Defence Amendment Bill: briefing by Mr D Maynier & response from Department and Parliamentary Legal Advisor; Department briefing on current policy and legislative environment

Meeting report

Briefing on Defence Amendment Bill [PMB 8 - 2013]

Mr D Mayneir (DA) started by stating that the Bill was Private Members Bill and that it was in response to the Ministers call to make sure that those deployed were well equipped. He said that the Minister had complained that that armaments acquisition compromised the operational capability of the South African National Defence Force (SANDF). It was to ensure that parliament was informed when armaments procurement was delayed or incurred massive overruns. It was to provide a relevant warning system to parliament.

Mr Mayneir said there was therefore a need to ensure that armaments acquisition was subject to enhanced scrutiny and oversight by Parliament.

He outlined some of the projects having problems which included Project Drummer which was a helicopter upgrade which had approximately 27 month or 2.3 years delay and Project Vagrant (Military Base Security) which had approximately 24 month or 2 year delay.

He stated that the proposed changes included adding a specific definition for ‘armaments acquisition’. They also included ensuring that quarterly reports on all armaments acquisition projects are tabled before Parliament.  Lastly they included providing for an additional special report within 30 days of any armaments procurement project incurring expenditure over 15% of the initial budgeted expenditure or a delay in schedule of more than 6 months.

In terms of amendments to section 80 of Act 42 of 2002, Mr Mayneir stated that it was to be amended by inserting, before section (1) of the following definition: “In this section – ‘Armaments acquisition’ means military equipment and associated parts, not commercially available, required exclusively for military use/purposes.”

It also included the insertion after subsection (2) of the subsections:

“(2A) Quarterly reports of all armament acquisition projects must be tabled before

Parliament; these reports must include the following information:

(a)        The project name;

(b)        Description of the armaments being acquired;

(c)        Project schedule; and

(d)        The budgeted expenditure for the project.

 

Mr Mayneir stated that an insertion would say:

 ‘a further report needed to be tabled before Parliament within 30 days when any armaments acquisition project -

(a)        incurs expenditure which exceeds 15 percent of the initial budgeted expenditure of the relevant project; or

(b)        schedule is delayed by more than 6 months.

(2C) All reports which are subject to section 80(2B) of this Act must include the following information:

(a)        The project name;

(b)        A description of the project;

(c)        The reasons for the excessive expenditure or delay in schedule; and

(d)        A plan of mitigation to prevent further excessive expenditure or delays.

(2C) All armaments acquisition agreements signed after the date of commencement of this Act are subject to these provisions.’

Mr Mayneir said the Minister would be required to table a quarterly report that would give specific information that would give overviews of projects and give explanations on steps taken in order to mitigate and deal with schedule slips or overrun costs.  He reiterated that the Defence Amendment Bill [PMB 8 - 2013] provided an “early warning” of cost overruns and schedule slips in armaments acquisition projects being implemented by the Department of Defence.

He said these warning systems would be important to empower the relevant committee to scrutinise the respective projects and he argued that one could see why the Bill was necessary whilst looking at found projects namely Project Swatch and Project Porthole which had experienced crucial delays. It was parliaments business as these delays compromised the operational capabilities of the SANDF especially in high risk missions such as that in the Democratic Republic of Congo. He hoped that the Committee would properly consider the Bill which would aid in raising the capability of the SANDF.

Presentation by the Secretary of Defence

Dr Sam Gulube, Secretary of Defence, Department of Defence and Military Veterans, presented the Department’s response to the proposed bill by Mr Mayneir saying the aim of the presentation was to inform the Committee on the impact of the proposed amendments to Section 80 of the Defence Act, 2002, and in turn recommendations.

In terms of the background, Dr Gulube said the Memo the Department had received on the objectives of the Bill in terms of procurement of armaments had been a subject of serious maladministration and malpractice. He argued that this statement was inaccurate as for past 5 years the SDA had an unqualified audit reports from the Auditor General of South Africa. 

Dr Gulube said the submission needed to be rejected for various reasons including:

- Strategic Capital Acquisition Master Plan (SCAMP)

- The Defence Industry

- Strategic Partnerships

- Matters of National Security

- The Financial Implications; and

- The Constitution

Dr Gulube said SCAMP was a projection of South Africa’s future required Military capabilities and provided critical intelligence which could be used to extrapolate what the South African defence capability (Order of Battle and future technologies) would be at any given time.  Information regarding details of SCAMP was highly sensitive and not for public consumption.

