Reply:

In a previous parliamentary question 2139 [NW2456E], I indicated that there is a lack of accountability and cooperation from the South African Revenue Services top management. I therefore cannot place great reliance on the information that I have received from SARS, particularly in terms of this matter; however, I am able to provide the following in response:

(1) (a) (i) Mr Moyane responded on the 27 October 2016 after a written request from me. Apart from this, SARS has not communicated with me further on the Makwakwa matter beyond what was reported in questions 1894 and 1975, both dated 12 October 2016.

As previously stated, Mr Moyane did not inform me about this matter prior to it appearing in the Sunday Times on 11 September 2016. A meeting was convened at my request on the 12 September 2016 regarding the Makwakwa matter, and thereafter correspondence was exchanged on the 14th and 16th of September 2016, to confirm and follow-up on the meeting. To date, apart from the letter dated 27 October 2016 from Mr Moyane, where he provided his Terms of Reference for the law firm Hogan Lovells (South Africa) Inc, to investigate and conduct disciplinary proceedings related to Mr Makwakwa and Ms Elskie, Mr Moyane has not provided any substantive report on this matter. However, Mr Moyane indicated in his letter that the law firm would conclude the first part of the investigation by 20 December 2016. By 22 December, I have not yet received any such report.

The Terms of Reference do not include the role of Mr Moyane in the Makwakwa matter. Mr Moyane stated in his letter dated 27 October 2016 that he does not accept responsibility for failing to timeously report the Makwakwa matter to the Minister of Finance (as the executive authority of SARS) prior to the 12 September 2016 meeting, as he expected the Financial Intelligence Centre (FIC) to do so. According to Mr Moyane “…the FIC is under a clear legislative mandate to report to…” the Minister of Finance “….. an investigation into Makwakwa”s affairs, taking into consideration the public importance of the matter and Makwakwa’s position within the SARS”. Mr Moyane holds to this view, despite the fact that section 40 of the FIC Act prohibits the FIC from reporting such transactions or referrals, to the Minister of Finance or to any other person other than those permitted to receive such reports.

I will not say more on Mr Moyane’s failure to act in terms of the FIC Act and other anti-corruption legislation at this stage. This matter is also subject to legal action as reported in the media (e.g. charges by Corruption Watch).

  (i) I will not comment on any further communication between SARS and FIC but want to point out the following. I wrote to Mr Moyane on 23 September expressing my serious concern on a media statement issued by SARS stating that there was a lack of co-operation by the FIC on the Makwakwa matter (refer to SARS media release titled “SARS APPOINTS SENIOR EXECUTIVES TO ACT IN MAKWAKWA’S POSITION” dated 16 September 2016). I pointed out that as the executive authority for both the FIC and SARS, I would have expected that before launching a public attack on the FIC, that he would have first requested my intervention if indeed there were any problems of non-cooperation between SARS and FIC. I requested his explanation for the statement, including what impact such statement will have for their future working relationship, and the steps he intends to take to address such breakdown. On the 27th October 2016, more than a month later, Mr Moyane responded, denying “that there is a breakdown of the relationship between the SARS and the FIC” and states that he does not need any intervention from my office, and that his media statement is not a public attack on the FIC and “….does not constitute a drastic step”.

  (ii) Mr Moyane has indicated to my office that SARS had a meeting with representatives from the Directorate for Priority Crimes Investigations (DPCI) on 27 September 2016. This meeting was convened subsequent to an email that had been sent to SARS by DPCI on 15 September 2016 regarding the DPCI investigation into the Makwakwa and Elskie matter. On 30 September 2016, SARS received a written confirmation from DPCI of the meeting that had taken place on 27 September 2016.

I have not had had any explanation from Mr Moyane why he did not contact the DPCI or any other law enforcement agency immediately after Mr Moyane first became aware of the Makwakwa matter after receiving the FIC letter 17 May 2016. Instead, Mr Moyane did not do so for four months and only did so after he was contacted by the DPCI on 12 or 15 September after the media exposure. (I refer the Honourable Member to the SARS response on this matter in PQ 1976 [NW2287E])

2. It is my view that the key issue currently is not any problem related to a lack of co-operation between SARS and the FIC but how best to protect the reputation and integrity of SARS as a critical fiscal institution. The focus must remain on the investigation against Mr Makwakwa, by both SARS and the law enforcement authorities. The issue of co-operation between SARS and FIC is important but must be understood in terms of the role and function of the FIC in terms of the law. As Mr Moyane himself confirms in his letter dated 27th October 2016, there is no breakdown in relationship between SARS and the FIC. This is also the view of the Director of the FIC.

To protect the reputation and integrity of SARS, we need to know why Mr Moyane took more than four months to act effectively after he was first alerted to the Makwakwa matter by the FIC through a letter dated 17 May 2016 and to only act after this matter was exposed in the media. Further, why Mr Moyane takes no responsibility for failing to report timeously to his responsible Minister. Mr Moyane also needs to explain why he continued to allow Mr Makwakwa to remain in his position as part of his top management team, dealing with individual and corporate taxpayers and allowing him to represent SARS at hearings of the Standing Committee of Finance on 23 August 2016 and the Davis Tax Committee on 8 September 2016. These and other matters like that involving Mr Vlok Symington raise serious concerns about the stewardship of a vital fiscal institution. Further consideration will be given to substantially increase the accountability of the top SARS management for their actions and decisions.

Reply:

1. Based on the actuarial valuation results as at 31 March 2016, the amount required to pay a 10% bonus to all pensioners of the Transport Pension Fund (TPF), i.e. Transnet Sub-Fund, SAA Sub-Fund and PRASA Sub-Fund is R37.7m and for the Transnet Second Defined Benefit Fund (TSDBF) the amount is R172.4m. The Rules of the respective Funds contain a provision that authorises for the payment of ad hoc bonuses. These amounts are paid from the actuarial surplus of each of the Funds, amounting to R4.325 billion for the Transport Pension Fund and R3.807 billion for the TSDBF

2. There is currently no provision in the respective Fund Rules to utilise the surplus to increase the base of the pension.

3. The Shareholder Minister is unable to consider an increase in the base of all pensions as this is not provided for in the pension fund rules.

4. The pending class action court case has no impact on the matter. The rules of the funds guide action related to the pension funds.

 

Reply:

(a) There is no company in charge of investments of the Transport Pension Fund and Transnet Second Defined Benefit Fund. The Boards of Trustees of the respective Funds are in charge of their investment activities.

(b) No role is played by the said individuals as the Board of Trustees of the respective Funds are in charge of the investment activities.

(c) The specified person’s official positions and involvement in (i) Transnet is that of a Non-Executive Director and Chairperson of the Acquisitions and Disposals

(d) Committee. He is also Chairperson and Trustee of the Board of Trustees of the (ii) Transport Pension Fund and (iii) Transnet Second Defined Benefit Fund respectively.

(d) All non-Executive Directors are appointed to the Transnet Board of Directors by the Shareholder Minister.

(e) The specified person was appointed in the specified positions on the basis of his academic qualifications and technical expertise on the activities of the Board of Directors, and the respective Funds.

Reply:

(1)(a) Refer to Annexure A for the list of the country's major dams that are below 35%.

(1)(b) My Department develops annual operating rules which include drought restrictions rules. These are communicated to stakeholders at the System Operations Forums. In addition Joint Operations Committees are established to monitor progress on the implementation of water restrictions and advice provided on further interventions where necessary e.g installation of flow restrictors at household level or supply through water tankers, drilling of boreholes etc. Further details are given in the table and section 2 of the response below.

(2)(a) Yes. Most of the municipalities are implementing measures to conserve water and there is already a reduction in demand. The measures include:

• Restrictors on the bulk meters and the reticulation meters, some municipalities are also restricting consumer meters;
• Pressure Management;
• Education and awareness;
• Water rationing;
• Monitoring Minimum Night Flows;
• Active and passive leakage control, etc.

(2)(b) As mentioned in (a) above, most of the municipalities are already implementing Water Conservation and Water Demand Management measures, for those that are not yet implementing. It is mainly due to lack of human and financial capacity. The Department will continue engaging municipalities through the established structures and the municipalities must actively participate and report in this meetings and prioritize resources and budgets to implement Water Conservation and Water Demand Management.

