ATC140711: Report of the Portfolio Committee on International Relations and Cooperation on the Budget Vote 5: International Relations and Cooperation, dated 9 July 2014
International Relations
Report of the Portfolio
Committee on International Relations and Cooperation on the Budget Vote 5:
International Relations and Cooperation, dated 9 July 2014
The Portfolio Committee on International Relations and Cooperation (the
Committee), having considered the Budget Vote 5: International Relations and
Cooperation of the Department of International Relations and Cooperation (the
Department), reports as follows:
1.
Introduction
The Committee met on 2 July 2014, both in the morning and afternoon, to
consider the Departments Annual Performance Plan (APP) 2014-2015, which is
based on the Departments Strategic Plan 2013-2018. The Committee further
discussed the African Renaissance and International Cooperation Funds
Strategic Plan 2014-2017 and its Annual Performance Plan 2014-2015, together
with the overall budget allocation for 2014/15 The purpose of the first part of
the meeting was to enhance the knowledge base of members of the Committee on
the international relations sector; while the second part was primarily for the
Department and its entity to outline updates in the strategic plans, and
demonstrate the alignment of its annual performance plans to its budget for the
2014/15 financial year.
In preparation for the Committees deliberations on the budget
allocation, the Committee received a series of presentations aimed at giving a
general overview of what the international relations sector entails, and the
trends that are influential to the South African foreign policy. For the first
part, the presenters were Mr L Sigwela, Committee Secretary; Ms L Mosala,
Content Adviser; Mr D Madlala, Committee Researcher and Dr S Zondi, Executive
Director
:Institute
of Global Dialogue.
2.
Presentations in the first session
Mr Sgwelas presentation was on the budget process. The information was
meant to unpack the budget processes in Parliament.
Ms Mosalas presentation examined the international relations sector;
its drivers, key role players, the mandate of the Department, the role of the
Committee and the linkages for purposes of oversight, between the Department
and its entity and the Committee. Possible areas for oversight were also
identified for consideration by the Committee in its subsequent engagement with
the Department. The presentation also pointed out the need for the Committee to
ensure that the plans of the Department were aligned to the budget; the
National Development Plan and the 2014 State-of-the-Nation address.
Mr Madlalas contribution was on the expenditure focus of the Department
for the MTEF period. The appropriation to the Department was discussed,
including the activities for which it was intended. The presentation was meant
to create a scenario for the Committee to engage with the intended budget
allocation in readiness to a discussion with the Department later that day. The
expenditure trends in different programmes of the Department were explained for
further consideration by the Committee.
Dr Zondis input was on the trends influential to South Africas foreign
policy since 1994. The pertinent question was whether the baseline for South
African foreign policy has changed since 1994, or reflects an element of
continuity. The baseline was said to be human rights, centrality of Africa
(geostrategic); importance of political and economic integration of Southern
African Development Community (SADC); solidarity with the countries of the
South, and the relationship with other the developed countries of the North for
trade and investment. It was argued that there has been change of the name of
the Department, but the underlying principles of the foreign policy have
remained constant, and adapting to change as it developed.
It was suggested that the Committee could enhance its oversight on
issues affecting the Department including: how South Africa would position
itself as one of the leading powers in Africa, as indicated in the National
Development Plan; South Africa should continue with alliances which would add
value to the region such as the Group of 77 plus China, Non Aligned Movement,
Brazil-Russia-India-China-South Africa (BRICS) forum; and India-Brazil-South
Africa (IBSA). It was further suggested that in its participation in global
governance, South Africa should continue to defend the interests of the
developing countries.
Dr Zondi highlighted the importance of the emerging powers and forums of
the South to which South Africa was a member. Although BRICS membership was
regarded as not wholly geographically south, but ideologically it represented
the aspirations of the South. He pointed out to the contestation by some
countries in the North, fearing that BRICS would win certain countries that
have dependency on the World Bank, on the notion of a BRICS Development Bank
aimed at funding some projects of developing countries which would otherwise
not qualify under the Bretton Woods institutions.
South Africa was said to have emerged from a strategist orientation,
with four elements underpinning its approach. It was said to be reformist, thus
participating in international organisations and keeping the agenda of reform
alive. It was also regarded as Pan Africanist, in that it placed Africa at the
centre of its engagement with the world; and strived to preserve the
independence and self-reliance of the continent. It was further said to be
ideologically eclectic, in that it was neither Marxist, socialist, liberal nor
capitalist; and that it was a multilateralist, in that it acted in conjunction
with all concerned on issues of global governance, and strived to work as a
collective and build relations. This particular strategic orientation would be
difficult to sustain in the face of the changing environment.
For oversight purposes, the Committee was drawn to the issues which were
considered important that the Department carried them through. These included
the establishment of the South African Development and Partnership Agency
(SADPA); the revision of the White Paper on foreign policy, with the new
concept of UBUNTU,
to align it to the
National Development Plan (NDP), and the operationalisation of the South
African Council for International Relations (SACOIR); discussions around the
code of conduct for South African companies abroad; professionalization of
diplomacy as a career, and to have a set ratio between career diplomats and
politically deployed personnel.
Also raised were the operationalisation of the Coordinating mechanism
for activities of international nature by municipalities and provinces
(para-diplomacy), in order to avoid being penetrated by other countries through
provinces as opposed to enter the country at the national level; conducting outreach
programmes to address the perceived elitist nature of foreign policy; the
enhancement of public diplomacy through media interface including use of the
UBUNTU Radio; involvement of business in support of international relations
policy; and increasing interface with intellectuals.
It was also highlighted that the Department consider the directives
provided for in the 2014 SONA, such as that Southern Africa and Africa be seen
as trade and investment zones; foreign policy be aligned to the NDP;
development of economic partnerships with developing countries and
consideration of developed countries as economic partners; and ensure the
implementation of international agreements and obligations. He continued to
point out that the blue region was increasingly becoming important. The
Indian Ocean region was strategic as a shipping lane, a trade route and
security zone for emerging powers around south Atlantic and he even wondered if
it could be an inverse of the North Atlantic Treaty Organisation.
