DIRCO & ARF Quarter 4 2021/22 Performance; Committee APP and Strategic Plan

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International Relations

31 August 2022
Chairperson: Mr S Mahumapelo (ANC)
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Meeting Summary

The Department of International Relations and Cooperation (DIRCO) and the African Renaissance Fund (ARF) briefed the Committee in a virtual meeting on their fourth quarter 2021/22 performances.

DIRCO's presentation highlighted its reasons for under-spending in this quarter, and explained why the implementation of its information communication technology (ICT) strategy had been delayed. It said the Department's under-spending was related to the appreciation of the rand. DIRCO had shown an improvement in its performance in all of its programmes, and was confident that it was on track to solve institutional issues that had plagued the Department for years.

The ARF gave the Committee feedback on its loan agreement with Cuba, and described the terms of the loan to the Committee. The Fund was on track to achieve all its objectives for the fourth quarter.

Committee Members were dissatisfied with the lack of progress or slow progress by DIRCO to resolve long-standing issues. Since the Committee first met in 2019, there have been continuous challenges involving property management and diplomatic bags. They also wanted to know why the legalisation of documents took so long.

Among important issues raised by Members were the threat of South Africa being grey-listed; the impact of the Health MEC's comments on foreigners using local health facilities; South Africa's role in helping to resolve the Russia-Ukraine conflict; when visa requirements for some countries would be dropped, and why there were delays in South Africans getting US visas; and the level of DIRCO's targets, and how the Department measured its performance.

The Committee was also briefed by its content advisor on its annual performance plan and its strategic plan, both of which were adopted.

Meeting report

The Chairperson welcomed Members to the meeting, and said the Portfolio Committee had not met for some time [due to the recess]. The meeting would be long, to allow the Committee to engage with the Department on crucial matters. The Chairperson requested Members use the allocated time optimally, as there was a National Assembly sitting happening at 15h00.

The meeting agenda was read out to be adopted by the Committee.

The Chairperson welcomed the Director-General and his team and asked them to start their presentation. He requested the DG to speak on crucial matters in the report and leave out unnecessary information.

Mr Zane Dangor, Director-General (DG), Department of International Relations and Cooperation (DIRCO), thanked the Chairperson and introduced Ms Salome Baloyi, Acting Chief Operations Officer, DIRCO, and handed over to her to present the report.

DIRCO 4th quarter 2021/22 performance

Expenditure analysis

Ms Baloyi reported that as of 31 March 2022, DIRCO's actual expenditure had amounted to R5.993 billion, or 91.9% of its 2021/22 available budget of R6.518 billion. The actual spending was R524.9 million lower than the projected expenditure of R6.518 billion for this period.

The reasons for overall lower spending were:

  • The lower than projected spending on goods and services due to favourable exchange rates at missions for most of the 2021/22 financial year, as well as reduced travel or official trips in observance of the COVID-19 pandemic management-related restrictions;
  • The budget for payments for capital assets was under-spent due to delays in the procurement of the network infrastructure modernisation system and laptops for missions, as the service provider for these services had not been identified yet;
  • Delays in the implementation of the property management strategy had attributed to the postponement of the required face-to-face bid evaluation committee meetings for services related to the execution of the strategy;
  • Lower than planned spending on the budget for transfers and subsidies as a result of non-payment to the South African Development Partnership Agency, as it was not yet operationalised,
  • Lower than planned payments of membership fees to the United Nations arising from the rand's appreciation against major currencies.

Emerging red flags

Ms Baloyi stressed that low spending could mean low or poor performance, and if there was low performance, it meant there would be challenges for service delivery. The trend of low spending continued into the fourth quarter performance.

1. ICT strategy implementation:

The slow pace in implementing the information communication technology (ICT) strategy has created space for non-performance. Very little showed that the digital strategy was being implemented even from the past reports, so ICT transformation remained very slow.

The missions continued to be disadvantaged by the slow pace of rolling out the delivery of tools of trade, which was highly likely to impact further on challenges with interfacing expenditure reports from missions on the basic accounting system (BAS). This had the potential of contributing to the receivables/expenditure that had no records explaining the transactions. Where there were issues with the monthly reconciliation of accounts, the headquarters might not be able to pick them up on time.

2.Expired contracts

There was a delay of three months before getting a missions systems developer, with invoices pending for three months. In the fourth quarter, the DIRCO reported that the service provider had not yet been identified, and it was continuing with the same service provider whose contract expired in September 2021.

