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Tuesday, 29 October 2013] 4811No 147—2013] FIFTH SESSION, FOURTH PARLIAMENTPARLIAMENTOF THEREPUBLIC OF SOUTH AFRICAANNOUNCEMENTS,TABLINGS ANDCOMMITTEE REPORTSTUESDAY, 29 OCTOBER 2013ANNOUNCEMENTSTABLE OF CONTENTSNational Assembly and National Council of Provinces1. Classification of Bills by JTM ........................................................ 48122. Bills passed by Houses – to be submitted to Presidentfor assent ......................................................................................... 4812National Assembly1. Membership of Committees ............................................................ 4812TABLINGSNational Assembly and National Council of Provinces1. Minister of Finance ......................................................................... 4813COMMITTEE REPORTSNational Assembly1. Agriculture, Forestry and Fisheries ................................................ 48132. Agriculture, Forestry and Fisheries ................................................ 48143. Defence and Military Veterans ....................................................... 48144. Tourism ........................................................................................... 48465. Basic Education .............................................................................. 48836. Water and Environmental Affairs ................................................... 48947. Water and Environmental Affairs ................................................... 48958. Water and Environmental Affairs ................................................... 4895ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4812 [Tuesday, 29 October 20139. Water and Environmental Affairs ................................................... 491410. Water and Environmental Affairs ................................................... 4919ANNOUNCEMENTSNational Assembly and National Council of ProvincesThe Speaker and the Chairperson1. Classification of Bills by Joint Tagging Mechanism (JTM)(1) The JTM in terms of Joint Rule 160(6) classified the followingBill as a section 76 Bill:(a) Division of Revenue Amendment Bill [B 38 – 2013](National Assembly – sec 76).(2) The JTM in terms of Joint Rule 160(6) classified the followingBill as a money Bill:(a)Adjustments Appropriation Bill [B 37 – 2013] (NationalAssembly – sec 77).2. Bills passed by Houses – to be submitted to President for assent(1) Bill passed by National Assembly on 29 October 2013:(a)National Environmental Management Laws SecondAmendment Bill [B 13B – 2013] (National Assembly –sec 76(1)).National AssemblyThe Speaker1. Membership of CommitteesThe following members have been nominated by their parties to serveon the Ad Hoc Committee on the filling of vacancies in theCommission on Gender Equality.African National CongressBhengu, Ms NRColeman, Ms EMRamodibe, Ms DMDlulane, Ms BNSnell, Mr GTSunduza, Ms TBBhengu, Mr FANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4813Democratic AllianceLamoela, Mrs HMore, Ms ECongress of the PeopleMosimane, Ms CInkatha Freedom PartyVan der Merwe, Ms LTABLINGSNational Assembly and National Council of Provinces1. The Minister of Finance(a)Report and Financial Statements of the Government EmployeesPension Fund (GEPF) for 2012-13, including the Report of theIndependent Auditors on the Financial Statementsand performance Information for 2012-13.National AssemblyCOMMITTEE REPORTS1. Report of the Portfolio Committee on Agriculture, Forestry andFisheries on the request to nominate candidates for appointment to theboard of the National Agricultural Marketing Council (NAMC), dated29 October 2013:The Portfolio Committee on Agriculture, Forestry and Fisheries, havingconsidered the request by the Minister of Agriculture, Forestry and Fisheriesto the National Assembly to nominate suitable candidates for appointmentto the board of the National Agricultural Marketing Council (NAMC),referred to it for consideration on 1 October 2013 (see ATC, 1 October2013), reports as follows:After having deliberated on 29 October 2013, the Committee recommends,in accordance with Section 4(4) (a) of the Marketing of AgriculturalProducts Act, (Act No 47 of 1996), to the Minister of Agriculture, Forestryand Fisheries that the following candidates be nominated to serve on theNational Agricultural Marketing Council:1. Mr Neo Harrison Masithela2. Dr Edwin Alfred ConroyANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4814 [Tuesday, 29 October 20132. Report of the Portfolio Committee on Agriculture,Forestry and Fisheries on the Marine Living ResourcesAmendment Bill [B30 – 2013], dated 29 October 2013.The Portfolio Committee on Agriculture, Forestry and Fisheries, havingconsidered the subject of the Marine Living Resources Amendment Bill[B30 – 2013], referred to it and classified by the Joint Tagging Mechanism(JTM) as a section 76 Bill, reports the Bill with amendments [B 30A -2013].The Committee further reports that the Democratic Alliance (DA) objectedto the amendment in clause 2 of the Bill with reference to the omission of“and other marginalised groups” and substituted by “, the youth and personsliving with disabilities”.Report to be considered.3. BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THEPORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANSThe Budgetary Review and Recommendation Report of the PortfolioCommittee on Defence and Military Veterans, dated 21 October 2013The Portfolio Committee on Defence and Military Veterans, havingconsidered the performance and submission to National Treasury for themedium term period of the Department, reports as follows:1. INTRODUCTION1.1. Mandate of CommitteeThe Portfolio Committee on Defence and Military Veterans (PCODMV) ismandated to oversee the Department of Defence and Military Veterans(DODMV) to ensure that the Department fulfils its mandate through themonitoring of the implementation of legislation and adherence to policies,such as the Defence Act (No. 42 of 2002), the White Paper on Defence(1996) as well as the Defence Review (1998). It must scrutinise legislationwhich supports the mission statement of Government; the budget andfunctioning of DODMV; and the employment of the South African NationalDefence Force (SANDF).1.2 Description of core functions of the DepartmentsThe Constitution (1996) in Section 200 sets out the mandate of the SouthAfrican National Defence Force (SANDF), while Section 204 establishes acivilian secretariat for the Department. The mandate is to “defend andprotect the Republic, its territorial integrity and its people in accordancewith the Constitution and the principles of international law regulating theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4815use of force”. In pursuance of this mandate, the DODMV provides,manages, prepares and employs defence capabilities commensurate withthe needs of South Africa, guided by the Constitution, relevant legislationand Executive direction.The purpose of the Department of Military Veterans (DMV) is to “overseeand manage the implementation of Government’s framework andprogramme on military veterans.” Core functions in this regard include thefacilitation, management and coordination of support to military veterans;provision of support services to the Department; oversight of the nationalmilitary veterans’ programme and periodic reporting in this regard.The DODMV has an oversight role for two Public Entities which fall underSchedule 2 and 3 of the Public Finance Management Act (No. 1 of 1999)namely ARMSCOR and the Castle Control Board (CCB). ARMSCORreceives allocations from the fiscus while the CCB generates its ownrevenue.1.3 Purpose of the Budgetary Review and Recommendation ReportThe Money Bills Procedures and Related Matters Amendment Act (No. 9 of2009) sets out the process that allows Parliament to make recommendationsto the Minister of Finance to amend the budget of a nationaldepartment. In October of each year, portfolio committees must compileBudgetary Review and Recommendation Reports (BRRR) that assessservice delivery performance given available resources; evaluate theeffective and efficient use and forward allocation of resources; and maymake recommendations on forward use of resources. The comprehensivereview and analysis of the previous financial year’s performance, as wellas performance to date, form part of this process.1.4 MethodThe Report is compiled from the various activities of the Committee. It isinclusive of the Committee’s meetings, oversight visits, reports on budgetvotes, strategic plans, annual performance plans and annual reports, aswell as previously published Committee reports.1.5 Dates of oversight visitsThe PCODMV conducted two oversight visits during 2013:• Oversight Visits to Air Force Base (AFB) Langebaanweg, AFBMakhado, AFB Durban, AFB Bloemspruit, AFB Hoedspruit and toselected Armscor Research and Development Facilities from28 January – 1 February 2013.• Oversight visits to the School of Tactical Intelligence, 1 TacticalIntelligence Regiment, Army Support Base at Lenz, 21 SAI Battalion inDoornkop, 1 Military Hospital, SA Army Infantry School, SA NavalGymnasium and the Simon’s Town Armscor Dockyard over the period29 July to 13 August 2013.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4816 [Tuesday, 29 October 20131.6 Outline of the contents of the Report.This Report covers the policy guidelines and performance of theDepartment of Defence, the Department of Military Veterans and concludeswith Armscor and the Castle Control Board.2. OVERVIEW OF THE KEY RELEVANT POLICY FOCUS AREAS2.1 State of the Nation AddressThe President of the Republic of South Africa delivered his State of theNation Address (SONA) on 14 February 2013. The SONA placedsignificant focus on the National Development Plan (NDP). Although theSONA paid little attention to the DODMV, the following aspects arerelevant:• South Africa’s involvement in regional stability and peacekeeping.• The role of the SANDF in internal peace and security.• Youth Empowerment and Skills development through the NationalYouth Service (NYS) and Military Skills Development System(MSDS).• Institution of measures to crime and corruption by the Department.2.2 Development Indicators• Performance Monitoring and EvaluationThe Ministry for performance Monitoring and Evaluation in the Presidencypublishes an annual edition of Development Indicators and, whereapplicable, the developmental role of the SANDF is also highlighted. In the2012 edition of the Development Indicators, this role is largely confined tothe SANDF’s role in peacekeeping in Africa and the subsequentcontribution to peace, security and stability. The SANDF’s role duringnatural disasters, electoral support and peacekeeping operations wasnoted. In reflecting on actual deployments, the Development Indicatorsnoted that during 2012, a maximum number of SANDF personnel deployedfor the function of peacekeeping was 2 468, which is slightly more than theProjected target of 2 250.• National Development PlanThe National Development Plan: A vision for 2030 is in essence a planwhich seeks to eliminate poverty and reduce inequality by 2030 in SouthAfrica. Understanding the role of the military in socio-economic and humandevelopment is important to put the military’s role regarding the NationalDevelopment Plan (NDP) in perspective. The most relevant chapter of theNational Development Plan to the military is chapter 12 entitled “Buildingsafer communities.” Although the chapter mainly emphasises the role of thepolice in securing a safe environment, the overall role of the military in thisregard is evident.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48172.3 Budget reviewNational Treasury’s budget reviews for 2012 and 2013 made mention ofbudgetary aspects related to the DODMV. The following matters have beenreferred to:• 2012 Budget Review’s note on border control: To boost border control,an additional R749 million is allocated over the medium term to deploythe SANDF for the function of border control. Expenditure on thisinitiative increases from R400 million in 2011/12 to R617 million in2014/15. The number of deployed personnel increases by 1 142,bringing the total to 3 300.• 2013 Budget Review’s note on the deployment to the Central AfricanRepublic: The Department of Defence deployed 400 members to theCentral African Republic at a total cost of R415 million in 2013/14 and2014/15.2.4 Medium Term Budget Policy Statement 2012/13While the 2012/13 Medium Term Budget Policy Statement states thatexpenditure on defence, public order and safety will grow at an averageannual rate of 6.2 per cent over the MTEF period, from R141.7 billion in2012/13 to R169.8 billion in 2015/16, little specific mention is made of thedefence force. It does refer to the fact that the Department has reprioritisedfunds towards military veterans' benefits and towards the Maritime SecurityStrategy, which addresses the fight against piracy in the Indian Ocean andfurther development of naval facilities in Durban.2.5 Policy Priorities for the Minister of Defence and MilitaryVeteransThe Overarching Strategic Statement for the financial year FY 2012 andbeyond has the following eight priorities for the DODMV:• Enhancement of the SANDF’s Landward Defence Capabilities.In order to undertake all required missions, the enhancement of theLandward Defence Capabilities is essential and this enhancement isconsidered a priority especially as it relates to technologically advancedPrimary Mission Equipment.• Maritime Security.The defence and security of South Africa is inextricably linked to that of theregion and the continent. Maritime security threats off the east coast ofAfrica, and similar trends emerging along the west coast of Africa, are amajor concern.• Job Creation.In support of the Government’s prioritising of job creation, the DOD willcontinue to ensure that job creation, within available resourcing, will beeffected through approved projects within the Defence industry as well asthe MSDS and NYS. A total of 8 955 young South Africans were recruitedto the MSDS.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4818 [Tuesday, 29 October 2013• Enhancement of the SANDF’s Peacekeeping Capability.The role of the SANDF in promoting both regional and continental peaceand stability necessitates the enhancement of the SANDF’s peacekeepingcapability which includes the SANDF Forward Deployment Capability.• National Youth Service (NYS).The Department continues with the execution of the NYS programmethrough the utilisation of core Defence capabilities to provide initial trainingto selected youth prior to absorption into respective GovernmentInstitutions.• Revitalisation of the Reserves.As part of the one-force concept, the Reserves will continue to betransformed and revitalised to fulfil the various Defence roles allocated tothem in support of the Regular Forces.• Restructuring and Support of the Defence Industry.The restructuring of the Defence Industry will focus on required Defencecapabilities and the sustainability thereof. The Defence Industry Frameworkand Function are to be fully aligned in order to ensure synchronisation ofthese with the requirements and mandate of Department.• Defence Works Capability.The establishment of the DOD Works Formation within Programme 8(General Support) seeks to achieve an end state where the DOD will havea fully functional and resourced in-house capability that will ultimatelyassume full responsibility for the repair and maintenance of Defencefacilities.2.6 Functions and Defence Commitments during 2012/13According to the SA Yearbook for 2012/13, the SANDF focussed on anumber of its primary functions which were in line with the general deliveryagreements. These functions and commitments include, inter alia:• Peace support operations: The SANDF took part in several peacesupport operations in Africa, including in Sudan (Darfur), theDemocratic Republic of Congo and anti-piracy operations in theMozambican channel.• Border safeguarding: During 2012, the troop deployment led to theconfiscation of contraband such as cigarettes and liquor, to the value ofR3.1 million. In addition, 763kg of dagga and 315kg of copper wasconfiscated and 23 stolen vehicles and nine weapons recovered, while5 210 undocumented people were apprehended and 212 criminalsarrested.• Defence Acquisition: In 2012/13, defence acquisition focused onacquiring new equipment and upgrading existing equipment. Suchdevelopments were recorded in, among others, the Infantry long-rangemortar capability, the Ground-based Air Defence System, the Rooivalkattack helicopter, the SA Navy’s submarine capability, sonar technologyand precision guided munitions.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4819• Military Veterans: The Department had been providing health servicesto older military veterans since 2010 and about 2 500 military veteranson the Department’s database are to receive health benefits.• Defence Reserve Force: At the end of 2011/12, the Reserve Forcestrength was 26 851, of whom 15 316 reservists were called up duringthe year. During 2012, various tertiary institutions also implemented theUniversity Reserve Training Programme.3. OUTCOME-BASED APPROACH - DELIVERY AGREEMENTTARGETS FOR 2012/13 AND 2013/14.3.1 Delivery agreementThe Medium Term Strategic Framework (MTSF) of Government identifies anumber of priorities and this outcomes-based approach further identifiesthe 12 desired outcomes of Government. The Minister subsequently setsout the various outputs, indicators and targets to be achieved in itsAnnual performance Plan. The following applies directly (See Outcome 11)and indirectly to the DODMV:• Outcome 11: Creating a better South Africa and contributing to a betterand safer Africa in a better world.• Outcome 2: A long and healthy life for all South Africans• Outcome 5: A skilled and capable workforce to support an inclusivegrowth path.• Outcome 12: An efficient, effective and development-oriented publicservice and an empowered, fair and inclusive citizenship.3.2. Performance Targets and IndicatorsOf the 247 planned targets for 2012/13, 196 or 79% were achieved. The 51targets not substantially achieved represent 21 per cent of the total plannedtargets. This is mainly due to budget constraints. Hence, the Departmentspent 99.5 per cent of its total allocation of R37.888 billion and onlyachieved the stated targets.In terms of selected performance indicators, the Department reported onthe total of 14 indicators with the actual achievement and the Table belowlist those overachieved and under achieved. The Department overachieved6 of the targets representing 43 per cent of the total targets. With regard toachieved targets, the Department managed to record 3 of the targetsrepresenting 21 per cent. However, the Department under achieved5 targets representing 36 per cent. The total success rate for all selectedtargets is 9, which represent 64 per cent.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4820 [Tuesday, 29 October 2013Table 3: Selected performance Indicators and TargetsPerformanceIndicatorCompliance withSADC standbyforce agreementsand SA pledgeNumber of externaloperations per yearAverage numberof personneldeployed daily inexternal operationsNumber of persondays used duringinternal operationsNumber of flyinghours in support ofoperationsNumber of seahours per yearNumber of healthactivitiesNumber of joint,interdepartmentaland multinationalexercisesNumber of MSDSmembers trainedeach year/ in thesystem per yearTotal number ofactive reservesLevel of DODmoraleProgramme Baseline2010/11Actual2011/12Target2012/13Actual 2012/13Administration 100% 100% Subject to Partialresource Complianceallocation Target UnderAchievedForce4 4 4 5 Target OverEmploymentAchievedForce2 041 2 280 2 250 2 176Employment3 TargetUnderAchievedForce524 000 580 000 620 000 825 420 TargetEmploymentOver AchievedAir Defence 8 279 10 902 10 500 11 696.71 TargetOver AchievedMaritime8 286 9 000 35 000 7 338.55 TargetDefenceUnder AchievedMilitary Health 1 138 2 200 2 140 550 2 450 754 TargetSupport873 000Over AchievedForce8 6 8 5 Target UnderEmploymentAchievedAdministration 8 662 11 140 6 673 8 955 TargetOver AchievedAdministration 11 083 13 816 12 400 14 285 TargetOver AchievedAdministration Satisfactory Neutral TargetUnder Achieved3.3 Overview of Strategic Plan• Synopsis of the Departmental Strategic PlanThe Overarching Strategic Statement for the fiscal years 2011/12 to2015/16 has revealed 10 priorities for the DODMV. These include theexecution of the Enhancement of the SANDF’s Landward DefenceCapabilities, Maritime Security, Job Creation, the Enhancement of theSANDF’s Peacekeeping Capability, National Youth Service (NYS), theRevitalisation of the Reserves, the Restructuring and Support of theDefence Industry, and the Defence Works Capability.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4821The strategic focus areas for the Minister of Defence and Military Veteransinclude the Military Skills Development System (MSDS), the finalisation ofthe Defence Review, transformation within the SANDF, ensuring that theDOD Grievance Procedure is functional and effective, the Maintenance andEnforcement of Discipline, the DOD Audit, the DOD Planning Instrumentsand eradicating Corruption and Fraud.3.4 Synopsis of the Departmental Annual performance Plans (APP)• South African National Defence ForceStemming from the government’s MTSF priorities, the abovementionedStrategic Plan, and Ministerial priorities, the SANDF has developed anumber of performance indicators and targets for the 2012/13 financialyear. While various specific indicators were developed, the table belowindicates a number of overarching performance indicators and targets forthe financial year 2012/13. These form part of the SANDF’s ‘layereddefence’ approach ensuring compliance with regional responsibilities,including peace operations, as well as internal responsibilities.Table 4: SANDF Selected performance Indicators and TargetsIndicatorProjections2012/13 2013/14 2014/15Compliance with SADC Standby Subject to or commensurate with resource allocationForce agreementsTotal number of Defence Attaché 40 40 40officesNumber of external operations per 4 4 (6) 4 (6)yearAverage number of personnel2 250 2 250 (100%) 2 250 (100%) ideployed externally (daily)Number of force employment hours 10 500 9 500 (6300) 9 500 (6 300)flown per yearNumber of hours per sea at year 35 000 35 000 (22 000) 35 000 (22 000)Number of internal operations per 4 4 4yearNumber of man days used during 620 000 850 000 850 000 iiinternal operationsNumber of joint, interdepartmental 8 9 8or multinational militaryexercises per yearNumber of MSDS members in the 6 673 4 159 (4208) 4 153 (4 420)system per yearNumber of reserves per year 12 400 12 900 (24 243) 13 500 (23 491)Number of health care2 140 550 2 140 550 2 140 550 iiiactivities per yearLevel of DOD morale Satisfactory Satisfactory Satisfactory ivThe figures in brackets indicate the Projections in the 2013/14 Annual performancePlan v if it differs from the 2012/13 projections.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4822 [Tuesday, 29 October 2013• Defence SecretariatThe Defence Secretariat also developed a number of Strategic Outputs andProgramme performance Indicators. The table below reflects the StrategicOutputs and Targets of the Secretariat.Table 5: Defence Secretariat Strategic Outputs and Targets viIndicatorPercentage of PSAP disciplinary casesfinalized in 120 days in the DODProjections2012/13 2013/14 2014/1540% 40 40Number of NYS participants per year 2 000 2 000 2 000Number of MSDS members in system peryearPercentage compliance with AU and UNrequirements for peace missionsPercentage MOU compliance with agreedforce level for deployment of UN missionsPercentage compliance with DOD fundedHR strength6 673 4 195 4 153100% 100% 100%85% 90% 95%90% 90% 90%Number of adverse audit findings 0 0 0Approved DOD policy regulating resourceunit costing statusPercentage achievement of signed andsubmitted performance agreements byDOD SMS membersNumber of PSAP attending trainingprogrammesPercentage DOD skills audit completionstatusApprovedpolicyPolicyimplementationPolicy (MonitorImplementation)100% 100% 100%2 587 2 578 2 58725 %Completed75% 100%3.5 Overview of key developments in the organisational andservice delivery environments of Department for 2012/13 and2013/14 MTEF cycle.One of the issues that need to be clarified with the Department is thechange in the Selected performance Indicators and Targets. For instance,the following changes were made between the 2012/13 and 2013/14Annual performance Plans of the SANDF:• The number of external operations were changed from 4 to 6 for2013/14 and 2014/15.• The “average number of personnel deployed externally” were changedto the “percentage compliance with number of ordered commitments(external operations).”• The number of force employment hours flown per year changed from9 500 to 6 300 2013/14 and 2014/15.• The number of hours per sea per year changed from 35 000 to 22 000for 2013/14 and 2014/15.• Number of MSDS members in the system per year changed from 4 159to 4 208 for 2013/14 and 4 153 to 4 420 for 2014/15.• The Indicator “Level of DOD morale” has been removed.These reductions were due to a lack of appropriate funding for theseoperational matters.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48234. SUMMARY OF PREVIOUS KEY FINANCIAL AND PERFORMANCERECOMMENDATIONS OF COMMITTEE4.1. 2012/13 Budget Review and Recommendations ReportrecommendationsThe following recommendations have been made by the PCODMV in the2011/12 BRR Report:• Funding constraints lead to underperformance against set targets byeach programme but there is a need for better planning andmanagement of the existing budget.• SANDF deployments should not be funded with money intended for,and at the expense of, other programmes or activities.• The Committee required a comprehensive briefing on theimplementation of Operation Corona.• Deteriorating conditions of facilities remain a cause for concern and thearrangements between the DODMV and the Department of PublicWorks (DPW) should be concluded to ensure that the Defence WorksCapability can execute an increasing number of the repair andmaintenance priorities.