regulations) – The Accounting Officer did not take steps to prevent irregular expenditure and fruitless and wasteful expenditure, as required by the PFMA. For 11 months, the Department did not have a Human Resource Plan as required by Public Service Regulations. The plan was only approved in March 2012. Goods and services with a transaction value of between R10 000 and R500 000 were procured without obtaining written price quotations from at least three different prospective providers as per the requirements of National Treasury Regulations. This issue was also raised in the 2010/11 financial year. Financial statements submitted for auditing was not prepared in all material respects in accordance with the PFMA and these were subsequently corrected, hence the unqualified audit opinion.
4.5.3 Internal ControlLack of leadership: The Accounting Officer did not exercise oversight responsibility over reporting and compliance with laws and regulations and internal controls. For example, control weaknesses reported were not in all cases analysed by management and appropriate follow-up actions were not taken to address the root causes impacting on the financial and performance reporting. Governance: Due to inadequate resources within the Internal Audit function, ongoing monitoring and supervision were not undertaken to enable an assessment of the effectiveness of internal controls over compliance and performance reporting. Finance and performance management: The Department did not always prepare regular, accurate and complete financial and performance reports that were supported and evaluated by reliable information. As a result, material adjustments were made to the financial statements that were submitted for audit and the AG could not verify the validity, accuracy and completeness of the performance information that was reported.
4.5.4. Financial Reports and Risk Management
As reported in the 2010/11 financial year and prior financial years, the Department's Audit Committee highlighted that the system of internal control applied by the Department over financial risk and risk management was not operating effectively, efficiently or transparently. In addition, as also reported in previous years, the Department's Internal Audit was under-resourced and given its current budget and other operational constraints, it cannot operate optimally in order to address and manage risks that were pertinent to the Department in the absence of a reliable risk assessment with concomitant controls identified to mitigate risks.The Chief Audit Executive did not effectively report, operationally and administratively to the Accounting Officer and was suspended on 22 July 2011. This was done without any input from the Audit Committee and without the Audit Committee being apprised of the reasons for his suspension. His suspension was then lifted on 18 June 2012 without an explanation, and to date no charges have been brought against him. This implies that for half of the 2011/12 financial year, the Department operated without an Internal Audit Executive. The Internal Audit Committee noted that certain matters that were raised in prior years indicative of deficiencies in the system of internal control and deviations therefore, in certain instances, have not been fully and satisfactorily addressed. The Audit Committee had requested but has not been presented with forensic investigation reports that were commissioned by the Department. Internal audits that were conducted in the year under review were not addressed, or in certain instances, not acted on at all by management or the Accounting Officer. Attempts made by the Audit Committee to meet with the Accounting Officer to address governance concerns prior to his suspension, were unsuccessful. Further attempts to meet with the Executive Authority after the suspension of the Accounting Officer, were also unsuccessful.
The serious issues that were raised by the Internal Audit Committee were in contrast to the picture that the Department portrayed in its annual report, where it reported that the Audit Committee and the Internal Audit Unit hold meetings with the Accounting Officer, the Chief Financial Officer, the Office of the Auditor- General and the Head of Internal Audit to discuss audit findings and risk management.
5. Consideration of Reports of Committee on Public Accounts
The Department did not appear before the Committee on Public Accounts during the year under review 2011/12.
6. Consideration of Reports of Standing Committee on Appropriations
The Standing Committee on Appropriations was established in terms of section 4 (3) of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009). The Act requires this Committee to consider and report on spending issues and on actual expenditure published by the National Treasury. The Committee has adopted a tradition of inviting both National Treasury and the affected departments to account on government spending.
However, the Department did not appear before the Standing Committee on Appropriations for the year under review, 2011/12.
7. Consideration of Other Sources of Information
7.1 The 2011 State of the Nation Address
During the 2011/12 financial year, the creation of decent jobs was one of the main focus areas of Government as was emphasised by His Excellency President Jacob Zuma in his 2011 State of the Nation Address in Parliament; and also in the country's New Growth Path (NGP) in which the agricultural value chain is one of the job drivers. This is linked to Outcome 4 of Government's priority outcomes and it is therefore expected that the Department's performance during the 2011/12 financial year will show progress towards the achievement of this outcome.
The NGP's aim for agriculture is to create 500 000 jobs from agriculture and agro-processing by 2020; to place 300 000 households in smallholder schemes by 2015 and to upgrade employment on commercial farms. Key integrated policies were to be developed to link smallholder schemes to land reform and provide integrated support (economic and social programmes), address high input costs, support farm worker organisations, and support growth in commercial sector by addressing price fluctuations in maize and wheat (staple food).
