Committee Report on International Relations and Cooperation 2014 Budget

Meeting report

Opening Remarks
The Chairperson noted that in 1994 the founding fathers and mothers of SA’s fledgling democracy had foreseen that one day the Committee would have to approve the budget of the Department of International Relations and Cooperation (DIRCO). In 1994 SA had 34 missions abroad. Twenty years on in 2014 there were 125 missions abroad.

During President Mandela’s term as President the aim was on integrating SA with the rest of the world. Under President Mbeki the emphasis was more on Africa and it saw the emergence of the African Union and encouraging the African Renaissance. With President Zuma the focus was on economic diplomacy. The idea was to increase trade in Africa and saw the emergence of trade agreements by SA with its trading partners ie the Brazil, Russia, India, China, and SA (BRICS) trade agreement.
The DIRCO was assisting SA to become a player in an environment that was not necessarily stable. There was a shift to developing economies.

Mr S Mokgalapa (DA) asked when the Committee would with its Committee Programme for the current term.

Mr B Radebe (ANC) said that the point raised by Mr Mokgalapa was valid. Once the process on the budget was over members would be tied up in Extended Public Committees (EPCs). Only thereafter could the Committee deal with its Programme.

The Chairperson noted that perhaps by the end of July 2014 the Committee would have an orientation workshop.

Ms Dineo Mosala, Committee Content Adviser, noted that the orientation session to the Committee would be presented by DIRCO. Specifics would be given on how they intended to reach their mandate and what their different structures entailed.

Mr T Lekota (COPE) referred to the earlier comments made by the Chairperson on the country’s past and present presidents. He made the point that the Chairperson had not referred to the presidents by their titles as President Mandela, President Mbeki and President Zuma but had named them only by surname. He noted that all members of parliament needed to sustain the dignity of parliament. By not following protocol the integrity of parliament would be scaled down. It was not befitting of members of parliament to speak in that manner. He was not only singling out the Chairperson but was referring to all members of parliament.

The Chairperson said that Mr Lekota’s intervention was noted and welcomed.
The agenda of the meeting was placed before members for consideration and it was unanimously adopted.

Committee Report on International Relations and Cooperation 2014 Budget
The Chairperson placed the Draft Report before the Committee for consideration. He would take the Committee through the Draft Report page by page and encouraged members to comment where they wished. Thereafter members would be allowed to make recommendations that would be incorporated into the Draft Report.

Ms M Moonsamy (EFF) referring to page 1 asked whether the Draft Report was a direct reflection of the meeting that had taken place. She questioned the sequence of the presentations that had been done. The DIRCO presented its Annual Performance Plan (APP). Was the strategic plan presented that of the African Renaissance Fund (ARF)? She did not think that the DIRCO had presented its strategic plan but had only touched on issues. She wished the Draft Report to reflect this fact.

Mr Radebe said the ARF had presented a strategic plan and had also spoken about its budget. Many issues transpired and the Committee had engaged in discussion.

Mr Mokgalapa noted that the presentation was a synopsis of a report. All was correct as was captured in the Draft Report. Members must not waste time with small things like inserting full-stops, commas etc. The crux to the Committee was its observations which would culminate in recommendations. The Committee could not argue about what was presented. Members merely observed. 

Mr Lekota asked whether other members had received the Report on the ARF as was requested of the Minister.

The Chairperson responded that what the Committee had said was for the Deputy Minister to inform the Minister about the issues raised by the Auditor-General’s Office on the ARF. And that the information should be made available to the Committee via a presentation of a report by the Deputy Minister.  The report Mr Lekota was referring to did not form part of the budget which the Committee was dealing with at present. In any event the Committee had not asked for the ARF report by today’s date.

The Chairperson referred to page 2 of the Draft Report and asked what Ubuntu Radio was.

Ms Mosala answered that DIRCO had established Ubuntu Radio to improve public diplomacy. It was an established studio.  

Ms Moonsamy said that the Committee should ask for clarity on the financial situation of Ubuntu Radio. What challenges had Ubuntu Radio faced on its launch?

Mr Lekota referred to page 2 of the Draft Report and asked about funds that had possibly gone missing around the funeral expense of ex-President Mandela. He asked whether there was a link regarding this and an arrest that was made in the Eastern Cape.