• The Department’s efforts to achieve an unqualified audit opinion arecommendable but the internal audit unit function should bestrengthened and the Department should brief the Committee, on aquarterly basis, regarding progress made with the resolution of mattersraised by the Office of the Auditor-General (A-G).Evaluation of response by Department and Minister of FinanceNational Treasury replied only to the recommendation on the deployment ofthe SANDF and its funding. It responded that this is managed in terms ofthe recently approved White Paper on South African participation ininternational missions. The White Paper states that each departmentparticipating will be required to meet the costs of deployment through thenormal budgetary process. Departments will therefore have an opportunityto request funds through the Medium Term Expenditure Committee andAdjusted Budget processes. This is in accordance the White Paper inclause 7.4.1 which also states that Funding from other statutoryframeworks such as the African Renaissance and InternationalCooperation Fund may also be considered.Clause 7.4.2 states that “South Africa shall be reimbursed for thedeployment costs relating to the equipment and personnel deployed inpeace missions in terms of the Memorandum of Understanding betweenthe Mandating Authority and South Africa. The reimbursement will be paidinto the National Revenue Fund.” The fact that departments can claimfunds spent through the Adjusted Budget processes raise the questionwhether the full amounts are refunded and the time frame before the fundsare actually refunded to the Department.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4824 [Tuesday, 29 October 20134.2. Committee Budget Report• Summary of selected 2013/14 Committee Budget ReportrecommendationsThe PCODMV observed during its consideration of the 2013/14 DODMVbudget, that since 2009, the Committee has persistently cautioned that ashrinking defence budget could weaken the SANDF’s ability to fulfil itsmandate. While an increase in the funding for the Department should beconsidered, maximum efficiency and accountability in the planning and useof limited resources are essential. The resolution of challenges identified bythe A-G, particularly challenges relating to the establishment of an internalaudit function, asset management, and supply chain management, wouldimprove the efficient management and use of a limited budget. It also foundthat:• The Defence Review should be finalised as a matter of urgency as thiswould guide the medium and long term planning of the defence needs(budget and capabilities). The delays in both the finalisation andimplementation mean that effective monitoring of defence activities islimited.• The status of Denel should be clarified by the Defence Reviewespecially whether it is feasible for the DODMV to again manage thisentity which is currently managed by the Department of PublicEnterprises.• Border safeguarding responsibilities cannot be properly executed withthe limited funding available especially with regards to the deploymentof an appropriate number of soldiers to the borders.• Facilities are a main concern, especially given the poor condition ofsome of the facilities although there were exceptions such as in thecase of 21 SAI in Doornkop. The Committee therefore welcomed theprogress made with the establishment of the Defence Works Formationalthough its finalisation should be speeded up.The PCODMV recommended that:• Greater synergy is required in the manner in which the DOD budget isallocated across programmes and a better alignment of performancetargets to strategic objectives should be pursued.• The 2013/14 budget should be approved, even though it was viewedas inadequate to meet the needs of the SANDF.OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCE4.3. Overview of Vote allocation and spending (2009/10 2014/15)Table 6 below indicates that over the five year period 2009/10 – 2014/15,the three largest programmes in terms of budgetary allocation are theLandward Defence, Air Defence and General Support. The LandwardDefence is mainly responsible for providing prepared and supportedlandward defence capabilities such as Borderline control and peacesupport operations. This is in line with the Ministerial priorities andANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4825especially the Enhancement of this capability. These three programmes arefollowed by Administration, Military Health Support, Maritime Defence(additional funds for counter-piracy operations) and Force Employment(peace support operations).Table 6: Vote allocation and spending 2009/10 – 2014/15 (R million).ProgrammeProgramme 1:AdministrationProgramme 2:Force EmploymentProgramme 3:Landward DefenceProgramme 4:Air DefenceProgramme 5:Maritime DefenceProgramme 6:Military Health2009/10 2010/11 2011/12 2012/13 2013/14 2014/15Audited Audited Audited Main vii Adjusted Audited/ActualMainEstimates2 914.1 3 452.9 3 747.1 3 730 7 3 820.7 3 781.6 4 434.6 4 849. 81 886.5 2 265.5 2 358.5 2 670.9 2 748.2 2 780.9 3 283.9 3 533. 89 042.2 9 295.6 10 962.2 12 686.7 12 313.7 12 367.9 13 853.8 13 795. 88 643.8 5 489.1 6 527.7 6 749.6 7 118.7 7 074.9 6 250.2 7 236. 31 997.5 2 349.9 2 574.7 2 551.3 2 862.3 2 894.9 3 171.1 3 579.92 608.1 3 150.1 3 400.1 3 316.5 3 496.5 3 459.9 3 642.5 3 826. 9SupportProgramme 7:Defence IntelligenceProgramme 8:General Support594.7 633.9 653.1 709.6 712.1 705.1 762.4 793.73 637.3 3 805.4 4 107.9 5 077.4 4 816.4 4 636.9 4 844.8 5 078. 9TOTAL 31 324.2 30 442.4 34 331.4 37 492.9 37 888.5 37 702.2 40 243.3 42 695 464General overview of the 2013/14 budgetThe Defence’s Vote for 2013/14 amounts to 1.17% of South Africa’s grossdomestic product (GDP) or 3.55% of total government expenditure. Thedefence budget allocation of R40.24 billion for 2013/14 constitutes3.82 per cent of the financial year’s total appropriation of R1.05 trillion.Although the budget allocation has increased by 6.21 per cent in nominalterms, it only increased by 0.58 per cent in real terms in comparison to2012/13. This signifies a slowdown in the growth of the Department’sbudget as a real increase of 3.07 per cent was allocated in the previousfinancial year. Matters that have been prioritised for the year 2013/14include are:• Increased deployment of forces for the function of borderline control.• Increased deployment in foreign countries (notably the interventionforce in the Democratic Republic of Congo).• Anti-piracy operations off the east African coast.• The implementation of the maritime security strategy.• The allocation of benefits to military veterans.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4826 [Tuesday, 29 October 2013Table 7: percentage of budget allocated to programmes for 2012/13 and2013/14% of total budget per2013/14% of total budget perR thousand2012/13 (R million)programme(R million)programmeProgramme 1: Administration3 820.710.08% 4 434.6 11.02%Programme 2: Force Employment2 748.27.25% 3 283.9 8.16%Programme 3: Landward Defence12 313.732.50% 13 853.8 34.43%Programme 4: Air Defence7 118.718.79% 6 250.2 15.53%Programme 5: Maritime Defence2 862.37.55% 3 171.1 7.88%Programme 6: Military Health Support3 496.59.23% 3 642.5 9.05%Programme 7: Defence Intelligence712.11.88% 762.4 1.89%Programme 8:General Support4 816.412.71% 4 844.8 12.04%TOTAL 37 888.5 40 243.3Table 7 indicates the percentage of the Department’s budget that wasallocated to each programme in 2012/13 and 2013/14 respectively. Thespending trends are in line with the ministerial priorities discussed earlier.The respective increases in the various programmes are also in line withthe spending over the MTEF period which will focus inter alia on bordercontrol and anti-piracy measures. Additional funds have been allocated toaccommodate the number of foreign deployments. The increase in funds toProgramme 1 is largely related to “increases in spending on officeaccommodation, allocations to military veterans and the establishment ofoperational law structures.”4.4. Financial performance 2012/13• Quarterly spending trends.Quarterly expenditure trends are important as the continuous monitoring ofexpenditure is necessary to ensure that allocated resources are utilised fortheir intended purposes and in so doing, ensuring accountability. Theanalysis of quarterly expenditure becomes necessary to preventunauthorised, irregular, fruitless and wasteful expenditure and it is ofparamount importance that the Department must account for expenditure atthe end of every quarter.Although the DODMV overall spending was on track throughout the year,several instances of high and low spending against the set targets can beidentified during the First and Second Quarters. During the third quarter,spending trends were similar to that of the first two quarters. The additionalvirements that were made during this and the final quarter of the yearbrought about favourable results in terms of percentage spending for theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4827Department. However, the size and timing of some of these virements maypoint to a lack of planning and consistent high/low spending on certainprogrammes and economic classifications.Of particular concern were instances where funds were shifted to/away froma programme or economic classification and, would this not have been done,it would have resulted in severe under/over spending at the end of the fourthquarter. For instance, have certain amounts not been adjusted downwards,the Department would not have spent 100% of the original appropriations.Although a number of these instances exist, those with the most significantfinancial implications include virements to Programme 8 (General Support),the Economic Classification (Departmental Agencies and Accounts),Programme 1 (Sub-programme Policy and Planning), Programme 3 (SubprogrammeSupport Capability), Programme 6 (Sub-programme MobileMilitary Health Support), Economic classification (Goods and Services),Economic classification (Buildings and other fixed structures) and Economicclassification (Machinery and equipment). Given the lack of planning thatthese imply, the questioning of these virements is essential.• Adjustments for 2012/13.The Department received an increased allocation during theadjustment period for the 2012/13 of R395.599 million. This comprised,inter alia, of R190.488 million for higher than anticipated personnelremuneration and R63 million for anti-piracy measures in the MozambicanChannel. This increased the main appropriation to R37.889 billion. A totalof an additional R63 million was received for unforeseeable/unavoidableexpenditure which was recorded in Programme 2 (Force Employment).This total formed part of the Sub-programme Regional Security. Of thistotal, R8.427 million was allocated to the Compensation of Employees andR54.573 to Goods and Services.The mid-year adjustments brought about major reductions to the budgets ofProgramme 3 (Landward Defence) and Programme 8 (General Support)with large increases to Programme 4 (Air Defence) and Programme 5(Maritime Defence). Similarly, in terms of economic classification, largereduction in funds for ‘departmental agencies and accounts’ as well as‘payments for financial assets’ can be observed. Major increases wereallocated for ‘goods and services’ and ‘compensation of employees’. Twolarge virements should also be noted, including 5.2 per cent vired fromProgramme 3 (Landward Defence) to other programmes and 9.0 per centvired from Programme 8 (General Support) to other programmes. Thisrequires the approval by Parliament, as the Public Finance ManagementAct (No. 1 of 1999 as amended) states in Section 43(2) that the viredamount appropriated should not exceed 8% of the amount appropriatedunder that main division.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4828 [Tuesday, 29 October 2013• Auditor-General Report.During the 2011/12 financial year the DOD received a departure fromNational Treasury to exclude Specialised Military Assets, Transport Assetsand Immovable Assets from the Annual Financial Statements. This playeda significant role in the Department receiving an unqualified audit opinionfor 2011/12.For the year 2012/13 the Department received a qualified audit opinion onthe basis of the moveable tangible capital assets and intangible capitalassets. Specifically, the Auditor-General states that with Moveable tangiblecapital assets that the Department did not disclose all these assets inaccordance with the Reporting framework of National Treasury, and theseassets were consequently understated by approximately R818 million. Withregards to Intangible capital assets, it states that it was unable to obtainsufficient appropriate audit evidence that all intangible assets weredisclosed in terms of the requirements by National Treasury. It was alsounable to perform alternative audit procedures due to non-compliance withthe framework and the lack of internal controls. The Committee will requesta briefing by the A-G to clarify these issues especially as it relates to theirmethodology and specifically the accuracy and relevance of their findingsfor the 2012/13 financial year.Unauthorised, fruitless and wasteful, and irregular expenditureThe Annual Report indicates that an amount of R60.918 millionunauthorised expenditure has been incurred for 2011/12. No unauthorisedexpenditure has been incurred for 2012/13. Fruitless and wastefulexpenditure of R20 000 was carried from 2011/12. viii The irregularexpenditure for 2012/13 amounted to R316.963 million compared withR350.364 million in 2011/12 (R8.354 million). Subsequently, this brings thetotal irregular expenditure awaiting condonement to R1.015 billion(R718 806 million in 2011/12).• Summary of key issues contained in report(s) of FinanceCommittees.Payment of invoices within 30 daysThe Department appeared before the Standing Committee onAppropriations (SCOA) on 17 September 2013 regarding the Payment ofinvoices within 30 days, as it was one of five departments showing littleimprovement in this regard. Section 38 (1) (f) of the PFMA together with theTreasury Regulation 8.2.3 mandates national and provincial departments tosettle payments to creditors within 30 days of receipt of an invoice.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4829Table 8: DODMV 30 days invoiceVote Department Invoices paid after 30 days Invoices older than 30 daysnot paid22 DODMV Average randvalue 2012Averagenumber 2012Average randvalue 2012Averagenumber 201270 989, 154 11,266 1 517 968 344Although the Department made a presentation to the SCOPA and variousissues were raised afterwards, the Department was not requested torespond. The SCOPA indicated that it will follow up on the various actionplans the Department presented to determine progress in this regard. Thisis an issue the PCODMV is advised to follow up on a continuous bases,especially since such late payments endanger the viability of especiallysmall and medium businesses to survive.Auditor-General’s report on utilisation of ConsultantsThe January 2013 Report of the Auditor-General of South Africa onthe performance audit of the use of consultants at selected nationaldepartments, has revealed some important findings. Amongst the 8departments audited, the DODMV was found to constitute thelargest percentage of the total expenditure on consultants from 2008/09 to2010/11. The total expenditure on consultants for all departments was foundto be R24,6 billion, of which R10,4 billion (about 31% of the totalexpenditure) was spent by the DODMV. The total number of contractsaudited was 124, of which 12 were from the Department. These contractsincluded supplementing skills in the South African Air Force; the clearance ofunexploded ordinance; the demilitarisation of redundant ammunition; the useof consultants to clear audit qualifications; the provision of general and skilledlabourers; the maintenance of the Limpopo border fence; maintenanceservices at 3 Military Hospital; the cleaning services at 1 Military Hospital;and the use of session doctors in Thaba Nchu and Botshabelo.4.5. Financial performance 2013/14First quarter expenditure (FY 2013/14)By the end of the First Quarter on 30 June 2013 of the financial year2013/14, a total of R8.469 billion of the Department’s approved budget ofR40.243 billion had been spent, representing 21 per cent of the totalbudget. The largest variation was with Programme 2, which spent24.3 per cent of its allocated budget against a projected expenditure of19.9 per cent. In terms of economic classification, the Department spent21.9 per cent (R7.052 billion) of the amount allocated for current payments(R32.207 billion). The Department incurred expenditure on payments forfinancial assets (R14.848 million) although no amount had been budgetedfor this item. Expenditure on foreign deployments for the first quarter of2013/14 financial year was at 31.6 per cent of the available budget ofR1.387 billion. Expenditure on Operation VIMBEZELA in the CentralANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4830 [Tuesday, 29 October 2013African Republic (CAR) had already reached 93.2 per cent of its allocatedbudget of R153.9 million. The expenditure for Operation COPPER was lowat 13.4 per cent (R19.273 million) of the allocated budget ofR143.939 million.By the end of the First Quarter on 30 June 2013 of the financial year2013/14, a total of R8.469 billion of the Department’s approved budget ofR40.243 billion had been spent, representing 21 per cent of the totalbudget. This figure is slightly higher than the 20.3 per cent projectedexpenditure.Special Defence AccountOverall, expenditure on the Special Defence Account (SDA) recorded13.1 per cent which was very low. However, spending on training capabilitywas relatively high at 32.4 per cent. This expenditure needs to bemonitored to avoid over expenditure by the end of the 2013/14 financialyear. Simultaneously, low spending was recorded for Transport andmaritime capability (0.5 per cent), Command and control capability(2.9 per cent), and Air combat capability (7.0 per cent). Additionally, lack ofspending was recorded for Mobile military health support, Operationalintelligence, Strategic direction and Technical support services.Reported spending pressuresThe DOD further states that it is experiencing the following fundingpressures which will necessitate reprioritisation and requests for additionalfunding from Treasury:• Landward Defence capabilities: Funds for ammunition, tactical Radio’sand Operational Vehicles• DOD Facilities, including the ARMSCOR Dockyard• Internal DOD maintenance and repair capability• DOD Military messes and rations• Air Defence capabilities: Funds for additional flying hours and aircraftMaintenance backlog• Ship Maintenance and Refits• Provisioning of comprehensive health care: Funds for the Renewal ofhealthcare technology, Deployable healthcare capabilities and Traumaunits• Computer Systems/Accountability: Funds for IT System Modernisation,Codification, Software, Disaster Recovery, Asset Verification and E-Procure• Fuel.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48314.6. 2014/15 MTEF financial allocationsSummary of funding submissions to National Treasury for the 2014/15MTEF.Table 9: 2014/15 Funding submissions2012/13 (R million) 2013/14 (R million) 2014/15 (R million)Programme 1: AdministrationProgramme 2: Force EmploymentProgramme 3: Landward DefenceProgramme 4: Air DefenceProgramme 5: Maritime DefenceProgramme 6: Military Health SupportProgramme 7: Defence IntelligenceProgramme 8:General Support3 820.7 4 434.6 4 849 8012 748.2 3 283.9 3 533 89312 313.7 13 853.8 13 795 8527 118.7 6 250.2 7 236 3532 862.3 3 171.1 3 579 9243 496.5 3 642.5 3 826 915712.1 762.4 793 7434 816.4 4 844.8 5 078 983TOTAL 37 888.5 40 243.3 42 695 464The Department states that it continues to face an ever-increasing outputrequirement whilst confronted with a non-commensurate budget allocationnecessitating internal Departmental budget reprioritisation and theimplementation of austerity measures resulting in the adverse impact onthe achievement of the defence mandate. Reductions proposed by NationalTreasury to the Department include:Table 10: National Treasury reprioritisationPurposeAmount (R’000)2013/14 2014/15 2015/16Compensationof - R205 645 - R675 006 -R 1 038 900employeesTravel and subsistence -R 96 100 -R 96 100 -R 96 100Special Defence Account -R 583 255 -R 263 894 0Contractors -R 250 000 -R 300 000 - R 350 000Total - R 1 135 000 -R 1 335 000 -R 1 485 000ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4832 [Tuesday, 29 October 20135. OVERVIEW AND ASSESSMENT OF SERVICE DELIVERYPERFORMANCE5.1. Service delivery performance for 2012/13Table 12: Strategic Outputs and Annual Targets for MTSF in SummaryStrategic Outputs and Annual Targets for MTSF in SummaryMTSF Outcomes Number ofActual AchievementTargetsOutcome 2 3 3 AchievedOutcome 3 4 1 Achieved and 3 information classifiedOutcome 5 3 2 under achieved and 1 overachievedOutcome 11 11 4 Overachieved; 4 achieved; 3 underachieved; and 3 information classified.Outcome 12 1 1 AchievedIn terms of strategic outputs and annual targets for the MTSF outcomes,the Department has achieved most of the targets as indicated in Table 12.In summary, of the 247 planned targets for 2012/13, 196 or 79% wereachieved. The 51 targets not substantially achieved represent 21 per centof the total planned targets while 99.5% of the budget has been spent.Notwithstanding the virements which took place in the fourth quarter, theDepartment did well in terms of value for money and expending the fundsallocated on the priorities identified.• Programme performance.This section will only deal with some of the main programmes andits performance in relation to the targets set.Programme 2: Force employment: The aim of this programme is toprovide and employ defence capabilities, including an operationalcapability, to successfully conduct all operations and joint, interdepartmentaland multinational military exercises. This programmeexpended 99.1% of its budget, achieved 5 of the six targets set, indicatinga high performance in this programme. This programme was howeversingled out by the A-G regarding the reliability of information as a result ofinadequate internal control and record keeping.Programme 3: Landward Defence: The aim of this programme is toprovide prepared and supported landward defence capabilities for thedefence and protection of South Africa. Significant achievements includedinternal and external deployments. This programme expended 100% of itsbudget, achieved 19 of the 23 targets set, indicating a success rate of 83%.Although this programme has been targeted the modernisation of itscapabilities, this became stagnant as it awaits the finalisation of theDefence Review.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4833Programme 4: Air Defence: The aim of this programme is to provideprepared and supported air defence capabilities for the defence andprotection of South Africa. The programme expended 100% of its budget,achieved 13 of the 14 targets with a success rate of 93% indicating a veryhigh performance. With the increase in foreign deployments such as in theDRC, keeping and maintaining this capability up to standard, is crucial.Programme 5: Maritime Defence: The aim of this programme is toprovide prepared and supported maritime defence capabilities for thedefence and protection of South Africa. It expended 100% of its budget,achieved 10 of the 14 targets with a success rate of 71% indicatingrelatively high performance. This programme has also been the recipient ofan additional amount of R63 million for anti-piracy measures in theMozambican Channel.Programme 8: General Support: The aim of this programme is to providegeneral support capabilities and services to the Department. Theprogramme expended 96.7% of its budget, achieved 28 of the 36 targetswhich indicates a success rate of 78% indicating relatively highperformance. This programme hosts the Defence Works Formation and theslow progress in this regard is concerning.• Key reported achievements.Given the limited financial resources allocated to the Department and theordered commitments, the Department has overall succeeded toconsistently execute its ordered responsibilities as witnessed with thesuccessful execution of operations.• Key reported challenges.The continued declining budgetary allocation may adversely impact ondefence capabilities such as:o Combat readiness capabilitieso Strategic reserveso Upgrading and renewal of prime mission equipment of especiallythe Landward Programmeo The ability to rejuvenate the Regulars and Reserveso Upgrading and maintenance of facilities.• Non-financial Audit outcomes and steps taken to address adverseaudit findings.Action plans have been drafted to address the audit findings and theseinclude:o Expediting the finalisation of asset policieso Tagging of all assets to enable the unique identification andinclusion in the asset registerANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4834 [Tuesday, 29 October 2013o Update and review Moveable Tangible Assets Registero Benchmarking nationally and internationally to obtain andimplement best practiceso Internal Audit to evaluate Moveable Tangible Assets to ensurecomplianceo Establish a nodal point to facilitate audit enquiries within theDepartment.5.2. Service delivery performance for 2013/14Oversight visit reports - summary of key service delivery issues.Some of the salient issues raised during the 2013 oversight visits include:• The poor condition of the infrastructure, equipment and facilities. Whilesome blame can be apportioned to the poor relationship between theDepartment and inability of the DPW, the continuous delay to properlyauthorise and capacitate the Defence Works Capability, the DOD isalso to blame.• Transformation in terms of race, gender and the utility in the rankstructure is still work in progress. Although the various units have madesignificant improvement in terms of transformation, it emerged that thedesired end state is still at a distant future.