7.2 Committee Oversight Reports
The Committee undertook joint oversight visits with Portfolio Committee on Rural Development and Land Reform to the Northern Cape on 28 February to 1 March 2011, Limpopo on 2 to 4 March 2011, Free State on 25 to 29 July 2011 and Mpumalanga on 2 to 5 August 2011. The objectives of these oversight visits were as follows:To assess progress in the implementation of rural development initiatives under the Comprehensive Rural Development Programme (CRDP) involving youth development initiatives under the National Rural Youth Service Corps, commonly known as NARYSEC; To investigate the extent of the challenge of post settlement for land reform beneficiaries; and To assess how the Revitalisation and Development Programme and other support programmes such as the Comprehensive Agriculture Support Programme (CASP) could address the weaknesses of the current post-settlement support from government.
7.2.1 Oversight Visit Recommendations
In view of the observations the above-mentioned committees recommended the following:
There was a need to assist the Land Reform for Agricultural Development (LRAD) beneficiaries struggling to repay their Land Bank loans. However, the means of assistance should be sought in consultation with the beneficiaries themselves. Therefore, the Department of Rural Development and Land Reform (DRDLR) should facilitate support mechanisms from DAFF and the Land Bank in order to ensure that the gains attained through enabling access to land by the black farmers are not undermined. The DRDLR and the DAFF should report to Parliament about the plans of support and progress to that effect within two months after the adoption of this report.
The DRDLR and DAFF should include in the monitoring and evaluation of programmes indicators that illustrate whether developmental initiatives are improving the livelihoods of beneficiaries. Success of land reform projects, especially joint ventures (strategic partnerships and equity schemes) should not only be judged by increase in productivity and maximisation of profits only. Changes in socio-economic conditions of the beneficiary households should be accorded even greater attention.
The DRDLR should put in place mechanisms that clarify the role of STRIF in post settlement support for land restitution, LRAD and PLAS projects. Support mechanisms should transcend the narrow focus on profiling and training of beneficiaries but extend towards coordination of extension support from the DAFF/DARD, Municipalities and any other government or non-government agencies involved in agriculture and rural development.
The DRDLR and DAFF should be involved in the formulation of all agreements for strategic partnership or equity schemes. The Northern Cape DARD and the Provincial DRDLR should within one month of the adoption of the oversight report, submit progress report in support of Silvermoon to finalise mentorship or strategic partnership – whichever model is deemed appropriate.
The DRDLR and DAFF should enhance their capacity for coordination of land reform and agricultural support programmes, integrated as a broader strategy for rural development.
8. Committee's Observations
The Committee analysed the Department's 2011-2012 Strategic Plan, the 2011-12 Annual Report of the Department, the State-of-the-Nation Address and the Committee's oversight reports and observed the following:The Committee is gravely concerned about the instability within the department which impacted negatively on its performance. The Committee noted with regret that no progress has been made in addressing the weaknesses identified by the Auditor-General even in the past financial years. The biggest challenge in reviewing the Department's programme performance and associated expenditure was that some of the performance targets that were presented in its annual report do not correspond with those that were in its strategic plan. In most cases, there was no uniformity in the units of measurement between the performance targets and the actual achievements. This was viewed by the Committee as a deliberate attempt to confuse readers of the annual report, as it was the issue that has been consistently raised by the Committee. There were numerous subprogramme changes within programmes, particularly in Administration, that appeared in the annual report but were not in the Annual Performance Plan (APP). The subprogrammes under Administration do not correspond with those that were reported under Performance Indicators and Targets for Administration, which further do not correspond with those that were in the APP. Although the Department has a number of actual jobs as a target in its Strategic Plan in terms of job creation (Outcome 4), it often used the terms job opportunities and full-time equivalents when reporting achievements, without giving explanations and budgetary implications. In addition, the term 'decent job' as alluded to in the New Growth Path (NGP), has not been defined for any of the three sectors. There is also a conflict in the number of projects implemented under the Working for Fisheries Programme as reported by the Department and the Department of Public Works. It was also noted that, through its failure to meet most of its targets, the Department has coined terms like 'partial achievement', which implies that they have done some minimal activity but did not necessarily achieved one target. This was the scenario across all programmes. In almost all programmes where some of the targets could not be achieved, these were rolled over to the 2012/13 financial year. Most of the Department's performance measures (indicators) and targets were quantitative and do not directly measure or even relate to service delivery, while some targets were different from those that were set in the Strategic Plan. For all the Department's programmes, some performance measures were not aligned with the Department's strategic goals and/or linked to the national priority outcomes. These issues were highlighted in the high level review of the Department's 2011/12 Strategic Plan by the Office of the Auditor-General. These were also raised by the Committee during the Department's presentation of its Strategic Plan and APP in March 2011, but have not been appropriately addressed in the Annual Report. The Department's vacancy rate, which was reduced to 11 per cent in the 2010/11 financial year, has increased to 13.4 per cent by the end of the fourth quarter in the 2011/12 financial year. The Department's key challenges were loss of key personnel due to an absence of an effective retention strategy and delays in appointments, particularly at Senior Management Service (SMS) level; as well as the inability to fill vacancies within three months as per the President's State of the Nation Address. Despite concerns raised by the Committee on the use of consultants, which in the previous financial year was confined to the Fisheries Management division (R3 million for six consultants), this has increased in the year under review. In the year under review, the Department has made use of 19 consultants to the value of R7.6 million for 1 931 work days. Of this total amount, 74 per cent (R5.6 million) has been used by the Forestry and Natural Resources Management division for seven consultants in a period of 575 work days.
