SA Maritime Safety Authority, Civil Aviation Authority, SA Rail Commuter Corporation: hearing on Department Budget

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
11 March 2003
SOUTH AFRICAN MARITIME SAFETY AUTHORITY, CIVIL AVIATION AUTHORITY, SOUTH AFRICAN RAIL COMMUTER CORPORATION: HEARING ON DEPARTMENT BUDGET

Chairperson: Mr JP Cronin (ANC)

Documents handed out:
SAMSA presentation
SARCC presentation

SUMMARY
The Committee was briefed by the South African Maritime Authority, Civil Aviation Authority and Rail Commuter Corporation on their programmes and budget for 2003. SAMSA expressed a desire for South Africa to start thinking about South African maritime in a global context, especially since South Africa had been afforded the duty of protecting and monitoring the African coastline on the Indian Ocean up to Tanzania by the International Maritime Organisation (IMO). SAMSA noted that there is no insurance backup for fishermen, but the Minister of Transport had asked them to look into making insurance compulsory for fishermen. Legislation could be drafted that would force role-players in the industry to provide compulsory insurance to whole fishing crews.

The Civil Aviation authority discussed organisation issues. They noted that the CEO was being vested with a great deal of power. This was a problem because of the way the Chief Financial Officer (CFO) of the organisation, in turn, has limited financial power. The CAA representative argued that the Public Finance Management Act needs to give more power to the CFO. He supported the idea of boards including members who have financial capabilities.

On the issue of safety SARCC told the Committee that they had put railway policing structures in place. They had instituted a pilot project in the Western Cape to combat crime and briefed Members on the results. Members questioned the SARCC on the possible merger between the three railway institutions, Metrorail, Shosholoza Mail and the SARCC.

MINUTES
South African Maritime Safety Authority submission
Mr Sipho Msikinya: CEO, SAMSA, was assisted by Mr Bill Dernier: Manager of Operations, SAMSA. Mr Msikinya outlined the strategic goals of SAMSA, which included: ensuring the safety of life and property at sea and promoting South Africa's maritime interests. They provide services to the maritime industry and to stakeholders as well as to government. In their presentation the sources of SAMSA's funding was outlined. They outlined the services they provide to government as well as to the maritime industry. (please see attached presentation)

Discussion
Mr A Ainslie (ANC) asked what levies SAMSA charged.

Mr Manamela (SAMSA) answered that they charged levies of R18,16 per 100 cost weight kilograms and R3 per meter.

Mr Ainslie asked what services SAMSA rendered to government.

Mr Manamela answered that they bill government on direct user charges, including inspection of vessels and the approval of construction drawings.

Mr Cronin, Chairperson, interjected by commending the fact that there were real services rendered to government. He asked whether there were any pressures on SAMSA to function under a regulator. In the instance where they did function under a regulator, the regulation of the levies they charged would be the domain of that regulator.

Mr Msikinya said that they were not under any pressure to function under a regulator themselves, but should they do so, regulating the levies charged by SAMSA would be under the domain of that regulator.

Mr Ainslie asked if there was any income paid to SAMSA from Government besides subsidies.

Mr Msikinya replied that SAMSA is self-funded through services rendered and gets no additional financial support from Government.

Mr Ainslie asked how many ships were registered with SAMSA at that particular moment.

Mr Dernier (SAMSA) answered that at the moment they had nine hundred registered ships and three thousand five hundred registered small carriers.

Mr Ainslie noted that the Department had set aside a budget for search and rescue. He asked whether the money for this purpose was going to SAMSA.

Mr Msikinya said that the money set aside by the Department for search and rescue was indeed going to SAMSA.

Mr Ainslie asked whether this money was included in the SAMSA budget breakdown.

Mr Msikinya replied that it was included in their breakdown, under 'Government Income'.

Mr Ainslie asked whether the South African National Defence Force (SANDF) had totally cut itself off from SAMSA rescue services.

Mr Dernier explained that the SANDF would maintain the Maritime Rescue Coordinating Centre (MRCC) but SAMSA would be responsible for its maintenance, coordination and funding.

Mr G Schneemann (ANC) asked whether, when the situation calls for it, SAMSA would be able to completely take over the search and rescue function from the SANDF.

Mr Dernier answered that when the time comes, they would be able to train people to perform the necessary search and rescue functions that the SANDF are presently performing.

A Member, focussing on the subject of maritime security, asked whether there was any structure within SAMSA at that moment that dealt with the specific issues regarding maritime security.