Mr Radebe responded that the Eastern Cape issue pertained to a municipality. The funeral expense of ex- President Mandela was an approved unexpected one.

Ms S Kalyan (DA) stated that if the Committee was making recommendations to DIRCO, would the recommendations only be noted or would the Committee be giving them timeframes to respond to it before the Budget Debate.   

The Chairperson said that members would make recommendations later on. The DIRCO was usually given 3 months within which to furnish requested reports or within a reasonable time. He noted that observations were not necessarily time bound.

Mr Radebe said that presently before the Committee was a budget report and sometimes issues could not be expressed therein. Issues could however be placed on the Committee Programme. There was a deadline for the Committee to adopt the Draft Report.

Mr Lekota noted that he sensed an uncertainty of the Committee in approving the budget of the ARF. Was there perhaps a misuse of funds? He pointed out that Dr B Holomisa (UDM) had wished for the issue to be dealt with before the Budget Debate. The Deputy Minister had given the impression that the ARF Report was available.

Mr Radebe stated that he had noted that R277m had been allocated to the ARF. The Committee had no clue what had transpired at the ARF for the period 2009-2014. A report on what projects were funded by the ARF and information on the employment of SA citizens in multilateral organisations should have been forthcoming immediately. The issue was not about the Auditor-General’s Report.

The Chairperson said that the Auditor-General’s Report was from the financial year 2012/2013.

Ms Moonsamy referred to page 4 of the Draft Report and said that no mention was made of concerns raised around the asset register and also around the buying and leasing of property. It was a concern of the Committee. How did the asset register impact upon the mandate of the DIRCO?
She said that the Committee had also been concerned about the expenditure of the ARF over the last five years and the employment of SA citizens in multilateral organisations. Did five vacancies really impact upon the overall budget?
Also not captured in the Draft Report was whether National Treasury made provision for currency fluctuations. The Budget was surely impacted upon by currency fluctuations. It affected the over and under spending by departments. The Committee recommended that National Treasury looked into the issue.

The Chairperson stated that the DIRCO had said that they had engaged with National Treasury over the issue of currency fluctuations. There was not much that they could do about it. Salaries payable were also affected. The Committee had made the observation that not all property was reflected on the asset register. The Auditor-General did take a look at asset registers. It would be covered in the Committee’s recommendations.

Ms C Dudley (ACDP) asked that the Chairperson look into the matter of oversight visits of the Committee abroad.

Ms Kalyan on page 13 of the Draft Report referred to Programme 5 of DIRCO and asked why the DIRCO paid SA’s membership fees to the European Union (EU), African Union (AU), Southern African Developmental Countries(SADC) etc. Parliament was affiliated and should therefore come out of the budget of parliament.

The Chairperson said that Ms Kalyan would be correct if it related to parliament to parliament relations. However where reference was being made it referred to DIRCO being linked to multilateral organisations like the EU and AU. The fees differed from country to country.

Mr Mokgalapa pointed out that parliament paid the membership fees where the linkage was parliament to parliament.
Those subscription fees referred to by Ms Kalyan was government memberships.

Ms Mosala said that a formula was used to determine amounts of membership fees.

Mr Mokgalapa wished to make an observation that the R115m that was spent on the funeral of ex- President Mandela was overspending but that it was due to the unprecedented passing of Madiba and due to currency fluctuations. This needed to be said as the figure spent could affect the audit outcome of the DIRCO.

Ms T Kenye (ANC) pointed out that that the funeral expenditure was explained on page 4 in paragraph 3.2.3.

Mr L Mpumlwana (ANC) said that the Committee could not state that the DIRCO could not spend on unforeseen things. He requested that the observation be withdrawn.

Ms Dudley added that unforeseen things did happen The DIRCO might have an idea of unforeseen circumstances that might occur and they would be able to access funds.

Ms Kalyan ventured perhaps that there was an emergency budget.

Ms Moonsamy stated that by now the DIRCO was aware of what came up from time to time. Currency unpredictability could not be the reason why the DIRCO could not reach its mandate. The Draft Report should state what the DIRCO did about unforeseen things. What respect did the DIRCO have for the Public Finance Management Act (PFMA)? How did the DIRCO prepare for risk?

