DOD on Human Resource Action Plan & measures put in place to contain budget over-expenditure; with Minister

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Defence and Military Veterans

04 November 2020
Chairperson: Mr V Xaba (ANC)
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Meeting Summary

The Committee convened on a virtual platform to discuss the Department of Defence’s Human Resource Action plan and measures put in place to contain over expenditure on HR.

On the presentation of the Human Resource Action Plan, the Minister asked if it can be presented later, before Parliament recesses, since consultations were still underway between Department of Defence (DOD), Military Command Council, and Plenary Defence Staff Council.

Members expressed disappointment with the leadership of the Department for delay in addressing the issues and presenting to the Committee. One Member observed that the report did not include more alternatives on how to resolve the challenges in the Department. The options highlighted in the report by the Department to mitigate the challenges are limited to more money.

The Minister said she was not comfortable with presenting a plan without finalising all procedures and consultation since it would cause unnecessary tension in the Defence Force. She assured the Committee that work was being done. It was agreed that the report would be tabled on the agenda in the first meeting of the year 2021. The Secretary for Defence also requested that discussion on measures to contain over-expenditure also be deferred, since over-expenditure is directly linked to the issues of human resource and staff compensation.

Members generally agreed to defer these items, although some felt that the Minister should have communicated this request prior to the meeting.

The Committee adopted its report on the workshop that the Committee conducted with the Department of Defence and Military Veterans on the South African National Defence Force’s (SANDF) Force Structure, Compensation of Employees and the development of an exit mechanism and Force Rejuvenation.

Meeting report

Opening remarks by the Chairperson

The Chairperson opened the virtual meeting, welcoming the Members, the Minister and the Department delegation to the meeting. He said there were seven sets of minutes that needed to be approved. He proposed that some be dealt with in the meeting as they related to matters on the agenda. This meeting would consider the briefing on the Human Resource (HR) Action Plan and the measures to contain over-expenditure in the Department of Defence (DOD). However, to refresh the memory of Members about the issues, he asked the Committee Secretary to present a report of the workshop on 26 August 2020, where National Treasury and the Defence Force Service Commission were present to consider HR issues, compensation of employees (COE), force structure and force design, and rejuvenation of the South African National Defence Force’s (SANDF).

Ms Nosiviwe Mapisa-Nqakula, Minister of Defence and Military Veterans, was attending a Cabinet meeting; she would join the meeting later. Apologies were noted for other Members.

Report on the workshop with the Department of Defence and Military Veterans on the South African National Defence Force’s (SANDF) Force Structure, Compensation of Employees, the development of an exit mechanism and Force Rejuvenation

The Committee Secretary presented the report.

The Chairperson communicated that only Members who were present during the workshop would have an opportunity to make corrections on the report since it was not a new debate.

On point 1.2: Attendance, Mr W Mafanya (EFF) said that his name had been skipped from the attendance list.

Ms T Legwase (ANC) expressed concerned that this was the fourth time her name was skipped yet she has not been absent from any virtual meeting.

Mr S Marais (DA) commented on section 2.2 on ‘Briefing by the DOD on the development of an exit mechanism’. He said that he recalled that although the report mentions attempts of government employees’ pension fund and interactions with Department of Public Service and Administration (DPSA), there was uncertainty that many soldiers are not employed in terms of the Government Employees Pension Fund (GEPF) and the Department of Public Service Employment Act, but rather the Defence Act. That being the case, there is only the civilian side that is linked to the GEPF and DPSA. While he stood to be corrected, the soldiers are presently DPSA employees are not Defence Act employees. This has a major effect on the eventual aim of right sizing the Defence Force.

Vice Admiral Asiel Kubu, Chief of Human Resources, SANDF, confirmed that they still subscribe to GEPF.

Mr Marais asked for clarification on whether this means that all the soldiers are employed in terms of GEPF or if it is just the concept that they subscribing to.

The Chairperson further added to the question, asking if soldiers contribute to GPEF.

Vice Admiral Kubu confirmed that all soldiers contribute to GPEF and they are also paid according to that.