The Committee also noted with concern that:No proper information was given by the Department in regard to the numbers of farmers that were assisted in the year under review and where those farmers were allocated in the country. What was reported by the Department on service delivery especially on disadvantage and poor communities was not the true reflection of what was happening on the ground. There was no mechanism to monitor the tractor mechanisation that was delivered in provinces. Onderstepoort Biological Products (OBP) as a national key point was not getting sufficient Government funding. There was no collaboration between Agricultural Research Council (ARC) and Onderstepoort Biological Products (OBP) on livestock programmes.
The Department was requested to respond in writing giving full details on the suspension of the DG Mr Zita, the liability issue of Dr RP Mohlahlane and the huge expenditure of the Department on foreign travel, catering, unspecified and performance bonus. The Committee wanted clarity on who qualified for performance bonuses in the Department when it was under performing.
The Committee did not support the request by the Department for more funding as there was no proper motivation by the Department as to how it planned to improve the spending of the budget that it had already received.
Having interacted with the Department and its entities, the Committee expressed its disappointment on the overall performance of the Department. Some of the entities recognised that coordination and service delivery were still lacking in most areas. The Committee was gravely concerned in particular with the lack of assistance and the absence of monitoring and evaluation of the Ncera Farms (Pty) Ltd by the Department.
The Portfolio Committee on Agriculture, Forestry and Fisheries recommends that the Minister of Agriculture, Forestry and Fisheries should ensure the following:The Department of Agriculture, Forestry and Fisheries urgently fills vacant posts with "suitably qualified and competent" personnel, particularly at senior management level in order to sustain stability within the Department within three months. If, after three months, the Department of Agriculture, Forestry and Fisheries has not done so, the Minister of Agriculture, Forestry and Fisheries should ensure that the Department of Agriculture, Forestry and Fisheries comes and report to the Committee on a quarterly basis why they have not done it. The Department of Agriculture, Forestry and Fisheries presents to the Portfolio Committee on Agriculture, Forestry and Fisheries a turnaround strategy on how it is planning to turn the Department around and to reach ALL its targets within its budget in order to function effectively and efficiently. The Department of Agriculture, Forestry and Fisheries tables a report on how it is planning to address all the issues raised by the Auditor-General including that of its entities reporting to it. The Department of Agriculture, Forestry and Fisheries develops to the Committee a national policy to monitor the tractor mechanisation in provinces. The Department should also present a mechanism on how it is planning to align the national policy on the tractor project so that it is harmonised with those of the provinces. The Department of Agriculture, Forestry and Fisheries minimises the use of consultants where at all possible (as per the 2010/11 Committee recommendations). The Department of Agriculture, Forestry and Fisheries provides the Committee with a plan to address the recurrent problems in provinces regarding the spending of conditional grants (as per the 2010/11 Committee recommendations). The Department of Agriculture, Forestry and Fisheries provides an explanation of what happened to the R70 million that has been put aside from departmental savings to implement the Zero Hunger Programme as it was reported to the Committee in February 2012. The Department of Agriculture, Forestry and Fisheries avails funds for fisheries research, particularly aquaculture as it is one of the priority areas for development and report to the Committee on how it is planning to deal with the challenges facing the industry and why government is delaying aquaculture from developing and expanding. The Department of Agriculture, Forestry and Fisheries develops a strategy for continuity of service, particularly on long term contracts such as vessel management to ensure uninterrupted service delivery. The Department of Agriculture, Forestry and Fisheries ensures that its targets as derived from the strategic plan were aligned with those of the Marine Living Resources Fund. The Department of Agriculture, Forestry and Fisheries provides an explanation on causes of delays in the implementation of the Working for Fisheries Programme and also provides measures to address delays. The Department of Agriculture, Forestry and Fisheries comes up with alternative and effective plans to strengthen monitoring, control and surveillance to address poaching. The Department should present to the Committee a full detailed report on conviction rates and penalties, and plans to review or reinstate Green Scorpions and Green Courts. The Department of Agriculture, Forestry and Fisheries provides the Committee with the report on transformation of