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Annexure A

Table1: Country’s Major Storage Dams below 35%

Provinces: Free State, KwaZulu-Natal, Mpumalanga, Limpopo, Eastern Cape, North West & Northern Cape

Reservoir Name	Full Supply Capacity in 106 m3	%	Municipality supplied	Measures	Implementation
Free State
Bloemhof	1 240	20.4	Lekwa-Teemane Municipality Bloemhof, Kuruman,	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 12/08/16 (No 40203)	Restrictions for Domestic @15%andIrrigation @ 20% are being implemented Early Warning systems established to monitor achievement of restrictions Joint Operations Committee (JOC) formed to give direction to municipality on implementing the restrictions Last SOF held on 1 December 2016
Kalkfontein	325	3.7	Kopanong Municipality (Koffiefontein, Jacobsdal, Jagersfontein and Fauresmith)	Drought Operating Rule determined and communicated at the SOF Restrictions gazetted on 19/02/16 (No 39718)	Restrictions for Domestic @ 40%&Irrigation @100% are being implemented Early Warning systems established to monitor achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last Forum held on 29 November 2016
Allemanskraal	174	14.0	Masilonyana and Tswelopele Municipality (Brandfort, Bultfontein, Theunissen and Virginia)	Drought Operating Rule determined and communicated at the SOF Restrictions gazetted on 12/08/16 (No 40203)	Restrictions for Domestic: 40%Irrigation 92% are being implemented Early Warning systems established to monitor achievement of restrictions. JOC formed to give direction to municipality on implementing the restrictions. -Last Forum held on 1 December 2016
Rustfontein	71	25.5	Mangaung Metropolitan	Drought Operating Rule determined and communicated at the SOF Part of Bloemfontein System. Restrictions gazetted on 12/02/16 No 39679.	Restrictions for Domestic: 30%Irrigation: 75% are being implemented Early Warning systems established to monitor achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions. Last SOF held on 29 November 2016
Krugersdrift	71	26.0	Ikgomotseng and Soutpan	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 19/02/16: No 39718	Restrictions forDomestic: 20%Irrigation: 50% are being implemented Early Warning systems established to monitor achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last SOF held on 29 November 2016
KwaZulu Natal
Goedertrouw	301	19.5	Umhlathuze, Umlalazi, Uthungulu	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 24/03/16, No 39860:	Restrictions for Domestic: 40%Irrigation: 80% Industrial: 15%are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last SOFs held on 12 July 2016
Albert Falls	288	27.3	Umgugundlovu, Ethekwini Metropolitan	Drought Operating Rule determined and communicated at the SOF. Part of the Umgeni system Restrictions published on 24/03/16 (No 39860)	Part of the Umgeni Water Supply System which is currently at 47,6% and -Restrictions for Domestic: 15% Irrigation: 50%Industrial: 15%are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last SOF was held on 17 June 2016 as part of Mgeni SOF.
Mpumalanga
Kwena	158	23.9	Ehlanzeni	Drought Operating Rule determined and communicated at the SOF. Part of the Crocodile System. Restriction notices issued by Inkomati/Usuthu Catchment Management Agency. (Compliance not known yet)	Restrictions for Domestic, irrigation are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last Committee held on 2 November 2016 as part of the CROCOC
Driekoppies	250	20.5	Nkomazi	Drought Operating Rule determined and communicated at the Komati Joint Operations Forum. Part of the Komati Basin Water Authority (KOBWA) Restriction notices were issued. (Compliance not yet known)	Early Warning systems established to measure achievement of restrictions JOC established to give direction to municipalities on implementing the restrictions Last Forum held on 17 November 2016 as part of KOBWA
Limpopo
Middel-Letaba	171	16.3	Mopani Municipality	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 16/09/16 (No 1066)	Restrictions for Domestic 20%Irrigation 80% are being implemented Early Warning systems established to measure achievement of restrictions. JOC formed to give direction to municipality on implementing the restrictions Last Forum held on 29 April 2016 as part of the Shingwedzi CMF
Tzaneen	156	13.2	Mopani Municipality	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 16/09/16 (No 1066)	Restrictions for Domestic @ 20%& Irrigation @ 70% are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions. Last Forum held on 25 October 2016
Nzhelele	51	8.6	Thulamela	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 16/09/16 (No. 1066)	Restrictions for Irrigation: 40% are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last Forum held on 21 April 2016
Flag Boshielo	185	17.7	Polokwane Metro	Part of the Polokwane System. Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 16/09/16, ( No 40284)	Restrictions for Domestic: 30%Mining: 55% are being implemented Early Warning systems established to measure achievement of restrictions JOC to be established to give direction to municipality on implementing the restrictions Last Forum held on 25 May 2016
Rhenosterkop	204	16.3	Nkangala DM	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 16/09/16 (No. 1066)	Restrictions for Irrigation: 60%-70%(Depending on rainfall) are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last Forum held on 20th April 2016

Eastern Cape
Darlington	180	18.2	Nelson Mandela Metro	Drought Operating Rule determined and communicated at the SOF. Receiving water from the Orange River System: Restrictions published on 26/08/16 (No.40229) The Dam is operated below 45% for Dam safety reasons	Restrictions of 15% on all transfers form the Orange River System are being implemented Early Warning systems established to measure achievement of restrictions and communication is on-going to align information Last Forum held on 20 September 2016
North West
Molatedi	200	25.2	Moses kotane	Drought Operating Rule determined and communicated at the SOF. Restrictions gazetted on 14/10/16 (No. 40346)	Restrictions on Domestic @50%& Irrigation @75% are being implemented Early Warning systems established to measure achievement of restrictions JOC formed to give direction to municipality on implementing the restrictions Last Forum held on 16 August 2016 as part of the Marico CMF

Northern Cape
Reservoir Name	Full Supply Capacity in 106 m3	%	Municipality supplied	Measures	Implementation
Spitskop	57	9.2	Mmamusa Municipality SchweizerReneke	Drought Operating Rule determined and communicated at the SOF. 30% restrictions on irrigation recommended. Achievement not yet visible	Restrictions on irrigation are being implemented Early Warning systems established to measure achievement of restrictions Last Forum held on 07 September 2016

Reply:

1. The table below details the surplus for the requested years, as well as the

utilisation:

ENTITY	REF	DATE	SURPLUS	UTILISATION
Transport Pension Fund		31 March 2010	R1605m	-
	aa	31 March 2011	R1739m	-
	bb	31 March 2012	R1548m	R120m as a Transnet 8.333% bonus
	cc	31 March 2013	R1453m	R62m as a Transnet 8.333% bonus, and extra 2.47% pension increase for SAA and PRASA respectively
	dd	31 March 2014	R2903m	R68m as two Transnet 8.333% bonuses, and extra 2.42% pension increase for SAA and PRASA respectively
	ee	31 March 2015	R3644m	R73m as two Transnet 8.333% bonuses, and extra 1.02% pension increase for SAA and PRASA respectively
		31 March 2016	R4325m	R72m as two Transnet 8.333% bonuses, an extra 2.42% pension increase, and 13th cheque bonus for SAA and PRASA respectively
		31 March 2017	-	R70m*
Transnet Second Defined Benefit Fund		31 March 2010	R2835m	-
	aa	31 March 2011	R2733m	R335m as two Transnet 8.5% and 8.333% bonuses
	bb	31 March 2012	2346m	R520m as a Transnet 10% and two 8.333% bonuses respectively
	cc	31 March 2013	R2167m	R155m as a Transnet 8.333% bonus
	dd	31 March 2014	R2983m	R305m as two Transnet 8.333% bonuses respectively
	ee	31 March 2015	R3145m	R300m as two Transnet 8.333% bonuses respectively
		31 March 2016	R3807m	R294m as two Transnet 8.333% bonuses respectively
		31 March 2017	-	R360m**

Notes:

* Uses after 31 March 2016 were two Transnet bonuses of 10% and 11% respectively, and an extra 2.07% pension increase and 13th cheque bonus for SAA and PRASA respectively

** Uses after 31 March 2016 were 10% and 11% bonuses respectively

(2)(a) The surpluses have been used to pay bonuses to beneficiaries of the Transnet Pension Fund and Transnet Second Defined Pension Fund.

(b) The expected future uses a mixture of bonuses and pension increases above 2%, should the Rules be amended to allow this.

 

Reply:

Mr. Riaz Saloojee did not receive a severance package and did not resign. He was only paid up to the end of his contract.

Reply:

Requesting the Honourable Member to refer to the Water Boards Annual Reports of each specified financial year.

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Reply:

(a) The department has established provincial illegal mining stakeholder forums in Mpumalanga, Free State, Gauteng and Northern Cape Provinces. Various stakeholders such as government departments (i.e. National, Provincial and local government), law enforcement agencies, mining companies, unions and associations, municipalities, certain SOEs, refineries and organized communities participate in these forums. Physical activities such as closure of open mine holes, arrests, prosecutions and convictions, deportations, disruptive operations and encouragement of land use/occupation have been conducted which led to a significant decrease of this practice. The illegal mining space is decreasing which result to illegal miners fighting for the remaining limited space and resorting to other crimes.

(b) The above mentioned Provincial Stakeholder Forums have action plans of which the output is measured against the action plan. Since the establishment of the Provincial Illegal Mining Stakeholder Forums progress has been made on combating illegal mining activities. The following has been achieved through the Provincial Illegal Mining Stakeholder Forums:

1. Illegal miners were arrested and continued to be arrested and convicted.
2. Illegal imigrants who are also involved in illegal mining activities were arrested and continued to be arested and deported.
3. Mining permits have been issued to mining companies to conduct legitimate mining in areas that were infested with illegal mining.
4. Most of the open holes and open shafts where illegal mining was taking place have been sealed, rehabilitated or closed.
5. Land where illegal mining was taking place has been rehabilitated and used for development.
6. People were employed through rehabilitation and shaft sealing projects.
7. Conviction rates have increased from 2 months to 8 years.
8. Reef outcrop and sub-oucrop areas where illegal mining was taking place has been succesfully mined and continued to be mined by legitimate mining companies.