(See presentation)

Discussion

Mr D Bergman (DA) said it was a pity the bar was not set high for this report, since there was a new DG. This had been a new opportunity for the Department to shine, but when looking at the new national interest document and the Department's fourth-quarter report, the two documents were a mile away from each other. Grey-listing was highly possible for South Africa, and the different Ministers and Departments had not done enough to address the causes for this.

South Africa must be aware of how the country is perceived. South African Ministers visiting Russia and having Russian aeroplanes land in South Africa did not help the country in trying to prevent grey-listing. The Committee should be very concerned about how this matter would affect the average South African. DIRCO's programme two should focus on facilitating issues such as grey-listing and other factors that would promote tourism. There should be no visa requirements for some countries. Former Ministers had promised countries that visa requirements would be dropped, but that still had not happened. DIRCO should try and make most of E-visas, or do away with visas.

The report did not include the recent visits by the Speaker of Parliament and the DIRCO Minister to Russia and Ukraine, but the Speaker's visit was highlighted in the Ukraine report. The Democratic Alliance's stance had always been for South Africa not to choose a side and to use its proximity to President Putin and the West to de-escalate tensions between Russia and Ukraine. When looking at the loss of life now and the impact of the war on the global economy, South Africa could not support countries because they belonged to BRICS. South Africa needed to take a stance -- it was the only country in the Brazil-Russia-India-China-SA (BRICS) group that had not asked for concessions from Russia.

He said the issue of legalisation was still a huge issue for DIRCO. There were allegations of victimisation, bribery, subordination, and people getting salaries for not coming to work. The Committee should summon DIRCO and go on a fact-finding mission to establish what was happening in DIRCO -- how many directors and deputy-directors report for work, and the turnaround time for the legalisation of documents. Something was not right, as legalisation used to happen on the same day at DIRCO and now it took up to eight weeks to get a document legalised. This infringed on people's constitutional rights, such as the right to get a job and to be able to travel safely abroad. He urged the DG to take this up and clean up the legalisation unit.

There also needed to be a focus on diplomatic bags -- it should not take the DIRCO up to a year to get bags to missions abroad. The Committee should summon the head of consular services to answer questions about the functionality of missions abroad. He added that in trying to find peace in the Middle East, it would be better for DIRCO to invite Israel to some of the meetings identified in programme five.

Mr T Mpanza (ANC) said DIRCO's targets had not met the expectations of the Committee. The targets should be aligned with SMART principles. There had been an improvement from DIRCO, but the Committee raised the issue of targets continuously. The Department had a new DG and the Committee had very high expectations, and wanted the DG to give his very best.

He agreed with some of the points raised by Mr Bergman, but warned that the Committee must be careful not the venture into party politics and party ideology when engaging the Department, as this would not help to solve issues at DIRCO. South Africa's foreign policy should always guide Committee Members, and not the position Members had within their respective parties. They must be careful not to over-reach and get involved with internal operational matters at DIRCO. They had to focus on oversight.

He said politically, DIRCO was doing very well, and a lot of work had been done in different regions abroad. There was a new sense of stability and improvement, and DIRCO should now focus on the administrative side. The next crucial step was to solve issues affecting or hindering DIRCO from implementing its administrative objectives. He asked the DG to work hard and improve audit outcomes in this financial year. It was a disappointment for DIRCO to under-spend when the Department had always complained about budget constraints. Under-spending was a serious problem, and consequence management must be implemented. He asked DIRCO how far along the process of reducing missions and improving buildings and the infrastructure of missions was. Lastly, he asked when DIRCO would publish regulations for the Foreign Service Act and when they would submit an audit implementation and action plan to the Committee.

The Chairperson said the Committee had been raising a matter which was in the Constitution of South Africa -- building a non-racial, non-sexist South Africa, and dealing with past injustices. One of the specific issues the Committee and DIRCO needed to deal with was addressing past injustices. He said the gap between the rich and the poor was a serious problem, which had been designed through colonialism and apartheid. The majority of the poor were black and majority of the rich were white. All South Africans, white and black, agreed to address these injustices. The Committee had raised this issue, and when DIRCO looked at investments, it should indicate whether foreign direct investment was helping South Africa to address the problem of inequality and the injustices of the past. There should be a focus on whether programmes that emanated from DIRCO were helping South Africa to build a non-racial and non-sexist South Africa. The status quo would not be changed if South Africa did not quantify the situation, and future generations would be left with a South Africa far worse than what had been inherited in 1994. The statistics around poverty were discouraging, and South Africa was becoming more and more unequal. Going forward, DIRCO needed to inform the Committee how foreign economic opportunities would help to fight economic injustice.

