Defence Strategic Business Plan and Budget: Department briefing

Meeting report

SECURITY AND CONSTITUTIONAL AFFAIRS SELECT COMMITTEE
13 April 2005
DEFENCE STRATEGIC BUSINESS PLAN AND BUDGET: DEPARTMENT BRIEFING

Chairperson: Mr L Mokoena (ANC)

Documents handed out:
Department Strategic Plan and Budget Presentation
Department Strategic Business Plan 2005/06-2007/08

SUMMARY
Members heard a briefing on the strategic plan and budget of the Department of Defence. Key aspects of the Department's strategy were recounted including defence outputs, the Minister's strategic guidelines and specific programmes of action. Members raised a number of issues including progress in the skills development programme, the role of the Department in disaster management, the ‘rightsizing’ of the force, alterations in budget allocations, proposed oversight visits to peace missions in Africa and the 10.5% increase in employee compensation.

MINUTES

Department briefing
Mr A Visser (Chief Director: Strategic Management) provided a breakdown of the Department's Strategic Business Plan including background on the origins of the plan and various interactions that took place with Parliament. The intention of the presentation was also to address issues raised by Members on previous visits. Key strategic decisions were taken in March 2004 and incorporated within the Parys Resolutions. A description of the planning cycles undertaken by the Department was elucidated and the legislative framework underpinning the Department's activities was explained. The Minister's Strategic Guidelines and the Department’s Programmes were outlined. Answers to specific questions previously raised by the Committee were provided including the relevance of the State of the Nation Address, key programmes in the action plan and skills development initiatives.

Mr B Engelbrecht (Director: Budgeting) provided an account of policy shifts within the Department, current capital expenditure programmes, foreign policy initiatives and the baseline allocation. The specific allocation per main programme was highlighted as well as amounts issued to core components of the Defence Force emphasising changes in distribution.

Discussion
Mr Qalani (Member of Finance Committee) asked about the removal of the corps service system from the Department into the public sector as a whole. He asked whether an audit of beneficiaries had been compiled regarding the Defence budget directed at skills upliftment. He asked what skills had been transferred and whether the programme was linked to the national skills development programme. He asked where Defence Force Members exiting the service would be placed. He asked whether the Department was participating in local forums regarding Disaster Management and whether information technology was being updated. He asked what level of co-operation was in place between the Department and the Department of Home Affairs regarding the handing back of border post control to the SAPS.

Mr A Manyosi (ANC) asked for clarity on the withdrawal from internal operations under the Minister's Strategic Guidelines. The phasing out of the Commando system was a controversial issue and the response of the Department to associated problems was questioned. He asked for clarity on the Security Services Division and the status of army facilities remained a concern.

Mr D Worth (DA) asked for a progress report on the rightsizing of the landward defence force and whether the average age of personnel was being reduced. The perception was that the army contained excessive amounts of higher ranks that needed to be balanced with younger recruits. He asked what amount was envisaged to provide adequate maintenance of aging equipment. Clarity was sought on the fate of existing commando equipment and where this might be placed.

Ms S Loe (DA) asked whether redeployment of personnel was being undertaken in consultation with all relevant government departments such as Correctional Services and the SAPS.

Mr Z Ntuli (ANC) noted the proliferation of small arms in the Kwazulu-Natal region and asked what steps the Department would take to uncover hidden caches and address sporadic faction fighting.

Mr Masilela replied that the Service Corps concentrated on youth development and the transfer of vital skills. The Centre for Advanced Training was a large institution that contributed to the development of market related skills. However, the Department had decided to scale down the training agency and discussions were being held with various Ministries to decide on the strategy to be adopted.

Mr Visser stated that the Department had decided that the training component should be outsourced to reduce capital outlay.

Dr Ledwaba (Chief Director: Human Resource Policy) stated that the exact figures contemplated to achieve rightsizing could be made available and the exit mechanism would be applied on a voluntary basis. A dispute had been called by the relevant trade union and the process was under review. The Minister of Finance was studying possible changes to the regulations. The Military Arbitration Board would hold a hearing on the matter next week.