Approved/not approved

Mr MJ Zwane, MP

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

Herewith is the requested information:

WEEK START DATE	EAF (%)	Weekly System Peak Demand (MW) Including IOS	Weekly System Peak Demand (MW) Including IOS & IPP's	Weekly System Energy (MWh) Including IOS	Weekly System Energy (MWh) Including IOS & IPP's
2016/01/04 00:00	71.86	28531	30090	4 174 029	4 379 957
2016/01/11 00:00	71.72	29808	30551	4 366 433	4 536 181
2016/01/18 00:00	72.66	30408	31166	4 444 243	4 588 116
2016/01/25 00:00	72.36	29953	30851	4 373 779	4 575 471
2016/02/01 00:00	73.48	30534	31475	4 377 616	4 595 062
2016/02/08 00:00	73.83	30490	31466	4 447 442	4 642 052
2016/02/15 00:00	74.20	30254	31316	4 421 569	4 619 527
2016/02/22 00:00	76.54	30942	31876	4 439 988	4 632 660
2016/02/29 00:00	77.29	30607	31654	4 396 548	4 596 759
2016/03/07 00:00	72.98	30604	31699	4 367 156	4 577 630
2016/03/14 00:00	74.36	31022	31984	4 383 798	4 557 577
2016/03/21 00:00	73.49	29662	30705	4 048 077	4 242 914
2016/03/28 00:00	73.57	30431	31393	4 222 967	4 426 056
2016/04/04 00:00	74.84	32095	33194	4 325 270	4 527 750
2016/04/11 00:00	75.96	31401	32330	4 337 243	4 542 074
2016/04/18 00:00	76.41	32077	32752	4 357 402	4 544 637
2016/04/25 00:00	76.16	30495	31749	4 196 797	4 414 522
2016/05/02 00:00	77.13	31698	32645	4 255 040	4 460 191
WEEK STARTDATE	EAF (%)	Weekly System Peak Demand (MW) Including IOS	Weekly System Peak Demand (MW) Including IOS & IPP's	Weekly System System Energy (MWh) Including IOS	Weekly System System Energy (MWh) Including IOS & IPP's
2016/05/09 00:00	77.89	33126	33993	4 433 338	4 595 217
2016/05/16 00:00	79.07	33318	34172	4 426 802	4 624 752
2016/05/23 00:00	80.22	33742	34533	4 486 352	4 673 142
2016/05/30 00:00	80.76	34134	34913	4 518 664	4 683 653
2016/06/06 00:00	80.99	33738	34171	4 525 477	4 672 101
2016/06/13 00:00	80.14	33884	34679	4 510 004	4 669 556
2016/06/20 00:00	80.66	34075	34329	4 549 648	4 674 224
2016/06/27 00:00	81.91	33986	34415	4 534 536	4 694 288
2016/07/04 00:00	80.38	34470	34821	4 585 635	4 738 698
2016/07/11 00:00	79.91	34023	34523	4 542 159	4 703 847
2016/07/18 00:00	80.51	34215	34742	4 504 107	4 672 753
2016/07/25 00:00	81.95	34197	34886	4 592 703	4 757 914
2016/08/01 00:00	79.88	34239	34707	4 465 760	4 632 796
2016/08/08 00:00	78.95	33027	33455	4 348 841	4 520 367
2016/08/15 00:00	77.87	32324	32977	4 391 797	4 557 565
2016/08/22 00:00	76.24	33016	33694	4 312 300	4 513 400
2016/08/29 00:00	77.21	30950	31957	4 230 939	4 464 099
2016/09/05 00:00	75.59	31383	32293	4 338 801	4 570 880
2016/09/12 00:00	78.56	31915	32986	4 384 392	4 648 366
2016/09/19 00:00	76.29	32005	32914	4 366 970	4 621 655
2016/09/26 00:00	76.06	30589	32012	4 242 442	4 522 398
2016/10/03 00:00	72.84	30743	31692	4 296 692	4 561 854
2016/10/10 00:00	77.73	31253	32172	4 361 792	4 611 242
2016/10/17 00:00	75.45	31413	32471	4 417 529	4 644 664
2016/10/24 00:00	75.44	30296	31767	4 349 636	4 610 456
2016/10/31 00:00	74.83	30520	31909	4 349 349	4 610 022
2016/11/07 00:00	74.81	30404	31606	4 303 359	4 595 709
2016/11/14 00:00	75.20	30008	31419	4 283 228	4 560 171

Reply:

(1) 

No amount was paid to Trillian Capital Partners for the Duvha power plant insurance claim. Eskom did not appoint Trillian Capital Partners to negotiate the settlement for the Duvha Power Plant insurance claim.

(2)

No, Eskom did not appoint Trillian Capital Partners to source a new supplier to replace the exploded boiler at the Duhva Power Plant. There was no need to appoint any external party to assist with sourcing.

(2)(a)

Not applicable

(2)(b)

No other additional relevant detail relating to the above is applicable.

(3)(a)

None

(3)(b)

Not applicable

Reply:

(1)

(a) The Department has advised the North West Provincial Department to institute legal action against the implicated individual with a view to determining whether the Prevention and Combating of Corrupt Activities Act 12 of 2004 has been violated as well as to implement the recommendations of the NEXUS report.

A progress report has been received from North West where one case has been investigated and finalised.

(b) (i) & (ii) The matter is still under investigation.

   (iii) The North West Provincial Department has been requested to further investigate whether there are other officials involved in the appointment of the official alleged not to meet the requirements.

2. The Head of Department has been advised to implement the recommendations of the MTT report as well as the NEXUs report.

3. The Minister will make the report available to the Portfolio Committee on Basic Education as soon after she has received and analysed it.

Reply:

1. Minister of Mineral Resources has not appointed or overseen an appointment of any person in the Department.

2. Not Applicable.

3. Not Applicable.

 

Approved/not approved

Mr MJ Zwane, MP

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

1. SAA has granted the National Treasury permission to review contracts.

2. The National Treasury requested the following 7 contracts on the 01st November 2016, currently received documentation for 3 contracts.

No	Names (a )	Scope (b)	Estimated values (c)	Has reviewed (i)	Is reviewing (ii)	Pending approval by the SAA Board (iii)
1.	Security	X-Ray Machine	R37 m
2.	Marketing & Media	Global Advertising	R90 m
3.	Ground handling	Washington	R 5 169 710
4.	Crew Transport	Crew Transport at ORTIA, Durban and Cape Town	R21 m			Awaiting documents
5.	Inflight Services	Wines	R20 m			Awaiting documents
6.	Inflight Services	Catering in Hong Kong	R47 m			Awaiting documents
7.	Inflight Services	Cosmetics and Amenity kits	R105 m			Awaiting documents

3. The above is consistent with the approach of the CPO to, from time to time, review certain tenders above the value of R10m in various government entities to ensure that there was ‘value for money’ obtained by government.

Reply:

This is a highly contentious matter. It has been further complicated by leaking of documents, a concerted campaign of vilification and even the initiation of criminal charges. The trail of injustice that has characterized this process thus far is evident to all. Under the circumstances the Honourable Member will appreciate that I will, based on legal advice, not venture into past or present details except to say that the South African Revenue Service, as a revenue collection agency, plays an important part in enabling the government to deliver services to its people and as such needs to focus on its core mandate.

It should be noted that some of the detail requested has been provided in a response to a previous parliamentary question.

Reply:

The information has been requested from the Limpopo Department Education and will be provided as a soon as it is received.

Reply:

This information was provided by the South African Revenue Service (SARS). The Ministry of Finance cannot verify its accuracy.

1. No, SARS as an institution has not established a new anti-corruption and security unit. Currently there is no plan to establish such a unit.

(a) Not applicable.

(b) Not applicable

(c) (i) Not applicable

(c) (ii) Not applicable

(d) (i) Not applicable

(d) (ii) Not applicable

(2) (a) Not applicable

(b) Not applicable

Reply:

The National Treasury has a well-established In-year Monitoring and Reporting System to monitor municipal performance. However, our system does not identify the type of details that the question requires. Such information can only be obtained directly from a municipality.

Reply:

The Registrar of Banks at the South African Reserve Bank (SARB), in terms of the Banks Act, 1990 (Act No. 94 of 1990), is the principal regulatory authority responsible for prudential supervision of banks i.e. protecting depositor funds. Currently there are sixteen registered banks in South Africa. The list is available at:

http://www.resbank.co.za/RegulationAndSupervision/BankSupervision/Pages/SouthAfricanRegisteredBanksAndRepresentativeOffices.aspx.)

The Bank Supervision Department of the SARB receives risk data, as opposed to product information, for the execution of its mandate. This is published in the form of BA returns on the SARB website.

The information required in terms of this question is not part of the information which is received from the banks. We therefore suggest that the Honourable Member should refer this question to the Minister of Trade and Industry, as the National Credit Regulator (NCR) is the competent authority regulating retail lending by registered banks and all other retail lenders. The NCR collects data on specific aspects of retail credit, including data on home loans, and is also responsible for determination of the national norms and standards regarding consumer protection (section 18 of the National Credit Act).