• The retention of scarce skills in especially the SAAF and SAN isconcerning and the Department is encouraged to dedicate moreattention to this aspect.• In certain units the grievance system does not operate optimally forvarious reasons.• The review of defence policy and especially the policy framework forthe restructuring of the South African defence related industry shouldbe clarified and finalised as a matter of urgency.• Accommodation for students, single and married members is achallenge in most of the units and were found to be either inadequate orin a poor condition.• The state of the vehicles in various units is unsatisfactory. Some of thevehicles are unserviceable and waiting for disposal through auctions.5.3. Concluding comments on service delivery performanceGiven that the Department is experiencing severe funding pressures asindicated throughout this Report (especially section 5.3), and the fact thatcurrent funding allocation is not commensurate ordered commitments, theDepartment had to resort to austerity measures and reprioritisation in orderto execute its mandate. The allocations in especially the 2013/14 budgetreflect the Landward Defence Programme correctly as the largestprogramme followed by the Maritime defence and Force EmploymentProgrammes. These spending trends are in line with the ministerialpriorities discussed earlier. The respective increases in the variousprogrammes are also in line with the spending over the MTEF period whichwill focus on border control and anti-piracy measures. Additional fundshave been allocated to accommodate the number of foreign deployments.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48356. KEY FINDINGS OF THE COMMITTEE6.1 Governance and operational issues• Concerns have been raised regarding audit findings as well as theincompatibility of the various IT systems in the Department and the slowprogress to address this.• The A-G’s note on Financial misconduct and the fact that no or lateinvestigations have been conducted into these matters, that areconcerning.• The fact that not 100% of senior management has signed their “Conflictof interest” declaration is concerning, as the Annual Report only statesthat compliance is high and not that all senior managers signed thedeclaration.• The finding by the A-G that Leadership is a challenge in the Departmentas it did not exercise sufficient oversight responsibility regardingfinancial reporting is a further cause for concern.• The Committee has on various occasions request information in writingand in several instances the Department has failed to submit therelevant information.6.2 Service delivery performanceThe Department has delivered on various Policy focus areas and theseinclude:• The Department has been involved in rural development throughconstructing bridges above overflowing rivers.• Peace keeping missions have been instrumental in ensuring regionaland continental stability to enhance diplomatic relations and economicstability to assist with fighting poverty and underdevelopment.• Issues raised in the SONA such as regional stability and peacekeeping,assisting with internal peace and security with borderline control andpreventing rhinoceros poaching, and assisting to address youthunemployment through the MSDS and NYS initiatives.• Delivering on the Ministerial priorities such as Maritime Security, jobcreation through the MSDS and NYS, enhancing the peacekeepingcapability and revitalising the Reserves.• A total of 8955 young South Africans were recruited to the MSDS.• A total of 2 891 members completed National Youth Service training, ofwhich 903 were at SAS Saldanha, and 1 988 at 3 South African InfantryBattalion.• A total of 14 285 Defence Reserve members were called up.• It is, however, concerning that the Landward capability has not beenfurther enhanced since “Modernisation of the Landward System hasremained stagnant, pending the finalisation of the Defence Reviewwhich will inform the required future Landward Defence Capabilities ofthe SANDF.”ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4836 [Tuesday, 29 October 20136.3 Financial performance including funding proposalsThe PCODMV noted with concern the cuts effected over the MTEF(2013/14 to 2015/16), as indicated in Table 10, to the Department’sallocation in spite of its motivated submission to Treasury on theconsequences of such cuts and the measures already taken over toreprioritise the budget and to deliver against its mandates. However, thefollowing financial issues require more attention:• The effective management of funds allocated to the Special DefenceAccount.• The number and amount of virements in the fourth quarter of thefinancial year.• The payment of invoices within 30 days.• The understatement of assets to the value of R818 million.• Unauthorised, fruitless and wasteful as well as irregular spendingamounts.7. RECOMMENDATIONSFinancial performance• The Department’s operational budget is underfunded and given that itsbudget for 2013/14 has increased with only 0.58% in real terms incomparison with 2012/13, it had to resort to austerity measures andreprioritisation. It is therefore recommended that maximum efficiencyand accountability in the planning and use of limited resources shouldbe prioritised especially against the background of virements in lastquarter of the financial year, insufficient oversight by the leadership andlack of investigations into financial misconduct.• It is crucial that the Department track its quarterly expenditure to avoidsignificant virements in the 4 th quarter of the financial year. For instancethe overspending on Training capability and the underspending onTransport and Maritime Capability in the SDA, should be closelymonitored to avoid over expenditure by the end of the financial year.Quarterly briefings by the Department to the PCODMV should thereforefocus on these and similar issues.• The challenges faced by the Department in its interaction with NationalTreasury, to increase its budgetary allocation, is a concern, especiallyagainst the background that National Treasury itself questions whetherthe Department is actually underfunded. This is due to allocations tothe SDA of R4.6 billion in 2012/13 and R5.8 billion for 2013/14, whichbrings the total amount in the SDA to R10.4 billion. This issue needs tobe clarified to the PCODMV by both National Treasury and theDepartment.• The Department should include information on its payment of invoiceswithin 30 days in each quarterly report it presents to the PCODMV inorder to avoid non-compliance.• The utilisation of funds allocated for the CAR deployment, which hasbeen subsequently been cancelled, should be explained to theCommittee.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4837• The Department, particularly the Minister and the Secretary forDefence, should ensure that investigations are conducted into financialmisconduct matters as stipulated by Treasury Regulations. ixPerformance related recommendations• The changes in the Selected performance Indicators and Targets fromyear to year as well as targets and indicators having to adhere to theSMART principles as set out by National Treasury Regulations shouldbe addressed.• The Department should improve its internal controls and recordkeeping in general and specifically as it pertains to the ForceEmployment Programme as indicated by the A-G. The A-G will beinvited to elaborate on its methodology and specifically the accuracyand relevance of their audit findings for the 2012/13 financial year.• The Department is in the process of establishing and filling the posts ofthe Internal Audit function and this process should be speeded up as itis central to pro-active measures to improve the performance of theDepartment, especially as it pertains to issues raised in theA-G’s qualified audit opinion. This will also assist in executing theaction plans drafted to address the audit findings.• The current Defence Review should be finalised as a matter of urgencyespecially against the background that it will help to resolve most of thechallenges faced by the Department. For instance, progress with themodernisation of the Landward defence capability remained stagnant,although it has been identified as a priority for the last five years,because the Defence Review has not been finalised.• The lack and poor condition of Facilities are a main concern and theCommittee recommends that the establishment of the Defence WorksCapability should be finalised as soon as possible and that thenegotiations with DPW for the repair and maintenance responsibilitiesto be moved to the DODMV be prioritised.DEPARTMENT OF MILITARY VETERANSThe Department of Military Veterans (DMV) was established through theMilitary Veterans Act (No. 18 of 2011). The Department’s aim is toformulate policies and standards to provide a comprehensive deliverysystem to deserving military veterans and their dependants.Strategic PlanThe DMV tabled its first 5 year strategic plan to Parliament in April 2012. Atop priority over the medium term planning cycle was the establishment of afunctional department with a separate budget vote to put into effectGovernment’s policy on military veterans.Annual performance Plan (APP)The DMV has tabled its first Annual performance Plan (APP) to Parliamentin compliance with the relevant DMV guidelines as directed by NationaTreasury. One of the main challenges for the DMV in realising its objectivesis the gap between current funding and the resources dictated by theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4838 [Tuesday, 29 October 2013costing of the Act. This gap can, potentially, frustrate efforts to service themandate and needs to be closely monitored and supported. For the2012/13 financial year, the DMV’s allocation was accounted for under theDepartment in Programme 1: Administration and the DMV is in the processof obtaining its own separate vote as approved by National Treasury on 30September 2011.DMV Annual Report 2012/13Issues that were specifically raised about the DMV Annual Report included:• There is an urgent need to provide visible rewards and due recognitionto military veterans.• The DMV started to operate independently from the DOD as from 1April 2013.• Coordination and collaboration with government departments andprivate sector led to the signing of service level agreements toaccelerate service delivery to military veterans.• DMV faced major financial constraints to fund posts which were to befilled for it to function effectively.• Three honouring functions were held and education bursaries, burialsupport and health care and wellness services were provided todeserving military veterans, despite no allocation having been made forthese to the DMV.• There are 56 505 military veterans registered on the database whichhad undergone a first and second phases to update personalinformation, although concerns remain about the reliability, accuracyand completeness of the database. A database clean-up programmeremains under way, but it remains unclear when this will be finalisedDMV Budget 2012/13The breakdown of the budget allocated and the related expenditure areindicated in table below. Note that the DMV received additional fundingduring the year, thus raising their appropriation to R101.403 million.ItemCompensation ofemployeesOriginalallocation2012/13 FYAdjustedappropriation(R’000) 2012/13FYExpenditure(R’000) 2012/13FYAvailablebalance(R’000)2012/13 FYPlannedspending(as per theAPP)16 451 26 857 26 857 0 13 500Goods and33 031 71 864 68 634 3 230 30 400ServicesTransfers and0 182 182 0 N/ASubsidiesPayments of1725 2 500 1 303 1 197 N/ACapital AssetsTOTAL 51 207 101 403 96 976 4 427 -ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4839The following financial aspects should also be noted, as per the AccountingOfficer’s Report:• The main utilisation of the appropriation was for i) the funding ofallocated posts; ii) the development of an IT system; iii) theprocurement of an office building; iv) and, policies and procedures.• In addition to the abovementioned, funds were also spent on honouringfunctions, education bursaries and health and wellness support.• The R3.2 million not spent in terms of Goods and Services relate toservices received in 2012/13, but where the invoices from the supplierswere delayed.• The R1.2 million underspending in terms of Capital Assets relate tofunds budgeted for office equipment which could not be purchased dueto delays in the acquiring of office space.• The Department’s performance could not be accurately measuredagainst the APP largely due to a lack of proper reportingon performance targets by the Accounting Officer.• The expenditure per programme was not provided and could thus notbe evaluated.DMV Budget 2013/14The DMV Strategic Plan for 2012 to 2016 lays the foundation for thestructuring of programmes within the Department, the allocation of fundsand the construct of the subsequent APP for 2013/14. x Since theenactment of the Military Veterans Act (No. 18 of 2011), the DMV haslargely been involved in capacity building. For the 2013/14 financial year,Programme 1 (Administration) is reflected as the largest programme. Thischanges, over the MTEF period as focus shifts to other programmes. Thereis also a significant decrease in funds allocated to Programme 3(Empowerment and Stakeholder Management) between 2012/13 and2013/14. This is balanced over the MTEF period as a substantial increasefor this programme is planned for 2014/15 (from R101 million in 2012/13 toR157 million in 2014/15). The table below indicates the percentage of thebudget allocated to the different programmes.Per cent oftotalbudget perprogramme2014/15(R million)% of totalbudget perprogrammePer cent of totalbudget perprogramme2012/13(R million)2013/14(R million)Programme 1: Administration 30.7 30.27% 139.5 39.70% 163.7 32.47%Programme 2: SocioEconomic Support Services 21.1 20.81% 135.5 38.56% 182.5 36.20%Programme 3: Empowermentand Stakeholder Management 49.6 48.92% 76.5 21.77% 157.9 31.32%TOTAL 101.4 351.4 504.2ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4840 [Tuesday, 29 October 2013Issues raised regarding the 2013/14 budgetary allocation includes:• An explanation for the drastic increase in funds allocated for travel andsubsistence, how this amount will be utilised and whether this increasecan be justified vis-a-vis the number of personnel in the department.• The specific purpose of the funds allocated to housing and how fundingfor housing is envisaged beyond the MTEF period.• Whether a cost-benefit analysis has been completed to determine if theoutsourcing of various services, such as cleaning and security servicesis the most cost-effective operational model.• The provision of a timeline for the filling of all vacant posts.• Given that only 29 posts have been filled and 53 additional personnelhave been appointed, does such a small staff contingent justify theR13.3 million allocated to travel and subsistence in 2012/13? Thisamounts to R162 195 per employee for travel and subsistence for thefinancial year in question.• Similarly, a question can be raised for future financial years, such as2015/16 where the staff contingent ought to reach 169 while the traveland subsistence allocation increases to R93.8 million. xiQuarterly spending trendsSince the DMV’s budget resorted under Programme 1: Administration as asub-programme, the quarterly spending is mostly covered in the DOD’squarterly spending trends for the 2012/13 financial year. However, detailedspending on the various sub-programmes of the DMV is not provided for.The following are however noted:• Third quarter spendingThe spending on sub-programme Military Veterans indicated that at theend of the third quarter, only 34% of the budget was spent against aprojected expenditure of 74.8%. This should be read against the hugeincrease to 95.4% in the fourth quarter and especially the additionalvirements.• Fourth quarter spendingOf concern in terms of Fourth Quarter spending was that this Subprogrammespent only 95.4 per cent of its allocated budget, although itsaw additional virements and significant spending in the last quarter,which should be noted. Despite this low spending, an additional virementmust then have been made to Military Veterans as their allocated budgetby the Fourth Quarter increased to R106.657 million. By the end of theFourth Quarter, a total of R101.745 million was spent. As such,R67.297 million, or 66.37 per cent of the originally allocated budget, wasspent during the last quarter.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4841Budgetary Review and Recommendation Report 2012.Since the DMV was a newly established department and still in the processof being set up, little mention was made of the Department in the 2012BRR Report by the PCODMV. Those issues referred to, included thefollowing:• The Defence budget vote represented an increase of 12.66% of theprevious year (R30.4 billion in 2010/11). The overall increase inallocation was inter alia due to the establishment of the Department ofMilitary Veterans.• The DOD’s Annual Report for 2011/12 indicated that the DMVdeveloped Regulations which are to be approved by Parliament in aneffort to regularise the benefits to military veterans. These Regulationsare important not only for the means tests but the Draft Regulationswere only referred to the PCODMV for consideration on 20 June 2013.Recommendations• One of the main concerns is the management of the data base and it isrecommended that the Department gives the PCODMV a detailedbriefing regarding the challenges, progress and status of the latestdatabase.• The allocation of benefits to deserving military veterans is welcomedbut the DMV should as a matter of urgency inform the Committee onthe methodology on how it determines which military veterans shouldreceive benefits.• More details should be provided on the Service Level Agreements andMemoranda of Understanding it has concluded, or are in the process ofconcluding, with other government departments and the private sectorto deliver benefits to military veterans.• The Department should brief the Committee on the challenges it facesin its interaction with National Treasury regarding the funding for thedelivering of benefits to military veterans.• Quarterly spending reports by the Department should be prioritised inorder to avoid significant spending in especially the last quarter of thefinancial year.• Detailed Annual Reports submitted to the PCODMV are also essential.These should measure the DMV’s performance against performancetargetsset as well as clear and detailed financial statements, includingfinancial spending per programme and sub-programme.• Quarterly financial spending report should also be submitted to thePCODMV to allow the Committee to evaluate the spending trendswithin the DMV.ARMSCORThe Armaments Corporation of South Africa Ltd (Armscor) was establishedin terms of the Armaments Corporation of South Africa Limited Act (No. 51of 2003) to satisfy the requirements of the SANDF in respect of DefenceMatériel. Armscor is a critical stakeholder in so far as the SANDFoperational effectiveness is concerned.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4842 [Tuesday, 29 October 2013Armscor Corporate Plan 2012/13 – 2014/15Armscor aligns its strategic priorities with the Government’s Medium-TermStrategic Framework (MTSF) and the DOD Outcomes derived from theMTSF. It states that it plays a supporting role in terms of contributing toOutcome 3: “All people in South Africa are and feel safe”.Performance Overview: Selected Achievements and ChallengesThe Service Level Agreement between Armscor and the DOD specifiestargets to be reached (brackets indicate the achievement for the FY2012/13):• Acquisition activities [Goals 1 – 3]: Contracts to be placed byArmscor (Achieved goals except for System Support: Acquisitionand Procurement).• Management of Defence Industrial Participation (DIP) [Goal 4](Objective not achieved).• Management and execution of defence technology, research, testand evaluation requirements by the DOD [Goal 5] (Objectiveachieved)• Management and performance against Dockyard mandate(Objective achieved).Armscor’s Three-year Corporate Plan includes two groups of performanceindicators. The first relate to performance against Armscor’s functions asdefined by the Service Level Agreement with the Department and thesecond measures performance against the set strategic objectives of thegroup. A total of 32 Key performance Indicators (KPI) were identified for2012/13 and adherence to these KPI’s are as follows:• 23 of the 32 KPI’s have been achieved.• 9 of the KPI’s (28 per cent) have not been achieved.Of the 9 KPI’s not achieved, which mainly related to issues of leadership,only one (KPI 3.1) was in close proximity to the goal set to be achieved.Armscor lists the following as highlights of the 2012/13 financial year:• Clean audit• Achieved level 3 BBBEE rating from level 7• Dockyard obtained ISO 9001: 2008 accreditation• Achieved a surplus of R84.6m (2012/13) against R70.2m in 2011/12• CSI Flagship programme – “Learner Enhancement Programme” insupport of Maths and Science in schools resulted to an average of51% improvement in these subjects.• LUH - All 30 Helicopters have been delivered to SAAF and updatedwith latest production standards.• Rooivalk – Rooivalk fleet was upgraded to the MK1 deploymentbaseline.• New Local Warning Segments of the Ground Based Air DefenceSystem has been completed.• 90 young engineers and scientists were identified for successionplanning.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4843The following main challenges are faced by the Corporation:• Insufficient and sustainable funding• Resourcing of the organisation• Operational inefficiencies and effectiveness• Local industry support• Capacity rejuvenation at the Dockyard• Current capacity at the Dockyard insufficient.Financial OverviewArmscor’s operating expenses are largely funded by a transfer paymentfrom the Department. In 2012/13 it was R1.318 billion and for 2013/14 itamounts to R1.96 bn. This amounts to a nominal change of 48.73 per centand a real change of 40.85 per cent. In monetary terms it amounts toR642 million in nominal terms and R538 m in real terms respectively.Armscor’s net asset value increased by 187% to R1 7292m due torevaluation of land and buildings. The profits increased from R70.2 in 2012to R 84.6m in 2013. The total revenue increased by 1% to R308.2 millionwhile the personnel costs remained the main contributor at 74.4% of totaloperating cost.ConcernsThe following selected concerns regarding Armscor are noted:• The delay with the appointment of a new Chief Executive Officer as theformer CEO’s contract was terminated with effect from 7 January 2010.Mr JS Mkwanazi, General Manager Acquisition, has been appointed asacting CEO and has been acting up to the time this report was drafted.• The need for a review of the relationship between the DOD andArmscor has been an issue over time especially as it impacts on theefficiency and economy of the entity.• The active participation of black female-owned enterprises in Armscorprogrammes is a challenge that needs to be addressed in the BroadbasedBlack Economic Empowerment (BBBEE) context.• The Simon’s Town Dockyard is experiencing challenges resulting frominsufficient capacity and capability to execute its mandate.• How and to what extent will the current Defence Review impact onArmscor Corporate Plan? Attention will have to be paid to theimplications of Defence Industry chapter dealing with the DefenceIndustry and Policy.• The Defence Industrial Participation objective has not been achievedand no new DIP agreements were entered into during the period underreview as the DIP policy was revised in 2012.Recommendations• The permanent appointment of a CEO should be concluded as soon aspossible.• Training, especially of historically disadvantaged personnel, should beprioritised to fill scarce skill vacancies and BBBEE targets should beaggressively pursued.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4844 [Tuesday, 29 October 2013• The status and position of Armscor regarding the corporation and theDefence Industry in the Defence Review Committee should be clarified.• Capacity rejuvenation, the current capacity as well as the funding of theDockyard, should be addressed as a matter of urgency.• Armscor should inform the PCODMV on a regular basis on the progressof implementing the new DIP policy, challenges in this regard as well aswhether the policy is conducive or not to attracting new business.• The Department should take the necessary action to ensure thatArmscor intervenes to properly manage the delays and cost overturnsof certain armaments acquisition projects.CASTLE CONTROL BOARDThe Castle Management Act, 1993 (No. 207 of 1993) provides for a CastleControl Board (CCB) to govern and manage the Castle on behalf of theMinister of Defence and Military Veterans. The National HeritageResources Act (No. 25 of 1999) provides for the management of the Castleas a national heritage site.Financial performanceThe Castle Control Board (CCB) does not receive transfer payments fromthe DODMV and is struggling to be self-sustainable. As can be noted fromthe table below, the Castle will be vulnerable if the support of theDepartment should be withdrawn as the amount in terms of wages andsalaries and related funding amounts to R2.5 million (R2.3 million for FY2011/12).2011/12 2012/13 PercentagedifferenceRevenue R3 182 000 3 417 000 +7.39%Expenditure R2 369 000 R2 534 000 +6.96%Surplus R813 000 R883 000 +8.61%Total R13 272 000 R14 155 000 +6.65%The table above outlines the main financial performance aspects over thelast two years. It should be noted that no fruitless and wasteful expenditurewas reported but an amount R524 000 was due to irregular expenditure.The opening balance for 2012/13 also Tshow an amount of R1 185 000brought forward from the previous financial year for irregular expenditure,and this was mainly due to instances where the CCB found it impractical tocomply with the stringent Treasury Regulations.Considering that the CCB receives no government grants it continued togenerate income through two thirds of gate revenue (one third goes to IzikoMuseums) and venue hire, which amounted to R3 417 000 for the yearunder review. There has been a constant increase in the number of visitorsto the Castle in recent years.