Sub-Committee: Public Protector Report on Toyota Quantum Panel Vans: engagement with Public Protector

Meeting report

The Chairperson explained that the Subcommittee wished to ensure that all the binding remedial action included in the report by the Public Protector (PP) on illegally converted panel vans was in fact taken, and to enrich the report by engaging with stakeholders in the private sector which, according the Public Protector Act, the PP was not empowered to do. He asked the PP to provide a high-level view of the findings in the report and indicate where it had been limited by the provisions of the Act.

Input by the Public Protector

Adv Busisiwe Mkhwebane, Public Protector, briefly summarised the circumstances leading up to the establishment of the investigation into illegally converted panel vans in 2012. The three main findings of the report were:

1) That the Department of Transport (DoT) failed to take effective and efficient steps to ensure the safety of commuters using the Toyota Quantum panel vans that had been illegally converted into minibus taxis, and failed to protect taxi owners from the consequences of purchasing illegally converted Toyota Quantum panel vans.

In connection with this finding, Adv Mkhwebane noted that the Department’s electronic National Transport Information System (eNaTIS) was not integrated at a national level but only at the provincial level.

2) That the National Regulator of Compulsory Specifications (NRCS) failed to take effect and efficient steps to ensure that all manufacturers, importers and builders (MIBs) complied with specifications in order to restrict illegal conversions.

In connection with this finding, Adv Mkhwebane noted that the NRCS had failed to inspect MIBs to ensure that they were not performing illegal conversions, even after being alerted to the practice by Toyota.

3) That the South African Bureau of Standards (SABS) failed to conduct adequate quality assurance tests on converted vehicles to ascertain whether they could be retrofitted to ensure the safety of commuters using these vehicles.

In connection with this finding, Adv Mkhwebane noted that SABS had administered a range of static safety tests but no high speed crash tests.

Among other remedial actions, the report directed the DoT to update its records on converted and/or retrofitted minibuses, scrap unsafe vehicles and compensate the owners, and investigate how vehicles were fraudulently registered on eNaTIS. She urged the Subcommittee to engage with the Special Investigations Unit (SIU) on the progress it had made in its investigation into the vehicle registration fraud. The report also directed the Department of Trade and Industry to foster an effective and efficient complementary working relationship between NRCS and SABS.

The report also made a general observation that various financial institutions, namely ABSA, Nedbank, Standard Bank, Wesbank, South African Taxi Finance and Toyota Financial Services, had provided finance to unsuspecting buyers to purchase the illegally converted vehicles. This was despite the fact that Toyota had declined to authorise the conversions for safety reasons, and despite the fact that they had been aware of the practice as early as 2005. As private institutions, they fell outside the jurisdiction of the PP, but there was no reason why the Portfolio Committee could not engage with them. The report also made a general observation about Toyota dealerships that had aided the spread of illegally converted Quantums.

Discussion 

Mr L McDonald (ANC) was very concerned about the complicity of Toyota and certain financial institutions in the illegal conversions. They had known about the practice as early as 2005 and needed to take some responsibility for the loss of life that had resulted from accidents involving the vehicles. He was not convinced that retrofitted vehicles were any safer and said that they should be scrapped. He was also concerned that eNaTIS was not nationally integrated. This meant that a vehicle de-registered in one province might be re-registered in another. He called on the Credit Regulator, which had failed to protect citizens from being given credit to purchase illegally converted vehicles, to refund these citizens and clear their credit records where necessary. Any company who had knowingly allowed illegally converted vehicles to enter the vehicle population should be brought before the subcommittee to explain its role.

Mr C Hunsinger (DA) asked why the PP’s office had taken so long to compile the report. It had taken seven years from the time the initial complaint had been laid in 2012. He was very concerned that the number of converted vehicles on the road exceeded 40 000, a far higher number than the 2 353 vehicles dealt with in the report. He had hoped that the remedial action directed by the PP would address the root causes of the problem and not just a limited set of vehicles. He was also disappointed that so little attention had been paid to unsuspecting buyers and that the taxi recapitalisation programme was being suggested as a way to compensate someone who may have lost a business, not just a vehicle. He asked if the February 2017 meeting with Toyota South Africa had been the first time the PP had been made aware of illegal ambulance conversions. He asked why NRCS had not obtained letters of authority from Toyota prior to homologating Quantum panel van conversions, and how had the converted panel vans passed the scrutiny of NRCS inspectors? He asked for the PP’s professional opinion on who was liable for the regulatory failure that had allowed the vehicles onto the road, how it could have been prevented, and what government’s responsibility was. He also asked for clarity on the status and contents of the 2010 memorandum which had initiated the retrofitment programme, whether it was fair that taxi owners had had to pay certain charges to the NRCS as part of the this programme, and whether R127 000 was fair compensation for someone who had lost their business.

Mr K Sithole (IFP) observed that Toyota, the DoT and the NRCS had all been aware of the practice of illegally converting panel vans. All three had failed to protect owners and commuters. He asked who should take responsibility for the situation.

The Chairperson asked for clarity on the scope of the PP’s investigation. Had it been limited by the scope of the initial complaint, preventing the PP from investigating other types of converted vehicles? He asked to what extent the PP was monitoring the implementation of the remedial action.

Responses

Due to limited time, the Adv Mkhwebane undertook to respond to most of the questions in writing.

Adv Mkhwebane said that her team shared Mr McDonald’s views on the complicity of financial institutions and MIBs, and suggested that the subcommittee engage with Mr Hennie De Beer, the individual who had brought the initial complaint, who had been working in the financial sector at the time and who had collected a lot of evidence. She also agreed that it would be helpful to engage with the Credit Regulator to clear the credit records of unsuspecting buyers, and added that the Committee might want to get a report on accidents involving illegally converted vehicles from the Road Accident Fund (RAF). The question of liability for the situation was a huge one, but she noted that it was within the Portfolio Committee’s mandate. She pointed out that Toyota had made huge profits from the sale of its Quantum panel vans, and the fact that they had been imported as goods vehicles but used as passenger vehicles might also have some tax implications. Remedial action was being implemented and she would indicate where it was happening slowly or there were gaps. She would also look into the 40 000 converted vehicles on the roads.

The meeting was adjourned.