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

Meeting report

Mr L Mangcu (ANC), Acting Chairperson, said the Sub-Committee would hear about the Department's progresson the Public Protector report on the illegal conversion of vehicles and on the matters referred to the Special Investigating Unit (SIU), the work of the Monitoring and Evaluation Committee to address this and the design of the current licensing system and other systems.

Update on the Scrapping of Illegally Converted Toyota Quantum Panel Vans
Adv Johannes Makgatho Acting DDG: Department of Transport, said the presentation is to provide an update on the scrapping of illegally converted Toyota Quantum panel vans in compliance with the Public Protector’s remedial action.

Background
In 2009, when the Department became aware of the unsafe practices of illegally converting panel vans into passenger vehicles, the taxi industry approached the then-Minister of Transport, seeking an intervention to assist them. The Minister approved a process of rectification through what is termed retro-fitment.

Progress and Updates
• The Department did a data filtration, and found that 2 353 vehicles were identified as illegally converted panel vans. Of these, 436 have been retro-fitted. The balance of the identified panel vans continued to operate illegally.
• The Public Protector issued remedial action on 27 March 2019.
• As far as the Department was concerned, the remedial action was that the panel vans must be scrapped through the Taxi Recapitalisation Programme.
• Data extrapolated by the Road Traffic Management Corporation (RTMC) and Taxi Recapitalisation SA (service provider appointed for scrapping) identified 1 916 panel vans possibly qualifying for scrapping.
• Only 1 226 of these vehicles had operating licences and were eligible for scrapping since an operating licence is a pre-requisite to qualify for scrapping.
• Of the 1 226, only 503 submitted applications for scrapping since April 2019, implying that 723 are still outstanding.

Breakdown Per Province
A table was shown of the number of illegally converted panel vans per province, how many had operating licences and the number of scrapping applications received to date, those paid/scrapped in 2019/20 and those paid/scrapped in 2020/21, and the number of applications in progress. For example, Western Cape had 239 panel vans, of which 214 had an operating licence; 106 applications received; 66 vehicles paid/scrapped in 2019/20 and 17 in 2020/21; and 23 applications in progress. In total, 79 applications were in progress.

Proclamation
DOT had prepared a draft proclamation which the Minister would sign off. It provides: The Minister of Transport, in terms of section 5(4)g(i) of the National Land Transport Act (NLTA), hereby issues a directive on measures relating to public transport on the safety of passengers. In 2005, Toyota panel vans were converted into minibus taxis illegally; these vehicles did not comply with the requisite safety standards for passenger-carrying vehicles. The Public Protector of South Africa found in the report titled Illegal Conversions of Toyota Panel Vans Into Minibus Taxis, issued on 27 March 2019, that the Department is to ensure that there is no Toyota panel van, that has been converted into a minibus taxi, carrying passengers on the South African roads. The process of scrapping the Toyota panel vans is not finalised. The Minister hereby to ensure safety of passengers, directs that:
(a) all the owners of illegally converted panel vans must surrender their vehicles to the Taxi Recapitalisation within four months from the date of the publication of this notice and
(b) no illegally converted panel vans will be allowed to transport passengers for reward after a four-month period in paragraph (a) has lapsed, and law enforcement shall impound all illegally converted panel vans.

Update on Other Items in the Public Protector Report
• No report has been received from SIU on illegal vehicle conversion matters referred to it.
• On matters referred to the DG:
- DOT has commenced with the redesign of the National Land Transport Information System (NLTIS) to close gaps that may have been exploited. It has engaged with SIU to investigate the manipulation of the system. It is in the process of issuing the Proclamation announcing the cut-off date for the grace period to qualify for the scrapping process.
- All converted panel vans have been admin-marked on eNaTIS and their licences cannot be renewed.