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4845Findings of the Auditor-GeneralThe Castle received an unqualified audit opinion from the Auditor-General.The A-G found no matters to be reported in terms of the financial healthand human resources of the entity and was largely positive about theimprovements made on previous recommendations. However, the auditopinion identified problems in the following areas:• Internal Audit. No internal audit function for some part of the year.• Supply chain management. The SCM was again identified as aproblem as the CCB did not fully comply with the rules regarding theprocurement of goods and services for entities.• Performance against predetermined objectives. A vast improvementwas noted by the AG, but a need to develop a properly-designedperformance management methodology was noted.• Compliance. The AG suggested the use of a compliance checklistto monitor outstanding responsibilities and approvals.• Retention of a surplus. The CCB did not apply to National Treasuryto accumulate a surplus in previous years but submitted a requestto retain its surplus in 2012/13. The result of this request is not yetcertain and, as such, the AG noted again that the CCB retained asurplus without National Treasury approval.• Leadership. The AG noted concerns in terms of the leadership bythe accounting authority. The accounting authority failed toeffectively communicate policies and procedures to ensure effectiveinternal control.Performance• Highly successful Military Tattoo (4000 spectators).• Jive Slave marathon with 5000 runners through the Castle.• Anglo-Boer War Philatelic Exhibition attracted 3000 visitors.• Annual paying tourist figures increased by 3519.• Month of Photography (October) attracted more than 3000.• Annual trading surplus of R883 000 was achieved.• Heritage Day 2012 (free access) numbers exploded from 1975 to3265.Recommendations• The internal audit function and the appointment of the CFO should besorted out as a matter of urgency.• The position of Het Bakhuys and its contribution to the revenue ofCastle should be prioritised. If the operation of Het Bakhuys istransferred to a private enterprise, this shift should be concluded in aprompt and transparent manner to maintain the image of the Castle asan exemplary tourist destination. The PCODMV should also be updatedin this regard.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4846 [Tuesday, 29 October 2013• The shortcomings of the SCM Policy should be addressed as soon aspossible and the relevant CCB as well as Castle staff should be trainedto ensure 100 per cent compliance with National Treasury guidelines.This will assist in ensuring a decrease in irregular spending.• Adequately measureable targets should be set as per the Auditor-General’s guidelines.• Since repair and maintenance is one of the major issues in thepreservation of the Castle, the CCB should inform the PCODMV on aregular basis on this issue, especially as it relates to the involvementand contribution of the Department of Public Works.• The retention of a surplus without the approval of Treasury should beprevented in future.• The CCB should give a clear action plan of how it will deal with theleadership concerns raised by the A-G.APPRECIATIONThe Committee expresses its appreciation to the Department of Defence,Department of Military Veterans as well as Armscor and the Castle ControlBoard for its cooperation and endeavours to improve the performance oftheir respective organisations.4. The Budgetary Review and Recommendation Report of the PortfolioCommittee on Tourism, dated 29 October 2013.The Portfolio Committee on Tourism, having considered the performanceand submission to National Treasury for the medium term period of theDepartment, reports as follows:1. INTRODUCTION1.1. Mandate of CommitteeThe Portfolio Committee on Tourism is established by the rules of theNational Assembly as enshrined in Section 57(2) (a) of the Constitutionof the Republic of South Africa, Act 108 of 1996. The Committee istherefore an extension of the National Assembly and derives itsmandate from Parliament. The mandate of the Committee fulfils thefollowing functions:• Pass legislation.• Scrutinise and oversee executive action• Facilitate public participation and involvement in the legislative andother processes.• Participate in, promote and oversee co-operative government.• Engage in, participate and oversee international relations.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4847The Portfolio Committee on Tourism fulfils its mandate by dischargingits oversight role over the National Department of Tourism and SouthAfrican Tourism which is its marketing entity. The Committee conductsoversight visits and hold public hearings to ensure public participationand corporative governance as enshrined in the Constitution. TheCommittee processes legislation, and in the period under review aTourism Bill that repeals the Tourism Act of 1993 was processed aspart of its legislative mandate.1.2 Core functions of the Department.This section provides the legislative and policy framework that governthe Department of Tourism and South African Tourism.1.2.1 Constitutional and Legislative MandatePart A of Schedule 4 of the Constitution of the Republic of SouthAfrica, 1996, lists tourism as a functional area of concurrent nationaland provincial legislative competence. The Tourism Act, 1993 (Act No72 of 1993) as amended, also makes provision for the promotion oftourism to and in the Republic and for further regulation andrationalisation of the tourism industry; measures aimed at themaintenance and enhancement of the standards of facilities andservices hired out or made available to tourists; and the co-ordinationand rationalisation, as far as practicable, of activities of persons whoare involved in the tourism industry.Whilst the government has prioritised tourism and the Department isdoing everything to ensure tourism growth, the provincial and localspheres of government have not fully embraced this economic sectoras part of their mandate. At a local government level tourism generallycompetes with other service delivery needs and always gets littlebudget or is not budgeted for at all. In this sphere of governmenttourism is seen as an unfunded mandate and thus neglected. This iscontrary to the tourism mandate enshrined in the constitution and allspheres of government should take tourism seriously.Tourism, in the main, happens at a local level. The abdication of theconstitutional mandate by the local government undermines theimportance bestowed on tourism by the state as the sector is classifiedas one of the six priority economic sectors in the New Growth Path.1.2.2 Policy mandateThe main founding policy document for the Department is the WhitePaper on Development and Promotion of Tourism in South Africawhich sets out broad principles on which tourism mandate isdischarged. The White Paper provides framework and guidelines fortourism development and promotion in South Africa.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4848 [Tuesday, 29 October 2013The National Tourism Sector Strategy (NTSS) was developed andagreed upon by both the public and private sector. NTSS provides ablueprint for the tourism sector in pursuit of growth targets contained inthe New Growth Path (NGP). The NTSS seeks to create 225 000 newjobs and contribute R499 billion rand towards the Gross DomesticProduct (GDP) by 2020. The collective vision which is a driving force oftourism in South Africa is to be one of the top 20 global destinations by2020.The Department developed a number of strategies to guide thedevelopment and promotion of tourism in South Africa, including theNational Tourism Sector Strategy, Domestic Tourism Growth Strategy,Heritage and Cultural Tourism Strategy. The Tourism B-BBEE SectorCode provides guidelines initiatives to transform the industry.1.2.3 Strategic Outcome Oriented Goals of the DepartmentThe government set five priorities that govern programmes ofgovernment departments. These priorities are:• decent work and sustainable livelihoods• education and skills development• fighting crime and corruption• health• rural development & Agrarian reform.In fulfilling its mandate, the Department observed the five governmentpriorities, and set seven strategic outcome oriented goals aligned tothese priorities. The Departmental strategic oriented outcomes are asfollows:• Achieve good corporative and cooperative governance• Improve the impact of tourism on the livelihoods of all SouthAfricans• Integrate tourism priorities in the sector departments, andprovincial and local government’s planning• Improve tourism sector research, and information andknowledge management• Increase contribution tourism sector to inclusive economicgrowth• Improve levels of competitiveness and sustainability in thetourism sector• Strengthen regional, African and international collaboration andpartnerships.The Department is involved in a number of programmes aimed atachieving the set outcomes thus address the five priorities ofgovernment. The following activities are amongst other programmesthat were conducted by the Department in 2012/13 financial year toadvance the five government priorities:ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4849• The Department is involved in a number of job creationprogrammes whereby seventy projects are being implementedthrough the Expanded Public Works Programme. However,there is still a challenge with inclusive growth that createspermanent jobs and promotes sustainable livelihoods. TheDepartment still need to ensure meaningful participation of thehistorically disadvantaged communities and individuals in themainstream tourism industry.• The Department is involved in tourism capacity buildingprogrammes that are meant to strengthen skills developmentand human resource base in the tourism industry. TheDepartment has conducted a tourism skills audit and revisedtourism curriculum with UMALUSI to ensure proper skillsdevelopment for the sector.• The Department is addressing health issues in the industrythrough promoting universally accessible accommodationfacilities that cater for the needs of disabled tourists.• The Department is involved in rural development wherebytourism projects are funded in rural areas. A rural tourismstrategy was developed and gives guidelines on what could bedone to develop rural tourism. In addition, the Departmentcommissioned a study with clear findings on how tourism routescan be used to promote rural tourism.• The Department is intensifying the fight against crime andcorruption whereby forensic auditing and court cases have beenopened against service providers who were suspected ofdefrauding the Department.1.3 Purpose of the BRR ReportThe Money Bills Procedures and Related Matters Amendment Act (Act9 of 2009) sets out the process that allows Parliament to makerecommendations to the Minister of Finance to amend the budget of anational department. In October of each year, portfolio committeesmust compile Budgetary Review and Recommendation Reports(BRRR) that assess service delivery performance given availableresources; evaluate the effective and efficient use and forwardallocation of resources; and may make recommendations on forwarduse of resources. The BRRR are also source documents for theStanding/Select Committees on Appropriations/Finance when theymake recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The comprehensive reviewand analysis of the previous financial year’s performance, as well asperformance to date, form part of this process. The purpose of thisreport therefore is to make recommendations to the Minister of Financeto amend the budget for the Department of Tourism.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4850 [Tuesday, 29 October 20131.4 MethodIn developing this Budget Review and Recommendation Report theCommittee interacted with a number of institutions and reviewed anumber of supporting documents. The Committee had a hearing withthe Auditor-General on the 8 th October 2013 to receive independentaudit outcomes of the Department of Tourism and South AfricanTourism for the period under review. South African Tourism presentedtheir Annual Report to the Committee on the 8 th October 2013 and theDepartment presented their Annual Report for 2012/13 on the 15 thOctober 2013.The Committee also considered outcomes of public hearings with anumber of organisations that appeared before, it including the meetingheld with the Financial and Fiscal Commission on the 16 th March 2013.The oversight visits to various provinces were also considered as theyprovided much insight on the service delivery by the Department andother spheres of government.1.5 Outline of the contents of the Report.The report deals with five broad distinct issues. These issues are:(i) Constitutional, legislative and policy mandate of theCommittee and the process that was followed in developingthis Budget Review and Recommendations Report.(ii) Previous financial performance of the Department on bothfinancial and non financial aspects.(iii) Financial, non-financial and service delivery issues for theperiod under review.(iv) Key findings from oversight work of the Committee, publichearings and research by external stakeholders that informthe recommendations.(v) Recommendations to the Minister of Finance in terms of thebudgetary requirements of the Department.2 OVERVIEW OF THE KEY RELEVANT POLICY FOCUS AREAS2.1 Key Government policyIt is acknowledged that policy in respect of oversight in the LegislativeArm of the State is derived from a number of sources. It is this policythat provides the necessary framework for the Executive to carry outGovernment programmes. It is from this policy framework thatGovernments service delivery programme is informed. In addition theState of the Nation Address provides priorities and directives for thecalendar year and subsequent Cabinet Makgotla assist to refine thedetail. The National Development Plan was introduced during thecourse of the year under review and has serious implications fortourism in the years ahead.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4851The following key government policy documents drive the mandate ofthe Department and were considered crafting 2012/13 tourismprogrammes:(i) State of Nation AddressIssues impacting on tourism as raised in the 2012 State of the NationAddress included the need for close monitoring of tourism linkedinfrastructure development through the Expanded Public WorksProgramme; constant engagements with regard to cultural tourism;need for the Committee to monitor the different programmes pioneeredby the NDT to attract investors for infrastructure development in ruralareas; alignment in the promotion of events which took place in differentprovinces; the need for Department to adhere to the 30-day paymentperiod for services. The Department should enhance domestic tourismmarketing and development; expedite transformation in the tourismsector.(ii) New Growth PathTourism has been designated as one of the six economic drivers inSouth Africa. The New Growth Path recognises tourism as a key sectorfor employment creation and sets a target of 225 000 jobs by 2015.This economic plan stipulates that to achieve the intended targets, theindustry needs to address quality assurance, training, tourisminfrastructure, youth employment and support cultural industries’ mainenablers.2.2. Outcomes-based approachThe Minister signed a performance agreement with the Presidentwhereby a commitment was made to address four of the twelvegovernment outcomes. The contribution of Tourism to the government’soutcomes based approach to service delivery for 2012/13 and 2013/14is leveraged on the following four outcomes:• Outcome 4 - Decent employment through inclusive economicgrowth• Outcome 7 – Vibrant equitable and sustainable rural communitiesand food security for all, and• Outcome 11 – Create a better and safer South Africa and world forall.• Outcome 12 - A development-orientated public service andinclusive citizenshipThe Department attached each strategic outcome to one of the fourgovernment outcomes chosen for the sector. The correlation betweenthe government outcomes and Departmental strategic outcomes is asfollows:• Achieve good corporate and cooperative governance – Outcome12;ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4852 [Tuesday, 29 October 2013• Improve the impact of tourism on the livelihood of all south Africans– Outcome 4;• Integrate tourism priorities in other sector departments andprovincial and local governments planning – Outcome 12;• Improve tourism sector research and information and knowledgemanagement – Outcome 4;• Increased contribution of tourism sector to inclusive economicgrowth – Outcome 7;• Improve levels of competitiveness and sustainability in the sector –Outcome 4 and Outcome 10; and• Strengthen regional, African and international collaboration andpartnerships – Outcome 11.Amongst the above mentioned outcomes, the major part of theDepartment’s work is meant to significantly contribute towards decentemployment and inclusive economic growth, and the smoothfunctioning of an efficient and effective Public Service. This means thatthe Department must work on increasing tourism investment andforeign earnings, focus more on the development of Small and MediumEnterprises (SMEs); promote mentorship and support programmes; andincrease the scarce skill base as identified by the skills audit.Supporting product development in rural areas for tourist consumption isa critical tool for tourism’s contribution towards rural development. In linewith the abovementioned points, the role of the local sphere ofgovernment needs to be developed and clearly defined in order topositively contribute towards the National Tourism Sector Strategy. Thus,the Department is in a continuous dialogue with municipalities, especiallyin targeted areas and contributes towards tourism product developmentin areas where there is the possibility of establishing feasible projects.2.3 Overview of revised Strategic Plan and Annual PerformancePlansThe revised Strategic Plan puts more emphasis on implementationrather than planning. Since the separation of Tourism from the erstwhileDepartment of Environmental Affairs and Tourism in 2009, the StrategicPlans of the new Department of Tourism have concentrated more onplanning. In order to achieve this, the Department has developed anumber of sector plans which include inter alia, the National TourismSector Strategy; Domestic Tourism Strategy; Rural Tourism Strategy;Heritage and Cultural Tourism Strategy and Responsible TourismStrategy.The implementation of the above mentioned strategies will includeimproved tourism sector research, information and knowledgemanagement in order to increase tourism’s contribution to GDP growthand job creation. This will be done through the provision of adequateTourism Sector Knowledge and Information Services; implementation ofthe National Visitors Information Centres (NVIF); ensuring that NationalVisitors Information Gateways (NTIGs) are operational; and implementationof a standardised research framework for the tourism sector.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4853Responsible Tourism is given special attention in the revised StrategicPlan with the planned roll-out of tourism incentives to encouragedevelopment and implementation of the toolkit for Certification Agenciesand tourism businesses. Attention is given to the implementation of theNational Minimum Standards for Responsible Tourism (NMSRT) as theindustry’s response to Climate Change.The Department established a new International Tourism Branch. Theprevious Strategic Plan focused on developing profiles for differentcountries to streamline marketing endeavours and increase the numberof foreign tourist arrivals. The revised Strategic Plan focuses on theintroduction of strategic interventions for selected tourism markets;activation of South African missions abroad for utilization in marketingactivities; facilitation of implementation of international agreements andparticipation in multilateral forums.With regard to Domestic Tourism, there is a focus towardsimplementing aspects of various tourism strategies that were developedin the previous financial years. The Department will continue to supportcommunity projects through Expanded Public Works SocialResponsibility Initiative Programme (SRI). However, the Departmenthas not indicated how they will improve the implementation method forthese projects that have proved to be very problematic in the past. TheDepartment should establish a new implementation model for theEPWP projects. Skills Training and service excellence programmeshave also been enhanced with some SRI projects focussed on skillstraining as opposed to infrastructure projects. Collaboration withCATHSSETA and UMALUSI on tourism curriculum is also one of thepositive initiatives in addressing skills in the sector. This coupled withtraining of municipal officials will, in a long term, ensure proper skillsbase for both public and private sector.2.4 Overview of key developments in the organisational andservice delivery environments of Department for 2012/13and 2013/14 MTEF cycle.The Department received the Tourism Incentive Scheme from theDepartment of Trade and Industry in the 2012/13 and is developing animplementation plan for the Scheme in 2013/ 14. The major change willbe in 2014/ 15 when the scheme will be implemented. The effect of thislong planning cycle is that in the period under review there has been notargeted assistance given the emerging tourism enterprises through thescheme.The Department commissioned research with five universities in thecountry and they yielded invaluable insights into various aspects of thetourism sector. There is also an improved impetus with regard toenhancing skills development in the sector and enhancing ServiceExcellence amongst service providers.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4854 [Tuesday, 29 October 20133 SUMMARY OF PREVIOUS YEAR KEY FINANCIAL ANDPERFORMANCE RECOMMENDATIONS OF COMMITTEE3.1 2012/13 BRRR recommendations3.1.1 Summary of key financial and non-financial performancerecommendations made by CommitteeIn the 2012/13 Budget Review and Recommendations Report, theCommittee recommended amongst other things that the budget for theDepartment of Tourism be increased to:• Open Tourism offices and marketing hubs in African markets tohave marketing presence and conduct activations in theseemerging markets, as marketing intelligence indicates anincreasing demand for short haul instead of long haul travel.• Create optimal level of advertising that would in turn ensuregreater generation of jobs.• Implement strategies that will enhance development of domestictourism.• Facilitate implementation of strategies and programmes thathave been developed to achieve the objectives of the Nationaltourism sector Strategy.• Create more Full Time Equivalent jobs from the ExpandedPublic Works Programme, especially in rural areas.