Reply:

This is a highly contentious matter. It has been further complicated by leaking of documents, a concerted campaign of vilification and even the initiation of criminal charges. The trail of injustice that has characterized this process thus far is evident to all. Under the circumstances the Honourable Member will appreciate that I will, based on legal advice, not venture into past or present details except to say that the South African Revenue Service, as a revenue collection agency, plays an important part in enabling the government to deliver services to its people and as such needs to focus on its core mandate.

It should be noted that some of the detail requested has been provided in a response to a previous parliamentary question.

Reply:

The replies below are based on relevant information provided by the Financial Services Board (FSB). Much of the information requested is also available in the annual reports of the FSB, and available on its website. :

(1) No staff member of the National Treasury or the South African Reserve Bank is involved in the management of the Financial Services Board (FSB). I am surprised that the Honourable Member is posing this question, but perhaps the Honourable Member is confusing the role of the Board of the FSB and its Executive Committee. The Board of the FSB is responsible for goverance, whilst its Executive Committee is responsible for management and operational issues, in line with the Financial Service Board Act No 97 of 1990. The Board is comprised of 11 non-executive members, including two National Treasury officials and one South African Reserve Bank official – none of whom is involved in the management of the FSB. The Executive Committee includes as its members, the Registrar and Deputy Registrars, who are directly responsible for supervising various supervisory activities like long- and short-term insurance, retirement funds, collective investment schemes, financial advice and intermediary services providers and financial market infrastructure.

(2) It is not clear what the Honourable Member is requesting, but the FSB does not believe it has driven any person with a valid Financial Service Provider (FSP) licence out of the insurance industry, as long as they comply with the regulatory requirements.

(3) The Financial Advisory and Intermediary Services Act, 2002 (“the FAIS Act”), came into operation on 01 September 2004 amid uncertainty amongst providers of financial services about;

1. the need to be an authorised FSP, and
2. the appropriate structuring of individual financial services business operations in order to meet the requirements of the Act.

At the time, some of the larger entities opted for multiple licences and thus ring-fenced different divisions of their businesses, according to various factors including line of business, province or district. After the implementation of the legislation, many authorised FSPs, opted to lapse their multiple FSP authorisations and consolidated the various financial services businesses into a single FSP.

Certain FSPs voluntarily cancelled their licences and operated as juristic representatives of other authorised FSPs. Others realised that their business did not fall within FAIS regulated activities, which led to the lapsing of their licences and some FSPs whose licences were withdrawn because of non-compliance (other than non-compliance with honesty and integrity requirements), with the FAIS Act, re-entered the industry as representatives of authorised FSPs. The FSPs whose licenses were withdrawn for contraventions due to lack of the character qualities of honesty and integrity, were barred from entering the financial services industry for a stipulated period and also referred to the prosecuting authorities.

Various exemptions have been granted to FSPs and representatives to allow for the progressive realisation of compliance by them with all the requirements of the FAIS Act. In addition, many exemptions have been granted on the basis of the principle that regulatory requirements must be proportionate to the risks the requirements are meant to mitigate, the nature, scale and complexity of the business of the FSP and the cost it imposes on the FSPs whilst at the same time ensuring that the exemptions do not diminish the protection afforded to clients under the FAIS Act.

The number of authorised FSP’s has grown from 5 033 in 2005 to 10 774 as at 11 November 2016.

The requested numbers since September 2004, are as follows

• Declined licences: 2224
• Withdrawn licences: 4451
• Voluntary lapses: 6923

Since the Act came into operation, the number of juristic persons as representatives of FSPs has increased significantly from 173 in 2005 to 3 755 in 2015, thus a significant number of the aforementioned licences that had been withdrawn or lapsed, subsequently became juristic representatives of other FSPs and were not lost to the market.

It should also be noted that certain individuals who were authorised as sole proprietors but whose authorisation was subsequently withdrawn for non-compliance or they have voluntarily lapsed their licenses, re-entered the industry as representatives of other authorised FSPs.

It has been noted that after the self-correction and stabilisation of the market over time, continuous growth in the number of FSP’s has taken place. This trend is also reflected in the number of natural persons registered.

Statistics in terms of race or colour are not recorded by the FSB.

(4) The National Treasury is not involved in the licensing or supervision of financial insitutions, and this is done by the FSB itself. Board Notice 113 of 2015 called for comments on the proposed fit and proper requirements to be prescribed under the Long-term Insurance Act No. 52 of 1998 and the Short-term Insurance Act No. 53 of 1998 (“the Acts”) pursuant to the definition of “fit and proper” in sections 1 of the Acts. The final fit and proper requirements were prescribed in Board Notice 158 of 2015. The board notices and other legislation administered by the Financial Services Board are available on the website of the Financial Services Board (www.fsb.co.za).

Due to the nature of insurance business, it is important that significant owners, directors, managing executives, public officers, auditors and statutory actuaries are fit and proper. The fit and proper requirements are intended to reduce the risk of insurer failure as a result of incompetent, reckless or improper risk management by responsible persons. In addition, these requirements are consistent and compatible with international standards and promote confidence in insurers amongst policyholders, and the public generally. Recent South African and international experience has emphasised the importance of closer supervisory scrutiny of the conduct of individuals in positions of responsibility. In the case of insurers, this additional scrutiny is necessary for the Registrar of Long-term/Short-term Insurance to ensure the on-going safety and stability of insurers and to reduce the risk of loss to policyholders due to mismanagement or misconduct in insurance companies.

The requirements set out in Board Notice 158 of 2015 will affect all persons to whom any of the criteria apply. The Registrar, in assessing whether a person is fit and proper must have due regard to, in respect of directors, managing executives, public officers, auditors and statutory actuaries –

(a) the seriousness of, and surrounding circumstances resulting in, a person not meeting the requirements;

(b) the relevance of the failure by a person to meet the specific criteria to the duties that are or are to be performed and the responsibilities that are or are to be assumed by that person; and

(c) the passage of time since the failure by a person to meet the specific criteria.

In respect of significant owners the Registrar, in addition to (a) to (c) above, must have due regard to –

(a) the nature and scope of the significant owner’s business; and

(b) the structure of any group that the insurer is part of, if applicable.

The board of directors of an insurer may also express the view that a person is fit and proper despite the fact that one of the criteria specified in BN 158 of 2015 is not met. The insurer must then, when notifying the Registrar of the appointment of such a person, declare that one of the criteria is not met and motivate why the board, despite this, is of the opinion that the person is fit and proper. The motivation should address the matters that the Registrar will have regard to in assessing the fit and properness of a person (i.e. seriousness, relevance and passage of time). The Registrar, when considering the information provided, must then apply his mind and inform the board of the applicant if he objects to the appointment or not.

Given the foregoing it is not possible to estimate the total number of persons who have been or will be adversely affected by the Board Notice as insurers in appointing directors, managing executives, public officers, auditors and statutory actuaries are expected to consider whether any of the disqualifications apply to such persons. Also, potential significant owners will likely consider these requirements when deciding to become a significant owner of an insurer.

(5) (a): Yes, the various Registrars of the FSB may make subordinate legislation that is binding on regulated entities. This includes codes of conduct mandated in the primary legislation. Such subordinate legislation prescribes a variety of prudential and other requirements regarding the conduct and operational ability of financial institutions and services providers, and is a legitimate executive instrument to effectively implement the principles and policies contained in the principal legislation enacted by Parliament.

(b) (i): Yes, penalties may be imposed. The Enforcement Committee of the Financial Services Board established under the Financial Services Board Act which consists of external persons with the necessary expertise imposes all monetary penalties with regard to material contraventions.

This Committee is chaired by a retired judge. The particular enabling legislation makes provision for the proper protection of the rights of respondents, including the right of a reply (audi alterim partem), and the right to legal representation. The onus is on the FSB (the relevant Registrar) to prove that the legislation has been contravened.

In addition a respondent may take the Committee on appeal to the High Court of South Africa. The proceeds of the penalties imposed may not be utilised for operational expenses, but are reserved for projects relating to consumer education or protection of the public.

(b) (ii): The Financial Services Board Act, is also available on the website of the Financial Services Board.

The FSB ensures compliance with the legislation administered by it, which is aimed primarily at protecting the investments, savings and retirement funds of the public and may include monetary penalties.

In addition to the Enforcement Committee, the Registrar has the authority to impose penalties for minor non-compliances, e.g. late submissions of prescribed returns. Such penalties are provided for in the legislation relevant to the different industries.

When the “Twin Peaks” legislation is passed by Parliament and signed into law by the President, the “market conduct authority” will be constituted and citizens can be assured of even belter regulation of market conduct.

Reply:

(1)(a) There is no timeframe in the legislation for the processing of applications for the transfer of a right/interest in a right.

(b) On average three to six months

(2)(a) Three months and two weeks

2(b)(i) 15 December 2015

(ii) 29 March 2016

3(a) There is no difference

(b) There was no request to expedite this application.

4 Please see 3(a) above. The application was not handled differently by the Department

Approved/not approved

Mr MJ Zwane

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

(a)

• The debt owed by ZESA to Eskom is R443 million as at 2 December 2016.
• The financial guarantee issued by ZESA in favour of Eskom amounts to R500 million.
• Consequently, there is no current financial exposure to Eskom.
• Eskom is currently looking at increasing the financial guarantee to cover future power purchases.