Mr Dernier said that since the advent of the September 11 attacks on the World Trade Center, on-ship security had been strengthened. However, SAMSA had not yet put into place structures dealing specifically with maritime security. The work done by the MRCC helped in raising awareness of security issues and provided valuable information to SAMSA. Mr Dernier explained that the issue from then on would be to identify who to pass this information and insight onto: whether to the South African Police Services (SAPS), the SANDF or the National Intelligence Agency (NIA).

Ms M Coetzee-Kasper (ANC) firstly noted and commended the work done by rescue volunteers in South Africa. She asked whether SAMSA had considered using these volunteers in helping them out with the phasing process where SAMSA would eventually be taking over the rescue functions currently performed by the SANDF.

Mr Dernier answered that SAMSA made use of the National Search and Rescue Institute (NSRI) officials, who are performing on a voluntary basis, all the time. However, he stated, they did not want to integrate these officials into SAMSA since their main field of expertise was short-term response. They would continue using them in their current capacity: assistance in search and rescue operations.

Mr Msikinya expressed a desire for South Africa to start thinking in a global context in terms of where South Africans want to see Maritime in this country. They ought to think seriously about what is needed to make South Africa a leader in this field, not only in Africa, but possibly in the whole of the Southern Hemisphere. He explained that the potential existed, especially since South Africa had been afforded the duty of protecting and monitoring the African coastline on the Indian Ocean up to Tanzania by the International Maritime Organisation (IMO).

Mr Ainslie brought up the issue of maritime fatalities. He noted that there seemed to be an improvement in the number of maritime fatalities. He asked whether this was truly the case and asked what hand SAMSA had played in reducing these fatalities.

Mr Dernier confirmed that it was truly the case that maritime fatalities had improved. He could not attribute it to any specific action SAMSA had taken. He explained that he had heard complaints from fishermen about the quota system which puts them under pressure to get their 'catches' in before their time expires and forces them to take unnecessary risks. Besides these complaints, Mr Dernier explained, they could not find any specific reasons for the fatality rate in the maritime industry.

Mr Dernier noted that the National Minister of Transport had given a commitment to improve the conditions under which fishermen worked in South Africa and to raise the dignity of the fishermen of South Africa. SAMSA had given their representatives these mandates. As a result, there were a number 'Indabas' held across South Africa encompassing and reaching fishing communities and major role-players in the maritime industry of South Africa. He stated that there was already legislation which had been drafted to improve working conditions in the industry. By means of providing examples, he referred to proposed legislation. The Department was looking into making it compulsory for all fishermen to wear buoyancy jackets. He also made mention of proposed legislation dealing with compulsory basic safety training for maritime employees and legislation that would have an HIV/AIDS awareness training component.

Mr Dernier mentioned that in their efforts to improve the working conditions of South African fishermen, the next phase was to perform practical demonstrations of safety functions for the benefit of the fishermen and other stakeholders.

Mr Cronin expressed his delight at the type of information the Committee was being provided with by SAMSA regarding the holding of 'Indabas' and training sessions in cooperation with fishing communities and maritime stakeholders for the purpose of improving the conditions for all concerned. He encouraged the report back on similar and related issues.

Mr Ainslie asked whether there was currently any insurance backup for fishermen and their families to cover them in cases of accidents and death.

Mr Dernier replied that at that moment there was no insurance backup for the fishermen, but the Minister of Transport had asked them to look into making insurance compulsory for fishermen. This could be done, he explained, by drafting legislation that would force role-players in the industry to provide compulsory insurance to whole fishing crews.

Mr Schneemann asked what sort of inspection services is performed by SAMSA, specifically whether SAMSA did any spot-inspections.

Mr Dernier explained that all boats initially have to pass a survey test carried out by SAMSA to obtain their fishing license. He explained that there is legislation forcing all boats to undergo inspection once a year. However, he answered, they did not do spot inspections at SAMSA. He mentioned that they were in a process of looking at setting up a body to enforce safety.

Mr Schneemann asked what sort of penalties were given by SAMSA to transgressors.

Mr Dernier replied that SAMSA handed out heavy fines to transgressors. A boat could be fined up to R20 000 for a breach of the legislation. Regretfully, he noted the attitude of the South African courts as not being friendly to the Maritime Fishing Act, owing to their reluctance to prosecute many maritime transgressions. In trying to be more effective in punishing maritime transgressions, Mr Dernier explained that they now opt to use a 'lenient fine' system, where transgressors are urged to pay immediate fines, which are more lenient, as opposed to being taken to court in a bid to extract a full fine.