• Assist the SMMEs in funding their businesses for start-upcapital, staff training, and extension of existing tourismestablishments.3.1.2 Evaluation of response by Department and Minister ofFinanceThe National Treasury responded by saying the recommendations ofthe Committee were supported. Marketing South Africa to Africancountries is an important diversification strategy, especially during theeconomic downturn in the Eurozone. The Department of Trade andIndustry has agreed to transfer the tourism investment incentive to theDepartment of Tourism; the programme supports SMMEs and theupgrading of existing tourism establishments.The response by Treasury is not adequate to enable the Department tofulfil its mandate and address all the needs of the sector. The TourismIncentive Scheme that was transferred from the Department of Tradeand Industry had already been available in the sector for a number ofyears but did not make remarkable impact, especially to the SMMEs.The only change is that the fund will now be administered by theDepartment of Tourism.There is therefore a need for National Treasury to look closely atthe mandate of the Department of Tourism and the contributionthis sector is making to the economy. Treasury must acknowledgethe capacity of this sector to contribute to job creation, GDP andANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4855balance of payments of the country, thus improving livelihoods ofSouth Africans. Tourism, for example, is already outperforming criticaleconomic sectors in the country such as mining and automotivessectors and this warrants more resources to unleash the full potentialof the tourism. It is therefore recommended that Treasury revises thebaseline budget for tourism in the MTEF and subsequent financialperiods to ensure that tourism performs at its full capacity.3.2 2013/14 Committee Budget ReportNoting the role the Department plays in contributing to job creation andGDP towards meeting the 2020 targets as propounded in the NationalTourism Sector Strategy, the Committee recommends that the baselinebudget for the Department needs to be reviewed in the MTEF andsubsequent financial years to allow the Department to carry its mandateeffectively.4. OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCEThe following section provides an overview and assessment ofreported financial performance for 2012/13 and 2013/14; as well asprojected financial needs or areas needing improvement in terms ofspending for the 2014/15 MTEF.4.1 Overview of Vote allocation and spending (2009/102014/15)Table 1 below indicates budget allocation for Tourism Vote 35 from aperiod spanning 2009 to 2015. The table shows that there has been asteady increase in budget allocation for Tourism over the years.However, this allocation should be viewed in the light of servicedelivery realities and mandate of the Department of Tourism.Table 1: Budget Vote allocation for the period 2009/10 - 2014/15Programme2009/10 2010/11 2011/12 2012/13 2013/14 2014/15Outcomes Outcomes Outcomes Main Adjusted Outcomes Estimates EstimatesProg 1: Administration 80.2 155.8 195.1 179.224 191.936 179.224 205.7 221.4Prog 2: Policy and KnowledgeServices 714.5 644.2 694.0 794.024 793.395 794.024 875.5 924.4Prog 3: International Tourism 10.7 26.4 22.1 22.1 28.792 41.830 27.133 49.6 52.3Prog 4: Domestic Tourism 340.2 317.1 339.1 372.103 346.982 371.578 369.8 496.0Total 1 145.6 1 143.5 1 250.2 1 374.359 1 374.143 1 371.959ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4856 [Tuesday, 29 October 2013The expenditure pattern by the Department indicates that the Departmenthas been able to spend its entire budget over the years. This demonstratesa financial discipline by the Department and capacity for service delivery.Table 2 below indicates that in the year under review, the Department wasable to spend 99.84% of its allocated budget.Table 2: Percentage of spending by programme 2012/13Programme Total Appropriation Virements Total ExpenditureExpenditure %R’000 R’000 R’000 R’000Prog 1: Administration 179.224 12.712 179.224 100Prog 2: Policy and Knowledge629100Services 794.024794.024Prog 3: International Tourism 28.792 13.038 27.133 94.2Prog 4: Domestic Tourism 372.103 25.121 371.578 99.9TOTAL 1 374.359 51.500 1 371.959 99.844.2 Financial performance 2012/13This section of the report provides a broad picture of spending patterns andchallenges for 2012/13. It looks at adjustments, virements, cashflows,over/under-spending, rollovers and savings, and assess the impact.4.2.1 Quarterly spending trendsThe quarterly spending trends for the Department in 2012/13 financial yearwere as provided in table 3 below:Table 3: Quarterly spending 2012/13R million 2010/11 2011/12 2012/13ApprovedExpenditureQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4R423 R804 R979 R1184 R307 R597 R951 R1265 R325 R766 R1124 R1374ActualExpenditureR404 R696 R856 R1143 R258 R557 R935 R1250 306 R728 1102 R1374Variance R27 R108 R124 R40 R50 R39 R16 R15 R19 R39 23 R2% Variance 6.3% 13.5% 12.7% 3.4% 16.2% 6.6% 1.7% 1.2% 5.9% 5.1% 2.0% 0.2%The quarterly spending patterns for 2012/13 indicate that there was avariation of 5.9 percent in the first quarter and 5.1 percent in the secondquarter. There was a remarkable improvement on spending in the thirdquarter with only a variance of 2.0 percent recorded. In the fourth and theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4857last quarter of the period under review the Department’s expenditurepattern had completely recovered and only 0.2 percent variance inspending was recorded.4.2.2 Adjustments for 2012/13.Table 4 below indicates all the adjustments that were effected in 2013/14per Programme with percentages.Table 4: Budget adjustmentsProgrammeMain AppropriationAdjustment EstimatesBudget after shiftsapproved by NationalTreasuryVirementsFinal Budget(Adjustment estimateplus/ minus virement)Actual Amount spentOver/ underexpenditure% SpentVirement as a % ofbudgetR’000 R’000 R’000 R’000R’000 R’000 R’000% %Administration 195,043 191,936 181,936 12,712 179,224 179,224 - 100% -1.4%Policy and 787,994 793,395 793,395 629 794,024 794,024 - 100% 0%KnowledgeServicesInternational 46,834 41,830 31,830 13,038 28,792 27,133 1,659 94.2% -6.5%TourismDomestic 337,450 436,982 366,982 25,121 372,103 371,578 525 99.9% 1.5%TourismTotal 1,367,321 1,374,143 1,374,143 - 1,374,143 1,371,959 2,184 99.4%4.2.3 Auditor General ReportThe Department obtained an unqualified audit for the 2012/13 financialyear whilst South African Tourism also received an unqualified and nomatter of emphasis report for the 12 th consecutive year. The only majorfinding of the Auditor-General is in regard to material misstatements ofdisclosure notes. This amounted to non-compliance with section 40(1) ofthe Public Finance Management Act. The misstatements were in regard toasset management. The information in the asset register did not matchinformation provided in the disclosure notes. However the Department wasable to avoid a qualification due to the correction of material statementsduring the audit process. The Auditor-General suggested the followingremedial actions:• Review of financial statements against applicable reportingframeworks needs to be enhanced to ensure that there are nomaterial adjustments made to financial statements.• Management should perform monthly reconciliation between theasset register (s) and the amount reflected in the financial systemand the supporting documentation need to be reviewed forcorrectness.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4858 [Tuesday, 29 October 2013• Implement and monitor action plans to address all internal andexternal audit findings.• Monitor adherence to the controls in respect of fixed assets.The Committee noted that some of the findings from the oversight visitswere not reflected in the Auditor-General findings as they were not part ofthe criteria used for assessment. These relate amongst others, to forensicand criminal investigations that are in progress relating to Expanded PublicWorks Programme projects involving Project Implementers The Auditor-General recommended that the Department should enhance performanceand consequence management for both services providers and staff.4.2.4 Summary of key issues contained in reports of Finance/Appropriation CommitteesThe Department incurred R97 000.00 fruitless and wasteful expenditure.This was incurred due to late cancellation and no shows with regard totravel bookings. The Department is investigating these issues to determineliability. The Department also incurred under spending of R2.075 million inthe period under review. Underspending occurred due to the followingreasons:(i) Compensation of Employees – Underspending on compensation ofemployees related to the vacancy rate as well as on goods and services(Heritage DVD Project not completed).(ii) Transfers and subsidies – Underspending under transfers andsubsidies were due to the following:• Memorandum of understanding (MoU) with Tourism BusinessCouncil was cancelled.• No inflation increase to the payment of The FederatedHospitality Association of South Africa (Fedhasa).The underspending incurred by the Department was within 2 percent of thetotal appropriation and was therefore condoned. However, the Departmentneeds to ensure that it spends on all goods and services budgeted for in aparticular financial year. Feasibility of implementation and properassessment of all the Memoranda of Understanding (MoUs) entered intobetween the Department and other institutions must be carefully examinedbefore they are signed to ensure that there are no delays or cancellationduring the financial year that may affect expenditure of appropriated budget.4.2.5 Summary of key financial issues contained in any otherrelevant report(s) for 2012/13The Financial and Fiscal Commission raised the following issues inregard to increasing funding for tourism:(i) Domestic expenditure on tourism shows fastest growth of 5.7percent per annum. The global recession led to renewed focus ondomestic tourism to cushion impact on local tourism industry. Thisis an area that NDT should further prioritize over the MTEF.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4859(ii) Infrastructure investment in tourism has fallen over the five yearslargely from a slowdown in the local economy, although in 2012significant improvement as the economy started picking up.Significant future investments are required to continue growing thesector.4.3 Financial performance 2013/144.3.1 Quarterly spending trendsThe quarterly spending trends for the Department in the first andsecond term of the current 2013/14 per programme are as follows:Programme 1: Administration – at the end of the first quarter of 2013,this programme had spent R41.2 million which is 20 per cent of theallocated budget. The majority of the budget was spent oncompensation of employees for improved conditions of service and ongoods and services.Programme 2: Policy and Knowledge Services – at the end of thefirst quarter of 2013, this programme had spent R8.6 million which is20.3 per cent of the allocated budget. The bulk of the budget was spenton compensation of employees for improved conditions of service. TheDepartment did not make any transfers towards higher educationinstitution resulting in 0 percent spending for that transfer.Programme 3: International Tourism – at the end of the first quarterof 2013, this programme had spent R7.6 million that is 17.3 per cent ofthe allocated budget. The majority of the budget was spent oncompensation of employees for improved conditions of service. Afurther R1.8 million was recorded as a transfer to the United NationsWorld Tourism Organisation (UNWTO) for membership fees. Thisrepresents 33.3 per cent of the budget for foreign governments andinternational organisations.Programme 4: Domestic Tourism – at the end of the first quarter of2013, this programme had spent R14.7 million that is 19.7 per cent ofthe allocated budget. The majority of the budget was spent oncompensation of employees for improved conditions of service. Thisprogramme also received transfers amounting to R70.4 million whichtranslates to 26.7 per cent of the total allocation for the EPWPprogramme by the end of the first quarter.The spending pattern for the first and second quarter of 2013/14 doesnot show much deviation from the expenditure pattern in 2012/13.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4860 [Tuesday, 29 October 20134.4 Summary of key financial issues contained in any otherrelevant report(s)No financial issues were picked up from other reports as SCOPA didnot raise any issues with regard to spending by the Department.However, there are some financial issues that were discovered by theCommittee on oversight visits with regard to EPWP projects in regard tofinancial controls.4.5 2014/15 MTEF financial allocations4.5.1 Summary of funding submissions to National Treasury for the2014/15 MTEF.The National Treasury should increase the budget for the Departmentallow the Department to fulfil its mandate. In addition, the NationalTreasury should assist South African Tourism with minimising foreigncurrency exposure on costs incurred on marketing activities abroad in2014/15 and outer years.4.5.2 Concluding comments on financial performanceThe Department and South African Tourism show good financial healthin the period under review. Allocated funds were used appropriately;negligible underspending was incurred and condoned. However, theDepartment incurred a total of R14,5 million on contingent liabilities andall precautionary measures should be taken in future to avoid litigationagainst the Department.5 OVERVIEW AND ASSESSMENT OF SERVICE DELIVERYPERFORMANCE5.1 Service delivery performance for 2012/13This section provided information on the performance of theDepartment against pre-determined objectives.5.1.1 Annual Performance Plan: Total number of targets for2012/13 and total number achieved.The Department had 92 targets. Table 5 indicates the spread of targetsper programme and achievement thereof. Of the 92 targets, 89 wereachieved and only 3 were not achieved. Programme 2 had most targetsin the Department and they were excellently achieved. Of the 3 targetsthat were not achieved, a substantial amount of work had been donetowards attaining them. This leaves the Department with only 1 targetthat was not achieved. The Committee is generally satisfied withachieved of targets as this indicates that the Department takes servicedelivery seriously and makes all efforts to perform according to settargets.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4861Table 5: Targets achievedProgrammeNumberofAnnualTargetsAchievedNotAchievedButSignificantWork DoneAdministration 23 21 1 1Policyand 46 45 1 0KnowledgeManagementServicesInternational TourismManagement6 6 0 0Domestic Tourism 17 17 0 0ManagementTOTAL 92 89 2 15.1.2 Programme PerformanceNotAchievedPerformance of the Department in 2012/13 per each of the fourprogrammes is given below:(i)Programme 1: AdministrationAdministration Programme had a total of 23 targets and 21 wereachieved with only two that were not achieved. This programme’sperformance was notable and commendable as it contributedsignificantly to the audit findings concerning the useful and reliableinformation submitted for audit purposes. However, it is also worryingthat the Department failed to reduce vacancy rate to 5 per cent,instead ended up with an 11.17 percent vacancy rate, which is1.75 per cent higher than the 2011/12 vacancy rate. This shortcomingcan pose a serious challenge for the Department in meeting the predeterminedobjectives if it is allowed to continue. Other achievementsand challenges of the Department include:• 103 per cent implementation of the Workplace Skills Plan;• Meeting the targets in as far as representation of designatedgroups are concerned;• Meeting targets in as far as reaching out to stakeholders,corporate legal support, and economic efficient and use ofresources, and effective internal audit services are concern.(ii)Programme 2: Policy and knowledge servicesProgramme 2 had 46 targets and a remarkable achievement of 45targets was recorded, with only 1 target not achieved. This programmeperformed well and managed to develop the annual progress report ofthe NTSS and also submitted the budget structure to NationalTreasury. In the Annual Performance Plan (APP), the DepartmentANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4862 [Tuesday, 29 October 2013planned to produce a draft report on the implementation of the budgetstructure by provinces, however, that was not reported on. Furtherachievements for the programme are as follows:• Development of two reports for the implementation of theDepartment of Home Affairs (DHA) Memorandum ofUnderstanding (MOU);• Development of reports on the annual tourism state of airlift, theimplementation of the NDT stakeholder engagement framework,the implementation of the National Visitors InformationFramework (NVIF), the extent of empowerment from PPPsconcessions and assets disposal and the implementation ofknowledge management Framework;• Development of a municipal tourism training programme andself assessment tool;• Development of a tourist arrivals forecasting model;• Integration of tourist guiding module into law enforcementagencies’ training programmes;• Signed MOU on rules of engagement between NDT and FieldGuides Association of Southern Africa (FGASA);• Completion of six commissioned studies;• Tourism charter equipped with a functional secretariat; and• The development of electronic stakeholder database.(iii)Programme 3: International TourismProgramme 3 had 6 targets in the period under review. Theprogramme delivered 100 per cent of the predetermined objectives andeven surpassing the target on three of the seven indicators.(iv) Programme 4: Domestic TourismProgramme 4 had 17 targets and was able to achieve 100 percentperformance. This programme also performed well, however it hadnoticeable virements amounting to R35 million into the SocialResponsibility Programme. The virements allowed the Department tosurpass their targets of fulltime equivalent jobs created projectsfunded. Of big concern though, are the reasons provided for thevariance between targets and actual performance, the Departmentstates that this achievement was due to projects under-planning andmoving quicker into implementation as well as the allocation of theEPWP incentive funding from Treasury. Other achievements of theprogramme include:• Completion of the nine provincial profiles;• Development of two regional packages;• Initiation of the domestic tourism campaign;• Hosting of the National Tourism Careers Expo;• Facilitation of six annual tourism leadership dialogues; and• Report on curriculum analysis.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48635.1.2 Key reported achievements.The Department was able to table the Tourism Bill in Parliament whichis currently being considered by the National Council of Provinces afterhaving been processed by the Portfolio Committee on Tourism.(i)Increased arrivalsIn line with government outcome 11, which is to create a better andsafer South Africa and world for all, there was an increase in thepercentage of arrivals to the country. The 2012 Tourism figuresannounced by President Jacob Zuma on the 25 th April 2013 indicatethat the Department and South African Tourism were able toachieve 9 188 368 international arrivals compared to 8 339 354 in2011, which was 10.2 percent increase against the internationalaverage of 4 percent.South Africa saw particularly good overseas tourist growth (touristsfrom outside of the African continent), which grew by 15.1 percent,one of the highest growth rates in the world last year. Europeremained the highest source of overseas tourists to South Africa,growing by 9.5 percent on 2011 figures and attracting a total of 1396 978 tourists to the country last year, more than half the totalnumber of overseas tourists.The United Kingdom continues to be South Africa’s biggestoverseas tourism market, with 438 023 UK tourists travelling toSouth Africa in 2012 (4.2 percent up on 2011 figures). The UnitedStates is South Africa’s second biggest overseas tourism market,with 326 643 tourists from the USA visiting in 2012 (up 13.6 percenton 2011 figures), with Germany the third biggest overseas marketwith 266 333 tourists (up 13 percent on 2011 figures). China hasbecome South Africa’s fourth biggest overseas tourism market, 132334 (up 55.9 percent on 2011 figures), with France now SouthAfrica’s fifth biggest overseas tourism market with 122 244 touristsin 2012 (up 16 percent on 2011 figures).The Chinese market in particular, needs a special attention. Thismarket has a potential to grow and South African Tourism shouldincrease their marking presence in China. A Chinese tourist isparticular with their tour packages, including travellingarrangements and cuisine. South African tourism industry shouldcater for tastes and preferences for this market. Market intelligenceindicates that, for example, the Chinese want exclusive golfexperience, they are particular about the equipment they use forgolf and so they bring their own equipment; in a five day itinerary attwo days must have Chinese cuisine; they want a branded clothingshopping experience and are very sensitive with time and thereforedelays should be avoided. The Department and South AfricanTourism should therefore conduct intensive research to understandthis market and prepare the tourism industry accordingly.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4864 [Tuesday, 29 October 2013(ii)Skills DevelopmentIn the previous financial year the Department in partnership withCulture, Arts, Tourism, Hospitality & Sports Sector Education andTraining Authority (CATHSSETA) conducted a skills audit in thetourism sector. A number of critical skills were identified in thesector, including a shortage of trained professional chefs. In linewith the government priority of improving education and skillsdevelopment in the country, the Department implemented aNational Young Chefs Training Programme whereby 133 learnerswere placed with the SACA Hotel Schools and 33 continued withtheir Diploma. In addition, the Department was able to train 3 267enterprises on skills development, tourism awareness, customerservice, toolkits and business skills.(iii)Assistance to SMMEsThe Department has realised that the growth of the tourism industryrelies on having a robust and thriving small business tourism sector.The small business enterprises are the ones with a potential ofcreating more job opportunities in the sector. In 2012/13 financialyear, the Department identified and assisted a number of Small-Medium and Micro Enterprises (SMMEs) which included 1 664 ruralenterprises and 4 145 members from designated groups. Thesupport included 104 SMMEs who were enrolled in mentorshipswhich are meant to increase efficiency and capacity of theseenterprises to deliver quality tourist experience. The intention is forSMMEs to grow and eventually become large tourism enterprises. Atotal of 852 businesses were supported with market access.(iv)Job creationIn performing its mandate, the Department was sensitive to thetriple challenge of unemployment, poverty and inequalities. Inaddressing the challenge of unemployment, the Department wasable to create over 5 003 full time equivalent jobs through the SocialResponsibility Implementation programme.The Department also hosted a National Tourism Careers Expowhereby over 7 300 learners participated and a total of 361curriculum vitae from unemployed graduates were received fromthe recruitment corner. This initiative addressed both skillsdevelopment and job creation.(v)Rural Development and inclusive growthTourism in South Africa has always been concentrated in big citiesand along the coastal areas. The Department has supported anumber of rural communities through the Social ResponsibilityImplementation Initiative whereby Community-Based-TourismANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4865projects have been implemented. These projects, in most cases, areowned by Traditional Councils and operated by Community Trusts.Beneficiaries of these projects are local communities who derivebenefits through temporary employment during construction andpermanent employment during the operation phase of the projects.Two regional support packages were developed whereby ruraldevelopment was prioritised. Seventy (70) EPWP projects wereimplemented in the period under review and a bulk of them are inrural areas. A total of 1 664 rural enterprises were supported.(vi)Reducing crime and corruptionThe Department discovered some irregular practices in through itsreporting system for the Expanded Public Works Programmewhereby some Project Implementers were defrauding theDepartment and had reported incorrect financial statements. In linewith the government priority of reducing crime and corruption in thecountry, the Department immediately suspended all the projectsand funding for phase 2 was put on hold. A forensic investigationinstituted by the Department has led to some matters being referredto court and some Project Implementers will be prosecuted.(v)Payment of service providersIn line with the sentiments raised by the President in the State of theNation Address, the Department was able pay its service providerswithin a 30-day time period.5.1.4 Key reported challenges.The Department reported the following challenges in the periodunder review:(i)Vacancy rateThe Department had a vacancy rate of 11.17 percent. Thisperformance was against a revised target of 10 percent that wasinitially set at 5 percent. The Department reported a challenge of thedelays in appointing suitable candidates for advertised posts. Thereis a tendency amongst government officials to ask for counter offersfrom their current employers when they are offered positions by theDepartment. Candidates then decline appointment by theDepartment when they have been given a counter offer by thecurrent employers. In line with the government priority of jobcreation, the Department should engage other departments in orderto find a solution to this transversal government challenge. TheDepartment also may develop an attractive retention strategy tokeep experienced staff.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4866 [Tuesday, 29 October 2013(ii)Fraud in Expanded Public Works Programme projectsThe Department continued to experience challenges with theinfrastructural Expanded Public Works Programme (EPWP). SomeProject Implementing Agents had committed criminal offenses thataffected completion of projects. Once the criminal activities weredetected, the Department was proactive in arresting the situation. Anumber of projects throughout the country were put on hold andsecond phase funding halted. In line with the government priority offighting crime and corruption, the Department instituted forensicinvestigations against suspected Project Implementing Agents.Forensic auditing was instituted for all projects after discoveringfraudulent reporting of financial statements by some ProjectImplementers. In some instances, criminal charges were laidagainst some project implementers. Advance payments to ProjectImplementers before reaching some project milestones was alsoone of the challenges in controlling expenditure on these projects asExpanded Public Works Programme and Treasury condoned thispractice.(iii)Foreign Currency ExposureSouth African Tourism (SAT) continued to experience currency lossdue to foreign currency exposure based on their marketing activitiesabroad. The challenge is that SAT could not embark on financialhedging and a permanent solution is needed. In terms of the PublicFinance Management Act and Treasury Regulations, cost incurredon marketing is not covered as only Human Resources costs areconsidered. There is an increase in the interest shown by emergingmarkets to South Africa. Some of these markets warrant anincreased marketing presence by South Africa. In other Africanmarkets a hobbling strategy has been adopted by South AfricanTourism but as these markets grow more individualised marketingcampaigns will become necessary. This means that South AfricanTourism will experience more foreign currency exposure in thefuture. The National Treasury therefore should intervene in reducingthe effects of this exposure to South African Tourism.5.1.5 Non-financial Audit outcomes and steps taken to addressadverse audit findings, if any.The Auditor-General had findings on misstatements in regard toasset management. Information in the asset register did not matchinformation provided. The statements submitted for auditing werenot supported by full and proper records and this constituted anaudit finding. The Department updated the asset register during theaudit period and was able to avoid a qualification. The auditor-General indicated that if this finding had not been rectified on time,this would have caused the Department to get a qualified auditreport.