Mr Marais asked on section 2.3 about ‘Force Rejuvenation under Demilitarisation’ - while there is mention that there may be a need for DPSA relaxation, and although there was reference to the DPSA, Vice Admiral Kubu did not respond to whether soldiers are employed in terms of DPSA or Defence Act.

Vice Admiral Kubu said that the Defence Force is not regulated under the DSPA. However, demilitarisation in this case means they will request the DPSA to provide the Defence Forces with a relaxation, not to advertise outside to DOD. This way, military personnel can compete for posts without having an extended appointment or external advertisement. He confirmed that it was captured correctly in the report that they were requesting for the relaxation.

Mr Marais observed that the report did not include more alternatives on how to resolve the challenges in the DOD. The options highlighted in the report by the Department to mitigate the challenges are limited to the need for more money. However, from the Department Service Commission and the National Treasury, more alternatives and matters of consideration are outlined.  He pointed out that the use of reserve force versus permanent force was also referred to by National Treasure and has been part of discussion but was missing in the report. As a result, one of the challenges that will be faced is to consider the dangers, benefits and disadvantages of retaining, reducing, or increasing the reserve force strength. This is because it is part of the discretionary funds and it can be reduced. However, Defence Force has said several times that they cannot do deployments without the assistance of reserve force. As such, it would create a “Catch 22” situation.

The Chairperson pointed out that this discussion was only meant to confirm whether the report correctly captures the discussion in the said meeting and not raising new debate. He asked Mr Marais to refer to a specific paragraph where he wanted a correction made.

Mr Marais said that he was referring to “Observations” under Section 5 of the report, where there should be an addition of the lack of as many alternatives from DOD to mitigate the challenges as proposed by the National Treasury and the Service Commission. Currently, it appears that the initiative is not within the DOD but rather in National Treasury, DPSA, and the Service Commission. The DOD needs to retain and regain leadership in this regard.

Ms Salome Velma Mabilane, Commissioner, Defence Force Service Commission, said that the attendance list only captures names of the Chairperson and the Deputy Chairperson of the Commission for Defence. Names of commissioners were missing from the list, but they attended the workshop.

Minister Mapisa-Nqakula said that she was worried that she had requested to be released from a Cabinet meeting that she was attending, to make herself available for this meeting. Her understanding was that this meeting would deal with new issues and did not realise that the agenda is that of adopting the report. It had now been an hour of the meeting tackling the report adoption, and she wondered whether to return to the Cabinet meeting and join the Committee meeting later.

The Chairperson indicated that the Committee was nearly at the end of the exercise.

Mr Marais pointed to the report section about ‘Observations and Recommendations’. Earlier in the report by the DOD, they referred to ages that they need to address in terms of rejuvenation of the defence forces. Currently, the average age in the Defence Force is 40, and it needs to be reduced. For the age groups that the Department has identified that needed to be addressed, how will that impact on the average age in the Defence Force? While this is an observation, the Department may also give feedback, since it has got a huge effect on the capabilities of the Defence Force.

The Chairperson pointed out that the report is not being discussed, but this engagement is about confirming that the discussion in the previous meeting was captured correctly.

Mr Marais said that he was raising the issue because it comes from the report, and it should be part of the observations and recommendations which DOD needs to give feedback on.

In terms of the reference to the identified age groups that DOD has mentioned in the report, and how they plan to address the rejuvenation and HR challenges: How will this affect the average age of the Defence Force? The DOD needs to give a report on that going forward.

This will be added to the report.

The Report was adopted.

DOD Human Resource Action Plan

The Chairperson pointed out that the report needed to be adopted first as it sets the tone for the meeting; the other two items on the agenda flow from the report, since the DOD had been asked to return with an actionable plan and not just noble intentions that are not tied down to a specific period. He asked the Minister to give remarks and then invite the Secretary of Defence to give the first presentation.