Dr Zondi also referred to the implications of the provisions of the NDP
such that, with economic diplomacy, there was a need for a dialogue on what
constituted national interest; the examination of types of regional
agreements the country should have, and whether it should have bi-national
commissions with every country or with strategic partners; focus on an audit of
foreign representation in terms of whether the country should maintain its
current global footprint; and the importance of a strengthened research and analysis
capacity to support the Department keep in step with changing nature of
international relations.
3. Observations and concerns raised by the Committee
3.1
The Committee sought more information as
follows:
3.11
The role South Africa would play regarding
the situation in the Middle East. Furthermore, whether before South Africa
makes an intervention to a situation of another country, it would make an
intelligent analysis of the situation.
3.12
The type of oversight strategy the
Committee could put in place for its work over bilateral and multilateral
missions abroad.
3.13
Whether the circumstances that caused the
R100 million over expenditure, were related to the funeral the late former
President Nelson Mandela or there were other factors at play.
3.14
There was need to explore modalities
engaged by South Africa in aligning its domestic imperatives with its
international obligations and whether South Africa was stretching itself with
regard to its representation abroad. The important element was for South Africa
to get value for money in terms of its missions abroad.
3.15
It was suggested that South Africa needed
to be aggressive on its public engagement. It was regarded important for South
Africa to know what the general public think about Governments decisions
relating to international relations, and to explain certain decisions taken to
avoid misconception.
There was a need to
brief both the South African and international media and the South African
society at large.
3.16
The Indian Ocean was regarded as of
strategic importance for South Africa. It has become a route by which South
Africa will increase trade with the countries in the Far East and the North.
3.17
Whether Treasury would make provision for
currency fluctuation when allocating the budget and how that would normally
be
built into the budget.
3.2
Responses by the presenters
3.21
It was explained that the Committees
oversight function was limited by the Parliamentary oversight model which
prescribes that the committees may travel abroad for study tours, and not
necessarily on oversight. According to the prevailing model, oversight visits
were only envisaged internally within the borders of South Africa. As a
consequence of that, the Committee has not been able to follow up on the projects
of the ARF and the activities of the missions abroad.
3.22
With regard to the Assets register, there
was an audit which was taken in all the 125 South African missions abroad. The
outcome was that some of the properties which were reported to be there were
not there, and the ones which were reported were there were not recorded.
3.23
The overspending was not only as the
result of the state funeral of the late former President Nelson Mandela, but
also as the result of
expenditure relating to the marketing and
protocol support services for the hosting of the 17
th
Conference of
the Parties to the UN Framework Convention on Climate Change and the BRICS
summit. These activities increased spending on travel and subsistence, venues
and facilities, and communication services over this period
International Transfer,
Funeral,
support the African
Union (AU) Commission.
4.
Briefing by the Department on its Budget vote 5:
International Relations and Cooperation
4.1
Presentation by the Department
Deputy Minister Luwellyn Landers gave a political overview of the global
situation under which the Department had to operate. He highlighted that South
Africas engagement with the world has been on the increase since 1994. He
attributed that to, among others, South Africas unique international profile
which evolved from its liberation from apartheid; effects of globalisation; and
the changing nature of diplomacy and international relations.
South Africa finds itself operating in a changing global environment.
This was characterised by many factors including the shift in global political,
trade and economic patterns; growing influence of the emerging economies of the
South; impact of non-state actors and social movements and new global
opportunities and frontiers including the blue and green economies and
knowledge economy.
He continued to share South Africas global standing as a respected,
active and responsible global citizen. The country was reported to be a host to
the second largest number of foreign representation in the world, with a global
footprint of 125 missions abroad plus Gaza, covering 180 countries. South
Africa has constantly championed human rights, disarmament and peaceful
resolution of disputes; the development of the South and the centrality of Africa
in its foreign policy. The Diplomacy of Ubuntu has earned global respect and
affords South Africa with a unique voice of legitimacy and influence.
Then the Acting Director-General, Mr Mahoai, in his presentation
recalled that according to the South Africas Constitution, the President has
the ultimate responsibility for the foreign policy and international relations
of South Africa. The Minister of International Relations is entrusted with the
formulation, promotion and execution of South Africas foreign policy and with
daily conduct of its international relations.
The Department was working for the realisation of South Africas foreign
policy objectives. These were to be achieved through coordinating and aligning
South Africas international relations abroad; monitoring developments in the
international environment; communicating governments policy positions;
developing and advising government on policy options. Its mandate extended to
creating mechanisms and avenues for achieving objectives; protecting South
Africas sovereignty and territorial integrity; contributing to the creation of
an enabling international environment for South African business; sourcing
development assistance and assisting South African citizens abroad.
5. Overview of the Departments
Medium Term Strategic Framework (MTEF) 2014-2016
The Departments budget vote was reported informed by South Africas
strategic vision for the country, region, continent and the world. In pursuit
of the countrys foreign policy objectives, it would be acting in support of
Governments medium term strategic objectives and the twelve strategic
outcomes. Outcome 11 focussing on external relations is the responsibility of
the Department. It has also taken due cognisance of the recommendations in Chapter
7 of the National Development Plan 2030. It reported as fully aware of the
great responsibility placed on it to contribute to a better life for all in
South Africa and in Africa. It has thus undertaken to achieve the mandate
through pursuing the high-level objectives of the enhanced African Agenda and
sustainable development; strengthen political and economic integration of the
Southern African Development Community (SADC); strengthen South-South
relations; strengthen relations with the strategic formations of the North;
participate in global system of governance; and strengthen political and
economic relations.
During the course of the medium term, the spending focus would be on
advancing national priorities through economic and political bilateral relations;
participating in global governance fora; advancing an equitable, just and
representative rules-based multilateral system; a sustainable developed and
economically integrated Africa; and the regional integration of the Southern
African Development Community (SADC). Greater impetus would also be directed
towards strengthening policy and coordination in relation to outgoing South
African development cooperation.
South Africa was aware that regional integration should be pursued
through a three-pronged approach, namely, regionally, continentally and
globally. In order to build greater productive and export capacity, including
global competiveness across the region, it would be necessary to advance a
developmental integration agenda in Southern Africa. The agenda should combine
trade integration, infrastructure development and sector policy coordination.