Update on NLTIS Redesign
• The following scope of work was undertaken:
- Integrate the system with the Geographical Information System (GIS)
- Ensure interoperability with eNaTIS
- Liaise with national, provincial and municipal stakeholders to gather functional requirements
- Interface as far as possible with provincial systems kept at provinces
- Migrate data from historical systems like the Land Transport Permit System (LTPS) into the new Operating Licence Administration System (OLAS)

Progress to Date on Redesign
• Inclusion of new modules for National Public Transport Regulator (NPTR), Transport Appeals Tribunal
• System design alignment to User Requirements Specifications
• NPTR Testing and User Acceptance Testing
• Legitimate data migration and system testing

Outstanding Activities on Redesign
• Migrating data from historical systems like LTPS into new OLAS
• Ensuring interoperability with other systems such as eNaTIS
• Interface with other systems such as:
- SARS – tax compliance vetting
- Home Affairs – validation of identity number and status
- SAPS – criminal activity checks
• Full system testing and implementation
DOT extended service provider contract due to COVID-19 from September to March, at no cost, because these are things that provider would need to do

Way Forward
• The Minister has committed to the following:
- Engage with Technical Committee
- Meet with Toyota to lobby for its contribution on resolving the challenge
- Meet with SIU to expand mandate on current R37 Proclamation investigating eNaTIS irregularities
- Issue a proclamation setting a deadline for the discontinuation of use of the illegally converted panel vans

Discussion
Mr C Hunsinger (DA) appreciated the presentation. It noted that DOT became aware of illegally converted panel vans in 2009. There have been reports, and there is evidence that the Department knew about this as early as 2005. If DOT did not have an answer for this, the Committee could get verification of this in a different way. He wanted to know: Why 15 years? Nothing has happened in the meantime.

The Taxi Recapitalisation programme seems to be the only solution within the scope of recommendations from the Public Protector report. Does DOT regard the R124 000 offered to owners of taxis as an adequate solution given the expense of buying the taxi is a lot more? How did DOT not obtain knowledge of this phenomenon before 2009, in what way was DOT made aware of it in 2009?

Does DOT regard the retro-fitment programme as adequate, given there are manufacturing specifications, and that the Department of Trade, Industry and Competition (DTIC) has a body responsible for safety checks and adequacy checks in terms of the homologation process? Could DOT give the Committee its impression of the retro-fitment process, and how it fits into the specification for homologation and MIB (manufacturer / importer / builder of vehicles) specifications?

The numbers for illegally converted taxis: One starts with 2 353. Was this the number assessed at the time in 2009, and no other assessments have since been undertaken, or can DOT give absolute assurance that the 2 353 is the total number of illegally converted taxis on South Africa’s roads? With the 436 retro-fitted taxis, what is their status? Where are they? Have other taxis been through this retro-fitment process?

Did DOT meet with the Public Protector before the release of the Public Protector report to discuss the taxi recapitalisation programme as a solution? He asked for DOT comments on the Paris Agreement, TRIPS Agreement and the Berne Convention. South Africa is a signatory of these international agreements on patent and intellectual property rights. It is dealing with a locally manufactured and converted taxi, whereas the origin country is a member of this accord? DOT referred to irregularities and manipulation of the system; he assumed it was talking about eNaTIS (electronic national administration traffic information system). Was it the case that a third party as seller of a panel van converted to taxi, can go to a traffic department and register and license this vehicle from a three-person to a 16-person vehicle, and deliver the vehicle without that owner ever being to the traffic office? Has this happened? Has it been investigated?

On the outstanding activities, Mr Hunsinger recommended that the Committee gets further details on this. He was sure that Adv Makgatho would agree that this the key turning point in securing the system, building firewalls back into the system, to protect users and commuters in the future. He recommended that the slide 11 information becomes a core part of the process going forward.

Mr K Sithole (IFP) said that the presentation is not enough. The report says that DOT received information about the panel vans in 2009. But there is evidence that DOT received the information in 2005 – what happened from 2005 until 2009? DOT “legalised” these panel vans through the scrapping of panel vans. What happened before DOT took the decision that it is going to scrap these panel vans? What happened to the manufacturers of those panel vans? How many panel vans have been converted to minibus taxis? He was not satisfied with the numbers given to the Committee. How many of these illegal panel vans has DOT given a licence to? How can a licence disc be given to something that is illegal? How much has DOT spent on scrapping these panel vans?