Minister’s Remarks

The Minister said that she was here together with the Secretary for Defence and the Chief Human Resources (CHR). There was an opportunity to listen to the report of the Committee, which is informed by inputs from both DOD and the Defence Force Service Commission. She pointed out the concern by Members that initiatives seem to be driven by the National Treasury and the Defence Commission. Her understanding was that with the CHR and Secretary for Defence, the expectation was that they present a report on the plan for realigning HR in view of budgetary constraints in the DOD. She supposed that after the meeting that was held two weeks prior there was meant to be a discussion of some of the issues, including the force rejuvenation, force design of the defence force, with specific reference on what exactly will be done to mitigate the budgetary constraints in the Defence Force. She did indicate earlier to the Chairperson that one of the biggest problems is that in talking about issues of HR and the budget, there is a plan that has been well prepared by CHR, which has been canvassed with the Military Command Council. Yet the plan has not been canvassed with the Plenary Defence Staff Council, neither has it been approved by the Council on Defence. She was concerned that presenting that plan at this forum before exhausting all procedures would create unnecessary problems for DOD and the country. This plan is likely to have an impact on members of the South African National Defence Force, including issues of finances, such as allowances.  These are matters that relate to conditions of service of members of the Department of Defence. As such, it is important that the report being presented should not misrepresent the facts and be misleading. It is proper that the plan be presented after consultation has been finalised to avoid creating challenges for the government in future.

However, she said if the Chairperson felt strongly that the presentation should go ahead, the CHR would present, but she was not comfortable with a presentation which has not been well canvassed. While the plan is brilliant, it does not consider views of the Department officials and as such, it may backfire later.

The Chairperson said considering that this matter arose on the 26th August, with the return date in November, it was now two and a half months later. He asked if the Military Command Centre (MCC) and the Plenary Defence Staff Council were the only remaining two bodies to be consulted.

The Minister clarified that a lot of work has been done on the plan. The plan was presented by CHR to the MCC. However, there was no consensus on the matter, hence that reluctance to proceed to the next step of taking it to the Plenary Defence Staff Council. She felt that whatever solution is prescribed to the Defence Force should be one that has taken on board all structures, so that when the Council on Defence (COD) – which she Chairs, and includes the Deputy Minister, Chief of the Defence Force and the Secretary of Defence – those processes should have been fully exhausted. It is not that work is not being done. There is a lot of discussion and engagement, and some of the things raised by the Defence Force Staff Council are very crucial. But is it right to appear in public about matters which there is no agreement on among uniform members? She felt that the answer is “No”, and has clearly said to CHR and Chief Defence Force to engage all of the structures, proceed to appear before the Plenary Defence Council, and only then go ahead to bring the matters to COD for final endorsement. As long as other structures are left out of that process, unnecessary tension will be created.

The Minister said when she heard that there is disagreement on how to proceed, she told the Secretary for Defence that these are matters should be properly canvassed, because it is not right to appear before the Committee to talk about matters which members of the Defence Force may not have been taken on board. This is likely to create problems. She did not want to create an impression that no work is being done to deal with the matters. However, she said she could have been overcautious that issues should not be taken to Parliament before fully exhausting consultations to avoid creating instability within the South African National Defence Force. This was also raised at the meeting on 16th October. She felt uncomfortable for a presentation to be made on issues not been fully agreed on.

Discussion

The Chairperson asked the Minister to specify how much time is needed to finalise the matters.

The Minister responded that the agreement is that a report be brought to the Committee before Parliament goes into recess.

The Chairperson asked if the matter can be scheduled for early 2021.

The Minister responded that they would be able to give the presentation before this Parliament rises. But if the Chairperson preferred to schedule it at the beginning of the year it would be fine.

The Chairperson confirmed that the Department would be given a chance to present before Parliament rises, or alternatively, in the new year depending on schedule of the Committee. He asked Members to make comments on the issue.

Mr T Mmutle (ANC) agreed that the Committee needed timelines for when the presentation will be made.

Mr Marais said that this was not good news, and he felt disappointed because the Minister has said many times in the past that South Africa and Parliament must decide on the Defence Force. Now the Defence leadership and the Minister were given an opportunity to present how they plan to deal with challenges.  If the issues are to be address by the New Year, by then, the main budget would have been concluded and the President’s State of the Nation Address also done. That would be too late for the 2021/2022 budget. This is related to his earlier observation that it appears that National Treasury and Defence Force Commission are serious about addressing the issues, but there is lack of eagerness from DOD. It seems there is no agreement between the Minister, the Department and the Defence leadership, and this is a concern. There needs to be discipline and a disciplined leadership.