Ms Coetzee-Kasper noted, from Mr Dernier's report, that seemingly some public prosecutors were unwilling to prosecute cases dealing with maritime transgressions. She asked whether SAMSA would like the Committee to intervene and make it compulsory for prosecutors to prosecute cases dealing with maritime transgressions.

Mr Dernier promptly declined the offer, stating that it was not a simple procedure for prosecutors to decide which cases to prosecute and which to leave. They had their own procedures to determine the hierarchy of the types of cases they take on, for example, homicide cases are usually placed in a higher order of importance than cases dealing with other crimes.

Mr Msikinya questioned whether it was not time for them to set up a special court in order to raise the quality of maritime safety. This was a process with which the Committee could help SAMSA.

Mr Cronin said that he would rather see SAMSA making the maritime stakeholders work more closely with authorities to improve safety.

Mr Cronin, as a form of a summary, stated that SAMSA, following the report they had just provided, was more or less on track. There were questions around responsibilities and mandates regarding search and rescue and the gradual phasing out of the SANDF in this function. He suggested that this issue could be resolved through negotiation. Furthermore, he urged SAMSA to be more proactive in their relationship with the Department. Mr Cronin made mention of the fact that the IMO had made amendments to the Safety of Life at Sea (SOLAS) Convention (1974) following the terrorist attacks on the United States and the subsequent increased need for safety. He highlighted the cost of implementing the safety measures proposed by the resolution as being a big issue. More specifically, he expressed concern that since these measure were estimated at costing multi-billions, they would punish Third World economies. Mr Cronin requested a comment on this and asked whether South Africa was capable of meeting these costs.

Mr Msikinya asserted his affirmation that security costs. He then explained that the issues involved with the adoption of the safety measures were more political, since there were stakeholders involved who had varied maritime interests and assets invested worldwide, including containers, port initiatives and personnel. As a country they stood at a risk of being blacklisted if they did not cooperate. He explained the precarious position of South Africa; owing to our continental and international affiliations, for example the Southern African Development Community (SADC) and the Non-Aligned Movement, SA's decision to comply or not will also have to take into account the joint development of Africa. He stated that they would do what they had to do once a political decision had been taken.

Mr Msikinya commented about pollution, stating that there were also other types of maritime pollution besides oil. SAMSA would create and implement mechanisms to minimize the liability of the South African maritime industry on pollution.

Mr Ainslie asked whether SAMSA would like to comment on the Auditor-General's report, and whether they are dealing with the issues brought out by that report.

Mr Msikinya replied that the matters were being dealt with but they could not promise the Committee that they would not crop up again. He explained that they had a dysfunctional board which was split. He questioned whether the board system really worked. He mentioned that some of the auditors they deal with tend to sensationalize issues. They were not as professional and as impartial as they had would want them to be.

Mr Ainslie suggested that as a Committee they needed to discuss these types of issues, and expressed his lack of clarity as to whether the Minister knew about them or not.

Mr Cronin concurred, stating that it does seem to be a systemic issue and it does crop up often. He noted the point.

Mr Msikinya commented further on the issue of the functionality of boards, reaffirming that there was a need to look at whether the board system really worked.

Civil Aviation Authority submission
Mr Naidoo: General Manager: Corporate Services, represented the CAA.

Mr Naidoo firstly noted that many of the CAA's concerns that he had planned to bring forward in this presentation were answered by the discussion subsequent to the SAMSA presentation. He also asked for the Committee's indulgence seeing that the other senior managers from the CAA did not accompany him.

Organisational issues
Mr Naidoo stated that the main issues he would be dealing with in his presentation would be recent organiational adjustments in, and the organisational development of, the CAA.

Mr Naidoo said he would start with a report on the way the organisation is currently managed. He reported that in early 2000, the Board commissioned a report on misconduct issues implicating the then CEO. The CEO was subsequently suspended. The Board received a full report and were now busy with the disciplinary proceedings. He commented that it would be unfair to discuss the details of the hearings at the meeting.

Mr Cronin confirmed this last point as a mutual sentiment.

Mr Naidoo stated that they have appointed an Acting CEO: a black female, who has been with the organization for two years and is a registered pilot. She is acting under full authority.

Mr Naidoo explained that one step below in the chain of command is the General Manager (GM) of Corporate Services, which in this particular case, was himself. He said that he had been in operation as the GM for one year.