In terms of the Defence Industry, Dr Gulube stated that it was not in the interest of the RSA defence industry to have acquisition details of Mil contractual negotiations and agreements projects made public. He said such an exercise was potentially damaging to the competitiveness of affected defence company.

He spoke on strategic partnerships saying that the Bill would jeopardise third party agreements / strategic partnerships. He also said that publishing commercial-in-confidence acquisition details would degrade the standing of the RSA defence industry in the International market place.

On National Security Dr Gulube stated that National security of the country would, over the long-term, be compromised due to information regarding South Africa’s particular military components, systems and/ or technology being made available to certain elements that may pose threats to the people of the Republic and its territorial integrity.

He said the proposed Bill would have gross financial implications for South Africa. He further stated that the Bill would result in the loss of revenue for the Defence Industry and national tax revenue collections, due to a the loss of international clients and concomitant skills and job losses.

Dr Gulube spoke to the issue of the effect in terms of the Constitution saying that as a result of the for mentioned reasons it was clear that the objectives of the proposed Bill would make it impossible for the South African National Defence Force (SANDF) to fulfil its constitutional mandate of providing for the defence and the protection of the Republic, its territory and its people.

In terms of Accountability and recording Section 199(8) of the Constitution gave effect to the principle of transparency and accountability for security services and consequently the Joint Standing Committee on Defence (JSCD) was established in terms thereof. The mandate of the JSCD was to investigate and make recommendations regarding the budget functioning, organisation, armaments, policy, morale and state of preparedness of the SANDF.

Dr Gulube argued that the Department reported to and appeared before the JSCD as required. The Department would, in a closed session, report on all acquisition projects when so invited. The SDA budget allocation per Main Programme was set out in the ENE for each Medium Term Expenditure Framework (MTEF) period.

He went on to say the detail of these allocations was contained in the “Approval for Expenditure from the Special Defence Account”, approved by the Ministry on an annual basis. He noted that this document was available for Parliamentary oversight and scrutiny through the Joint Standing Committee on Defence due to the content and security classification. The final appropriation and actual expenditure of the SDA for the financial year was included in the Defence’ Annual Report as per PFMA. The detailed and audited financial statements of the SDA were also included in Defence’s Annual Report.

In conclusion Dr Gulube stated that As per legislation already in place, the Department was required to report extensively to Parliamentary oversight structures. He stated that there was therefore no need for additional legislation to achieve this objective. The approval of the Bill would severely prejudice national security and interest of the Republic.

The recommendation given by the Department was that the Committee should reject the proposed Bill.

Discussion

Mr Michael Prince, Parliamentary Legal Adviser, said his office had been approached to look at the constitutionality and the impact on other legislation or legislative processes. It was of the opinion of the Parliamentary Legal Advisers that it did not go against the spirit of the Constitution or clash with any other legislation or legislative processes.  The Bill sought to extend the oversight role of parliament in terms of procuring armaments. The office further believed that it provided a general mandate to Parliament. He ended by saying that there would be no need to amend any other legislation if the Committee should find the Bill desirable.

Mr J Skosoana (ANC) said his understanding of the entire legislative process was that if there was legislation passed then Parliament needed to be at the centre as they would be the ones who would implement the legislation. He wanted to say that the desirability of this Bill possibly needed to come from the

The Chairperson said this was not the time to see if this Bill was desirable or not but this was a time for points of clarity. It would be dealt with in the next sitting.

Mr B Bongo (ANC) said there seemed to be an element of micromanagement from the Committee in the idea of this Bill. He stated that the space of ‘early warnings’ was not a space that Parliament was supposed to occupy as it would be contrary to idea of oversight.

Mr Skosana said he respected the Chairperson’s request to return and deal with the Bill. He however said the process had been executed in an incorrect manner in terms of the way in which the Bill was to be dealt with.

Mr S Essau (DA) stated the issue that had been concerning for the Committee had been the issue of national security, confidential content and things ‘held in camera’.  He said there was a need to look at international best practice in terms of the idea of sensitive information being circulated between committees and released to the public as this was sometimes conflated and this allowed for abuse of the system. He said he wanted to know if there were provisions for this.

Mr Mayneir said one of the reasons that the Bill had been rejected by the Department was because the Department already reported to Parliament through reports. He asked if Dr Gulube felt, in good faith, this was truly happening. He argued that the Department had not been correctly reporting to Parliament and in fact had been withholding information.

Mr Skosana said the meeting was ‘becoming a case of Mr Maynier against the Department’ so he suggested the meeting end due to this fact as this was not the way to handle the matter.