Mr Sithole asked for an exact number for how much was budgeted for those panel vans. How many panel vans were scrapped? When DOT says the remedial action was for the panel vans to be scrapped through the taxi recapitalisation programme, that decision was already taken by DOT in 2009. Today it is 2020, and there has been no finalisation in the scrapping of those panel vans. Why did it take so long? Does DOT have figures for how many accidents have been caused by these panel vans per province? The Committee must know exactly what it is dealing with. If one checks the provincial breakdown, Gauteng has 711 panel vans. How many were in Gauteng now? KwaZulu-Natal had 220; Eastern Cape had 169. In the DOT research and investigation, how many did the provinces have initially?

Mr L McDonald (ANC) was very concerned about the 436 retro-fitted panel vans that were already illegally converted. Who approved the retro-fitting homologation? Was it tested by SABS (South African Bureau of Standards) and NRCS (National Regulator for Compulsory Specifications)? What was the New Car Assessment Programme (NCAP) certification afterwards? The panel van is “a coffin with wheels”. What does 79 recapitalisations in progress mean – how long does it take for a taxi to be recapitalised and the owner receive the money? If he remembered correctly, this is the same figure DOT presented to the Committee in 2019. Since then until now, it has not completed the recapitalisation of those 79 taxis. What is the stumbling block? The taxi is brought in, it gets scrapped, DOT gives the money. How difficult can that be? There are many more taxis than the initial number of 2 353 taxis given in this report. If one data mines the system now, one will get another 1 500 illegally converted taxis, that might not even be Toyota panel vans. How many of these taxis have actually been impounded since the four months grace given by the Public Protector after the report was published. The Committee needed to get better information as the information given is lacking because it is nearly 12 years old. It cannot be working with figures from 2009; the world has changed drastically since then.

The Chairperson observed that either Mr Makgatho did not prepare it himself, or he prepared it a long time ago and did not have time to go through it. He stands to be corrected. There will be a rigorous interrogation of figures and facts as the Committee wants to get to the bottom of this matter and be able to take it forward as it has taken very long. It is not a case of DOT giving answers and then going away; the Committee will be coming back to the same topic.

Responses
Adv Makgatho replied that DOT is willing to comply and bring this matter to finality. The delegation included Mr Lesiba Manamela, DOT Director: Public Transport, and Ms Nonhlanhla Nkosi, DOT Director: Business Systems. In case missed something, his colleagues might want to respond. He started with the questions from Mr Hunsinger.

[Audio cut-off of 20 minutes]

Follow up questions
Mr Hunsinger asked how the maximum number of passengers could have been changed from three to 16 on eNATIS. In the taxi recapitalisation process of scrapping, have these scrapped vehicle parts found their way back into the market post-scrapping? He asked about the involvement of DOT in the retro-fitment process. Did the retro-fitment testing involve vehicles in movement? Were there any impact tests? Were there roadworthy or road capability tests as part of the retro-fitment process? He asked DOT to share the details of the retro-fitment process.

Mr Hunsinger said to Mr Manamela that he accepted the limitations of the Public Protector in terms of mandate. The Committee was disappointed that no mention was made of ambulances. Nearly every government hospital in the country has ambulances that were converted from panel vans. No mention of this was made, and no remedial action steps were mentioned. That should have been mentioned in the report, since it does involve the public sector and government hospitals. He accepted that there were mandate limitations, but how could DOT, DTIC, NRCS, SABS get involved in deciding what would be adequate manufacturing and engineering specifications around retro-fitment for the private sector? There must be limitations on what can be done.

Mr Sithole said he did not hear the answer about figures for accidents caused by these panel vans per province. He noted the figure of 2 353 and that 723 are still outstanding. From which provinces are these?

The Chairperson replied that Adv Makgatho had said that for all figures, including the accident figures, DOT will go and check these so that it does not contradict itself. If he is misrepresenting DOT, it will correct him.

Responses
Adv Makgatho replied that DOT will indeed check the numbers, so that it provides correct information. Mr Manamela, Ms Nkosi and himself would take turns responding to the follow-up questions. On the question of scrapped vehicle parts making their way back to the market, if Members were to witness the scrapping process, and they can request a video, they would see that the vehicle is compacted to something so small that it is highly unlikely, if not impossible, that anything would make its way back to the market.