The matter of ICT continued to be a problem, and DIRCO had not been consistent in what it had said in previous quarters. It had previously reported the ICT matter had been resolved, and ICT contracts and tools were delayed because of COVID, but ICT had been flagged as one of the reasons for under-spending. He asked the DG to explain the appreciation of the rand and how it contributed to under-spending.

DIRCO's response

Mr Dangor responded that DIRCO was in the process of improving what was being measured. He said it would be difficult to change some indicators and targets because of the nature of international relations, which relied on many meetings, international forums etc, and not much back-office work. DIRCO would focus more on outcomes going forward, and was working with the Auditor-General to develop targets and outcomes that would speak to what had been achieved and what had not been achieved.

He said legalisation was a high-priority project for DIRCO at the moment, and it needed to ensure that this part of the Department interfaced with the public. COVID-19 created a huge backlog, but this did not mean current practices were acceptable. This special project was working on turning around the legalisation unit, where the maximum waiting time should be five days. Legalisation was a demand-driven service, and the indicator would report on documents that came in and went out, but not on the time periods for processing those documents, and in terms of the quality of the service. DIRCO would come back to the Committee and report on what progress had been made in this regard. It took this issue seriously and would address the issues. Legalisation was important, as it allowed South Africans to access job opportunities and study abroad.

DIRCO had been engaging with National Treasury and other stakeholders to ensure that grey-listing did not happen. DIRCO also planned to engage key stakeholders in the banking sector. The key issue that had been raised around grey-listing was money laundering and terrorism financing. DIRCO was engaging with sister departments to ensure that some loopholes were closed. Once everything was concluded, DIRCO and National Treasury could address the Committee jointly on this matter. There was no fear of sanctions being called against South Africa. The issue of grey-listing had to do with money laundering, and the focus needed to be on how to close the gaps that allow for it.

DIRCO would have a meeting with the Department of Home Affairs (DHA) on the issue of visas to see what some of the issues were and how the two departments could work together to solve some of them. The issue of visa-free countries would also be discussed, and DIRCO would report back to the Committee on this.

There were problems with the courier DIRCO uses for diplomatic bags, but it had signed a new contract with DHL to fix this issue in the short term and ensure bags were delivered to missions on time. DIRCO would look to put a long-term contract in place to fix this issue permanently.

He said DIRCO had not reported the Ukraine and Russia visits, as they had not fallen fall within this reporting period. DIRCO was guided by principles of peace and sought a negotiation for lasting peace between Ukraine and Russia. Minister Pandor and US State Secretary Blinken were in discussions, trying to find a way forward, and for negotiations between Ukraine and Russia. There would be a follow-up meeting between Minister Pandor and the US President to take this forward.

DIRCO was addressing issues affecting the administration and institutional issues that had plagued the Department for years, and had made some progress in the last few months. The ICT challenges would be dealt with during this financial year. 

All missions that Cabinet approved for closure were in the process of being closed, and the process was going well. The process was a bit slow, as DIRCO had to ensure consular services were not disrupted in countries where missions were currently closing.

DIRCO was working on a plan to improve audit outcomes, which was linked to addressing administrative issues within the Department. It had made slow progress on this and would revert to the Committee to have an in-depth discussion on the matter.

He said that what the Chairperson had raised was important and DIRCO, through economic diplomacy, spoke to different government departments and facilitated investment through them. How investment was shared through the South African economy was a concern to everyone, but DIRCO was not the major player in this, where it could make a meaningful impact. It would look and quantify the nature of investments coming into South Africa and report this to the Committee.

He said when the rand appreciated against the dollar, DIRCO could save -- but the savings were classified as under-spending by National Treasury, the same as when the rand depreciated against the dollar, it was classified as overspending. DIRCO would engage with National Treasury and ask for the funds not to be classified as under-spending.

He said the meetings that happened in the Middle -East were convened by Palestine and the Deputy Minister had been invited. It was not a meeting between foreign secretaries.