(b)

Additional arrangements are as follows:

• There is ongoing contact between Eskom and ZESA leadership to monitor the payments
• There is a guarantee in place to cover the amount owed.
• ZESA is putting in place mechanisms to address the foreign currency reserves challenge of the central bank so that they are able to meet their ongoing payment obligation.
• ZESA has recently made a number of substantial payments for example during November up to 1 December they have paid R198.2 million.

Reply:

The following information was submitted by the Public Investment Corporation:

1. There were no investments made outside the mandate. However, there have been some technical breaches as is normal in the ordinary course of asset management business. These technical breaches are as a result of various factors such as changes during portfolio transitioning periods, market movements and currency fluctuations. These technical breaches are recognised by the mandate signed with the Government Employees Pension Fund (GEPF).

2. All technical breaches are reported to the GEPF in accordance with the mandate.

Reply:

(1)(a) The South African Banking Risk Information Centre (SABRIC) has been established by the banks in South Africa specifically to assist the banking industry in combating organised bank-related crimes. SABRIC consistently releases information on different types of criminal activity, including cyber-crime, to assist customers to be more vigilant. Banks themselves have in place sophisticated systems to detect and prevent fraudulent access to customer accounts. Internationally, the issue of technological innovations in the financial sector, and the risks that it can bring from a cybercrime perspective, is a major focus area, led by international regulators in the Financial Stability Board and Basel Committee on Banking Supervision.

(1)(b)(i), (ii) The current legal basis for financial consumer protection is in terms of generic consumer protection legislation. However, it is important to note that Parliament is currently processing the Financial Sector Regulation Bill, which places a strong emphasis on market conduct regulation and the fair treatment of customers in the financial sector. The Bill creates a Financial Sector Conduct Authority, and will result in the introduction of new regulation and standards that aim to better protect financial sector customers.

Currently, banks are required to comply with the Consumer Protection Act 68 of 2008, which provides for the rights of consumers to be protected against, for example false, misleading or deceptive representations (section 41) and fraudulent schemes and offers (section 42).

Banks are also required to ensure continued compliance with legislation such as the Financial Intelligence Centre Act 38 of 2001, the Prevention of Organised Crime Act 121 of 1998 and the Protection of Constitutional Democracy against Terrorist and Related Activities Act 33 of 2004. Banks are specifically required to register with the Financial Intelligence Centre in terms of section 43B of the Financial Intelligence Centre Act. Sections 21 to 45F of that Act address the control measures which banks must implement to combat money-laundering activities and prevent the financing of terrorist and related activities.

Regulation 50 of the Regulations made under section 90 of the Banks Act 94 of 1990, states that a bank must implement and maintain robust structures, policies, processes and procedures to guard against the bank being used for purposes of financial crime such as fraud, financing of terrorist activities and money laundering.

In terms of the Regulation 50, banks are required to facilitate co-operation with relevant law-enforcement agencies, identify customers, recognise suspicious customers and transactions, maintain high ethical standards in all business transactions, provide adequate training and guidance to staff, maintain records of transactions, report suspicious customers and transactions and provide a clear audit trail.

(2) The manner in which a bank mitigates its risk is not prescribed per type of risk (e.g. fraud and financial crime risks) by the Regulator. However, Regulations 33 and 34 of the Banks Act do require a robust enterprise risk management framework for a bank, which includes operational risk, such as fraud and financial crime. There is an obligation on banks to hold capital for operational risk. Banks are allowed to take out insurance against this risk, but this does not influence the regulatory capital requirement.

(3) The manner in which a bank compensates a client depends on the bank’s internal policies and are generally assessed on a case-by-case basis. Clients that are not satisfied with the services of their bank in relation to such compensation decisions can approach the Ombudsman for Banking Services. The majority of retail banks in South Africa are members of the Ombudsman for Banking Services. Going forward, it is worthwhile to note again that the conduct of business of retail banks, including its fair treatment of customers, will be regulated by the Financial Sector Conduct Authority when the Financial Sector Regulation Bill is enacted.

Reply:

1. 

   (a) No, the Minister of Finance was not informed by the South African Revenue Service regarding this matter.

   (b) No to date, the Minister of Finance has not been provided with any formal explanation by SARS on this matter.

 

2. What has appeared in the public domain is completely unacceptable. Mr Symington is a person of great expertise and a person of integrity that I have worked with for many years.

Reply:

(a) Three.

(b) Business and advisory services (audit, research reports and project management).

(c) Total contract amount is R1, 148,069.88

Approved/not approved

Mr MJ Zwane, MP

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

This information is provided by the South African Revenue Service (SARS).

1. No. Mr Lebelo was not authorised by SARS to send a letter to the Business Day which was published on 28 November 2016 entitled “Gangster Ratings Agencies”.

2. No, SARS will not be taking any disciplinary action against Mr Lebelo as he wrote to the Business Day in his private and personal capacity.

3. No.

As far as the Ministry is concerned:

(a) Mr Lebelo, as a senior and influential manager in SARS, should not be commenting on a sensitive and serious matter such as ratings in the public domain;

(b) Mr Lebelo’s attack on the ruling party, the ANC, is both from a point of ignorance and unwarranted;

(c) He displays a complete lack of understanding of the role of borrowing money both locally and from foreign lenders in helping to finance our social programmes for the poor. It is the very same poor people and the vulnerable middle class South Africans, the vast majority of whom are black, who will be affected by rising interest rates and prices should the South African sovereign lose its investment grading.

(d) Finally, his letter to the media indicates clearly that he writes in two capacities – one of which is “Group Executive of Employment Relations, SARS”.

(e) Surely, he cannot be allowed to attack the very government that pays his salary on a matter that is of importance to all South African’s – except those who pursue an ignominious agenda against the national interest – with impunity?

(f) The SARS management must account for their lack of action in this matter.

Reply:

The Government Employee Pension Fund (GEPF) has submitted the following:

Yes, in terms of the rules of the Fund, a person who has contributed for more than 10 years qualifies to receive a gratuity (lump sum) and an annuity (monthly pension). The certain person (name furnished) contributed for a period of 42 years.

(a) Not applicable.

(b) Not applicable.

(i) Yes, the pension claim was successfully processed on 28 April 2016.

(ii) Yes.

(iii) The lump sum was paid on 13 May 2016 and the monthly pension (from date of retirement) was paid on 06 May 2016.

(iv) The certain person (name furnished) is divorced and the fund received claim documents from his ex-spouse for her portion of the divorce interest. This had to be finalised first before his pension was paid and the legal department had a backlog which caused a delay in finalising the divorce claim.

(v) There are no outstanding funds. All his pension benefits were paid.

The GEPF would also like to indicate that due to the fact that some of the requested information is personal, it cannot be made available to third party without the written consent of the person involved.

Members of the GEPF could utilise the call centre or walk in centre facilities provided by the GEPF to its members to deal with this type of enquiry.

Reply:

The information has been requested from the Limpopo Department Education and will be provided as a soon as it is received.

Reply:

1. The Chief Procurement Office (CPO) of the National Treasury requested in writing 7 contracts on the 01st November 2016. Documentation has been received for 3 contracts.

No	Titles (a )	Scopes (b )	Values (c)
1.	Security	X-Ray Machine	R37 m
2.	Marketing & Media	Global Advertising	R90 m
3.	Ground handling	Washington	R 5 169 710
4.	Crew Transport	Crew Transport at ORTIA, Durban and Cape Town	R21 m
5.	Inflight Services	Wines	R20 m
6.	Inflight Services	Catering in Hong Kong	R47 m
7.	Inflight Services	Cosmetics and Amenity kits	R105 m

2. The above is consistent with the approach of the CPO to, from time to time, review certain tenders above the value of R10m in various government entities to ensure that there was ‘value for money’ obtained by government.

Reply:

(a) The Department employed only one official at the senior management level with a special salary level (b) (i) the amount paid to the official is R1, 420,944 per annum (ii) The official possesses more than fifteen years experience in the public service and was already in this salary level during the time of her transfer to the Department (iii) based on experience and competencies the official was laterally transferred to serve in the current position.

 

Approved/not approved

Mr MJ Zwane, MP

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

1. Yes, (a) 1 November 2016 (b) The official was appointed to act in terms of chapter 3 of the Senior Management Services (SMS) Handbook.

2. No. The position is not vacant. (a) N/A (b) N/A.

Approved/not approved

Mr MJ Zwane, MP

 

Minister of Mineral Resources

Date Submitted:-……………/………………/2016

Reply:

The details of the sickness of any member of SANDF are confidential. The SANDF cannot disclose the member’s duration, nature of the illness, sick certificates issued by medical practitioners.

Reply:

(1) (a) and (b) The names and ranks for uniformed members of the SANDF who received performance bonuses cannot be provided as it might compromise individual’s confidentiality and this also includes the amount received in each case.

Total number of members who received bonuses 2013 – 2015: 305

(2) Yes, there are portfolios of evidence and motivations, by the line superiors to award bonuses to the specified persons and it is actually contained in each member’s PMDS Booklet, as follows:

• 1. Each individual score per KRA and GAF is motivated.

• 1. Each superior has to have at least two compulsory interviews with his/her member, in order to highlight good or bad performances.

• 1. Superiors also have the opportunity throughout the year of assessment to have performance related interviews with members, which can be captured in the PMDS Booklet.