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48675.2 Other service delivery performance findingsThis section contains service delivery findings for both 2012/13 and2013/14 based on oversight visits and research from externalstakeholders.5.2.1 Oversight visit reports- summary of key service deliveryissues.The Portfolio Committee undertook three oversight visits in theperiod under review. Oversight visit were undertaken toMpumalanga and Eastern Cape provinces in 2012. Two otherprovinces, namely, Free State and KwaZulu Natal were visited in2013. A Tourism Summit was also convened in 2013 to establishthe state of tourism in South Africa. The Committee was concernedby the following service delivery issues that need to be addressed:• Extended Public Works Programme: The major concernexpressed by the Committee on service delivery was on theSocial Responsibility Implementation programme (SRI) which isa departmental Expended Public Works Programme initiative.The Committee noted lack of project management skills andcontrols in implementing these projects. There was poorworkmanship and no value for money. Project beneficiaries onthe ground also raised issues about project implementers whoare not from their provinces and who do not implement projectsaccordingly.However, the Committee noted that the SRI projects aregoverned by criteria set by the Department of Public Works andthe National Treasury. Some of these criteria are not particularlysuitable for the tourism industry and should to be reviewed toserve the industry better.• Small, Medium and Micro Enterprises (SMMEs): SMMEs arestill struggling and not part of the mainstream tourism economy.Spheres of government should work towards strengtheningcompetitiveness and promotion of SMMEs and tourismcooperatives. Some municipalities in particular do not recognisetourism as a local economic development sector as they do nothave Local Economic Development/ Tourism Officers.Municipalities should appoint staff that deal with tourism toassist SMMES to access the sector.• Market Access – despite tourism having low barriers to entry,there are few entrepreneurs getting into the sector and there is achallenge with accessing potential market. The Departmentshould facilitate market access and entry into the value chain bysmall businesses and cooperatives and reduce regulatoryburden on small businessesANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4868 [Tuesday, 29 October 2013• Local Government: the local sphere of government is animportant contributor to the success of tourism activities in termsof community driven tourism philosophy. Municipalities controlmunicipal rates, by-laws, and electricity prices which affectSMMEs and the industry at large. Municipalities should providean enabling environment for tourism to thrive at a local level andshould be guardians of individual interest over communitybenefits. Some municipalities however, do not have tourismdirectorates to assist in aligning tourism to other municipalactivities for the benefit of the industry.• Job creation at local level: tourism is a demand-driven sectorand there is a need to conduct studies on how the volume andvalue of demand inform investment in supply and job creation. Ajobs model developed by the department should beimplemented to ascertain how many jobs are created by thesector. Niche products and tourism routes should be developedat local level to enhance opportunities for job creation withincommunities.• Public-Private Partnerships (PPP’s): the Department shouldwork closely with national Treasury to implement the PPPToolkit for Tourism. The Social Tourism project of auditing allunderutilised public assets for tourism development was seenas a good collaboration. The Independent DevelopmentCorporation could assist in developing potential sites into lowcost tourism accommodation.• Road Signage and infrastructure: poor road signage andinfrastructure impact negatively on access to tourism products,especially in rural areas. The poor condition of some roads,such as R74 that runs between the Free State and KwaZulu-Natal provinces, has caused some tourism businesses to closedown. Tour operators have taken destinations affected by poorroad conditions out of their itineraries. This in turn has causedloss of permanent job opportunities to local communities.Collaboration between the Department of Tourism and theDepartment of Transport needed to be intensified.• Tourism information: the public is not fully aware about theprogrammes of the Department therefore public education,awareness and information dissemination should be linked tooutreach initiatives. It was observed that there is slowmovement in transformation and there should be greatersupport in implementing the Tourism Sector Codes and TourismB-BBEE Scorecard. Innovation is needed from the Departmentto expedite transformation.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4869• Skills Development: while the committee acknowledges theinitiatives taken by the department to engage five universities inthe country to develop skills and capacity in the industry, there isalso a need to support FET colleges and Sector Education andTraining Authorities to be linked to business, industry and otheradvanced education and training programmes.• Air Lift: travel by air to some destinations in the country is tooexpensive. Other destinations in the country have poor airconnectivity or no connectivity at all. The YamoussoukroDecision is also not fully implemented and affects regionalconnectivity. There is a need for national government to assist inincreasing number of flights and reduce cost of flights. Thisshould apply to both local and regional air travel.• Implementation of infrastructure development: parliamentshould prioritise overseeing the implementation of infrastructuredevelopment aligned to rural communities and also ascertainsupport facilities in rural areas for tourism sector, particularlyroad and air connectivity.5.2.2 Relevant external research assessing performance of theDepartment.There needs to be a close link between what the Department doesand the response of the private sector in growing the industry inSouth Africa. The Tourism Business Council of South Africa(TBCSA) perspective on the performance of the industry thereforeis crucial in that regard. TBCSA uses the Tourism Business Index(TBI) as a tool of measuring industry performance. The surveyelicits information on trends, current performance, and expectationsof market players as to future performance. The methodologyconforms to the international OECD (Organisation for EconomicDevelopment and Cooperation) and the survey is administered byan e-mail link to an online survey which is carried out on a quarterlybasis. The TBI methodology is based on a business survey sent toCEO’s or senior tourism business executives.In their Annual Report for 2012, the TBCSA confirmed that overall,2012 was a far better year for tourism businesses in South Africacompared to 2011. In this period, tourism business performancepeaked in the last quarter to 104.6, the earliest indications yet thatthe industry was recovering from the previous quarters’performance lows having achieved 101,9 in the first quarter, 88.2 inthe second quarter and 101.6 in the third quarter. On the back ofimproved performance in the last quarter of 2011, the industry wentinto the new year with cautious optimism. This was evident with theindex surpassing normal performance levels slightly to reach a TBIscore of 101.9; a significant development when compared against ascore of 79.6 in the same period in 2011. However, this soonANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4870 [Tuesday, 29 October 2013changed in the second quarter of the year, when performancedipped to an index of 88.2, only to recover in the last two quarters ofthe year.The TBI is fairly optimistic about the prospects for 2013. In thisspecific edition, respondents were asked additional questions toassist in establishing the industry’s outlook for the year ahead.Respondents were asked to indicate their expected employmentlevels, capacity growth, which markets they believe had the mostpotential for growth in 2013 and the biggest constraints they haveidentified to doing business in 2013.On balance, the accommodation respondents to the survey expecta fairly similar overall annual performance at a -0,6 percent,however, this balance statistic has been improving steadily everyquarter from a low of -70,3 in Q3 2011. Other Tourism Businessesare on balance +37,6 percent positive about the outlook for theyear, which is significantly higher than in Q4 2012 and the highestever positive outlook recorded. A large number (41,5 percent) of therespondents believe that their businesses will perform better thannormal in the next year.Notwithstanding positive gains in 2012, the industry has cited thefollowing as specific constraints to doing business in 2013:• The accommodation and other Tourism Businessrespondents, cited as major threats to business in 2013, theglobal economic recession, the political uncertainty andlabour/community unrest in South Africa and the negativeperceptions this has created, profiling South Africa as anunsafe destination to foreign visitors.• Rising operational costs, especially municipal rates, fuel andelectricity prices.• The Accommodation Sector identified price wars within thesector as a major threat to the industry, with many operatorsundercutting rates. Competition from European destinationswith accommodation operators offering top standardaccommodation at very low rates was mentioned by some ofthe respondents.• Lack of direct air access of international flights to CapeTown was highlighted by many respondents as a challengefor 2013.• The other Tourism Businesses, especially the operators inthe transport industry, believe e-tolls to be a major constraintto business in 2013, increasing operational costs anddecreasing the disposable income of their customers.• Other constraints and threats mentioned by more than onerespondent include a lack of destination marketing by SouthAfrican Tourism and other Destination ManagementOrganisations (DMOs), a lack of municipal service delivery,labour strikes, increase in competitive establishments andANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4871businesses, the corporate and business travel marketreducing their spend on travel, reduced disposable incomefor the domestic market, exchange rates, slow debtrepayment by customers and bad weather conditions.• Exposure to the growing Asian and African markets and lackof Destination Marketing Organisations.• Maintaining market share as online travel portals make iteasy for tourists to book direct, thus cutting out the need fora tour operator or travel agent.• Long haul destination making access to South Africaexpensive and difficult.These issues therefore need attention of both the Department ofTourism and South African Tourism. Some of the issues raised bythe private sector were also raised by stakeholders during publichearings. These issues are very important for the sector and shouldbe taken seriously. The Committee recommends that theDepartment investigates issues raised by the private sector andconsider them their marketing campaigns. It must be acknowledgedthat the private sector is the one in the forefront of providing atourist experience in the country and their perspective is based onpractical industry experience. A comprehensive approach inaddressing these issues will however need coordination of allstakeholders, public and private sector, and all spheres ofgovernment. This also means tourism need more budget to addresssome of the pertinent issues.5.3 Concluding comments on service delivery performanceJudging by the increase in the number of arrivals in South Africa,both the Department and South African Tourism performed fairlywell. However, the Committee is concerned about a trend ofcontinuous decline in domestic tourism. The Committeeacknowledges that tourism is a sector that depends on a number ofother government departments and that the national Department ofTourism alone cannot provide holistic service delivery. A morecoordinated approach to tourism development in the country isneeded amongst all the stakeholders.Despite the Committee being generally satisfied with servicedelivery to communities, a number of service delivery issuesemanating from poor coordination of resources amongst the threespheres of government were observed. The Department should useall intergovernmental forums to create synergy amongst all spheresof government and the private sector.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4872 [Tuesday, 29 October 20136. FINANCE AND SERVICE DELIVERY PERFORMANCEASSESSMENTThis section assesses the service delivery performance againstspending patterns for 2012/13 and 2013/14 including efficiency,effectiveness and value for money.Generally, all the service delivery performance of the Departmentand South African Tourism show effectiveness, efficiency and valuefor money. The area where there is no value for money is ExpandedPublic Works Programme. Most of the projects were incomplete butthe entire budget had been spent. In some cases there is poorworkmanship on the structures constructed whereby structures hadto be dismantled and new ones constructed to meet requiredstandards. In other instances, cases of fraud had been reported andforensic investigations are in progress. The Committee supports theDepartment in its endeavours of conducting forensic audits andopening court cases to reduce crime and corruption.7. KEY FINDINGS7.1 Technical issuesSection 40 (1) (e) of the Public Finance management Act of 1999stipulates that the accounting officer for a department, trading entityor constitutional institution must, in the case of a constitutionalinstitution, submit to Parliament that institution’s annual report andfinancial statements, and the Auditor- General’s report on thosestatements, within one month after the accounting officer receivedthe Auditor-General’s audit report. The Department and SouthAfrican Tourism tabled their Annual Reports on time and met thetechnical requirements of submission to Parliament. The Committeenotes with appreciation that the Department and South AfricanTourism have always met this technical requirement over the years.This gave the Committee ample time to study the documents inpreparation for the BRRR.However, there is a challenge with regard to quarterly reporting.The Committee made a concession with the Department that theDepartment will be allowed to present quarterly reports bi-annuallyinstead of quarterly. However, the Department did not honour thatconcession as no reports were presented to the Committee for thewhole financial year under review. This meant that the Committeeonly received service delivery and performance information whenthe Department tabled Annual Reports. Non-reporting by theDepartment at regular intervals undermined the capacity of theCommittee to detect emerging service delivery and performanceissues as they occurred. This posed a challenge during thecompilation of this report as no quarterly information was availablefrom the Department. The Department should revert to the quarterlyANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4873reporting intervals so that all the relevant service deliveryinformation could be available on time.The Committee notes the improvements made by the Departmentand South African Tourism in leadership, supply chain managementand governance from the 2011/12 audit report Improvements. TheCommittee urges the Department and South African Tourism tokeep improving and maintain the clean audit they received in theperiod under review.The quarterly information for 2012/13 and the first and secondquarter for 2013/14 financial years were requested from theNational Treasury in preparation for this report.7.2 Governance and operational issuesThis section deals with general governance and operation concernsand Committee evaluation of how well the Department operates;such as IT, infrastructure matters human resources, disciplinary andgrievance processes and audit action plans.The Auditor-General had no findings with regard to governanceissues in the Department. However, there were material issuesdiscovered by the Committee during the oversight visits. Duringoversight visits allegations were made by project beneficiaries thatsome companies appointed to implement Social ResponsibilityImplementation projects were not South African and did not havecapacity to deliver on these projects. Some of these implementingagents had disappeared without a trace. The way in which projectImplementers are appointed should be reviewed to eliminateassociated risks.There is a concern with regard to the reporting system for SRIprojects. The Project Implementers report electronically but in someinstances work on the ground does not reflect the reportedoutcomes. This has led to Project Implementers being paid forsubstandard work based on milestones reported on the system asopposed to what has been actually delivered on the ground. TheDepartment should provide capacity building for Provincial ProjectMangers on project management and close monitoring of reportsbefore payments are affected. Project aftercare should also bemonitored post project implementation.In regard to South African Tourism, the Committee is concernedthat this Entity did not fully comply with the King Report whichprovides guidelines of good governance in South Africa. The KingReport stipulates that the Chairman of the Board may not be theChairperson of the Remuneration Committee. However, SAT doesnot comply with this as the Chairperson is also the Chairman of theRemuneration Committee. SAT also has the Chairperson of theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4874 [Tuesday, 29 October 2013Board as a Chairperson of the Audit and Risk Committee and this isagainst the King Report recommendations and contravenes goodgovernance principles.The Committee acknowledges that the Department has institutedsome forensic investigations and some cases have been referred tocourts with regard to Implementing Agents and staff members thatwere allegedly involved in fraudulent activities with regard to SRIprojects. However, there is a lack of information on the progress ofthese cases and how much the Department has incurred ininstituting such legal matters.7.3 Service delivery performanceThe Department has set specific service delivery targets in theNational Tourism Sector Strategy (NTSS) and the NationalDevelopment Plan (NDP), particularly, that the tourism sector isexpected to contribute 225 000 new jobs and R499 Billion to theGross Domestic Product by 2020. The performance of theDepartment and South African Tourism in the period under reviewindicates that the Department might not be able to reach the settargets by 2020. The Financial and Fiscal Commission reported thatthe total contribution of tourism to GDP in 2012 was R309 billion(i.e. 11% of GDP) and that if it grows at current rate of 1.52 % p.a.,will fall short by R150 billion of NDP target of R499 billion by 2020.The growth rate should be increased to a higher pace to allow theDepartment to meet its 2020 targets.The Department should conduct regular service deliveryassessments, particularly with regard to tracking the achievement oftargets set in NTSS. The Department also needs to apply therecently developed tourism jobs calculation models to determinehow far the sector has gone in developing targeted jobs figures. Thejob figures need to be reported to the Committee regularly to ensurethat Parliament can track achievement of the set job targets.Despite meeting its full-time-Equivalent jobs in the period underreview the department is not doing well in ensuring that sustainablejobs are created. A major departmental programme that could haveyielded more sustainable permanent jobs in the sector is theExpanded Public Works programme. However, most of theseprojects throughout the country are generally not operational andcreation of permanent jobs has been delayed. Non-completion ofthese projects has delayed inclusive tourism growth, particularly forpreviously disadvantaged communities and thus affects livelihood ofcommunities.The Committee notes with appreciation that the Department wasable to comply with the 30-day period of paying service providers.This assists service providers, particularly small business, with theircash flow and to sustain their businesses.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48757.4 Financial performance including funding proposalsThe overall financial performance indicates that the Departmentwas able to spend 99.84% of its appropriated budget in the yearunder review. This indicates that the Department has capacity tomanage and utilise funds appropriated for service delivery. TheDepartment is however not able to implement all its plannedstrategies to grow tourism in South Africa. The industry is expectedto create 225 000 new jobs and contribute R499 billion to the GrossDomestic Product of the country by 2020. These targets are basedon implementing all the strategies that have been developed toensure value, volume and growth of tourism. If tourism growthcontinues at the current rate the industry will not be able to meet theset targets.The Department therefore requires more funding to fulfil its mandatein the following areas:(i) Funding for pro-poor tourism initiatives in rural areas. This isnecessary for identifying, planning and development of heritage,cultural and recreational tourism attractions in previouslyneglected communities.(ii) Increased marketing presence in emerging markets in Asia andregional Africa to capture market share for South Africa.(iii) Increased domestic product development and marketing tofacilitate travelling by South Africans and increasing contributionof the sector to the GDP.(iv) Cushioning South African Tourism from foreign currencyexposure when they conduct their marketing activities abroad.(v) Initiate targeted interventions to expedite transformation withinthe tourism sector.8. RECOMMENDATIONSThe recommendations made to Parliament, the Minister of Finance andthe Department are categorised into two, namely financial andperformance related matters:8.1 Financial performance including forward fundingrecommendationsThe Committee would like to make the followingrecommendations to the Minister of Finance with regard to thebudget of the Department of Tourism:8.1.1 Increase in Tourism Budget - Successful execution of themandate of the National Department of Tourism depends onbudget that allows permeation into all different aspects of thesector. These include amongst others, planning, transformation,research, development, and marketing. Marketing traditionallyANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4876 [Tuesday, 29 October 2013takes a huge budget for the department. There is also a needfor funding for tourism in rural areas to allow for identification,planning and development for attractions in previouslydisadvantaged communities.It is recommended that the National Treasury reviews thebaseline budget for tourism through a steady increase over theMTEF period and that the Department should quantify theamount required to allow them to effectively execute theirmandate.8.1.2 Recognition of tourism as an export sector - tourism is oneof the biggest foreign income earners for the economy of SouthAfrica. South African Tourism is exposed to foreign currency riskwhen conducting marketing activities abroad. Consequently, SouthAfrican Tourism incurs costs that are not covered in the allocatedbudget and this affects the budget for this entity.It is recommended that National Treasury covers the costs incurredby South African Tourism due to foreign currency exposure as thePublic Finance Management Act only covers personnel costs andnot marketing related costs.8.2 Performance related recommendationsThe following recommendations are made to Parliament and theDepartment with regard to service delivery and performance ofthe sector:8.2.1 Tourism statistics - South Africa enjoyed an increase of10.2 percent in tourist arrivals in 2012. The committee notesthat this performance is far above the global average of4 percent. Nevertheless, as much as the substantial increase isapplauded, more work still needs to be done to consolidatetourist data collection methodology to ensure reliable andimpeccable tourist statistics in South Africa. It is recommendedthat the Department, South African Tourism and StatisticsSouth Africa:(i)(ii)develop mechanisms, such as a Tourism SatelliteAccount, to record proper tourism statistics as opposed tototal arrivals in South Africa.facilitate the establishment of the Tourism EconomicAccounts for provinces and municipalities to allow them tohave destination specific statistics and quantify the valueand volume for tourism at a local level. Availability of localstatistics will allow municipal councils to prioritise tourismand provide adequate budget.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48778.2.2 Need to strengthen marketing - there has been a growth fromAfrica land markets with 8.2 percent achieved in the periodunder review. A good growth in tourist arrivals from African airmarkets was also experienced with tourist arrivals at 14.2percent. This growth was evident from all markets in the regionand the marketing endeavours in Africa are starting to beargood results. This demands a more consolidated marketingstrategy in Africa to drive more growth in numbers. Moreresources are therefore required to continue penetrating theAfrican markets. Marketing also needs to be consolidated inother emerging markets such as BRICS countries, with specialattention to China which is presentation a promising growthtrajectory. Marketing presence must also be sustained in theestablished core markets to maintain good arrivals from thesedestinations.It is recommended that South African Tourism open moreoffices in the African market and emerging markets in Asia toensure more visibility in those markets and increase arrivalsfrom the region.8.2.3 Social Responsibility Implementation (SRI) – TheDepartment needs to review the implementation methodologyfor SRI projects to ensure accountability, efficacy, effectivenessand value for money.The following recommendations are made in relation to SRIProjects:(i) A turn-around strategy for all SRI projects which are notoperational needs to be developed before the end of the2013/14 financial year.