Mr Radebe cautioned the Committee not to harp on Madiba’s funeral expense. The Committee had to show restraint and not bring up the issue over and over again. Yes there was overspending but it had been accommodated for in the PFMA. It was a necessary expenditure. On currency fluctuations the rand was dependant on other currencies. It was an issue to be left to experts.

Mr Mokgalapa wished to clear the air that he was not raising the issue of the funeral expense out of disrespect. The point he was trying to make was about planning. The DIRCO had to plan for unforeseen things. Such expenditures would affect the audit outcome of the DIRCO by the Auditor-General. The DIRCO in Programme 4 had to plan better.    

Mr Lekota noted that in DIRCO there would always be over spending. Many unforeseen things could happen which were not planned for in budgets. For example a flood could hit Southern Africa and SA could be asked to make a contribution. It would be unforeseen and unavoidable expenditure. For Madiba’s funeral the DIRCO could not foresee how many heads of state wished to attend. 

The Chairperson in the interest of time asked members to move on to the recommendations to be made in the Draft Report.

The Committee Secretariat had come up with Draft Recommendations which was circulated to members.

The Chairperson took members through each Draft Recommendation and asked members to comment on them.
The first recommendation related to who DIRCO sent to areas to oversee ARF projects.The task could be given to embassies to oversee projects. In addition that Committee oversight visits to areas overseas where projects were located should be increased. Having said this there was perhaps a need to have the oversight model of the Committee to be relooked at. 

 Mr Radebe said that the oversight model had been adopted by parliament and if there were limitations it should be brought to the attention of parliament.

Mr Mokgalapa said that mention could be made that the Committee was aware that the ARF was to be phased out in the next three weeks and that the Minister had to brief the Committee on the Southern African Development Partnership Agency (SADPA).

Ms Mosala responded that the recommendations in the Draft Report were aimed at the Minister in terms of what he could do. The increase in oversight visits to sites was an internal recommendation to parliament.

Ms Kalyan said that the first recommendation could read something to the effect that the Committee recommends that the Minister provides reports of embassies on the progress of projects in their respective countries to the Committee.
The Minister could be given 3 months within which to provide the Committee with a progress report on SADPA. 

Mr Lekota stressed that the Committee could not give instructions to the Minister. The Committee could visit some of the projects and write its own reports on what was seen. The Committee could not only rely on reports from the Minister.

Ms Moonsamy noted that it could not be that the recommendations in the Draft Report were made to the Minister only. The recommendation concerned both the legislative and the executive model. She was sure the DIRCO had some reports on work already done. The Committee could get a full report from DIRCO on the progress of projects.
Oversight to ARF projects and a relook at the oversight model of parliament were two separate issues.

Mr Radebe felt that the recommendations were not only aimed at the Minister but to presiding officers as well.

Mr M Maila said that the recommendation should remain as it was. He supported the fact that the oversight model should be revisited.

Ms Kalyan pointed out that the plan of action of the Committee needed to be separated from the Draft Report. If the provisions about revisiting the oversight model was to be included in the Draft Report she cautioned that the Draft Report could possibly only be noted and not adopted. It would defeat the purpose. It was best to leave the provision out. The Draft Report had to be adopted by the Minister.

The Chairperson continued with the second recommendation which related to DIRCO leasing or purchasing property abroad.

Mr Radebe noted that the recommendation was good as it was.

Mr Lekota felt that the recommendation was giving the impression that the Committee was micro-managing the DIRCO. It should be up to DIRCO to decide where it wished to lease and where it wished to purchase property.

Ms Kalyan felt it fair that the decision should lie with the DIRCO. It was not the intention of the Committee to micro-manage the DIRCO. The Committee merely wished to see to it that funds were used properly.

Ms Dudley stated that the Committee should review the chanceries that SA had and that they in fact did line up with budgets.

The Chairperson continued with the third recommendation which related to local municipalities and metros having to obtain the DIRCO’s permission to enter into agreements with local governments abroad.
He noted that there were many metros from SA visiting districts in China. It often lead to city-city agreements which tied SA to countries. Foreign countries go this route in order to access things which they could not obtain through national government. In most instances the agreements were not to SA’s benefit. It was more for their own benefit. There were perhaps things that national government knew about these countries that local government officials were not aware of.