Further discussion

Ms T Msane (EFF) said the DG's response was unsatisfactory. Diplomatic bags have been a burning issue since 2019, and progress has been slow or non-existent. The Committee needed to look at who was responsible for diplomatic bags, and how they were benefiting. Why did DIRCO not have a proper contract in place? The same with the ICT issue.

She said the issue of property management had not been emphasised in this report. DIRCO had provided the Committee with a property management implementation plan, but this had fallen through the cracks. She asked if DIRCO had paid the debt it owed to the DHA.

The US was granting South Africans visas at a very slow pace, and this had prevented students from going to study abroad. She asked what the cause of this may be, and why South Africans were not granted visas.

She said the recent remarks made by a Health Member of the Executive Council (MEC) had divided the country, and DIRCO should have spoken out about her behaviour. This was an international relations issue, but DIRCO had been silent. It needed to be more outspoken on how foreign nationals were treated in this country.

Ms B Swarts (ANC) asked whether the DG had received a handover report from the Acting DG. She said DIRCO was going around in circles at every meeting, and the Committee had been discussing and addressing the same issues since 2019. The Committee sounded like a broken record, raising the same issues. The property management issue had been raised numerous times, and no progress had been made. The Committee needed to meet with DIRCO on property management because Members could not continue raising the same issues every year.

Mr Bergman agreed with the Members, and said the Committee needed to apply its mind and Parliament had to use its oversight power to ensure departments were working. This Committee must not be afraid to hold officials accountable. Oversight work needed to happen without fear or favour. It was his right to enter any unit of DIRCO and do oversight, and he was not sure what Mr Mpanza was worried about. He was doing his job to protect South Africans and ensure that officials were doing their work. 

The Chairperson said the Committee must call a special meeting to focus on property management and diplomatic bags, and asked the Committee secretariat to follow up on this.

DIRCO's response

Mr Dangor responded that he agreed property management and diplomatic bags needed to be a standing issue. He said the Foreign Service Act was in place, and a draft implementation document would be shared with the Committee.

On the comments by the Health MEC in Limpopo, DIRCO had met with officials from Zimbabwe, extended an apology, and made it clear that this was not the position of the South African government. This was a very serious issue that the Committee and DIRCO needed to discuss further, because it impacted how South Africa was seen on the continent.

DIRCO was engaging with the new US Ambassador to South Africa on the issue of visas, and he had given an assurance that there was just a backlog in the US, and this issue would be addressed speedily.

Fourth quarter 2021/22 performance of the ARF

Ms Dineo Mathlako, Head of Operations: African Renaissance Fund (ARF), presented to the Committee. She would keep it brief and raise only important points. She spoke on two issues.

The ARF in this quarter had project commitments amounting to R402 million. All projects were on track for completion, and Cuba had repaid parts of its loan to the ARF with interest.

Mr Dangor said the ARF presentation was self-explanatory, and there was no need for further presentation.

(See attached presentation)

Discussion

Ms Msane asked whether the ARF had sent observers to elections happening on the African continent this year, and what the outcomes or reports from these activities had been.

The Chairperson asked what the terms of the loan agreement with Cuba were.

Mr Dangor responded that there was a team currently overseeing elections in Angola, collecting information on all African elections to compile a report. This report would give a comprehensive overview of whether elections had been free and fair.

Ms Mathlako responded that Cuba got access to a R140 million loan facility which they had utilised fully, and had a repayment agreement up until 2026, with two instalments per year. Cuba had honoured both of its instalments this year and had stuck to the terms and conditions. Cuba had also requested an extension on this loan, but a decision had not been made.

The Chairperson thanked the Deputy Minister, the DG and his team, and said they could leave the meeting if they wished to. The second part of the session would focus on Committee matters.

Consideration and adoption of Committee's annual performance plan and strategic plan.

Ms Lineo Mosala, Committee Content Advisor, said she would refer to only a few slides because of time. She took Members through the strategic plan, and gave an overview of the priorities for the current year. She said the priorities in the sector oversight strategy were:

  • Identify and oversee implementation of national interest;
  • Economic diplomacy;
  • The policy on Africa/African agenda;
  • Peace and security;
  • Multilateralism and global governance reform;
  • Migration from the African Renaissance Fund; and
  • Operational issues

(See presentation)

The Chairperson said all Members have been through the annual performance plan (APP) and strategic plan, and asked if there were any additions.

Both plans were adopted by the Committee.

The meeting was adjourned.

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