the fishing sector. The Department of Agriculture, Forestry and Fisheries provides the Committee with the report on moving the Fisheries Branch to Pretoria. The Department of Agriculture, Forestry and Fisheries provides the Committee with a strategy and plan of action of assisting underperforming entities. The Department of Agriculture, Forestry and Fisheries ensures that the Land Bank through the Department's account to the Committee on the funding that is receiving from the Department. The Department of Agriculture, Forestry and Fisheries presents a detailed report on the Ministry's budget and come to the Committee to account on the budget report. This report should include information on the extent to which the Deputy Minister of Agriculture, Forestry and Fisheries reached set targets and budget implications thereof. The Department of Agriculture, Forestry and Fisheries presents to the Committee a mechanism on alignment between the Department and provinces on the challenges regarding the spending of conditional grants. The Department of Agriculture, Forestry and Fisheries considers having the monitoring and evaluation team within the Department that will focus on monitoring and evaluating set targets, the funding (conditional grants - CASP and Disaster Fund) transferred to the provinces and report back to the Committee quarterly. The Department of Agriculture, Forestry and Fisheries provides the Committee with full detailed reports on the current investigations and disciplinary actions taken by the Department, including Dr RP. Mohlahlane's, Mr Zita, Dr Middleton and other investigations. The Department of Agriculture, Forestry and Fisheries provides a progress report regarding pieces of legislation that were supposed to come to Parliament in the year under review, upgrading of agricultural colleges and the accessibility and usability of the Department's website. The Department of Agriculture, Forestry and Fisheries presents a full report with a plan and budget on the long term fishing rights to be allocated next year. This required report should be submitted to the Committee within three months after the adoption of this Report by the House. The Department of Agriculture, Forestry and Fisheries presents the implementation strategy with timelines and budget on small scale fishing policy within three months after the adoption of this Report by the House. The Department of Agriculture, Forestry and Fisheries provides the committee with the report on compliance with international agreements affecting the fishing industry with start and renewal times as a matter of urgency and within three months. The Department of Agriculture, Forestry and Fisheries provides a turnaround strategy and budget for revitalizing and upgrading the 12 proclaimed fishing harbours within three months. The Department of Agriculture, Forestry and Fisheries reports back on all the recommendations by the Committee on the transformation of fishing industry (ATC dated 8 May 2012) within 3 months. The Department of Agriculture, Forestry and Fisheries ensures that there is collaboration between the Onderstepoort Biological Products and Perishable Products Export Control Board on the live stock industry. The Department of Agriculture, Forestry and Fisheries increases Perishable Products Export Control Board's budget and mandate to include quality controls and testing of imported fresh and frozen goods in the 2012/2013 budget allocation. The Department of Agriculture, Forestry and Fisheries considers increasing Onderstepoort Biological Products funding for proper equipment. The Department of Agriculture, Forestry and Fisheries ensures that, when entities report on their annual performance, they include financial information that links their targets with the budget. The Department of Agriculture, Forestry and Fisheries briefs the Committee on how it is planning to integrate the National Development Plan in order to internalise it into a policy and to guide plans for the Department, and to include it in the 2012/2013 budget allocation. This briefing should be conducted within three months after the adoption of this Report by the House. The Department of Agriculture, Forestry and Fisheries submits a progress report on the transfer of agricultural colleges to the Department of Higher Education and Training. The Department of Agriculture, Forestry and Fisheries together with Ernst and Young, brief the Committee on the preliminary findings on the first phase of the Ernst and Young forensics report. This briefing should take place within a month after the adoption of this Report by the House. The Department of Agriculture, Forestry and Fisheries submits a progress report on the transformation of the Forestry Industry. The Department of Agriculture, Forestry and Fisheries makes arrangements that its Internal Audit Committee reports its internal audit findings to the Committee quarterly.
Report to be considered
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TUESDAY, 30 OCTOBER 2012
1. Introduction of Bills
(1) The Minister of Women, Children and People with Disabilities
(a) Commission on Gender Equality Amendment Bill [B 36 – 2012] (National Assembly – proposed sec 75) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 35572 of 10 August 2012.]