(3) No, these PMDS booklets are not open for scrutiny by any persons other than the specific individual, the immediate supervisor, the Service Centre Manager, the Personnel Officer, members of the PMDS Moderating Board and the Officer Commanding. These PMDS Booklets are kept in filing cabinets in the office of the Warrant Officer in charge of PMDS Administration. These booklets can only be accessed by means of authority given by higher HQ via the Officer Commanding.

(4) No, Col M.R. Mongo did not receive a bonus in each of the specified financial years. He only received a bonus in 2012 and nothing since then. The Unit Officer Commanding is assessed by the GOC Support Formation, and nomination for a bonus comes from the GOC. The unit does not even capture the PMDS of the officer commanding.

Reply:

(a) (i) No, the incident was reported and the Board of Inquiry was convened.

(ii) The matter is under investigation.

(b) (i) The outcome of the investigation will determine what tools inside the toolboxes were lost.

(ii) Matter is under investigation to determine value loss per tool.

Reply:

The question has been put to the CEO of the IDC who has responded as follows:

“The IDC’s total investment in On Digital Media (ODM) was R882 401 000.

On the 26th of October 2012, ODM was placed into business rescue and the undrawn portion of the equity funding into ODM was cancelled.

The business rescue of the company was terminated with effect from 1 July 21016. With the introduction of a new strategic partner and operator that has come on board the IDC is hopeful that the company will turn around in time.

From the resultant business rescue the IDC is a 22% shareholder and in a related company Star Time, IDC has a 5.8% shareholding.

When the company matures, we are anticipating to realize the true value of our investment which will enable us to establish the exact amount that we will be able to recover. In terms of the value of IDC shares, we are presently not placing value since the company has just come out business rescue.”

Geoffrey Qhena, CEO

Recommended/ Not Recommended

Comments:______________________________________________________

_______________________________________________________________

……………………………..

Mr Malcolm Simpson

Acting Director-General

Date: ………………………

Approved/ Not Approved

Comments:_____________________________________________________

______________________________________________________________

______________________________________________________________

………………………………..

Mr Ebrahim Patel

Minister of Economic Development

Date:………………………..

Reply:

The IDC has a confidentiality policy that applies to companies that it transacts with. The CEO of the IDC advised me that the requested information would be in breach of the current policy. The IDC has taken a decision to provide macro-data on the number of transactions involving politically exposed persons in future annual reports.

I have taken note of the IDC’s advice and have now requested the IDC to review the appropriateness of the current policy, having regard to relevant commercial considerations, the legitimate public expectations of transparency as well as the rights to privacy of individuals and the need to ensure – and be seen to ensure – integrity in all investment decisions; and to facilitate an engagement between me and the Board on the outcome of this review during the course of 2017.

Original proposed by: Mr MG Qhena, CEO IDC

Recommended/ Not Recommended

Comments:______________________________________________________

_______________________________________________________________

……………………………..

Mr Malcolm Simpson

Acting Director-General

Date: ………………………

Approved/ Not Approved

Comments:_____________________________________________________

______________________________________________________________

______________________________________________________________

………………………………..

Mr Ebrahim Patel

Minister of Economic Development

Date:………………………..

Reply:

(1) Grievances 2014:

(a) Number of grievances lodged by staff members: 07

(b) Nature and trend: placement, MEM, Pers Assess, Previous Grievance, Promotion, Acting Allowance

(c) (i) Resolved: 05

(ii) Unresolved: 02

(2) Grievances 2015:

(a) Number of grievances lodged by staff members: 03

(b) Nature and trend: Promotion and housing.

(c) (i) Resolved: 03

(ii) Unresolved: 00

(3) Grievances 2016:

(a) Number of grievances lodged by staff members: 02

(b) Nature and trend: Promotion and Performance Assessment

(c) (i) Resolved: 00

(ii) Unresolved: 02

Reply:

Yes - 10926244PE Staff Sergeant K.C. Mbulawa – Mashalaba.(20 January 2011 to 31 October 2016)

(a) The ASB Western Cape had to await the outcome as it was a civilian court case which only took place on 04 April 2012.

(b) (b)(i) The member’s remuneration over the period 20 January 2011 to 31 October 2016 was: R 1 205 511 (Annual Bonus included).

         (ii) Nil.

(c) The member was administratively discharged wef 31 October 2016.

(d) (i) Her work was distributed among her colleagues.

     (ii) Nil.

Reply:

(a)(b)(c)(i) Members of the Traffic Legislation Technical Committee are officials or representatives of Provinces, NRCS, SAPS and all the Agencies, who have been nominated by their respective Authorities and Institutions to attend the Committee.

(ii) They represent the Provincial Departments responsible for transport, Agencies of the Department of Transport and those Institutions.

(iii) They have the required expertise in road traffic related matters, extensive experience in road traffic related legislation, road traffic management and process and procedures.

Reply:

(a) (i) 461 - Number of members in each division that are based in Youngsfield Military Base in Wetton, Cape Town.

     (ii) 73 – Number of uniform members involved in traffic accidents.

     (aa) 2014/15 – 14 traffic accidents

     2015/16 – 08 traffic accidents

     2016/17 – 08 traffic accidents

    (bb) Since April 2016

    (iii)  (aa) 03 vehicle accidents investigated.

    (bb) 04 cases unresolved

(b) (i) Cases include members with the state cover and members liable for damages as indicated.

    (ii) Cases include members with the state cover and members liable for damages as indicated.

(c) 2014/2015 – R42 295.19.

2015/2016 – R163 393.70.

2016/2017 – Cases still pending.

 

Reply:

1. Yes, the supply chain management and procurement policies are strictly adhered to and all required committees to approve acquisition are in place.

2. No, all acquisition matters are done through credible committees.

3. Measures are always in place as the unit follows the supply chain management prescript.

4. (a) Challenges:

(i) All the vehicles disposed of, must go through a process of eNaTIS and Microdotting. The vehicle must be cleared by SAPS.

(ii) The above-mentioned process is lengthy and time-consuming. Normally, vehicles that have been acquired recently have already gone through the above-mentioned processes. Therefore, during their disposal, they do not need to repeat the processes.

(iii) Vehicles that become BER (beyond repair) as a result of an accident cannot be disposed of immediately because of Board of Inquiry still needs to be convened and possible claims determined for claims for or against the state. Such vehicles will only be disposed of after the investigation is complete.

 

Reply:

1. (a) The number of burglary incidents since 01 January 2014 is 23.

  (b) The burglaries occurred within the base on different dates.

   (c) The outcome of the investigation conducted:

    Theft of oil and negligence: 02 members were charged.

     The following are under investigation:

      - Theft of vehicle parts

      - Copper theft

      - Theft of Cannon camera

     - Breaking of window

    - Theft of toolbox

    - Theft of batteries

2. The military police is still investigating the cases and to date no evidence of collusion between staff and the criminals has been discovered.

3. (a) and (b) It must be noted that some of the members have been suspect in the investigation, some charged and some are the subject for investigation. Therefore our guards have done whatever they could in combating the burglary incidents. The arming and disarming of soldiers is not for public.

4. The total number of guards and the routine is not for public. The security of the military base is determined by the Guard Commander on duty after going through an analytical process regarding threats in the base.

5. Yes, our Military Bases comply with military security requirements. In terms of the National Key Point legislation, SAPS is tasked as the protecting authority and will be in a position to provide what is and what isn’t a key point.

Reply:

(1)What is the total amount that has been paid to date for expenditures incurred for,

(a) the bidding process for the Commonwealth Game to be hosted in Durban and

Sport and Recreation provided R1m for the bidding process. The other spheres of government and the National Lottery have made contributions to the total expenditure for bidding. The Closeout report which contains the audited financial statements of the Bidding Company will be tabled before the Inter-Ministerial Committee on the Games for approval prior to the figures being considered final.

(b) any capital projects undertaken to upgrade the Ethekwini precinct by each

(i) national

None

(ii) provincial and

None

(iii) local sport authority;

None by the local Sport Authority but the Municipality had long term plans for the renovation for the Rachael Finlayson Swimming Pool. They have taken the opportunity to enhance the upgrade to meet the requirements for the Commonwealth Games. This increased the cost by R2m bringing the upgrade to R3,5m. The renovations will be complete by March 2017.

(2) whether South Africa met the 30 November 2016 deadline to ensure that all securities have been put in place to host the specified games in 2022; if not, why not; if so, what are the relevant details?

South Africa met the deadline of 30 November 2016. South Africa responded to the issues raised by the Commonwealth Games Federation. All the information and supporting documents were uploaded onto the Commonwealth Games Knowledge Systems Portal and acknowledgement of receipt was received.

 

Reply:

1. (a) and (b) No, the member was charged for AWOL and drunkness in October 2016.

2. Yes, the member was reported that he was drunk and the matter was addressed by his immediate supervisor.

3. Yes, the OC was aware and the OC since charged the member in October 2016 and even sent him to Military Correctional Services for one night.

Reply:

Road Accident Fund (RAF)

1.(a)(i) The RAF uses market research and benchmarking by reputable remuneration consultancy firms as well as guidelines issued by National Treasury to determine inflationary annual salary adjustments as criteria for the approval of salaries and salary increases respectively.