Mr Masilela responded that the Department participated in Disaster Management structures and assistance was rendered during crises such as the recent floods. The Department was participating in broader government structures to upgrade technology. The Commandos would be phased out as their current role would be filled by the SAPS. A Joint Task Team was involved in the planning of the discontinuation of the system. An audit had been conducted regarding the weaponry currently within the commando system and the majority would remain within the Department. Certain equipment and personnel could be made available to the SAPS. The withdrawal would be conducted in a phased manner to address crime and security issues. The maintenance of old facilities remained a challenge and an evaluation study had been conducted involving 67 bases. An estimated figure of R7.7 billion would be required to upgrade and maintain facilities. Maintenance would be conducted in collaboration with the Department of Public Works. The shortage of available funds remained a liability but critical needs had been identified. The rightsizing of personnel would be conducted in accordance with the principles of the Human Resource Strategy 2010.

Brigadier-General De Wet (Human Resources) stated that rejuvenation of the personnel corps included addressing the problems posed by Aids. Approximately 6222 people were currently in service within the Skills Development System with 35% in the 18-24 age bracket. Intakes would be increased on a continuous basis with 4800 to be recruited next year. The profile of the service personnel would be addressed in the medium term including a concerted effort to reduce the average age. The numbers of middle and senior management would be a focus point.

Mr Masilela stated that the White Paper on Defence Review was considering means to streamline the overall force and reduce excessive higher ranks. The required levels of weapons would also be considered. Obsolete equipment presented a challenge to the effectiveness of the defence capacity. Care should be taken to avoid compromising the local defence industry and initiatives were underway to strengthen Denel and other associated entities. Redeployment of personnel would be conducted in consultation with the SAPS.

Ms Ledwaba commented that 250 trained Commando members had been transferred to the SAPS. Training was continuing on an ongoing basis.

Mr Masilela added that other Departments such as Correctional Services, Home Affairs and the SAPS would be incorporated in redeployment initiatives.

Mr Grundlingh (Chief Financial Officer) stated that Justice was also involved as security personnel were needed for the protection of court facilities. Border control posts within Home Affairs would also receive personnel although they would have to apply for advertised posts in this case.

Brigadier-General De Wet stated that the Security Services Division was located within the SAPS.

Mr Masilela added that the division would guard national strategic points and defence personnel would be transferred to the division. The Department was involved in curtailing the proliferation of small arms particularly within Kwazulu-Natal, but the SAPS took the lead in this regard.

Major-General Ramlakan (Director: Military Strategy) responded that the Security division would operate in response to crisis situations where state security was undermined. The Department would assist the SAPS in neutralising the threat. The intention was not to revert back to a securocratic state and the SAPS would remain the primary agent.

Mr Qalani commented that the Committee should continue to monitor the transformation of personnel. He asked whether the R3 million allocated for land restitution in the 2002/03 budget had been utilised. The significant increase in the maintenance baseline allocation was questioned. Clarity was sought on the payment practice regarding the procurement of goods and whether overpayment was being addressed.

Mr Worth asked for a progress report on the training of personnel related to the recently acquired new equipment. The offset plan regarding the acquisition of cargo planes was potentially problematic as Denel would be involved in production and might not exist in 2012. He asked whether armoured vehicles would be replaced from an overseas source or a local supplier. The creation of an ammunition disposal plant was a necessity to deal with unmanageable quantities.

Mr A Moseki (ANC) stated that the issue of transformation was crucial involving a number of dimensions. The incorporation of former homeland structures was one area of priority. The continuation of transformation would advance stability within the Department and the Defence Force as a whole. The replacement of certain skills lost through exit strategies was important for overall efficacy. He asked for detail on the nature of mercenary activity within the defence system.