(ii) The Department of Public Works need to look at reviewingthe EPWP programme and a new implementation modelneeds to be developed, including revising remunerationand contract management of project implementers.(iii) Treasury and Department of Public Works need to look atassessing whether the EPWP programme is still serving itsintended purpose and also allow criteria to be customisedfor specific sectors.(iv) SRI projects should be directed at sustainable job creationand skills development, particularly in rural areas.8.2.4 Integrated tourism planning - South Africa still experienceschallenges with regard coordinated tourism planning at aprovincial and municipal level. This is happening despite theprovisions of the National Tourism Sector Strategy thatrecommends tourism institutional arrangements at all spheresof government. More effort needs to paid to coordinated tourismplanning by all spheres of government. This necessitates strongmonitoring of the implementation of the National Tourism SectorStrategy by various spheres of government.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4878 [Tuesday, 29 October 2013It is recommended that the Department assists provinces andmunicipalities in aligning tourism plans at all spheres ofgovernment.8.2.5 Changing global tourism markets - There is a shift fromestablished to emerging markets in tourism segmentation forSouth Africa with a marked increase in arrivals from the easterncountries. The committee notes that China, for example, hasmoved to the fourth position as one of the core markets of thecountry. The committee has observed that these new markets,especially China, come with new demands on the tourismindustry and South Africa has not been adequately prepared forthese new demands.It is recommended that:(i) South African Tourism intensifies marketing presence inthe emerging markets such as China to get more marketshare than our competitors.(ii) South African Tourism conducts market analysis of the newmarkets and provides market intelligence to the privatesector to ensure the tourism industry is ready to receiveand service these markets.8.2.6 Tourist Airlift - The committee notes with concern thechallenges of airlift in South Africa. The Department needs towork with other stakeholders to ensure that airlift barriers areeliminated at a national, regional and international level. TheFollowing recommendations are made:8.2.6.1 International AirliftThe Committee notes the loss of airlift capacity in some ofSouth Africa’s core markets, rising oil prices, and the unilateralapproach taken by the European Union in implementation ofthe carbon emissions trading scheme. However, thecommittee also notes the new regional airlift capacity providedby new routes that have been established in African countries.It is observed with concern that there is a continued the slowpace and resistance of some African states in ratifying theYamoussoukro Declaration in opening African skies andhaving seamless airlift capability in the region.It is recommended that:(i) An integrated approach should be established betweenthe National Department of Tourism and the Departmentof Transport in tackling airlift issues.(ii) Parliament to interact with the African Union in influencingother African States to ratify the YamoussoukroDeclaration.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4879(iii) Parliament engages the European Union with regard tothe methodology used to implement the carbon emissionstrading scheme to ensure tourists using the nationalcarrier do not incur exorbitant airline ticket prices.(iv) The Department should work closely with the Departmentof Home Affairs to facilitate issuing of visas to potentialtourists and to continue working on a univisa regime inthe country. However, this should not comprise bordercontrol and security of the country.(v) The Department should engage the BRICS countries inpromoting the South-South air connectivity to boosttourism in the emerging markets.8.2.6.2 Domestic AirliftThe Committee noted lack of airlift and poor servicing byairlines of some towns which are tourist destinations within thecountry.It is recommended that:(i) The Department engages low cost airlines to service allpotential tourism destinations and towns in South Africa.(ii) South Africa Tourism works with airlines in developingdomestic tour packages to inculcate the culture of travelamongst South Africans.(iii) Department of Tourism works closely with theDepartment of Transport to incorporate tourism issues inthe Airlift Strategy.8.2.7 Domestic tourism - the committee notes with concern that thenumber of domestic trips taken declined by 3.8% from26.4 million in 2011 to 25,4 million in 2012. The averagenumber of trips taken by a South African adult remainedconstant at 2.1 trips however the number of travellersdecreased from 13,9 million in 2011 to 12,5 million in 2012. Asa result of the decrease in travellers, despite the constantnumber of trips taken, overall trips decreased in 2012. This callsfor a more focussed domestic marketing campaign.It is recommended that the National Department of Tourism incollaboration with provincial destination marketing organisations(DMOs) intensify domestic marketing campaigns on the groundand ensure that South Africans travel within their own country.8.2.8 Effectiveness of the grading scheme - there has been a vastimprovement with regard to acceptance and uptake of the newgrading system by the private sector. However, the emergingtourism enterprises still find it expensive to undertake grading. Itwas also observed that the grading system has embraced byANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4880 [Tuesday, 29 October 2013social media platform such as Trip Advisor which is a positivecontribution to marketing endeavours. The exclusion ofemerging tourism enterprises in the grading scheme due tounaffordable prices means the emerging enterprises are losingleverage on extended social media marketing.It is recommended that the Grading Council develops incentivesto entice more properties to enroll in the scheme and ensurethat emerging tourism enterprises also benefit from the gradingscheme.8.2.9 Community-Based tourism development - participation oflocal communities in the tourism industry remains minimal.Community-based tourism endeavours in most communitieshave failed due to poor implementation models. The publicprivatepartnership (PPP) tourism toolkit has not been fullyactualized in the industry. The National Department of Tourism,municipalities, and other public entities need to enter intomeaningful agreements and partnerships in activating the PPPTourism Toolkit. The National Treasury has indicatedwillingness to work with the National Department of Tourism inpiloting some PPP tourism projects and the full extent of thisopportunity must be explored.It is recommended that the Department engages ProtectedAreas Management Authorities as custodians of some valuabletourism assets that could be utilized in the PPP projects topartner with communities in developing community-basedtourism projects.8.2.10 Transformation - the Committee observed with concern thattransformation in the tourism industry is not taking place at anacceptable rate. The committee acknowledges the gains madein transformation with regard to the Tourism BEE Scorecardthat has not translated into success that is visible in the sector.However, transformation at that level has not translated intomeaningful and visible transformation in the tourism industry.It is recommended that the National Treasury increases thebudget of the Department to allow them to develop innovativeways of expediting transformation of the sector.8.2.11 Indaba as premier African consumer show - effectiveness ofIndaba as a premier African tourism show remains a concern.Issues about the value for money, price of the stands, andtransactions have been raised by stakeholders in the sector.The lack of a long term strategy for the events and the size ofthe venue also remain critical issues. Observations have beenalso made that some African countries are also developing theirown tourism trade shows similar to Indaba and this is creatingcompetition for South Africa.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4881It is recommended that South African Tourism develops a longterm strategy for Indaba and innovative ways in growing Indabaand adapting it to the world standards and dynamicinternational shows of similar nature.8.2.12 Unresolved Land Reform Claims - the prolonged land reformprocesses, especially around Protected Areas is affectingtourism development and depriving local communities’meaningful participation in the mainstream tourism industry.It is recommended that the Department develops a database ofall projects affected by land reform and work closely with theLand Claims Commission to develop ways of sustainingaffected tourism businesses.8.2.13 Tourism Funds - the Tourism Incentive Scheme that wastransferred from the Department of Trade and Industry to theNational Department of Tourism has been on hold and this hascaused some delays in assisting tourism SMMEs with theirbusiness ventures.It is recommended that the Department expedites the processof disbursing funds to qualifying emerging tourism enterprises.8.2.14 Leveraging on SIPS - the Committee noted that tourism doesnot have direct benefit from the Special Infrastructure Projects(SIPS) championed by the Presidential InfrastructureCoordination Commission (PICC) as there are no tourismspecific projects included in the SIPS.It is recommended that the Department facilitates collaborationsamongst various government departments and state entities toleverage the indirect benefits from a wide array of the SpecialInfrastructure Projects with tourism potential.8.2.15 Assessment of targets – the Financial and Fiscal Commissionindicated the Department will fall short of meeting the 2020targets as enshrined in the National Tourism Sector Strategy.It is recommended that the Department works closely with theFinancial Fiscal Commission on tracking the performance of theDepartment against the set targets and give quarterly reports tothe Committee.8.2.16 Provision of Bulk Infrastructure – the Committee noted thatthe lack of bulk infrastructure such as electricity, water androads in some areas in the country stifles tourism growth.It is recommended that the Department of Tourism engagesrelevant authorities responsible for providing bulk infrastructurewhere potential tourism projects are planned.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4882 [Tuesday, 29 October 20138.2.17 Destination Management Organisations – some destinationsdo not have functional Destination Management Organisations.Some have closed down whilst others are struggling. Thiscreates a marketing vacuum at a local level.It is recommended that the South African Tourism works closelywith destinations to facilitate establishment of functionalDestination Management Organisation to align the national andlocal marketing plans and campaigns.8.2.18 Alignment with the National Development Plan (NDP)The National Development Plan (NDP) recognises tourism asone of the main drivers of country’s economy and job creation.The plan envisages the promotion of South Africa as a majortourist destination, with unique features, in order to boost touristnumbers and enable tourism to contribute to sustainableeconomic growth and poverty reduction. Tourism is seen as asector which is an important driver of growth and povertyreduction. Tourism sector targets for 2020 are creation of225 000 jobs and total direct and indirect contribution to GDP ofR499 billion. Attainment of these targets will ensure that SouthAfrica occupies a space in the global arena as one of the top 20tourism destinations.It is recommended that all spheres of government should aligntheir tourism activities and budgets to the National Developmentplan to ensure that the sector achieves the set targets.9. APPRECIATIONThe Committee would like to thank all the internal and externalstakeholders that participated in one way or another in making it possible tocompile report. Special appreciation goes to the offices of the Speaker andthe House Chairperson for their continued support in the work of theCommittee, members of the Committee for their dedication and ensuringgrowth in the sector, the Minister of Tourism for his accountability to theCommittee and the senior Departmental officials for always being availablewhen the Committee wants to exercise oversight on various aspects of thework of the Department, and the office of the Auditor-General for alwaysco-operating with the Committee.Report to be considered.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48835. Report of the Portfolio Committee on Basic Education on anoversight visit to the Western Cape Education Department (WCED),dated 29 October 2013The Portfolio Committee on Basic Education, having undertaken anoversight visit to the Western Cape Education Department (WCED) on20 September 2013, reports as follows:1. Introduction1.1 A delegation of the Portfolio Committee on Basic Educationconducted an oversight visit to the Western Cape EducationDepartment (WCED) on 20 September 2013.1.2 The purpose of the oversight visit was to assess the state ofreadiness of the Province for the National Senior Certificate(NSC) examination for 2013. This included assessing thestate of security systems for the printing, distribution andstorage of examination question papers as well asprocedures in place to conduct the examinations. TheCommittee also aimed to provide support to departmentalteams and to ensure the delivery of successful and credibleexaminations, with no or minimal irregularities. In pursuit ofthe oversight programme objectives, the delegationconducted briefing sessions with the Office of the Head ofDepartment, District and Senior Curriculum andExaminations Officials as well as organised labour. Thedelegation also undertook a site tour of the printing,packaging, distribution and storage facilities for theexamination question papers in order to obtain first handknowledge of the state of security at these facilities.1.3 This report provides a summary of the key issues thatemerged from the interaction with officials of the ProvincialEducation Department and organised labour, and thePortfolio Committee’s deliberations, observations andrecommendations.2. Delegations2.1 National Portfolio Committee on Basic Education: Hon HH Malgas MP (ANC) (Chairperson), Hon N Gina MP (ANC)(Whip), Hon Z S Makhubele MP (ANC), Hon D Smiles MP(DA), Mr D Bandi (Content Advisor), Mr J Ngcobo(Researcher), Mr L A Brown (Committee Secretary), Ms RAzzakani (Parliament Communications) and Ms S Ntabeni(Committee Assistant).2.2 National Department of Basic Education (DBE): Dr RPoliah – Chief Director.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4884 [Tuesday, 29 October 20132.3 Western Cape Education Department (WCED): MEC DGrant – MEC for Education in the Western Cape, Mr BSchreuder – Deputy Director-General, Ms T Singh – ChiefDirector, Ms Z Modimakwane – Director and Mr A Clausen –Director.2.4 South African Democratic Teachers Union (SADTU): MsS Kwazi and Ms F Solomons.2.5 National Professional Teachers Organisation of SouthAfrica (NAPTOSA): Mr D Marshall and Ms HSieborge.3. An Overview of the national examination systemThe national examination system in South Africa is managed by theDepartment of Basic Education (DBE) supported by the nine ProvincialEducation Departments (PEDs). National examinations are conducted inaccordance with the Regulations Pertaining to the Conduct, Managementand Administration of the National Senior Certificate. The DBE monitors theimplementation of the regulations, while the heads of examinations in theprovinces are responsible for their implementation. The DBE setsexamination question papers for the National Senior Certificate (NSC)examinations. Printing, packaging and distribution of the question papers toexamination centres is the responsibility of the Provincial EducationDepartments (PEDs). The PEDs have further operational responsibilitieswhich include the supervision of the writing of the examinations and thecapturing of marks on the Integrated Examination Computer System(IECS).4. Input by the Western Cape Education Department (WCED)4.1 Issues from the WCED’s report to the DBE on Preparations of theNSC examinationsMr B Schreuder, Deputy Director-General, referred the Committee to thereport prepared for the DBE highlighting the Province’s preparations of theNSC examination in respect of planning, quality assurance of SchoolBased Assessment (SBA) tasks, support for underperforming schools,interventions and moderation,In terms of planning, the Curriculum Planners and Curriculum Advisers mettwice a year (in the first and fourth terms) to reflect on and plan for learnerand teacher support. Planning started at the end of the fourth term of theprevious year to reflect on the moderation process, share best practice andgood School Based Assessment (SBA) exemplars. The meeting at thebeginning of the first term was to analyse and discuss the NSC results ofthe previous year and to plan for support to underperforming schools andschools at risk. Curriculum Advisers then met with teachers in clustergroups in their district during the first term to discuss the planning for theANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4885year and to set, mark and moderate SBA tasks. Exemplars of best practicewere shared with teachers.In respect of the quality assurance of the SBA tasks, the CurriculumAdvisors (CAs) trained teachers to set, assess and moderate tasks - withexemplar tasks set for underperforming schools to assist teachers indeveloping their own SBA tasks. The CAs drew a sample of schools tomoderate the SBA tasks before they were given to learners. Themoderation of SBA tasks occurred throughout the year. Forunderperforming schools, the districts developed plans to support theseschools throughout the year through school visits, teacher developmentworkshops, winter/spring schools and extra classes. All schools thatachieved below 60 percent and those at risk with marks between60 percent and 70 percent were closely monitored with regularinterventions and special programmes. Some of the interventions includedthe following:• Beaming of Telematics lessons to 146 schools in the seven largeenrolment subjects: Mathematics, Physical Sciences, Life Sciences,Geography, Accounting, English Home Language (HL) andAfrikaans HL.• Lesson segments in Geography, Mathematics and PhysicalSciences were also available on the social network YOUTUBE.• Learners were provided with study guides.• All schools were provided with a CD containing exemplar questionsand answers.• Every learner in Grade 12 was provided with a printed tabloidformat of Questions & Answers in both English and Afrikaanscovering the following subjects: Mathematics, MathematicalLiteracy, Physical Sciences, Life Sciences, Accounting and EnglishFirst Additional Language (FAL).• Extra classes were conducted during the June and July holidays inall districts.• “Tips for Success” booklets were developed and given to eachGrade 12 learner.• A Matric Support Day was conducted in two sessions (one rural andone urban). Fourteen schools were invited and 1700 learners, intotal, attended. The following subjects were offered; Mathematics,Physical Sciences, Life Sciences, Geography, Accounting, EnglishHL, Afrikaans HL and Business Studies.• Advice for learners on how to approach the examinations in subjectcontext was broadcast on community radio stations.• Learners were taken on subject revision camps over weekends andschool vacations.• Learning support material was uploaded on the CurriculumDevelopment website as well as on the social media platform ofYouTube.• Learners attended live stage performances of set-works in the threepredominant languages of the province.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4886 [Tuesday, 29 October 2013The WCED supplied a broad overview of the progress in respect of theimplementation of the Mathematics, Science and Technology (MST) Pillars:• Pillar 1 – Learner participation and success rate• Pillar 2 – Teacher demand, supply, utilisation, development andsupport• Pillar 3 – Partnerships• Pillar 4 – Provision of resources.4.2 National Senior Certificate (NSC) Examination Readiness for 2013The WCED’s presentation to the Committee on the National SeniorCertificate (NSC) Examination Readiness for 2013 was as follows:4.2.1 Registration: The Western Cape had a total of 59 594candidates (48 768 full-time and 10 826 part-time) whowould sit for the 2013 National Senior Certificate (NSC)examinations. This was an increase of more than 3 200 fulltimecandidates from the previous year. The WCED had twopreliminary schedules submitted to schools to check thecorrectness of enrollments. They had a total of 434examination centres registered – with 370 public schoolsand 64 independent schools. The Province saw an increasein the figures for Mathematics (17 066) and PhysicalSciences (11 692).4.2.2 Receipt of Question Papers from the DBE: Two seniorofficials from the WCED collected Question Papers from theDepartment of Basic Education (DBE). The policy of theDBE was that provinces needed to check papers and reportany errors. A delay by the DBE in making question papersavailable had impacted on the provincial printing plan.4.2.3 The Printing of NSC Examination Question Papers: Atleast 106 National Question Papers were administered bythe WCED with 23 million images to be printed. Currently,13 million images had already been printed. The printing andsealing would be concluded by 2 November 2013.4.2.4 Packing and Distribution of Question Papers: The WCEDpacked examination question papers per examinationsession per day per school. The papers were sealed inboxes that were clearly marked per session per school andper subject. There was a checklist for each consignmentgenerated for checking purposes by schools and districts. Atotal of six (6) weekly consignments were delivered toschools.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48874.2.5 Storage of Question Papers at Schools: The WCED wasworking to ensure a much shorter storage time of questionpapers at schools than in previous years which totaled fivedays. All bags remained sealed until the day of theexamination – with constant monitoring by Districts andHead Office. During the examination period, only theprincipal of the school managed the safe. School principalswere aware of the consequences in terms of any breaches.All school principals and invigilators were trained annually onsecurity aspects to be observed.4.2.6 Delivery of Question Papers (Pilot): The WCEDinvestigated a new and more secure packaging systemthrough the use of special containers with a programmablelock to be approved for future use. The special containerswould only be opened one hour before the start of anexamination. Only one unique code for an examinationsession would be used. The code would be provided to theprincipal, district directors and examination coordinators viaa Short-Message-System (SMS) on a daily basis. A pilotwould be run with one or two subjects to be written inNovember 2013.4.2.7 Use of Dedicated Courier Services: The WCED made useof a dedicated delivery service to 343 examination centresby seasoned dedicated drivers. All couriers were fitted with atracking system. The WCED would monitor all deliveries viaa computerised system. The courier service provided apersonalised service to schools with electronic dailycommunication with examination officials. The Head Officemonitored the premises while district officials monitored thedelivery for each consignment.4.2.8 Appointment of Markers: Marking would commence on 4December 2013. The WCED introduced the competencybased assessment for teachers who wished to mark (10subjects). The competency test had shown that marking hadimproved and that there was a reduction in the number ofremark applications.4.2.9 Marking: The WCED would have one central markingcentre for the marking of the 2013 NSC examinations. Themarking period was 4 – 13 December 2013 with specialarrangements for subjects with a shortage of markers. Thenumber of appointed marking official were as follows:ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4888 [Tuesday, 29 October 2013Number of MarkingOfficialsChief Marker 66Internal Moderators 66Deputy Chief Markers 42Senior Markers 415Markers 2 735TOTAL 3 3244.2.10 Invigilation: The WCED made use of a system of50 percent educators and 50 percent members of thecommunity. The Chief Invigilator was School ManagementTeam (SMT) member of the school and was assisted by asenior invigilator appointed by the community. The seniorinvigilator took charge of the Supplementary examination(February/March) and Senior Certificate Examination(May/June). Principals were appointed as Chief ExaminationOfficers and took full responsibility for the management ofthe examinations.4.2.11 Training of Invigilators: Invigilators were trained annuallyby the WCED during the third term. In 2013, 19 trainingsessions were set-up throughout the province across theeight districts. All principals, chief and senior invigilatorswere trained with training of invigilators being cascaded toassistant invigilators by principals and SMT members of theschool. Support was provided by district officials andprovincial officials where necessary.4.2.12 Monitoring of the Writing: The monitoring of the conduct ofthe examinations was conducted by the WCED and Districts.Daily monitoring reports were submitted to the DBE. Ananalysis of the irregularities database was conducted toidentify centres at risk – these centres were monitoredregularly. The WCED paid special attention to independentschools that wrote the Grade 12 examination for the firsttime.