(ii) The RAF uses performance against specified performance indicators agreed in the respective annual performance contracts, which indicators are linked to the performance targets set in the Annual Performance Plan, as criteria to approve bonuses.

(b)(i)(ii)The Remuneration and Reward Policy and its associated procedure, which inter alia provides for benchmarking of salaries and auditing of the annual salary adjustments by the Internal Audit Department, and the Performance Management and Development Policy and its associated procedure, which inter alia provides for quarterly performance assessment of the CEO’s performance by the Chairperson of the Board. The annual performance assessment scores to be tabled at the REMCO and the Board; and the auditing of results by the Internal Audit Department, or Auditor-General where the Board so elects, exist to verify that the specified criteria were (i) used and (ii) followed in the (aa) 2013-14, (bb) 2014-15 and (cc) 2015-16 financial years.

Road Traffic Infringement Agency (RTIA)

1.(a)(i) The Registrar of the RTIA’s salary is determined in terms of DPSA framework and it is on salary level 16 (DG level).

(ii) The Registrar’s bonus is determined in terms of the approved performance management framework, where a performance bonus is based on a certain percentage obtained and it is approved by the Board.

(b)(i) The criteria and procedure used is outlined in the Agency’s Performance Management Framework.

(ii) The criteria and procedure used is outlined in the Agency’s Performance Management Framework

(aa) 2013/2014: As approved by the Board in its assessment in terms of the Performance Assessment criteria.

(bb) 2014/2015: As approved by the Board in its assessment in terms of the Performance Assessment criteria.

(cc) 2015/2016: As approved by the Board in its assessment in terms of the Performance Assessment criteria.

Passenger Rail Agency South Africa (PRASA)

1.(a)(i) Salaries are offered to employees at the time of their appointment to the organization according to their job level and the approved scales as per PRASA policies.

(ii) PRASA does not pay bonuses at the moment, but should the time come where bonuses have to be paid this will be guided by the relevant Human Capital Management Policies on Performance Management as well as Remuneration and Benefits.

(b)(i)(ii) This is guided by job evaluation and profiling as well as approved scales as per PRASA policies all the time.

PRASA does not pay any bonuses at the moment.

Road Traffic Management Corporation (RTMC)

1.(a)(i) The salary increase and the bonuses of the CEO of the Road Traffic Management Corporation are based on the contract of employment and organizational performance.

(ii) Performance bonus is only payable if the organization achieves the minimum of 75% of overall performance. Performance assessment is conducted by the Board and the amount payable is based on the performance achieved. Performance information is audited by the Auditor General.

(b)(i)(ii) (aa) 2013/14

There was no performance bonus paid to the CEO relating to 2013/14 financial year. This was due to the fact that the CEO’s contract of employment commenced in January 2014 which was three months before end of financial year. The organization had also under performed.

(bb) 2014/15

The Board report that The performance bonus paid was based on organizational performance achieved of 83%. A performance assessment was conducted by the Board and the amount paid was based on the performance achieved.

(cc) 2015/16

I am informed The CEO’s salary was adjusted during 2015/16 based on the following:

• Organizational growth occasioned by the decision of the Shareholders Committee to transfer the management of the e-NaTIS system from TASIMA to RTMC.
• Organizational performance achieved during 2014/15

The performance bonus relating to 2015/16 financial year was based on organizational performance achieved at 92%. The performance assessment was conducted by the Board and the performance information was audited by the Auditor General.

South African Civil Aviation Authority (SACCA)

1.(a)(i)(ii) The SACAA has Board approved remuneration and perfomance management policies which provide overall guidance of annual salary increases and bonuses. The Director Civil Aviation (DCA)’s salary and bonus was approved by the board in line with the remuneration and perfomance management policies.

The salary increase approved by the board was in line with the guidelines published by the National Treasury. The SACAA salaries including the DCA’s are benchmarked on a regular basis and the pay scales are approved by the board.

(b)(i)(ii) The percentage in respect of salary increases and the total amount payable in respect of Bonuses including the DCA’s are approved by the board and audited by the Internal Audit before implementation annually.

(aa) The DCA was appointed on 1 December 2013 and the salary was determined and approved by the Minister.

(bb) 2014/2015 salary increase was approved by the board and paid in accordance with the policy and national treasury guidelines. The bonus was also paid in accordance with the entity’s remuneration and perfomance management policies and was subjected to Internal Audit processes.

(cc) 2015/2016 salary increase was paid in accordance with the policy and national treasury guidelines. The bonus was paid in accordance with the entity’s remuneration and perfomance management policies and was subjected to Internal Audit processes.

Cross-Border Road Transport Agency (C-BRTA)

(1)(a)(i) In terms of the Cross-Border Road Transport Act, Act no. 4 of 1998, the CEO salary is determined by the Minister of Transport in consultation with Minister of Finance.

(ii) As per the terms and conditions of the employment contract, the salary package is structured as 80% fixed salary and 20% variable portion. The 20% is paid as a performance bonus on achievement of agreed target as stipulated in the performance agreement contract.

(b)(i) The Minister’s written approval is used as an input document to load the salary into the payroll system and this is reviewed at the executive level. The calculation of the performance bonus is based on the final performance assessment and the calculation is reviewed by Executive: Human Resources and the Chief Financial Officer before the payment is processed.

(ii) (aa) (bb) Yes criteria was followed for 2013/14 and 2014/15.

(cc) For 2015/16 not applicable as the performance bonus is not yet finalized for payment.

South African Maritime Safety Authority (SAMSA)

1(a)(i)

Criteria for approval of salary increases	2013/14	2014/15	2015/16
	*CPI+	CPI	CPI

*CPI+ was used as CEO had not received annual salary increases for 2 successive years (since 2011).

(ii)

Criteria for approval of bonuses	2013/14	2014/15	2015/16
	Organizational performance Employment contract which stipulated that up to 20% bonus will be payable based on organizational performance

(b)(i)

Procedures	2013/14	2014/15	2015/16
Used	Recommendation made by Exco, REMCO and approval by Board of Directors	Recommendation made by Exco, REMCO and approval by Board of Directors	Recommendation made by Exco, REMCO and approval by Board of Directors

(ii)

Procedures	2013/14	2014/15	2015/16
Followed	*There was no Board of Directors appointed at the time. As a result the decision was taken by Executive Committee (EXCO)	*There was no Board of Directors appointed at the time. As a result the decision was taken by Executive Committee (EXCO)	*There was no Board of Directors appointed at the time. As a result the decision was taken by Executive Committee (EXCO)

* The Board of Directors was subsequently appointed but members resigned/did not form a

quorum before it could ratify the decision.

(1)b(i) What procedures (for bonus) exist to verify that the specified criteria were used?

Procedures	2013/14	2014/15	2015/16
Used	Recommendation made by Exco, REMCO and approval by Board of Directors	No bonus was paid out	No bonus was paid out

(ii) What procedures (for bonus) exist to verify that the specified criteria were followed?

Procedures	2013/14	2014/15	2015/16
Followed	*There was no Board of Directors appointed at the time. As a result the decision was taken by Executive Committee (EXCO)	No bonus was paid out.	No bonus was paid out.

*The Board of Directors was subsequently appointed but members resigned/did not form a

quorum before it could ratify the decision.

Railway Safety Regulator (RSR)

(1)(a)(i) The organization submits for approval an inflationary increase percentage, based on the benchmarked rate each year and these increases are payable at the start of each financial year in April each year.

(ii) Performance Appraisal for the CEO will be assessed by all the Chairpersons of the Board Committees chaired by the Board Chairperson and organizational performance and key performance areas to arrive at a score which will determine the eligibility for a performance.

(b)(i) Performance contracts are entered into, which include Strategic performance objectives/Key Results Areas, weightings, Key Performance Indicators, Targets, Rating Descriptors, Source of Evidence, Observations and Score Ratings.

(ii)(aa) (bb) (cc) A five point rating scale is used for the Strategic Performance Objectives which determines that an individual who has reached a Level 4 rating (80%- 85%) becomes eligible for a performance bonus incentive. The appraisal indicates that the employee has achieved all the performance aspects of the job and the performance is significantly higher than the expected performance standard.

Ports Regulator South Africa (PRSA)

1(a)(i) The starting salary was approved by Minister of Transport in consultation with cabinet, as the

CEO is appointed by the Minister of Transport in terms of the National Ports Act (12 of 2005) section 34, and thereafter increases were approved by the Regulator (board) as the same percentage annual salary increase as pertains to the staff as a whole.

(ii) The CEO performance is appraised by the Human Resources/ Remuneration Committee of the

Regulator (Board) in terms of an approved performance agreement, and the performance assessment and score is signed off by the Chairperson. If the overall score is above a minimum threshold of 3.1 out of a maximum of 5, a bonus is payable in terms of the Ports Regulator Short Term Incentive Policy which sets out the bonus calculation.

(b)(i) The CFO checks the performance bonus calculation and it is captured on the payroll and the

CFO and CEO approves every pay-run before payment as the CEO is the accounting officer as per the Ports Act. This is verifiable from signed pay-run records. The pay-runs and performance system, calculations and records are subsequently audited by internal audit and external audit by the Auditor General.