He expected that the leadership would burn the midnight oil to ensure a reliable and credible plan is finalised. While the report has been brought to the Committee, the Committee has been told not to pay any attention to it since it may change after workshops and consultations. This is a huge concern. In the midst of fiscal and economic challenges, it does not appear that the Defence Force is prepared to burn the midnight oil to resolve the issues. This is incredibly disappointing. The Committee is committing itself to deal with the challenges and assist the Department, but it seems the Department and the Minister are not showing the same commitment; no wonder there are many challenges in the Department. There is no agreement between National Treasury and Defence Force Commission on one side, and the Department of Defence and the Ministry on the other side. They are worlds apart. Delaying the issues is only exacerbating the problem. This is a huge disappointment. The Defence Force does not want to take the initiative; they just want to stumble back and fight back. The only solution that they have given is to have more money, and this is not possible. There is problem with some of the points they have raised like rejuvenation of both equipment and staff. While it sounds very good, currently all equipment (including aircrafts and naval vessels) has been deployed. The only thing that has been attended to at this stage is HR – which is over 60% of the budget, and it is increasing. It is an incredibly disappointment that there seems to be a major leadership problem in the Department of Defence.  

Mr W Mafanya (EFF) agreed with Mr Marais by saying the Minister should have communicated with the Chairperson before coming to the Committee. Even though work has been done, they are not ready to make a presentation. This should have been communicated to the Chairperson that the report is there, but the presentation should be postponed to before recess so that it should not be a matter of debate in the meeting. In future, when confronted with such issues, the Minister must communicate points of consideration and concern in advance, so that the Committee does not have to be probing the manner at which things are done.

The Chairperson said Parliament rises on 30th of November until next year. As such, it is not possible to schedule the matter before the end of the year. He suggested that it be the first item on the programme for the year 2021. He asked the Committee Secretary to schedule it on the agenda for next year.

Mr Mmutle agreed with the Chairperson about rescheduling the item. He was worried about the assertions made that there is a problem with the Minister’s leadership in addressing the issues with satisfactory speed. He said that the Minister has outlined the challenges, and the Committee should offer support to the Ministry and ensure that they deliver according to the timeframe. While it has been observed that there is a challenge with the timeframes at the level of the Department, it is not the first matter where the Department has said they are not ready. The Committee needs to work with the Department so that they can correct this challenge, rather than to condemn the leadership of the Minister.

The Chairperson said that the Minister must be commended for trying to produce a plan that will fly. There would be no point of crafting a plan that is not capable of being put to effect because of lack of consultation. Secondly, there may be barriers to implementation such as budgetary challenges, and issues related to conditions of service. Therefore, it is proper to grant the Department time to go through this process as it is not an easy one. The country is facing serious financial constraints and any plan that is produced must take that into account, since the situation is not likely to improve. At the same time, there is need for a Defence Force that is fit for purpose. There is a threat to the critical capabilities of the Defence Force, which, among other things, has been caused by the over-expenditure against the Compensation of Employees (COE). The Department needs to seriously mitigate this, so that there should not be a situation where the Defence Force is not fit for purpose, and whose critical capabilities have been seriously compromised. There are areas which when lost now will be lost for good. That would compromise the sovereignty capability of the country. While the Minister asked to come back before the end of this year, but since there will be no meeting before the end of the term, they will be scheduled next year on the first term programme.

The Chairperson asked the Secretary for Defence not to come back to at the last minute to say they are still not ready. There is enough notice and the Minister has made a commitment to come back to the Committee with the matter early next year. It is good that the Chief of Staff was also in the meeting to convey the message to the Chief of the Defence.

SANDF Briefing: Reducing HR Cost Pressures

The Chairperson proposed to move to the second item on the agenda on measures that should be put in place to mitigate over-expenditure.

Ms Sonto Kudjoe, Secretary for Defence, asked if the issue of the over-expenditure could be handled together with the HR plan, because it is only in COE where the budget has been exceeded. In considering the various solution options, they will be able to demonstrate how much of a burden in the budget is being reduce. The same was done in the issue of natural attrition, and not filling vacant posts. Currently, the budget for COE is R29 billion, but they have currently gone over R32 billion; as such, they are over the budget by R3.4 billion. How the HR plan is dealt with will automatically show the savings to be made in order not to exceed what is allocated for COE.