Mr Mayneir said his intention was to ask Dr Gulube various points of clarification which would assist in deliberations. He said that for all he knew the Department had produced and proliferated many reports that had simply not been furnished to the Committee.

Dr Gulube agreed that these were provisions that had been in the Constitution and rules of Parliament. The only problem was the Department had not been invited to a joint meeting which was closed so the information was not made public.

Mr R Ramakatsa (EFF) asked if there was information that Members of the Committee did not have access to and were not allowed access to.

It was confirmed that there was.

Mr Mayneir said there was in fact some information that could not be disclosed to the public and normally the Committee in charge of oversight would not delve deep down into the information but sometimes there was information that was needed. The question had been thus how to walk that fine line. He suggested that some information would need to and then decide if the Committee should deal with a matter in a closed meeting or an open meeting or, if they were satisfied with the explanation of the matter given by the Department, dealing with the matter at all. The root cause of the problem was that in order to have oversight there needed to be ‘some sight’ thus the Department sometimes needed to reveal some high levels of information.

The Chairperson asked if all further conversation could be left for deliberations as this needed to be treated as a Bill.

Mr Mayneir said all that the Bill sought to do was provide Parliament with sufficient information to ask ‘the hard questions’.  That was all the early warning system sought to do.

Presentation by Department on Legislative and Policy Briefing: Overview of possible legislation

Dr Gulube said this presentation was to give and overview of possible legislation that would be brought to the Committee. He warned that this however would be a long process as to bring legislation there were many processes within the Department and Ministry. There were processes including various clusters and other entities. This needed to be noted even though these possible pieces of legislation were being presented as possibilities now.

Dr Gulube gave the aim of the presentation saying that it was to inform the Committee on the implications of the Defence Review Policy on the Defence legislation and legislation to be tabled before the end of the Financial Year.

He gave the background saying that the Defence Review Team, had been mandated to review the Policy of 1996 and it had now produced a Defence Review policy document, which would be served before Parliament. He said that this was a Policy which had Legislative implications.

He spoke on the legislative impact of the defence review by saying that legislation and spoke on the fact that the New Command and Control Doctrine which was to be added. He stated that the Defence Act was to be amended by addition of the provision to differentiate between the Military Command Staff and Staff Functions.

Dr Gulube said the department was set to add the ‘Inclusion of Organisational Structure Function in Defence Act’. The provision was set to address the organisational structure and would give the Department a legislative mandate to effect structural changes when the need arose.  The function was currently addressed in the Public Service Act administered by DPSA.

There was to be Revision of Military Discipline System and the Military Discipline Bill addressed the military discipline matters, the discipline would form part of the Command Function. The legislation would empower Commanders to ensure discipline in the Units. The Bill had been referred to State Law Adviser for pre-certification.

Dr Gulube said there was to be an addition in terms of a System to address minor failings and defaults. He said that the Military Discipline Bill was to provide for a system to address minor failings and default relating to standards and performance and this was a matter of discipline in the Defence Force.

There was to be a Hydrographic Bill and the DLSD, in an attempt to be a step ahead of the Defence Review, the Hydrographic Bill had been drafted and pre-certified by the Chief State Law Adviser. The Bill formed part of the 2014 Departmental Legislative Programme. The Bill was being processed through the cluster committee and would be forwarded to the Minister for Cabinet approval before the end of the year.

He said that the Department is currently reviewing the Castle Management Act and Moratorium Act.

Mr Gulube stated that there were three Bills on the 2014 Departmental Legislative Programme. One had been withdrawn due to time constraints. The Defence and Related Acts Repeal and Amendment Bill had been forwarded to the Minister.

Discussion

The Chairperson emphasised that this was a briefing and the Bills would be placed in the programme and be monitored. He said that they would fall within the five year strategic plan.

Mr Mayneir said he welcomed a number of those Bills. He however questioned why the National Key Points Act had disappeared of the agenda?

Dr Gulube replied that there was a plan to engage with that in another financial year. He stated that the Act had put the Department as a custodian however there had been a gazetting stating that this would now lie with the South African Police Service and there had been a decision to have a task team that would look at how this would be managed. This was why it had no longer appeared on the programme.

Mr Ramakatsa asked for time frames in terms of this Act as the vague nature of this answer had not been satisfactory. There needed to be time frames in terms of how the matter would be dealt with.

The Chairperson said the minutes would be dealt with in the next meeting.

The meeting was adjourned.