Adv Makgatho replied about the manipulation of eNaTIS. When someone logs onto the system, a login number is required. This number is unique so if people share their login number, it is easy to tell that somebody did that. It is possible for somebody to manipulate the system and change a three-seater vehicle to a nine- or sixteen-seater capacity. This is more of a human element – whatever arrangements that person might be having with a corruptor.

He would ask Mr Manamela to clarify what date the data filtration figure of 2 353 was established. He would also ask him to respond to the question on the 2009 date and when DOT became aware of these illegally converted panel vans.

Mr Manamela replied about the figure of 2 353. As he had indicated before, the focus from DOT’s side was on what is in the Public Protector report. The figure of 2 353 is what is in the Public Protector report when the retro-fitment was approved by the Minister in 2009. That was the figure that was identified then. The assumption was that anything converted post the window period of retro-fitment would not qualify for scrapping because it becomes illegal. The number is strictly what is in the Public Protector report. The data filtration of 2 353 was done purely for Toyota Quantum vehicles. The verification of the number was done through the system, similar to a VIN number check. That number would determine whether that vehicle was originally a panel van. It is picked up on the system using that number. After the 436 were retro-fitted, the number left was 1 996, and only 1 200 of those were found to qualify for scrapping.

On why 723 panel vans were still outstanding, the Public Protector report stated that the operators must bring the vehicles voluntarily. It is a voluntary process; he thought that was why the Minister said that there should be a cut-off time. Those 503 were the ones that submitted applications for scrapping. The 723 left over are the ones who decided not to submit their application for whatever reason. DOT made a follow-up, and it has picked them up through system to give them an opportunity. But the Public Protector report says the scrapping of the vehicle would be voluntary. Once the proclamation is approved and published, if people do not submit their applications voluntarily, and the four-month window period is closed, then those vehicles forfeit the scrapping process, and they forfeit being paid. Those vehicles will be impounded because they cannot renew their licences, and cannot go back on the roads.

On the years 2005 and 2009, DOT might have to go back to the report. The Public Protector report stated DOT became aware of this practice in 2009. Was it really 2005? Initially, the complainant went to the Public Protector in 2012, and this practice may have started before. The Toyota Quantum came onto the market in 2005. That is why DOT was saying it might be around 2005. DOT will have to double-check the reason the complaint came from the taxi industry, but the concern was around safety. Some people were saying that there were safety issues. DOT will have to double-check the rationale for people coming to complain.

The Chairperson asked Ms Nkosi if there was anything that she wanted to say.

Ms Nonhlanhla Nkosi, DOT Director: Business Systems, replied that her colleagues had said everything. She wanted to confirm what Adv Makgatho said on slide 11 about the outstanding activities of the NLTIS Redesign project. DOT is working hard to ensure that those outstanding activities will be completed so DOT can implement the system come the time of the end of the contract.

The Chairperson made some observations. Some of the questions had not been answered but he thought that Members had decided to let those ones go as they are not deal breakers. One thing that was coming out clearly was that the numbers were not adding up at all. It is true that these numbers are the ones that were submitted by the DG at the last interaction a few months ago. The first task for DOT is that the Committee needs it to go back and re-look at all of these numbers, taking into consideration the questions that were asked. Key to the questions is: The numbers that DOT is giving, whether it is 2 363 or whatever the number is, is it at the time DOT checked the numbers, or is it up to date? Very important to the Committee is to understand whether there is an increase; it wants to know the real numbers in all the categories that DOT had stipulated. There was a question that was asked, but not responded to. He wanted DOT to respond to that question in writing when it updates the numbers; the question was, “How many vehicles have been impounded?” Every time DOT is presenting, it says, “If this does not happen, we will impound vehicles”. How many have been impounded? He said the Committee would appreciate a provincial breakdown.

The proclamation is an interesting development and the Committee welcomes it. He did not hear exactly when is it intended to be signed and brought into effect.

The Chairperson mentioned slide 11 on the way forward. One thing the Committee wanted to see there is timeframes. DOT said that it would do this, but there are no timeframes. Another question that was not responded to is, “How did DOT become aware of this issue, whether it was 2005 or 2009?”