Ms Dudley suggested adding the phrase, “reasonable explanation” to the recommendation.

Ms Kenye suggested adding the phrase, “guidelines and clearance”. She added that these foreign countries only had their own interests at heart.  

Mr Maila suggested that the Committee review existing agreements and memorandums of understanding.

Mr Mpumlwana said the question was about what was “reasonable”. The decision should lie with the DIRCO. “Guidance” and “approval” were the correct terms to use. The recommendation was a good one.

Ms Moonsamy said that the issue was about how the coordination of the DIRCO could be improved. Were provincial structures speaking to the DIRCO? The integration of national and provincial functions was lacking.

The Chairperson pointed out that the Minister had made a statement in Mpumalanga that China had stated that it was flooded with agreements with municipalities from SA. Some of the agreements were not in sync with SA’s foreign policies on trade. A need for coordination was what was needed.
According to DIRCO section 231 of the Constitution stated that only members of the national executive could enter into international agreements.The DIRCO had a guideline document on the issue.

Ms Mosala stated that the issue had come to the Committee’s attention in 2013. Cabinet decided that action was needed hence the guideline document was drafted. The DIRCO had however pointed out that it was difficult to implement the guideline. The Committee was requested to reach out to municipalities and provinces over the issue. 

The Chairperson said that it was a weakness that could be dealt with. He felt that the Committee needed to make a recommendation regarding the issue. He suggested that the Committee recommend that the DIRCO host an indaba where all mayors would be invited to. The mayors would then be  workshopped about the issue.

Mr Mokgalapa agreed that a workshop and indaba was the route to take. Domestic imperatives needed to be aligned with international imperatives. Intergovernmental issues also came into play.

Mr Radebe felt that the DIRCO needed to do its job in leading foreign policy in SA.

The Chairperson noted that the fourth recommendation was for an introduction policy and implementation strategy for officials of the DIRCO abroad to go for economic diplomacy training.

A fifth recommendation was to advance the developmental agenda in Africa and for sector policy coordination to take place at all levels in Southern Africa.

A six recommendation covered the issue of the Pan African Parliament’s headquarters.

Ms Kalyan said that the issue of the Pan African Parliament’s headquarters should be done in consultation with the Department of Public Works.

Recommendation seven directed the Performance Management Unit in the Director-General’s Office to provide a report to the Committee on a regular basis.

The eighth recommendation was that the DIRCO needed to strengthen public diplomacy.

Ms Dudley stated that the effectiveness of current public diplomacy should also be looked at.

Ms Kalyan noted that DIRCO should identify shortfalls in public diplomacy and come up with a strategy to deal with it in the next three months.

Ms Moonsamy added that perhaps the question should be asked what the vision of public diplomacy was. How did the budget affect public diplomacy?

The Chairperson emphasised that public diplomacy was the responsibility of the DIRCO. He conceded that there were challenges but he felt that a timeframe was unnecessary. Public diplomacy was an ongoing process.

Ms Moonsamy suggested a ninth recommendation that the DIRCO should comply with the Public Finance Management Act (PFMA). The DIRCO should also be encouraged to communicate that all structures complied with the departmental mandate.

Mr Radebe responded that the DIRCO was complying with the PFMA. The DIRCO had not received a disclaimer or an adverse note. It received an unqualified audit report for six years. It was up to the Auditor-General to instruct the DIRCO to comply with the PFMA.

Mr Mokgalapa confirmed that compliance with the PFMA was the domain of the Auditor-General. It was a constitutional imperative.

Ms Moonsamy wished that the Minister be urged to give due consideration to the under and over spending by the DIRCO.

The Chairperson reiterated Mr Lekota’s earlier comments that there would always be under and over spending by the DIRCO.
He placed the Draft Report before the Committee for adoption.

The Draft Report was adopted as amended.

Mr Mokgalapa wished it to be placed on record that the DA supported the Draft Report but abstained from supporting the budget.

Committee Minutes
Minutes dated the 25 June 2014 was adopted unamended.
Minutes dated 2 July 2014 was adopted as amended.

The meeting was adjourned.