The Committee was made aware that the previous budget programme dealing
with International Relations has since been divided into two budget programmes.
International Relations would be focussing on Bilateral Relations and
International Cooperation programme would deal with Multilateral Relations. The
split was reported as allowing for a more focussed approach to planning.
The annual performance plan (APP) of the Department and that of its
entity were reported to be significantly different from previous APPs. They
were far more detailed in their approach, and were compliant with the Framework
for Management Performance Assessment (MPAT). To this end, the Office of the
Director-General has established a new unit called Strategic planning,
Monitoring and Evaluation Management. The unit is to coordinate and evaluate
the strategic planning and monitoring processes of the Department.
The Department intended tabling a new Bill that would repeal the African
Renaissance Fund (ARF), and establish a new fund, the Partnership Fund for
Development. Then the South African Development Partnership Agency (SADPA)
would be established as a strategic entity for all outgoing development
cooperation.
Two planned policy options were reported on. Notably, these have not
changed from the information given since 2012/13. These related to the
establishment of SADPA and the tabling of a Foreign Service Bill to cater for
the unique work environment in which the Department operates. The Bill was
expected to create the necessary flexibility to address the challenges posed by
operating at the global level.
South Africa was elected as a member of the Economic and Social Council
(ECOSOC) for the period 2013-2015. The main focus would be in shaping the
implementation of the post-2015 United Nations Development Agenda.
Economic diplomacy would be prioritised given its importance in
promoting South Africas value-added exports and attracting Foreign Direct
Investment (FDI). Focus would be on skilling diplomats, including Heads of
Mission, in the tools of economic diplomacy.
6.
Situational analysis
The Department gave a situational analysis which underlined a continued
trend of South Africa, Africa and the broader Souths socio-economic
development being slowed by challenges of the developed countries. The global
environment continued to be characterised by a major shift in global, economic
and social dynamics. These included the realignment of new economic powers, new
media and social networks; environmental change; heightened demand for scarce
resources and the changing nature of conflict and insecurity. The new economic
powers were influencing the balance of the global distribution of power,
resulting in the formation of new political and economic groupings. South
Africa and African economies were increasingly linked to these new economic
powers.
Africas economic integration in pursuit of increased intra-continental
trade has become more important in light of the current global economic
environment. Efforts to built infrastructure in the continent would be
intensified to improve connectivity of African economies. These would create
new value chains and facilitate the movement of goods within the continent.
Africa has abundant natural resources; however, political stability and good
governance should be entrenched.
South Africa was potentially at the heart of global shipping routes. It
was believed that the southern part of South Africa should reposition itself to
play an increasing role in shipping networks due to problems associated with
the use of the Suez Canal. The Indian and south Atlantic oceans were becoming
very strategic for trade and investment for South Africa.
7.
Distribution of the Budget
According
to the Estimates of National Expenditure 2014, the Department was expected to
be allocated R5.7billion for the 2014/15 financial year. However, over the
medium term, expenditure was expected to increase to R6.4 billion owing to
inflation related adjustments made across all programmes. These would include
provision for rental increases, unitary fees incurred for the head office
building, and salaries for transferred officials and Locally Recruited
Personnel. The Departments growth trend (budget) has been decreasing over a
seven year period. Taking into consideration the projected foreign exchange
loss, the budget growth would further decrease to an annual average rate of 2.3
per cent.
The
bulk of the Departments allocation over the medium term would be directed
towards spending on compensation of employees, travel and subsistence,
operating leases, transfer payments to international organisations and
departmental agencies, and payments for capital assets in the Administration,
International Relations and International Transfers programmes.
According to the Treasury Estimates of National Expenditure (ENE) 2014,
these programmes support the 125 South African diplomatic missions abroad, the
management of the Departments diverse assets and property portfolio, and
facilitate transfers to international organisations as membership fee
contributions. These activities are to be carried out by the personnel on the
Departments funded establishment of 5 040 posts, of which 2 375 are additional
to the approved establishment. The Departments establishment includes 2 270
posts for personnel employed in the South African diplomatic missions abroad
who are paid in the local currency of that country. This would make expenditure
on compensation of employees, specifically in the International Relations and
International Cooperation programmes, vulnerable to fluctuations in the
exchange rate.
The
Department has planned to fill some of the critical vacancies over the medium
term to address capacity requirements in key competency areas such as
economics, development, international relations and diplomatic affairs. This
was expected to increase spending on compensation of employees from R2.4
billion in 2013/14 to R2.7 billion in 2016/17.
The
ENE has noted that expenditure
on consultants
over the medium term was
expected to increase once the Department began the ICT modernisation project
and infrastructure development. Expenditure in the Administration programme
over the medium term was expected to increase to support other departmental
objectives, such as the operationalisation of the South African Council of
International Relations, and the finalisation of the Foreign Services Bill and
the Partnership Fund for Development Bill. Once enacted, the latter bill would
repeal the current African Renaissance International Cooperation Fund Act
(2000) and facilitate the operationalisation of the South African Development
Partnership Agency, which would supports the development of the African
continent and the regional integration of the SADC. This was expected to
increase spending on legal consultants, communication and compensation of
employees over the medium term.
The
ENE stated that the Department received Cabinet approved additional allocations
of R25.2 million over the medium term for capacity building for the South
African Development Partnership Agency, R80 million to cater for all the
logistical arrangements and the diplomatic and protocol services to be rendered
by the Department with other departments during the inauguration of the
president in 2014, and R115.1 million as a voluntary contribution to the
African Union (AU) Commission.
The
Budget also includes a Cabinet approved reduction of R576.8 million over the
MTEF period, which the Department was to effect on the transfer to the African
Renaissance International Cooperation Fund and expenditure on non-core items of
goods and services. The fund would use its accumulated reserves to sustain
itself, if needed, so the reduction was not expected to have an adverse effect
on service delivery.