Mr Naidoo raised his first issue of concern as that of the CEO being vested with a great deal of power. He expressed how he saw this as a problem because of the way the Chief Financial Officer (CFO) of the organization, in turn, has limited financial power. He felt that the Public Finance Management Act needs to give more power to the CFO. He supported the idea of boards including members who have financial capabilities.

Mr Naidoo made reference to the King Report on corporate governance, making a case that a board governing an organization should have a majority of non-executive managing directors. He agreed with the view supporting a review of the board structure. Boards often have members who act and make decisions in terms of their mandate, and not necessarily in the overall interest of the organisation.

Mr Naidoo then went on to note a few other suspensions within the CAA. TH e first one affected the Public Relations Manager. He stated that the disciplinary process would commence the following week. The second suspension, he went on, affected the Manager in charge of Information Technology (IT). He said that the disciplinary proceedings would initiate on the following Friday.

To deal with these disciplinary issues, Mr Naidoo mentioned that the CAA was, together with unions, trying to draw up an ethics policy for the organization. They would be coupling this with a 'sudden-death' policy, where an official would undergo immediate suspension should they be charged with any misconduct. He explained that this was necessary because, in the case of an IT official being charged with misconduct, he/she could decide to crash the information system of the whole department. The 'sudden death' system would limit the possibility of these types of 'revenge attacks' by officials implicated in misconduct charges.

In terms of capacity building, Mr Naidoo explained that in certain areas, transformation had not taken place. He also noted that the general age profile of CAA employees was also increasing in these areas. They needed to address this. He mentioned the process of bringing in new 'previously disadvantaged' employees to take over form the older generation employees, only for the older generation employees to be brought back on as 'consultants', training the new employees. He explained how this process could even occur at General Manager level. He said that the problem they were encountering with this process was how to pair the 'previously disadvantaged' employees with the older generation ones.

What the board had suggested was that the organization 'bulge' the process, that is, they should allow the organization to grow a little wider in certain areas in terms of staff numbers until such time that a complete transfer of skills has occurred. Their staff numbers were currently 118, but, following the suggestion of the board, they planned to grow this number to about 150.

Training
Mr Naidoo then went on to discuss the subject of training. The previous year, the organization had under-spent the training budget by 75%. This issue would be brought up with the managers. They were looking at a training plan that was aimed at deepening the skills of personnel as opposed to adding on to the skills they do have. He explained that this would combat lack of organisational loyalty that is synonymous with post-training employees. He explained further that skills would only be added as the employee rises in the organisational hierarchy.

Finance
Mr Naidoo then moved on to the subject of finance. Their budget was R104 million. He said that 60% of the money required for the budget would come from their service charges. He made a note that the service charge was R4 the previous year, but that they were increasing it to R7 from 1 April 2003.

Mr Naidoo made it known to the Committee that the CAA was cash-flush at that particular moment because of the aircraft that they had sold. This posed a problem, however, because the additional finances obtained form the selling off of the planes would build up at a loss over a couple of years and they need an extra aircraft anyway to help in carrying out CAA duties.

Discussion
Mr Ainslie asked how operations previously conducted with these planes are conducted now that these planes have been sold off.

Mr Naidoo answered that the CAA was still responsible for the operations, but were only able to perform them on a limited scale. The board would lease an airplane for this year.

Mr Schneemann referred to recent newspaper reports concerning an airplane receiving incorrect landing details and nearly colliding with a mountain. He asked whether dealing with this type of situation would fall under the CAA domain.

Mr Naidoo confirmed that the CAA would indeed deal with 'Calibrations', which he explained as being the correct term for the process that Mr Schneemann mentioned.

Mr Schneemann referred to Mr Naidoo's point about the raising of service charges from R4 to R7. The imposition of this increase in the tariff was planned for August the previous year. He asked why there was a delay.

Mr Naidoo explained that the delay was due to the legislative process.

Mr Schneepers asked where the CAA would be obtaining the rest of the 40% for their budget. He also asked if any of it would be coming from government subsidies.

Mr Naidoo explained that the other 40% comes from commissioned work done by the CAA on aircraft. He stated that they received no subsidies from Government.

Mr Cronin, as a form of summary, expressed his feeling that it was reassuring to know that the board was active in the CAA and it was interesting to hear of their organisational restructuring. Mr Cronin said that it was worrying, however, that the regularity of calibrations was being hampered by a resource issue. He also expressed concern about the fact that the rest of Mr Naidoo's delegation was not present. This could potentially be viewed as not taking the Committee seriously.