The Chairperson advocated an oversight trip to peace missions in Africa by Members in the near future. Numerous complaints of ill-treatment by United Nations personnel towards SANDF personnel had been received. He asked whether issues of racism within pockets of the armed services had been addressed and what plans were in place to alleviate this in the long-term. He asked whether the Department was assisting with the removal of landmines in sub-Saharan Africa. A recommendation was made that old ammunition could be placed in museums as an historical asset.

Mr Qalani asked how a 10.5% increase in compensation for employees could be justified given the strict inflation targeting in place.

Mr Masilela replied that Members should play an active role in monitoring the transfer of assets. The R3 million budgeted in 2003 had been for the restitution of land to the San community at Smitsdrift.

Mr Grundlingh stated that previously the maintenance of facilities had been handled by Public Works but a new approach would involve National Treasury placing funds directly with the Department and the amount provided would increase in 2006. The President and the Minister of Finance had instructed all sectors of government to reduce costs and improve efficacy. The Parys Resolutions adopted by the Department stressed the streamlining of operations and the efficiency of business. The pending White Paper on Defence would contain details of an appropriate strategy that would be provided to Members in due course. The tendering process involved two approaches, namely procurement and acquisition. Procurement dealt with expendables while acquisition involved major weapon systems. Both processes had been audited by the Auditor-General. The Department was involved in the production of the Financial Management Information System. Personnel found guilty of financial irregularity would be dealt with by established disciplinary procedures.

Mr Masilela stated that the Department was part of a national team contemplating reform of supply chain management and improved efficiency by means of new technology.

Captain D De Villiers (SAN) stated that the crews of newly acquired corvettes had been trained in Germany. The ships were undergoing the fitment of combat systems and the Amatolo would become operational during the year. Sea trials were underway and the remaining ships would follow at six-month intervals. The first submarine would arrive in January 2006 and crews had received training in Germany.

Mr Masilela added that a Memorandum of Agreement had been signed with a number of countries including India and Sweden to assist in the upliftment of capabilities. An invitation had been received from European interests to participate in the construction of the envisaged transport plane. This initiative would promote the local aerospace industry. Armoured vehicles would be replaced in two ways, namely a project involving local industry where superstructure would be replaced and Operation Hoofyster where whole vehicles would be replaced. The disposal of ammunition was constrained by rigid environmental legislation that reduced options for disposal. The preparations for the building of an ammunition disposal plant were at an advanced stage involving international collaboration. A national task team including the Department, Trade and Industry, Science and Technology and Foreign Affairs had been assembled to oversee the project. The British government had provided two mobile plants in the interim. The envisaged plant would cost R800 million to construct and ongoing operations would cost R100 million.

The transformation of the Defence Force was a difficult process characterised by acrimony and disputes. However, major progress had been achieved and sound policies were in place to govern the process. Major challenges remained at the middle management level and the process was monitored on a continuous basis. An Advisory Board was in place overseeing employment equity and affirmative action. The Department would welcome a visit by Members to peace-keeping missions in Africa. The eradication of landmines was an ongoing project and important maps detailing original placement had been provided to various affected countries. Certain private entities were involved in the practical removal of landmines in the field.

Brigadier-General De Wet stated that the recruitment policy had in the past been managed at a central level but the new approach would incorporate a decentralised approach with specific units and commanding officers directly involved in recruitment. The intention was to cover a greater part of South Africa. The 10.5% increase in employee payments was due to the increase in employee contributions required by National Treasury for pension funds and health, and rural and scarce skills allowances.

Mr Moseki reminded the delegation of his question regarding mercenary activity.

Mr Masilela replied that the Department would have no problem in principle with the placement of ammunition in museums but material would have to be demilitarized first in order to protect communities. Certain museums had not complied with existing regulations. Mercenary activities in Iraq had involved some serving members of the defence force. The National Prosecuting Authority, SAPS and Department were involved in the reinforcement of the Foreign Military Assistance Act to better address anomalies. Internal measures were in place to discipline members found guilty of such activity. South African members of peacekeeping missions in Africa were generally well treated by UN personnel and the UN commander in Burundi was a South African. The missions received warm approval from the local populations.

The meeting was adjourned.