Spending on infrastructure increased from R134.5 million in 2010/11 to
R203 million in 2013/14 and was expected to increase to R236 million over the
medium term. The allocation earmarked for infrastructure would go towards the
construction of new state owned chanceries, official residences and staff
accommodation abroad, and the completion of existing renovation and
refurbishment infrastructure projects abroad. In particular, the Department was
expected to complete the construction of chanceries and official residences in
Dar es Salaam (Tanzania) and Lilongwe (Malawi), and progress substantially with
the construction of chanceries in Kigali (Rwanda) and Mbabane (Swaziland), over
the medium term.
The Department would engage the private sector for the development of
chanceries and official residences on vacant state owned land in New Delhi
(India), Riyadh (Saudi Arabia), Dakar (Senegal), Bamako (Mali), Gaborone
(Botswana) and Montevideo (Uruguay) through development agreements or public
private partnerships.
Expenditure trends for departmental
programmes
Table 1 Budget Allocation-International
Relations and Cooperation
Programme
|
Adjusted appropriation
|
Budget
|
Nominal % change
|
Real % change
|
||
R million
|
2013/14
|
2014/15
|
2015/16
|
2016/17
|
2013/14-2014/15
|
|
Administration
|
1 320.7
|
1 396.3
|
1 393.3
|
1 441.1
|
5.72 per cent
|
-0.45 per cent
|
International Relations
|
2 768.1
|
2 810.2
|
3 002.3
|
3 225.4
|
1.52 per cent
|
-4.41 per cent
|
International Cooperation
|
459.0
|
486.4
|
541.3
|
560.2
|
5.97 per cent
|
-0.22 per cent
|
Public Diplomacy and Protocol Services
|
254.5
|
317.2
|
250.3
|
265.9
|
24.64 per cent
|
17.36 per cent
|
International Transfers
|
952.4
|
744.3
|
846.8
|
918.0
|
-21.85 per cent
|
-26.41 per cent
|
TOTAL
|
5 754.7
|
5 754.4
|
6 034.0
|
6 410.6
|
-0.01
per cent
|
-5.84
per cent
|
Source:
Estimates of National Expenditure 2014
Table
1 illustrates the changes in allocations from the years 2013/14 and 2014/15.
For programme 1: Administration, the nominal change is 5.72 per cent and the
real change is -0.45 per cent. Programme 2: International Relations
has
a nominal change of 1.52 per cent and the real change of
-4.41 per cent. It would be noted that in previous years the Department had
four programmes, however it has split its International Relations and
Cooperation Programme into two programmes namely: Programme 2: International
Relations and Programme 3: International Cooperation. Programme 3:
International Cooperation had a nominal change of 5.97 per cent and a real
change of -0.22 per cent. Programme 4: Public Diplomacy and Protocol Services
experiences a nominal change of 24.64 per cent and a real change of -17.36 per
cent. Finally, Programme 5: International Transfers experiences a nominal
change of -21.85 per cent and a real change of -26.41 per cent.
7.1
Expenditure
per programme
Programme 1: Administration
The
programme was reported responsible for policy development and management of the
Department. The programme has been allocated R1, 396.3 billion for the 2014/15
financial year. Over the medium term, spending in this programme was expected
to be on providing property and office management services to the Department,
as well as modernising its ICT infrastructure. Thus the bulk of the
Departments budget over the medium term was allocated to the Corporate
Services, Office Accommodation and the Foreign Fixed Assets Management
subprogrammes for spending on compensation of employees, travel and
subsistence, operating payments, leases, computer services, and capital
expenditure.
According
to the ENE, the allocations to the Office Accommodation subprogramme over the
medium term provided for the locally based property portfolio, which consists
of the head office building, VIP and protocol services lounges in three
international airports, two diplomatic guesthouses as well as accommodation for
the United Nations (UN) agencies in South Africa, the Pan African Parliament
and the secretariat for NEPAD.
E
xpenditure
over the seven-year period increased largely due to the challenge of managing a
geographically decentralised department that incurs expenditure in multiple currencies.
This was particularly the case for spending on remuneration and incentive
packages for personnel deployed in foreign missions, official and residential
accommodation, and goods and services. This was the reason for the significant
increase in spending in the Foreign Fixed Assets Management subprogramme
between 2010/11 and 2013/14, as the Department acquired property for the
mission in Geneva, Switzerland in 2011/12, built chanceries and official
residences in Tokyo and Washington in 2012/13, and provided for increases in
lease payments and municipal rates paid for state owned properties and
embassies in foreign missions. Other related expenditure increases were in
terms of legal and contract management fees for the public private partnership
contracts.
Programme 2: International Relations
The
programme was reported responsible for strengthening political, economic and
social relations with targeted countries to advance South Africas national
priorities. The programme has been allocated R2, 810.2.billion for the 2014/15
financial year. The spending focus over the medium term would be on promoting
relations through political and socio-economic development.
Subprogrammes
-
Africa
would embrace relevant national priorities by
strengthening bilateral cooperation with individual countries in Africa,
particularly through focusing on increasing exports of South African goods
and services, foreign direct investment with technology transfers into
value added industries and mineral beneficiation, and inbound tourism and
skills enhancement. In 2013/14, foreign representation continued through
47 diplomatic missions in Africa, which facilitated 8 structured bilateral
mechanisms and 37 level engagements during state visits to promote
national priorities. By the end of September 2013, 3 structured bilateral
mechanisms and 4 trade and investment seminars had been held to promote
South Africas national priorities, investment and tourism. This subprogramme
had a staff complement of 330 in 2013/14.
-
Asia and Middle East
would embrace relevant national
priorities by strengthening bilateral cooperation with individual
countries in Asia and the Middle East, particularly through focusing on
increasing exports of South African goods and services, foreign direct
investment with technology transfers into value added industries and
mineral beneficiation, and inbound tourism and skills enhancement. In
2013/14, foreign representation continued through 32 diplomatic missions,
which facilitated 7 structured bilateral mechanisms and 15 high level
engagements during state visits to promote national priorities. By the end
of September 2013, 7 structured bilateral mechanisms and 27 trade and
investment seminars had been held to promote South Africas national
priorities, investment and tourism. This subprogramme had a staff
complement of 236 in 2013/14.