(ii) No internal or external auditor findings on CEO salary or bonus were incurred in each of the

listed years indicating that the specified criteria were followed in these financial years; (note

that the overall audit outcome in each year is specified in brackets.)

(aa) 2013-14, (unqualified audit)

(bb) 2014-15 (clean audit) and,

(cc) 2015-16 (clean audit)

Airports Company South Africa (ACSA)

(1)(a) criteria were used to approve

(i) salaries and

• Projected inflation i.e. based on CPI as determined by stats SA (CPI refers to the Annual Percentage Change in the Consumer Price Index excluding interest rates on mortgage bonds);

• External remuneration market analysis (Executive Remuneration Survey and Comparison Ratio Report);

• Supporting variables such as capability and performance; and

• Company financial affordability.

(ii) bonuses,

• The incentive remuneration policy and scheme rules of the company, a matter falling inside the discretion of the Board of Directors.’ - The CEO performance contract and assessment rating as concluded by relevant members of the Board of Directors;

• The Company’s key performance framework score card approved by the Board of Directors;

• The On-target bonus percentage which is 50% of the CEO’s annual salary.

(b) procedures exist to verify that the specified criteria were

(i) used and (ii) followed in the (aa) 2013-14, (bb) 2014-15 and (cc) 2015-16 financial years;

• An internal audit is conducted on an annual basis prior to the payment of incentive remuneration to ensure compliance with company policy and scheme rules;

• The remuneration increase and bonus payment schedule is signed-off by relevant authorized company officials

Air Transport Navigation Systems (ATNS)

1(a) The criteria within the Company’s Performance Management and Short Term Incentive Policies were used to determine the eligible rate.

The application of the criteria is audited by an External Auditing Company, every financial year.

South African National Roads Agency Limited (SANRAL)

1(a) criteria were used to approve

(i) salaries

• The Board uses comprehensive Market Surveys to determine the appropriate level for each pay grade, with a minimum and maximum per grade. The grade and adjustments includes consideration for inflation (including medical aid inflation), scarce skills, qualification and experience. Individual pay adjustments are based on performance or merit ratings.

(ii) bonuses

The current SANRAL Short Term Incentive (STI) policy, was introduced and approved by the SANRAL Board in 2012, after the pilot in 2011. This policy specifically abandoned the subjective discretionary bonus regime used since 1998. The policy takes the following principles into account:

a. The organisation as a whole has to perform above a specified minimum in terms of the Annual Performance Plan, in order to be eligible.

b. An individual has to score at least a 3 (5 point scale) merit rating to be eligible for a bonus

c. Four tiers of measurable performance was identified: Organisation, Region, Cluster and individual.

d. Each region and cluster has to perform above a specified level, per their identified measurable criteria, in order for that region or cluster to qualify for a score in that tier. The criteria is directly linked to the SANRAL strategic objectives.

e. Each grade participates in various weighting on the tiers depending on their opportunity to influence the tier.

This formula and all the supporting documentation or proof to determine the scores for each performance rating is reviewed in detail by Internal Audit before the payment is made. Once payment is made, this is checked against the calculated values for errors. The Auditor General then reviews during their normal annual audit the same process. On every tier, each performance criteria has to comply with the principles of “SMART” criteria, which leaves little room for subjectivity.

Individual performance contracts, which also includes performance criteria, signed annually between each individual and his/her line manager and submitted to HR for recordkeeping. This process is also audited by the AG in great detail. An individual will receive a merit rating, annually, which is then used as follows:

a. Adjust annual salary (also formula based), effective from 1 March each year.

b. Included in the formula to determine STI bonus, which is paid after the Annual Financial Statements and Performance information is signed off by the AG, normally in September.

(b) procedures exist to verify that the specified criteria were (i) used and (ii) followed in the (aa) 2013-14, (bb) 2014-15 and (cc) 2015-16 financial years;

The processes are audited internally and externally by the AG.

Reply:

The residents of Wards 20 and 22 in the Kgetlengrivier Local Municipality in North West will get clean water once the funds for the pipeline are confirmed.

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Reply:

1. I am informed that the furthermore, as the investigations are still underway and in putting the interest of the company first, the Board decided not to put Mr Maseko on suspension, but imposed stringent conditions during this period at work

2. (a)The Board has adopted the findings and recommendations of the Report to conduct further investigations on some of the allegations with a view to institute disciplinary proceedings. Where recommended, the Board is in the process of reporting any criminal acitivity to the South African Police Service. In addition, certain implicated individuals have been placed on suspension pending the said further investigation.

(b) (i) and (ii): The timelines and deadlines for the period of suspension and finalisation of the further investigations is 3 February 2017.

3. (a) and (b): Yes, there are processes and mechanisms in place to ensure recommendations are executed. Furthermore investigations into the recommendations are underway; the process of reporting criminal activity to the South African Police Services is underway and suspension of certain individuals, where warranted, has been executed. The Board has further delegated to some of its members some of the actions to be taken to ensure the execution of the findings and recommendations, subject to due process, and as per applicable legal prescripts.

4. (a) and (b): All recommendations have been adopted by the board save for one part regarding the City Lodge contract of 2007 to discipline the then Tender Board and Executives. The reason being that due to the passage of time, most of the individuals mentioned are no longer in the employ of the company and further, that the reversal of that contract would not be in the interest of the Company, nor will it make commercial sense to do so.

Reply:

(1) Yes, I am aware of the findings that are presented in the National Treasury Expenditure and Performance Review (EPR). Please note that the key purpose of the review is to understand the financial implications of water services delivery, not to reflect specifically on sector performance and propose solutions. The Review has also developed an expenditure performance Costing Model that will facilitate regular discussions with National Treasury on the relationship between government expenditure and performance. The model measures (and predicts) performance against current (and future) levels of financial expenditure. The Review confirms what my Department already knows with regards to the current constraints to performance within the water (services) value chain. In fact, my Department provided the consultant with this insight during the initial data and information collection phase, prior to the publication of the Review, but was never given the opportunity to comment on any of the draft versions. The Final Review has not been circulated within my Department for comment.

(2) The findings contained in the Review have not led to any new programme or measures being implemented. My Department, as sector leader and as part of its mandated responsibility, continues to monitor sector performance and intervenes when appropriate, and has recently developed a Regulatory No Drop System in support of Water Conservation and Demand Management, and is finalising a comprehensive and detailed Water Sector Investment Framework, which forms part of an overarching National Water and Sanitation Master Plan.

My Department is also implementing Municipal Water Master Plans within 27 Priority District Municipalities in support of the Water Services Development Planning process, which will ultimately emanate in a pipeline of projects, to address the water services delivery problems that might exist.

(3) Yes, I am aware of the current state of infrastructure in the water sector, and specifically the state of asset management, and associated problems with infrastructure operation and management within municipalities. My Department is busy finalising a detailed municipal investment requirements analysis, which is part of the sector Investment Framework, to confirm the actual extent of the problem, financially, within municipalities. The Investment Framework will be completed in 2017, and my Department will, in due course, make recommendations over what period of time the infrastructure should be replaced, refurbished or extended, while taking into account the current economic environment in the country. The 59% quoted in the Review is based on a preliminary Departmental estimate of infrastructure renewal. Other studies have also based renewal on accumulated depreciation which is only a financial provision for the renewal of infrastructure. This implies that there is shortfall in funding.

(4) Due to this identified shortfall, my Department has engaged with National Treasury and COGTA to establish a new refurbishment fund. The required funds to support the investment requirements have not yet been secured from National Treasury. This will only happen once the Investment Framework has been finalised and the findings and recommendations have been presented and discussed internally within my Department, and once other lead sector departments, who are involved with municipal water services delivery, have had the opportunity to make their inputs. The funding is critical to ensure that the pipeline of projects emanating from the Water Services Master Plans are implemented.

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Reply:

(1) The Minister empowered in terms of section 81(1) of the National Road Traffic Act, 1996 (Act No. 93 of 1996) to grant exemptions to motor vehicle due to their designs that do not comply with the provisions of the Act. The “TRH11 Dimensional and Mass Limitations and Other Requirements for Abnormal Load Vehicles” and “TRH11 Administrative Guidelines for Granting of Exemption Permits for the Conveyance of Abnormal Loads” TRH 11 are guidelines document which are used in assisting me in making the decision.

(2) Paragraph 2.2.2 of the TRH11 “Dimensional and Mass Limitations and Other Requirements for Abnormal Load Vehicles” clearly outlines the maximum allowable dimensions under permit of the load which may be carried by the vehicle for which principle approval have been issued.

(3) In terms Section 81 (2) of the Act the MEC may, after the applicant has paid the fees or charges referred to in section 7 (3) and subject to such conditions as he or she may determine, authorise in writing, either generally or specifically, the conveyance in a safe manner on a public road of passengers or any load otherwise than in accordance with this Act. Therefore, the MEC’s are empowered to prescribe any processes for the better management of these vehicles.

(4) As highlighted in paragraph 1 above and in accordance with Section 81(2) of the Act the MECs may use TRH11 and any other conditions in considering any applications.

(5) They may take into consideration the provisions of the TRH11 Administrative Guidelines for Granting of Exemption Permits for the Conveyance of Abnormal Loads in determining permit conditions..