The Committee would be meeting the Road Traffic Management Corporation (RTMC) next week on eNaTIS manipulation. In summing up, he did not get a sense that DOT was alarmed or shocked about conversions. DOT is confining itself to what the Public Protector has said should be remedied, thus making it a tick box exercise. He could be corrected. He did not get the sense there is an urgency to resolve this matter. The Committee is here to ensure that it will push until it sees the matters in the Public Protector report resolved, and also its effect on ambulances.

With the proclamation, it would be useful for the Committee to know DOT’s enforcement plan. The record shows that the many things DOT asks the taxi industry to do, most of it the industry will not do. After the taxi is not brought in voluntarily after four months, what is the DOT plan to enforce impounding the taxi? He stated that (1) the Committee wants a copy of the presentation for its records, (2) DOT must revisit the numbers (3) DOT should include the SIU feedback. DOT was scanty in its report-back. The Committee would like updated information on the investigation. The Committee wanted an enforcement plan for the Minister's proclamation. This written information will form the basis as it meets stakeholders going forward.

Mr McDonald thanked the Chairperson for his summary of today’s proceedings. In light of what the Chairperson said, the Committee must schedule a meeting with DOT as soon as possible. It must invite the Minister and the DG so these gaps can be attended to and the Committee can have the actual figures and actual truth, thus allowing the Committee to work to close the gaps. It is no use working with something that the Committee already finds is problematic. The Committee must have a meeting with the Public Protector as soon as possible, and get her insights. The Committee has only read the report. He was sure the Public Protector had better knowledge. Sometimes when one puts something on paper, one loses some context.

Mr Sithole said that he was fine and had no further questions.

Mr Hunsinger said the Chairperson had summarised all of the outstanding matters adequately. The Committee had more direction following the DOT responses. He thanked Ms Nkosi, Adv Makgatho and Mr Manamela. It is important for the Committee to form an alliance with DOT on the gaps identified; it should be clear to the Committee that the parameters are set. It is clear that the problem is bigger than the content of the report. He therefore suggested that the Committee meet with DOT regularly to verify and go along with it step by step. It is important for DOT to realise the Committee’s oversight role and in representing road users not just Quantum taxis; the scope of this investigation is wider. He assumed that there would be opportunity to engage on this again.

The Chairperson thanked the DOT delegation. It is important that all parties are on one side, and one team. All parties want to get to the bottom of this, and be able to find solutions. It should not be about merely the ticking of boxes saying “we have responded to this”. The matter is important as it is about saving lives and assisting those who might have lost money through unscrupulous financiers and dealers. The Committee’s interest, to the best of its ability, is to leave no stone unturned, to understand this, and make proper recommendations on what needs to happen.

Committee Programme
The Committee Secretary explained that plenary sessions were now planned for the afternoon of 1 and 2 December, so there will be a change to the duration of the committee meetings on those days. Members would be kept abreast of any other changes to the programme.

The Chairperson asked the Committee to look at the programme for next week’s meeting with the Road Traffic Management Corporation (RTMC). As the Committee reflects on what it received today from DOT, the intention is not for the Committee to get the "same old, same old". It wants to get the meat. If there were any suggestions, he wanted to invite colleagues to interact, even before meetings, so that any interaction the Committee has, is impactful, and it gives the Committee the results that it wants. Overall, the Committee has had a good start. The support team has prepared a lot of information, and he encouraged Members to go through it. The Committee is very grateful to them.

Mr Hunsinger had a suggestion on something that would be of great benefit to the Committee. It had received substantive information on homologation and MIB, which is important to know about legal changes to manufacturer specifications known as the design envelope of engineering specifications. What the Committee heard today was about a retro-fitment intervention by DOT. He suggested that as background, the Committee asks DOT to supply it with written information on what this retro-fitment involves. This technical knowledge would be important going forward.

The Chairperson said that his point was well taken. He noted that the Committee was accepting the committee programme as a work-in-progress as there might be further changes to 1 and 2 December. However, as a working framework, it is acceptable.

The Committee adopted its minutes and its programme as a programme in progress.

The meeting was adjourned.