-
Americas and Caribbean
would embrace relevant national
priorities by strengthening bilateral cooperation with individual
countries in the Americas and the Caribbean, particularly through focusing
on increasing exports of South African goods and services, foreign direct
investment with technology transfers into value added industries and
mineral beneficiation, and inbound tourism and skills enhancement. In
2012/13, foreign representation continued through 18 diplomatic missions,
which facilitated 5 structured bilateral mechanisms and 7 high level
engagements during state visits to promote national priorities. By the end
of September 2013, 2 structured bilateral mechanisms and 19 trade and
investment seminars had been held to promote South Africas national
priorities, investment and tourism. This subprogramme had a staff
complement of 143 in 2013/14.
-
Europe
would embrace relevant national priorities by
strengthening bilateral cooperation with individual countries in Europe,
particularly through focusing on increasing exports of South African goods
and services, foreign direct investment with technology transfers into value
added industries and mineral beneficiation, and inbound tourism and skills
enhancement. In 2013/14, foreign representation continued through 28
diplomatic missions, which facilitated 6 structured bilateral mechanisms
and 18 high level engagements during state visits to promote national
priorities. By the end of September 2013, 6 structured bilateral
mechanisms and 38 trade and investment seminars had been held to promote
South Africas national priorities, investment and tourism. This
subprogramme had a staff complement of 223 in 2013/14.
The spending focus over the medium term would continue to be on
facilitating socioeconomic development by strengthening bilateral cooperation
with individual countries, particularly throughout the rest of Africa, Europe,
Asia and the Middle East. The increase in expenditure in all the subprogrammes
between 2012/13 and 2013/14 related to improvements in conditions of service,
the continued provision of support to the 125 diplomatic missions, the hosting
of trade and investment seminars, and engagements with chambers of commerce to
promote South Africa as an investment destination.
The deterioration of the Rand against most major currencies also
contributed to the increase in expenditure over this period, as a significant
proportion of the programmes expenditure is denominated in foreign currencies.
As the Rand has continued to deteriorate, expenditure on compensation of
employees, property payments and operating payments, venues and facilities is
set to continue rising over the medium term. This would allow the Department to
undertake over 819 economic diplomacy activities to attract investment and
tourism, as well as 34 structured bilateral and 65 high level engagements to
strengthen political relations.
Programme 3: International Cooperation
Purpose
- Participate in international organisations and institutions in line with South
Africas national values and foreign policy objectives.
The
programme was reported responsible for participation in international
organisations and institutions in line with South Africas national values and
foreign policy objectives. The programme has been allocated R486.4 million for
the 2014/15 financial year.
Objectives
-
Contribute towards a reformed, strengthened and, multilateral
system that is based on equal rules and that would be responsive to the
needs of developing countries and Africa, in particular, by participating
in the global system of governance on an ongoing basis.
-
Strengthen the African Union (AU) and its structures by:
-
providing financial and technical support for operationalising the
African Court of Justice and AU financial institutions by March 2014; and
-
providing
ongoing financial support for the
operations of the Pan African Parliament in terms of the country host
agreement.
-
Contribute to the political and economic integration of African
regions by supporting the implementation of the tripartite summit
comprising the Common Market for Eastern and Southern Africa, the East
African Community and the SADC on establishing a free trade area between
the summit countries by March 2014.
-
Improve governance and capacity in the SADC secretariat on an
ongoing basis by implementing the secretariats job evaluation plan and
assisting with the recruitment process on an ongoing basis.
-
Contribute towards the New Partnership for Africas Development
(NEPAD) process for socioeconomic development in Africa by participating
in the African Peer Review Mechanism and submitting the African Peer
Review Mechanism country report when required.
-
Strengthen bilateral, trilateral and multilateral interest and
relations within the Brazil-Russia-India-China South Africa group of
countries dialogue forum through continuous active participation in forum
structures.
-
Strengthen political solidarity, economic cooperation and
socio-cultural relations with Asian countries by participating in the New
Asian-African Strategic Partnership structures over the medium term.
Subprogrammes
-
Global System of
Governance
provides for multilateralism and a rules-based international
order. This would entail participating and playing an active role in all
forums of the UN system and its specialised agencies, and funding
programmes that promote the principles of multilateral activity. In
2013/14, South Africa participated in the 67th UN General Assembly and
contributions were made to agenda items dealing with the peaceful
resolution of conflict in Africa and Syria. During the 23rd session of the
UN Human Rights Council, South Africas position in the negotiation of
resolutions in the area of political and socioeconomic reforms was
advanced. This subprogramme had a staff complement of 161 in 2013/14.
-
Continental
Cooperation
would provide for the enhancement of the African Agenda and
sustainable development. In 2013/14, South Africa participated in the
election observer missions to Zimbabwe, Swaziland, Mali and Guinea; and
served on the NEPAD steering committee, where the countrys position on
domestic resource mobilisation was presented. This subprogramme had a
staff complement of 69 in 2013/14.
-
South-South
Cooperation
would provide for partnerships with countries of the South in
advancing South Africas own development needs and the needs of the
African Agenda; and creates political, economic and social convergence for
the fight against poverty, underdevelopment and the marginalisation of the
South. In 2013/14, South Africa participated in various meetings,
including the 12th meeting of Commonwealth foreign affairs ministers held
in New York in September 2013, the 13th ministerial meeting of the Group
of 77 (G77) and China, and the BRICS meeting to monitor and assess the
level of implementation of resolutions from the fifth BRICS summit and
prepare for the next summit. The fourth Forum on China-Africa Cooperation
served to achieve political consensus on the implementation modalities for
the forums development cooperation under the Beijing Declaration and
Platform for Action. This subprogramme had a staff complement of 8 in
2013/14.
-
South-North
Dialogue
would provide for South Africas bilateral and multilateral
engagements to consolidate and strengthen relations with organisations of
the North to advance and support national priorities, the African Agenda
and the developmental agenda of the South. In 2013/14, the Department
hosted the sixth South Africa-European Union (EU) summit. Key outcomes of
the summit included: the establishment of the Structured Dialogue Forum on
Human Rights, the creation of a maritime security cooperation
subcommittee, the creation of an infrastructure fund of R1.4 billion (100
million), a partnership in rural electrification, and an agreement to
establish a South African-EU business council. This subprogramme had a
staff complement of 28 in 2013/14.