Introduction and referral to the Portfolio Committee on Women, Children and People with Disabilities of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification of the Bill may be submitted to the JTM within three parliamentary working days.
National Assembly and National Council of Provinces
1. The Speaker and the Chairperson
(a) Equality Report 2012 of the South African Human Rights Commission.
(b) Annual International Report 2011 of the South African Human Rights Commission.
(c) South African Human Rights Commission: Section 184(3) Report.
(d) Annual Report of the South African Human Rights Commission on the Promotion of Access to Information Act (PAIA) for 2011-12.
(e) South African Human Rights Commission: Strategic Focus Area Report – Study on Makhaza.
2. The Minister of Justice and Constitutional Development
(a) 2012 Third Quarterly Report of the National Conventional Arms Control Committee (NCACC), tabled in terms of section 23(1)(b) of the National Conventional Arms Control Act, 2002 (Act No 41 of 2002).
3. The Minister in The Presidency: National Planning Commission
(a) Census 2011 Fact Sheet.
(b) Census 2011 Statistical Release.
(c) The South Africa I Know, The Home I Understand.
4. The Minister of Water and Environmental Affairs
(a) Government Notice No 613, published in Government Gazette No 35572, dated 2 August 2012: Publication of the names of the Board Members of the Isimangaliso Wetland Park Authority, in terms of the World Heritage Convention Act, 1999 (Act No 49 of 1999).
(b) Government Notice No 613, published in Government Gazette No 35572, dated 10 August 2012: Draft standard for assessment of waste for landfill disposal, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(c) Government Notice No 614, published in Government Gazette No 35572, dated 10 August 2012: Waste Classification and Management Regulations, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(d) Government Notice No 615, published in Government Gazette No 35572, dated 10 August 2012: Standard for disposal of waste to landfill, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(e) Government Notice No R. 625, published in Government Gazette No 35583, dated 13 August 2012: National Waste Information Regulations, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(f) General Notice No 453, published in Government Gazette No 35406, dated 1 June 2012: Draft National Standards for validation of the treatment efficacy and operation of a non-combustion technology for the treatment of health care risk waste, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(g) Government Notice No 731, published in Government Gazette No 35665, dated 6 September 2012: Amendment of Schedule 3, in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998).
(h) General Notice No 777, published in Government Gazette No 35716, dated 28 September 2012: Proposed amendments to Environmental Impact Assessment Regulations Listing Notice 2 of 2010, in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998).
(i) General Notice No 778, published in Government Gazette No 35717, dated 28 September 2012: Proposed amendments to Environmental Impact Assessment Regulations Listing Notice 1 of 2010, in terms of the National Environmental Management Act, 1998 (Act No 107 of 1998).
(j) General Notice No 779, published in Government Gazette No 35718, dated 28 September 2012: List of waste management activities that have, or are likely to have, a detrimental effect on the environment, in terms of the National Environmental Management: Waste Act, 2008 (Act No 59 of 2008).
(k) Government Notice No 635, published in Government Gazette No 35602, dated 24 August 2012: National Action List for the Screening of Dredged Material Proposed for Marine Disposal in terms of section 73 of the National Environmental Management: Integrated Coastal Management Act, 2008 (Act No 24 of 2008).
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3. Report of the Portfolio Committee on Communications on the South African Broadcasting Corporation (SABC) Section 15A Inquiry Process, dated 30 October 2012
The Portfolio Committee on Communications (the Committee), having considered the complaint from the SABC Board and response by Advocate Cawekazi Mahlati, reports as follows:
The Committee received a briefing from the SABC Board on its inquiry regarding a Board member's (Advocate Cawekazi Mahlati) conduct on Tuesday, 18 September 2012. The Board had also passed two votes of no confidence against Advocate Cawekazi Mahlati with allegations of misconduct. The Committee also afforded Advocate Cawekazi Mahlati an opportunity to present her version of events.
The Committee sought legal opinion on how best to deal with the matter from the Parliamentary Legal Services. The Committee was briefed by the Parliamentary Legal Advisor on the above matter on 30 October 2012.
Having deliberated on the legal opinion as provided by the Legal Advisor and having established that there will not be any action by the Presidency on section 15(1)(a) of the Broadcasting Act, No. 4 of 1999, inquiry conducted by the SABC Board, the Committee recommends that: (i) an inquiry is conducted in terms of section 15A of the Act by the Committee; (ii) the Committee be authorised to refer the matter to the Office of the Auditor-General for a special integrated audit; (iii) the report of the Auditor-General be considered by the Committee for recommendations to the National Assembly; and (iv) the National Assembly inform the appointing authority of the inquiry to be conducted in terms of section 15A of Act.
Report to be considered.
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