Mr Marais agreed with the Secretary for Defence. He said that it is very important to know the extent of the over-expenditure, because over-expenditure is expected. It will impact other commitments like defence readiness, Air Force, the Navy, and the role of Armscor, among other. Therefore, it must be a comprehensive plan, because money must be recovered from somewhere – which will have an impact the ability to comply with constitutional requirements and the percentage of HR cost versus the total one.

The Chairperson granted the request of the Secretary for Defence to hold discussion for later.

The Secretary for Defence acknowledged the comments of Mr Marais and said that they would be considered. Going over the budget now has already impacted on what was received on the Special Defence Account, which is largely about sovereign acquisition. She agreed that when the plan is later presented, it should be comprehensive. If everything is stabilised, other areas within the Department would be impacted by the over-expenditure – which will now benefit and begin to stabilise the environment.

The Chairperson agreed that the request of the Secretary for Defence was fair.

The Minister thanked the Chairperson for agreeing to give more time to have the matters finalised.  She said she would not want to appear before the Committee just for the sake of complying, but rather to appear with a report that is acceptable and credibility. There is need to create a stable environment to retain the stability of the Defence Force. As such, any decisions to be taken must be acceptable and not compromise the stability of the Department. She said she believes in taking people along. She responded to Mr Marais that she does not undermine the Portfolio Committee. However, she did not want to come with misinformation as it would question her integrity. She appreciated that Members agreed to give time, and assured them that the work will be done. She will ensure that the Defence Force moves together and does not create unnecessary tension or instability.

The Chairperson assured the Minister of support in the endeavours. He released the Minister, the Department officials and the Commission from the meeting, so that Committee Members could use the remaining time to deal with minutes.

Mr Marais expressed disappointment with what had happened. He reckoned that it would be better if the Department had communicated to the Chairperson at least a day in advance that they have a problem.

The Chairperson responded that the item had been concluded.

Mr Marais said that while accepting this, he still expressed huge disappointment since the Committee had great expectations of what would have been discussed in the meeting.

The Chairperson responded that all delegates from DOD had left, and the Committee already had a previous opportunity to make comments on the matters.

Mr Marais said that the comments were not directed at the Minister or the Department, but to Members of the Committee.

The Chairperson requested that Members move on to addressing minutes.

Consideration and adoption of minutes

Minutes dated 24 June 2020

The minutes were adopted

Minutes dated 8 July 2020

Mr Marais said that under Section 4.2 of the minutes, he clearly recalled asking a question regarding performance bonuses for both 2020 and 2021 financial years. On this question, both the CEO and CFO responded confirmatory. However, the minutes only capture 2021. This should have been recorded. He asked for amendment of the information that Armscor is indeed paying out bonuses, notwithstanding their confirmation. He requested for this can be double-checked since it is not reflected in the minutes.

The Chairperson responded that the Department made it clear in their presentation, since the issue was how they intend to mitigate the risks. The question on 2020/2021 was captured in the deliberations section of the minutes. He said verbatim records would be checked on the specific question of bonuses. If the record agrees, minutes will be amended accordingly.

Under Committee recommendations, it was agreed to amend the minutes on the point that the Committee agreeing with the initiative of National Treasury to funding the three statutory bodies separately. The minutes should be amended to reflect the consensus that there is need for DMV to ring funds.

The minutes were accepted as a true reflection of the discussion, following correction made on the two points raised.

Mr M Shelembe (DA) asked on the question raised by Mr Marais about bonuses. If the verbatim records show that it is as Mr Marais had said, how will the Committee know that it has been corrected?

The Chairperson responded that the Committee Secretary would check the recordings and communicate to the Committee should there be any amendment.

The minutes were adopted subject to the two amendments. 

The Chairperson thanked the Members for finalising the report and adopting two sets of minutes. He said that there are five sets of minutes remaining for adoption. These were deferred to the next meeting.

He thanked Members for attendance and participation.

The meeting was adjourned.

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