The
spending focus over the medium term would be on: participating in the UN system
of governance through South Africas elective membership of the UN Economic and
Social Council (ECOSOC); and contributing to the integration of the SADC
through supporting regional infrastructure programmes. The bulk of the spending
over the medium term towards achieving these objectives occurs in the Global
System of Governance and Continental Cooperation subprogrammes, mainly on
compensation of employees, operating leases payments, and travel and
subsistence.
The
Department would continue playing a supportive role over the MTEF period to the
AU and its structures through the hosting and funding arrangement for the Pan
African Parliament, and providing capacity and technical assistance to the
President in his role as the chair of various infrastructure initiatives under
the New Partnership for Africas Development (NEPAD). The latter would include
projects such as the AU-NEPAD presidential infrastructure championing
initiative, and the North-South road and rail corridor project for the
effective implementation of the Africa action plan 2010-2015. This ongoing role
was set to further increase spending in the Continental Cooperation and
South-South Cooperation subprogrammes over the medium term.
Programme 4: Public Diplomacy and Protocol
Services
Purpose
- Communicate South Africas role and position in international relations in
the domestic and international arenas and provide protocol services.
Public
diplomacy was reported to provide strategic public diplomacy direction and
state protocol services both nationally and internationally. The programme has
been allocated R317.2 million for the 2014/15 financial year.
The
spending focus over the medium term would be on enhancing programmes for
creating public awareness both locally and abroad
Subprogrammes
-
Public Diplomacy
promotes a positive projection of South
Africas image; communicates foreign policy positions to both domestic and
foreign audiences; and markets and brands South Africa by using public
diplomacy platforms, strategies, products and services. In 2013/14, the
Department provided coverage on ministerial and deputy ministerial
activities by holding 24 media briefings and issuing 373 press releases,
including facilitating 8 public participation programmes and awareness
campaigns. This subprogramme had a staff complement of 81 in 2013/14.
-
Protocol Services
facilitates incoming and outgoing high
level visits and ceremonial events, coordinates and regulates engagement
with the local diplomatic community, provides protocol advice and support
to the various spheres of government, facilitates the hosting of
international conferences in South Africa, and manages state protocol
lounges and guesthouses. In 2013/14, the department provided protocol
services for 66 incoming and 61 outgoing state and official visits,
including the South Africa-EU and SADC organ troika summits and the
congress of the Pan African Womens Organisation. This subprogramme had a
staff complement of 221 in 2013/14.
According
to the ENE, the spending focus for Programme 4 over the medium term would be
on: enhancing programmes that create public awareness of South African
international policy and disseminate national priorities, policies and
programmes locally and abroad; and facilitating incoming and outgoing diplomatic
visits to South Africa. Pursuing this objective would require significant
spending on compensation of employees, property payments for diplomatic
guesthouses, venues and facilities, and advertising.
The
projected increase in spending on goods and services and compensation of
employees over the medium term was due to a once-off allocation of R80 million
in 2014/15 for the 2014 presidential inauguration, and to bring the Sefako
Mapogo Makgatho presidential guesthouse and the South African Council on International
Relations into operation. The additional spending on compensation of employees
would allow the Department to increase the number of personnel in the programme
from 349 in 2013/14 to 354 in 2016/17.
Expenditure
increased between 2010/11 and 2013/14 due to the operationalisation of the
Soutpansberg diplomatic guesthouse in Pretoria and renovations to other
diplomatic guesthouses and protocol lounges. In addition, expenditure relating
to the marketing and protocol support services for the hosting of the 17
th
Conference of the Parties to the UN Framework Convention on Climate Change and
the BRICS summit increased spending on travel and subsistence, venues and
facilities, and communication services over this period.
Programme 5: International Transfers
Purpose
- Fund membership fees and transfers to international organisations such and
the United Nations (UN), African Union (AU), and the Southern African
Development Community (SADC).
The
programme was reported to provide South Africas contribution with regard to
membership fees of international organisations, and facilitates transfers to
the African Renaissance and International Fund (ARF). The programme has been
allocated an amount of R744.3 million for the financial year 2014/15.
The
major spending focus over the medium term would be on making transfers to the
ARF and timeous payment of South Africas membership fees to international
organisations.
Subprogrammes
-
Departmental
Agencies
facilitates the transfer to the African Renaissance and
International Cooperation Fund, a public entity of the department. In
2013/14, this subprogrammes total budget was transferred in full to the
entity.
-
Membership
Contribution
facilitates transfers to international
organisations. In 2013/14, this subprogrammes total budget was
transferred accordingly for payments of all membership fees to
international organisations.
Accor
ding
to the ENE the spending focus for Programme 5 over the medium term would be on
making transfers to the public entity and timeous payment of South Africas
membership fees to international organisations. To give effect to a Cabinet
approved reduction of R540.3 million over the medium term, the Department cut
the transfer to the African Renaissance and International Cooperation Fund.
R220.3 million of this was reprioritised to bring the South African Development
Partnership Agency into operation, provide for the 2014 presidential
inauguration and increase voluntary contributions to the AU Commission.
Implementation of cost containment measures
The
Department has held discussions with Treasury regarding its foreign currency
related operations and a number of measures to be further explored in order
curb costs that have been identified. These would include:
Foreign
exchange mechanism; review of appointments of Locally Recruited Personnel;
utilisation of technology in conduct of foreign policy; and a funding model -
acquisition strategy for properties abroad.
8.
Public entities and other agencies
African Renaissance and
International Cooperation Fund
The African Renaissance and International Cooperation Fund
was
established under the African Renaissance and
International Cooperation Fund Act (2000). The fund is mandated to:
-
enhance cooperation between South Africa and
other countries, in particular African countries;
-
promote democracy and good governance;
-
work for the prevention and resolution of
conflicts;
-
promote socioeconomic development and
integration; and
·
provide
humanitarian assistance and human resource development.