South African Rail Commuter Corporation submission
Mr Lekota: CEO, SARCC, presented the SARCC submission along with Mr van Niekerk: Executive Manager: Finance, SARCC. Mr Lekota noted that the objective of SARCC is to provide rail commuter services in the public interest. They noted that safety and security remain the biggest threat to the image of rail commuting and briefed the Committee on a pilot project run in the Western Cape to combat crime. They highlighted the cost of damage to assets. They considered investment potential and the repositioning of commuter rail. Institutional reforms include stronger regulatory control and realignment of current dysfunctional arrangements.

Discussion
Mr Ainslie requested clarity on the graph on crime. He asked what the SARCC meant by 'people'.

Mr Lekota replied that they meant 'The percentage of human injury or death'.

A Member asked whether the SARCC is going to do anything about railway policing, in terms of it being more visible in ensuring the security of commuters.

Mr van Niekerk said that they had put railway policing structures in place but he only wished that what had been resolved about railway policing happens in reality.

Mr Ainslie asked whether the SARCC had made any submissions to the National Treasury regarding their need for funds. How did the National Treasury respond?

Mr van Niekerk responded that they had indeed requested funds from the National Treasury. Apart from written submissions, they had also made the effort of delivering verbal and physical submissions to the National Treasury. He expressed displeasure at the fashion in which the National Treasury sometimes handles requests for funding, citing the way in which they advise organisations to help themselves for a while and y then see whether they still needed the money.

Mr Ainslie referred to the results of the pilot project aimed at reducing crime coordinated by the SARCC and included in the report. He referred to it as being 'impressive'. He asked what other actions the SARCC was taking on the trains themselves to ensure the safety of passengers.

Mr van Niekerk responded that other actions included mainly undercover work, whereby they try to arrest perpetrators and potential perpetrators of crimes on trains. Visibility was key in ensuring the safety of passengers.

A Member referred to the interaction between the SARCC and the Free State Department of Public Works. She asked what the Department's response was.

Mr Lekota said that SARCC had met with the Provincial Minster of Public Works in the Free State and the Department had been cooperative in aiding the plans of improving the rail services infrastructure of the province. They were targeting a launch before the end of the year.

A Member then asked whether they had engaged the taxi and bus officials and tried to bring them into the process.

Mr Lekota said this was a point they had noted and it was on the cards.

A Member referred to the subject of the merger between the three rail institutions. When they had done oversight work over the merger, they had picked some institutional problems, especially regarding the definition of responsibilities over the maintenance and replacement of assets. She requested a comment on this.

Mr Lekota said that the SARCC owns the rights over rail assets and Metrorail is utilising those assets. He expressed his personal view that Metrorail is closer to the user on the ground and whatever input Metrorail has on the rail service and the management of the assets should be done with the user in mind. SARCC were directly involved with day-to-day commuter operations. He would therefore feel more comfortable with the input of Metrorail on what goes into those assets that the SARCC has rights over. The SARCC should just ensure that whatever input Metrorail has should be in line with the public demands.

Mr Shilubana expressed concern that the number of injuries and deaths had gone up in recent times.

Ms Coetzee-Kasper expressed concern that the SARCC CEO did not make mention of the empty buildings alongside the railway that have been sitting empty for the last ten years or so. She asked why some of these buildings were not rented out.

Mr van Niekerk responded that some of the houses on the side of the railway were not their property. Those they did own were being rented out and they were in the process of selling them, but in the meantime they had rights over them and were responsible for maintaining them.

Mr Schneemann noted that there was a dramatic increase in cases of arson. He asked what the cause of the increase was.

Mr van Niekerk said that the increase in cases of arson should be looked at in context, mentioning the occurrence of the 'Germiston fire', where 67 coaches were burnt in one go. They hoped the security program they were running would have an impact on the number of arson cases.

Mr Cronin asked whether the SARCC, a sort of 'public protector' as a way of describing their function, still saw an 'institutional division' between the functions of the three railway institutions, namely Metrorail, Shosholoza Mail and the SARCC.

Mr Lekota said that there were still debates regarding this issue and he suggested that the Government make a decision on this issue. There was a proposal put forward for the provision of a sector regulator for passenger sales services. He went on to explain that Shosholoza Mail dealt with long distance railway services, Metrorail dealt with intra-city railway services while the SARSS dealt with the management of the railway assets.

Mr Ainslie asked whether the SARCC, with the financial constraints they foresaw, regarded their vision of the future of the railway services as realistic.

Mr van Niekerk said that once the merger issues with the other railway bodies of South Africa had been sorted out it would be possible to realize their goals. However, their plans would fail if they did not receive a financial injection.

The meeting was adjourned.