The ARFs activities are administered and managed by its advisory
committee, which comprises representatives from the Department and National
Treasury. This committee makes recommendations to the two ministers for
concurrence to fund all its projects. In its current format, the ARF does not
have any personnel and allocations are earmarked for the funding of projects.
It is completely supported and administered by the Department. Plans to set up
an agency to administer the funds operation, including the monitoring of its
projects are well under way. Positive development was noted of a Strategic plan
2014-2017 and Annual Performance Plan 2014-2015 which would facilitate the
Committees oversight on the activities of the ARF, against targets set by it
as an agency of the Department.
The funds strategic goals over the medium term are to:
-
continue to develop operational policy and
guidelines;
-
continue to build capacity to deal with urgent
cases requiring humanitarian and/or emergency assistance;
-
address concerns relating to the question of
supply chain management and procurement, including finalising a database
of approved service providers;
-
address concerns relating to the monitoring
and review of the implementation of projects, including
increasing visits to projects in the countries
concerned, and making more use of the departments bilateral desks for
implementing projects, and the respective missions in the monitoring and
follow up process; and
-
support
projects that
contribute to South Africas foreign policy priorities, particularly in
relation to the consolidation of the African Agenda.
According to the ENE, the spending focus of the African Renaissance and
International Cooperation Fund over the medium term would be on: providing coop
eration funding for
initiatives between South Africa and other countries that relate to the
promotion of democracy and good governance, the prevention and resolution of
conflicts, socioeconomic development and integration, humanitarian assistance
and relief, human resource development, and infrastructural development. The
Fund has been allocated R277.560 million for the 2014/15 financial year.
Cabinet has approved a reduction of R540.3 million over the medium term to the
transfer to the African Renaissance and International Cooperation Fund. The
Fund would use its accumulated reserves to sustain itself such that there is
not an adverse effect on service delivery.
Expenditure on projects declines
significantly over the seven-year period due to strategic and operational
inefficiencies within the fund. A process of restructuring was currently under
way and would result in the establishment of a new agency, the South African
Development Partnership Agency, which is meant to improve the coordination of
South Africas diverse development partnerships. The legislative process for
establishing the agency was under way, with the Partnership Fund for
Development Bill currently before Parliament. Once enacted, the Bill would
repeal the African Renaissance and International Cooperation Fund Act (2000),
resulting in the integration of functions and the transfer of reserves and
assets from the fund to the agency.
9.
Observations and concerns raised by
the Committee
9.1
The budget allocation
for 2014/15 was still not adequate for the expanding mandate the Department is
charged with. The Department should look into reprioritisation of resources to
more urgent priorities. The annual performance plan should adequately reflect
the focus and priorities in 2014 SONA and NDP such as economic diplomacy,
increased intra-Africa trade and closer cooperation with the forums in the
South.
9.2
The element of
continuity with human rights baseline in South African foreign policys trends
since 1994 should be reflected accordingly.
9.3
The oversight strategy
for activities of the missions abroad should be explored.
9.4
The bilateral-national
commissions with other countries were considered too many, and running the risk
of being misinterpreted, losing criteria and having strategic relations with
almost all countries.
9.5
A need was identified
for further deeper discussions on the nature and operational framework of the
African Renaissance Fund. It was also cautioned against the adoption of the
reported operational inefficiencies of the African Renaissance Fund over to the
new partnership fund, SADPA. It was however noted that the Department has
developed a strategic plan and annual performance for the ARF. A need was
expressed for the Committee to conduct oversight in project areas of the ARF,
for purposes of assessing impact on the ground.
9.6
The decision by
government to create the Management Performance Assessment Tool Framework
(MPAT) was an important step in monitoring compliance by departments with good
governance practices. It was noted that in response to this requirement, the
Office of the Director-General has established a unit which will monitor
compliance with MPAT.
9.7
Para-diplomacy was a
newly recognised notion under which provinces and municipalities could be
authorised to engage their counterparts abroad. In order to avoid the
increasing risk of uncorrelated foreign policy postures, the Government
approved Measures and Guidelines for the Coordination of South Africas
International Engagements. A further discussion on the challenges to the
implementation of the guidelines was needed.
9.8
There was a need to
examine the criteria for opening embassies and missions abroad. That also
translated into the need for the Committee to strengthen oversight on assets of
government under the purview of South Africas missions abroad.
9.9
It was highlighted as
important that the activities of the Department were aligned to the 2014 SONA
and the aspirations of the National Development Plan, with emphasis on
intra-Africa trade.
9.10
The Committee noted that
the Department was responsible for the project of delivering the headquarters
of the Pan African Parliament. It was however not clear what the challenges
were in that regard.
9.11
A perception was raised
with regard to South Africa being used by the other BRICS countries in
furtherance of their own strategic interests into Africa.
9.12
Maintaining a diplomatic
footprint in Africa was welcomed and considered strategic and positive.
9.13
The Indian Ocean shipping
lane passage by shipments was regarded very strategic for the country, for
linking the west with the east.
9.14
The best model for
acquisition of property for missions abroad would require deeper examination by
the Committee to be in a position to recommend buying or leasing.
9.15
The issue of fluctuation
of foreign exchange currencies was to be studied further; however it was
cautioned not to be used as excuse for non-compliance with financial
regulations.
9.16
The issue of filling
quotas for employment allocated to South Africa in international organisations
was regarded important. A dedicated discussion on the matter was agreed on.
9.17
The NDP provides for the
streamlining the Department and missions to improve effectiveness. It was noted
that such an issue was a contested terrain between the Department and the NDP
and needed further examination.
9.18
There was a need for an
update on the projects funded under the African Renaissance Fund (ARF). It was
referred to as the only entity under the Department
9.19
There was a need for an
update report on the outcome of investigations, as commissioned by the Minister
of International Relations and Cooperation, on the irregular expenditure under
the ARF. The situation was reflected in the Auditor Generals 2013/14 report.
9.20
A request was made that the Department provide the
Committee with the details of all multilateral institutions that South Africa
is a member; and how many South Africans work there and at what levels; to
ascertain value for the money South Africa is paying towards membership.
9.21
A concern was raised that
it was disappointing that since 2009 there was still non compliance on ICT
matters, sought reasons why the Department was not moving with speed.
10.
Responses by the Department
10.1
Political and economic
considerations inform the establishment of embassies and missions abroad. Prior
1994, South Africa had embassies mostly in Europe because of the countrys
political history. Post-1994, the Department began opening embassies and
missions in Africa in response to the change to a democratic landscape.
10.2
The plan has been to open
missions or embassies in all African countries. History has taught the
Department that it becomes an advantage to have early presence in small
countries, as these countries tend to become lucrative markets later on. In the
future, the Committee will be briefed in the event of embassies being opened.
10.3
South Africa ought to be
exporting more into Africa. As the most diverse economic region in Africa
regarding resources utilisation, South Africa should be exporting at least 60
per cent of finished products. With the Department of Trade and Industrys
resolution to value-add through the implementation of the Industrial Policy
Action Plan 3 (IPAP3), it was believed that during 2014-19, the investment in
technology transfer should be able to create a basket of products and services.
10.4
The Governments
implementing agent for the building of the headquarters of the Pan African
Parliament (PAP), is the Department of Public Works (DPW). Construction on the
site in Midrand has not gone ahead due to related environmental impact
assessment issues. Given the projects budget escalations as reported by DPW,
National Treasury has advised that alternative procurement methods be
considered. The Department has escalated the lack of progress on the project
through its principals to the political leadership of the responsible
department. The new target is to complete the headquarters of the Pan African
Parliament by 2016.
10.5
It was important to put
to good use the ship lane traffic passing around the southern tip of Cape Town.
South Africa was granted its application for some additional land under the sea
at the southern tip, making it the largest country in Africa.
10.6
The Department has
accordingly applied to Treasury for the unauthorised spending due to the
funeral of the late President Mandela.
10.7 It was agreed that a better way should be explored of dealing with
the challenge of fluctuations of foreign exchange currencies.
10.8
The issue of whether to
buy or lease property for missions abroad has pros and cons to it. It requires
further consideration.
10.9.
Streamlining of missions
to strategic interest as provided for in the NDP was regarded important.
Missions were opened for political and strategic reasons; as a result further
engagement was needed on the matter.
10.10
All funds within the ARF
at the time of establishing SADPA would be transferred to the new agency. The
outcome of the investigation into the irregularities in the activities of the
ARF would be shared with the Committee in due course.
10.11
Provisions of the PFMA
were binding on the activities of the ARF, and the reported inefficiencies were
being addressed. One of the remaining issues for negotiations on the
establishment of SADPA was the concurrence mechanism which currently required
two ministers to give such a go-ahead before assistance is approved.
11.
Conclusions
After discussions during the briefing, the Committee concluded as
follows:
The Department has been operating on a shoe-string budget year after
year. Its main operations abroad have been affected by currency fluctuations.
The Department has to carry out its mandate within unpredictable, at times
turbulent, external environment to advance South Africas national interest.
The National Development Plan dictates that the Department should position
itself to assume greater leadership role in Africa, leading development and
growth in the continent. The interplay between foreign policy and national
interest continue to be the baseline of their success in the conduct South
Africas foreign policy. Following from the above conclusions, it has,
therefore, become important to have continued clear and focus driven plans
which remain aligned to the budget allocated.
12.
The Committees recommendations
Having considered the Strategic plan and the Budget Vote of the
Department and its entity, the Committee recommends that the Minister should
consider the following and report on progress within three months of adoption
by the National Assemblyof this report:
12.1
Addressing concerns
relating to the monitoring and review of the implementation of projects under
the ARF. The Portfolio Committee further recommends that this should include
increasing Oversight Visits to selected projects in the countries concerned by
visits of South African Missions/ Embassies in their countries of deployment.
12.2
DIRCO projects of
building Chanceries abroad have to be informed and guided by political
stability assessments and analyses of such countries. Cost effectiveness and
due diligence whether to buy or rent properties have also to be considered with
the view to reduce cost related to lease accommodation, in keeping with the
proposed funding model.
12.3
Local Municipalities and
Metros needs to first seek DIRCO consent of authorisation on agreements to be
entered into between them and other Local Authorities abroad. Furthermore
twinning of Local Cities with cities abroad including agreements on cultural
and economic and or trade arrangements have always first seek the ratification
and approval of DIRCO as per DIRCO Constitutional Mandate vested in the
Constitution of RSA under Section 231. This will ensure coordination of
continuing practices of Para-diplomacy among spheres of government to prevent
the risk of different foreign policy pronouncements.
12.4
Introducing a policy
requirement that all officials at DIRCO head office and missions abroad undergo
economic diplomacy training and re-orientation programme. This would ensure
that economic diplomacy forms the basis for aligning foreign policy to domestic
priorities and in line with the National Development Plan.
12.5
Advancing a developmental
integration agenda in Southern Africa combining trade integration,
infrastructure development and sector policy coordination. The integration of
SADC remains critical for the economic development of the region and for South
Africas global competitiveness.
12.6
Speedily finalising the
processes of providing the Pan African Parliament with its own headquarters as
agreed to in the Host Agreement with the African Union. This should be done in
consultation with the Department of Public Works.
12.7
Directing the Performance
Monitoring unit in the Director Generals office to provide the Committee with
performance reports on a quarterly basis.
12.8 Strengthen the Public Diplomacy Programme.
The Committee recommends that the Budget Vote 5: International Relations
and Cooperation be passed.
Report to be considered.
Sources:
State of the Nation Address
February and June 2014
The African Renaissance and
International Fund Act 2000
Department of International
Relations and Cooperation Strategic Plan 2013-2018
Department of International
Relations and Cooperation Annual Performance Plan 2014-2015
Department of International
Relations and Cooperation briefings 2013 to 2014
African Renaissance and
International Cooperation Fund Strategic Plan 2014-2017
African Renaissance and
International Cooperation Fund Annual Performance Plan 2014-2015
National Treasury Estimates of
National Expenditure 2014
Documents
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