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48894.2.13 Moderation of School-Based Assessment (SBA): Themoderation of SBA was dealt with via the curriculum butmanaged and co-ordinated by the Directorate: AssessmentManagement. The Department focussed on schools withpoor quality SBA tasks in terms of DBE and Umalusi reports.The SBA of independent schools was moderated by SeniorCurriculum planners. Curriculum advisors worked directlywith schools and SBA was moderated on an ongoing basis.The provincial moderation of SBA for Mathematics, PhysicalSciences, Accounting, Life Sciences, Economics, Geographyand Life Orientation was conducted by Senior CurriculumPlanners and Curriculum Advisers on 17 and 18 September2013. The provincial moderation for the Life Orientation CATwould be held between 25 and 27 September 2013.The DBE would conduct moderation for Accounting, LifeOrientation, History, Mathematics and Physical Sciencesfrom 26 to 30 September 2013.Umalusi had informed the WCED that they would beverifying the moderation of the DBE in the following subjects:Accounting, History, Physical Sciences and Life Orientation.They would also moderate an independent sample oflearner evidence from two schools in each district inBusiness Studies on 01 and 02 October 2013.4.2.14 Common Assessment Task (CAT) for Life Orientation:The CAT for Life Orientation was written on 04 September2013. The CAT was a nationally set assessment whichreplaced Task 4 in the Grade 12 Life Orientation programmeof assessment. The question papers were printed, packedand distributed to the schools by the WCED. All schoolswrote the assessment on 04 September 2013 and noirregularities or shortages of question papers were reported.National marking guideline discussions were conducted on09 and 10 September 2013. The provincial markingguideline discussion with the Senior Curriculum Planner anddistrict curriculum advisers were conducted on11 September 2013. Schools were provided with the finalmarking guidelines on 13 September 2013.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4890 [Tuesday, 29 October 20134.2.15 Safety and Security: The WCED had ongoing engagementswith Eskom and Municipal providers of electricity forthe examination period. The Department also had directemergency contact with the Department of CommunitySafety in the Province. Engagements with SAPS encompassedthe following:• Direct link to OPS Centre and Disaster management• Fraud Unit• Detectives Unit• Visible policing• Riot control• Defence ForceThe WCED also had its own Safe Schools Programme4.2.16 Results and Certification: The target date for the releaseof the results is 7 January 2014. All promotion scheduleswould be verified and signed off by all districts. TheDepartment would conduct special checking in Decemberbefore the release of results by schools. All promotion datawas captured on the Centralised Educational ManagementInformation System (CEMIS). Recording and reportingprogrammes had been developed for the Foundation Phaseand Senior Phase in line with CAPS with the Grade 9electronic tool for recording and reporting as well as Grade10 and 11 mark sheets developed in line with CAPS.4.2.17 Important Dates were highlighted as follows:• 04 December 2013 - Commencement of marking• 13 December 2013 - Conclusion of marking• 16 December - Final data capturing anduploading of marks• 19 December - NEIC meeting• 21-23 December - Standardisation meeting• 31 December - Umalusi approval meeting• 07 January 2014 - Release of NSC results• 14 January 2014 - WCED NSC AwardsCeremony• 21 January 2014 - Closing date for applicationsfor remarking, rechecks andsupplementary examination• 17 February - 25 March 2014-NSCSupplementary examination(to be confirmed)ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48915. Input by the National Department of Basic Education (DBE)Dr R Poliah, Chief Director of Examinations, welcomed the engagementswith the Western Cape Education Department on examination readiness.He reiterated that the National Department of Basic Education had a closeworking relationship with the Western Cape Education Department. Thiswas maintained through the National Examination and AssessmentCommittee. This forum allowed for discussion of all issues of mutualinterest. For the DBE to produce error-free question papers, various levelsof editing and quality control were introduced. However, this still resulted inpapers with minor errors. For this reason, the DBE was employingadditional professionals to quality check papers. This had resulted in adelay in making papers available to provinces. The Department was awareof the pilot in respect of the delivery of papers by the WCED. The DBEwould monitor this process and look at the best practice for the delivery ofpapers across the country. Dr Poliah reiterated that the WCED was one ofthe leaders in maintaining a good system through the analysis andavailability of data to schools. The WCED was very responsive to anysuggestions by the DBE.6. Engagements with Organised Labour (SADTU and NAPTOSA)In general, both SADTU and NAPTOSA were in agreement with most ofthe issues raised by the WCED. The unions enjoyed a good workingrelationship and collaboration with the Department in the Province. Therewere very few challenges faced during the 2012 NSC examinations asthere was regular interaction with the WCED through the examinationboard that was in existence. Unions generally trusted the WCED toadminister the examinations in a diligent and effective manner. However, in2013 the examination board was disbanded, which left unions uninformedas to developments in respect of examination readiness. Unions wereuncertain of the reasons for the disbanding of the examination board. Todate, unions had no reports on the state of readiness of the WCED for the2013 NSC examinations. The unions requested that the following beaddressed as a matter of urgency:• The establishment of a multi-lateral discussion forum while theWCED worked on an alternative to the redundant examinationsboard.• The improvement of safety and security at schools, especiallywhere gangsterism was prevalent.• Clarity on the issues around the pilot being run for the delivery ofquestion papers. What was the rationale for changing from the useof couriers? Whether this was a safer option.• Clear and unambiguous policy directives in respect of irregularitiesrelating to the use of cell phones• SADTU still had challenges in respect of the competency test formarkers, - though they participated in the nominations for themarking processes.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4892 [Tuesday, 29 October 2013Both unions were of the view that, apart from a few obstacles, the provincewas fully prepared for the NSC examinations for 2013.7. Site tour of the storage facilitiesApart from the engagements with the WCED and organised labour, thePortfolio Committee also undertook in-loco site visits to the storage,packaging and distribution facilities of the Department. The PortfolioCommittee was very impressed with the high standards and the heightenedsecurity at these facilities. Members of the Committee were able to tour thestorage facilities, loading/off-loading garages and the CCTV camera room.The delegation was shown the different storage facilities which housed thequestion papers and answer sheets and security measures in place. Theoperations room which housed the surveillance monitor (CCTV) capturedall footage from the surveillance cameras stationed around the facility. Allquestion papers were distributed from this central point to all schools.The delegation was also taken on a tour of the printing works wherequestion papers were printed for distribution to the main storage facility.Members of the Portfolio Committee gained first-hand experience of howthe questions papers were printed, packaged and made ready fordistribution. Members were able to tour the factory floor, control room andloading bays at the printing facility.8. Committee ObservationsThe Committee noted the following key issues and concerns regarding thestate of examination readiness in the Western Cape:• The Committee commended the Western Cape EducationDepartment for the sound working relationship and collaborationwith the National Department of Basic Education.• The Committee was interested to know how the WCED managedthe papers for both public and independent schools since mostindependent schools opted to write the NSC examinations.• There was concern around the arrangements where there was ashortage of markers for certain subjects.• The Committee was assured that the training for principals andinvigilators was sufficient.• The Committee was interested to know how the merging andclosing of schools in the province had affected learners – andwhether these learners received any additional support from theDepartment in respect of examination readiness. The WCEDhighlighted that the majority of schools involved in the mergers wereprimary schools, which were not participating in the NSCexaminationsANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4893• Of equal concern was the impact of gangsterism on schools in theaffected areas and how the Department was able to deal with thesituation. It was highlighted that broader programmes andinterventions were introduced to deal with gangsterism whichincluded improved policing to ensure safe access in and out of theaffected areas.It was important that the WCED consider the union’s request for there-instatement of the examination board, and in the interim, theestablishment of a multi-lateral discussion forum between theunions, the WCED and other relevant stakeholders, that willconsider issues related to examinations.9. ConclusionThe oversight visit to the Western Cape Education Department providedthe Portfolio Committee with an opportunity to assess the state ofreadiness of the province in respect of the National Senior Certificate(NSC) Examination readiness for 2013. The Portfolio Committee wassatisfied with the preparations made by the WCED in respect of the 2013NSC examinations. It was further noted that the Province has developedmechanisms to deal with challenges that may arise during the examinationperiod.10. RecommendationsThe Portfolio Committee on Basic Education, having conducted anoversight visit to the Western Cape Education Department, and consideredthe issues that were raised, requests that the Minister of Basic Educationensures that the following recommendation is considered:That the Western Cape Education Department consider looking into the reestablishmentof the Examination Board, or a multi-lateral discussion forumfor Unions, the WCED and other relevant stakeholders which considerissues of examinations.Report to be considered for adoption.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4894 [Tuesday, 29 October 20136. Report of the Portfolio Committee on Water and EnvironmentalAffairs on the Annex VI to the Protocol on the EnvironmentalProtection to the Antarctic Treaty, dated 29 October 2013.The Portfolio Committee on Water and Environmental Affairs (the PortfolioCommittee), having considered the request for approval by Parliament ofthe Annex VI to the Protocol on the Environmental Protection to theAntarctic Treaty (Annex VI), referred to the Portfolio Committee,recommends that the House, in terms of section 231 (2) of the Constitutionof the Republic of South Africa of 1996, approve the said Annex VI.The Portfolio Committee further notes that Annex VI creates a frameworkfor Parties to require operators in the Antarctic Treaty area to develop andimplement contingency plans and preventative measures to reduce the riskof environmental emergencies and to respond to environmental incidentswhen they occur. In addition, if an operator does not respond to a particularenvironmental emergency, any party is encouraged to take action andcreates a mechanism for that party to recover the costs of response actioneither from the operator or an international fund which will be established.The Portfolio Committee also notes the requirement to amend the AntarcticTreaties Act, 1996 (No.60 of 1996), to accommodate Annex VI, in order forit to become part of South African domestic law. The Portfolio Committee,however, expressed concern as to the structure of the Act and theimportance of only incorporating the operative and relevant aspects of theTreaty and the Annex into the Act, as opposed to the entire text of theTreaty, as the present Act reads. The Portfolio Committee, therefore,resolves to recommend that after ratification of Annex VI by Parliament, theDepartment of Environmental Affairs (the Department) will amend theAntarctic Treaties Act, draft appropriate Regulations to the Act and processthese amendments through Parliament accordingly. The Department mustreport to Parliament on progress in this matter by the end of January 2014.Report to be considered.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48957. Report of the Portfolio Committee on Water and EnvironmentalAffairs on the Benguela Current Convention on the EnvironmentalProtection and Conservation of Benguela Current Large MarineEcosystem, dated 29 October 2013.The Portfolio Committee on Water and Environmental Affairs (the PortfolioCommittee), having considered the request for approval by Parliament ofthe Benguela Current Convention on the Environmental Protection andConservation of Benguela Current Large Marine Ecosystem, referred to thePortfolio Committee, recommends that the House, in terms of section231(2) of the Constitution of the Republic of South Africa of 1996, approvethe said Convention.Report to be considered.8. Report of the Portfolio Committee on Water andEnvironmental Affairs on the National EnvironmentalManagement: Integrated Coastal Management Amendment Bill2013 [B8- 2013] [National Assembly – section 76], dated29 October 2013.The Portfolio Committee on Water and Environmental Affairs (thePortfolio Committee) having deliberated and considered the subjectmatter of the National Environmental Management: IntegratedCoastal Management Amendment Bill [B 8 - 2013] (NationalAssembly – section 76) (Amendment Bill), referred to the PortfolioCommittee and classified by the Joint Tagging Mechanism (JTM) asa section 76 Bill, agrees with the classification as a section 76 Billand reports the Amendment Bill with amendments [B 8A – 2013].ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4896 [Tuesday, 29 October 2013The Portfolio Committee processed the Amendment Bill, by receivingbriefings from the Department of Environmental Affairs (theDepartment), calling for written submissions from the public, hostingpublic hearings for oral submissions by the public and the PortfolioCommittee engaged in deliberations on the Amendment Bill.The Portfolio Committee, mindful of the need:(a) for development of our country;(b) to effectively track and improve environmental managementsystems; and(c) to monitor the environmental sustainability of development,particularly relating to coastal public property, which is held intrust for the benefit of all citizens and the importance ofmanaging development activities in the sensitive anddynamic coastal zone area, particularly within the sea,decided to support the following amendments:Decided to support the following amendments:1. Amendment of definitionsCertain definitions are amended to clarify their meanings andusage. These include technical improvements to definitionssuch as "estuary", "high water-mark", and "land unit". It isproposed that the scope of "coastal waters" be expanded byincluding the exclusive economic zone (EEZ) and thecontinental shelf. New definitions are proposed for insertion asa consequence of proposed amendments to the Act, e.g. thedefinitions for “access fee”, "reclamation" “harbour” and "port".2 Section 2: Insertion of coastal protection zone in theobjects clauseIt emerged from the public comments that the coastalprotection zone was erroneously omitted from the objects ofthe Amendment Bill.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48973 Section 6: Insertion of new subsection 4 to clarifyownership of organs of stateThis clause clarifies the ownership and status of assets ownedby organs of state, like Transnet, within coastal public propertyand that they can continue to enjoy the use and control of thesea space within ports and harbours.4 Amendment of section 7: Coastal public propertyThe Act creates the notion of “coastal public property” (CPP),which comprises the territorial waters of South Africa up to thehigh-water mark and includes admiralty reserves. In otherwords, the beaches, sea and sea-bed which occur below thehigh-water mark form part of coastal public property. Section11 of the Act (which is not yet in operation) vests ownership ofthese natural assets in the citizens to be held in trust by theState. Section 65 (also not yet in operation) prohibitsoccupation of CPP without a lease from the Minister of theDepartment of Environmental Affairs (the Minister). CoastalPublic Property cannot be sold or leased. The Act did notclearly specify whether the infrastructure below the highwater-mark also formed part of coastal public property and asa result, organs of state, such as Transnet, felt uncertainabout the status of their assets within ports. Transnet, forexample, leases out spaces on jetties which extend into thesea in order to fund port operations. They are concerned thatthe Act may be interpreted as divesting Transnet of itsownership and right to lease these jetties. In addition, they areconcerned that the 20-year limitation on leases in section 65limits their ability to secure finances through long-term leases.Clause 4 seeks to clarify that coastal public property does notinclude assets or infrastructure above or below the high watermark.Hence the Act would not negatively impact on theirleases as they would not be subject to the ownership andlease restrictions in sections 11 and 65.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4898 [Tuesday, 29 October 20135 Insertion of new section 7A: The purpose of the coastalpublic propertyPublic comments revealed that whilst the purpose of thecoastal protection zone is fully covered in section 17 of theAct, there is no similar clause in respect of coastal publicproperty. A new section is therefore proposed.6 Insertion of new section 7B: Reclamation for purposes ofstate infrastructureSection 27(6) of the Act briefly addresses reclamation. Thesection was inserted late during the parliamentary process toaddress ad hoc concerns that arose when the PortfolioCommittee was considering the Act. It was inappropriatelyplaced and the current provision in section 27(6) isinadequate. The Amendment Bill proposes an insertion of twonew comprehensive clauses in a more appropriate place inthe Act. In addition, a definition for “reclamation” was insertedunder clause 1.This clause deals with the process to befollowed in respect of reclamation for state infrastructurepurposes.7 Insertion of new section 7C: Reclamation for purposesother than for state infrastructureThis clause sets out the process for all reclamation other thanfor state infrastructures purposes. The main difference in theprocess is that these types of reclamation can only beapproved by the Minister with the pre-approval ratification ofParliament and once reclaimed, such land becomes coastalpublic property which is subject to a lease with the Minister.8 Amendment to section 8: Consequential amendmentThis proposed amendment is a consequential amendment tothe insertion of section 6A – the purpose of coastal publicproperty.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 48999 Deletion of section 10 relating to the designation of stateland for certain purposesThis clause contains very similar provisions to section 8 of theAct and appears to achieve the same purpose and wascreating confusion. It is, therefore, being deleted as theprovisions in section 8 can achieve the same objectives.10 Amendment of section 13: Access fees to coastal publicpropertySection 13 of the Act currently obliges a person to obtain theapproval of the Minister before charging access fees tocoastal public property. The current provisions result inmultiple individual applications being made to the Minister forpermission to charge any access fees to coastal publicproperty. Fee payers would include municipalities, boat-clubs,events organisers, etc. This would result in hundreds ofapplications which need to be responded to and delays inprocessing such applications may negatively impact onmunicipal revenue. To streamline the process and standardiseaccess fees, it is proposed that the Minister publish amaximum fee and anyone who wishes to charge a higher feewould only then have to apply to the Minister, justifying theneed. In addition, it is made clear that access fees are not tobe confused with the costs of tickets for commercial activitiesthat take place on or in coastal public property, e.g. a trip toseal island or a beach volley ball event. The term “access fee”has therefore been defined. In addition, an offence has beencreated in relation to blocking public access to coastal publicproperty.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4900 [Tuesday, 29 October 201311 Amendment of section 14: High-water markAfter the stakeholder engagement on the high water mark, itbecame apparent, particularly from the Surveyor-General, thatthe substitution of the high water-mark for a straight lineboundary was no longer necessary as those properties thatwere bounded by the high-water mark would gain or lose landdepending on the natural movement of the high-water mark.Allowing a property owner to determine a fixed line couldpotentially create unfair land grabs of coastal public propertywhich would impact on the public’s access to the beach.The relevant sections have therefore been deleted and theremaining sections clarify the consequences of the high-watermark moving inland.12 Amendment of section 15: Erosion and accretionThis proposed amendment to section 15 of the Act is intendedto align it with National Environmental Management Act andother specific environmental Acts.13 Amendment of section 16: Composition of the coastalprotection zoneThe proposed amendments to section 16 of the Act addresstextual corrections and a technical change to increase thesurface area of flood prone areas as a consequence ofclimate change. Public comments pointed out that relevantparts of rivers were not part of the coastal protection zone andthis is corrected through the proposed amendment to section16(1)(f).The proposed amendment to section 16(1)(i) isintended to refer to flooding only from the sea and not fromstorms upstream from rivers. It is therefore limited to areasadjacent to the other categories of the coastal protection zone.If not, it could potentially cover areas of land that are nowherenear the sea. In addition, the 1:100 year flood line is moreappropriate in light of climate change.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 490114 Amendment of section 17: TerminologyThe proposed amendment seeks to clarify terminology. Theterm “coastal waters” is more accurate in the context.15 Amendment of sections 18 and 19: Designation of coastalaccess stripsCurrently, there is no power to intervene if a municipality failsto designate coastal access land which is an essentialfunction in complying with the objectives of the Act. Given theDepartment’s strategic focus on access of beaches by thepublic, it is important to empower the Member of the ExecutiveCouncil (MEC) and failing the MEC, the Minister to act if amunicipality fails to do so. Provisions clarifying the nature ofthe public servitude, which is created once access strips aredesignated, are also amended.16 Amendment to section 22: Powers of Minister to exciseprotected areasThis clause has been amended to insert the wording fromsection 87 which allows the Minister to exercise powers inrelation to excising national protected areas from the coastalprotection zone.17 Amendment of section 25: Coastal set-back linesThere was confusion between EIA development set-back lines(in terms of the NEMA Environmental Impact Assessment(EIA) regulations) and coastal setback lines under this Act. Itis, therefore, proposed that ‘coastal setback-lines’ be changedto ‘coastal management lines’. The proposed amendments tothese sections are consequential to that change. In addition, afew problems were raised during the public consultations. TheAct, in section 26, provides that coastal boundaries may bedetermined or adjusted by notice in the Gazette. However,section 25 of the Act provides that the MEC must inANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4902 [Tuesday, 29 October 2013regulations establish or change coastal (set-back) managementlines. Provinces point out that they are currentlyexperiencing difficulties and have to amend some of their setbacklines. It is in fact easier to withdraw or amend notices asopposed to amending regulations, it is therefore proposed thatthe MEC be given the power to publish a notice in the Gazetteto establish or change coastal set–back lines, similar to thepowers in section 26 (adjustment of boundaries). The MECmay then still by way of regulations prohibit or restrict thebuilding of structures seaward of that coastal set-back line.18 Amendment of section 26: Insertion of Minister’s powersin respect of the coastal protection zoneThis amendment inserts similar wording to what is containedin section 22 to make it clear that where such powers, asdescribed in section 26, are exercised in certaincircumstances in the coastal protection zone, the Ministermust exercise them.19 Amendment of section 27: Determining and adjusting theboundary of coastal public propertyDuring the Parliamentary process when enacting the Act, anattempt was made to resolve the issue relating to the statusof Transnet’s assets within coastal public property (seeparagraph 4 above) by inserting a power to exclude areasfrom coastal public property with the ratification ofParliament. Such ‘exclusion’ was effected prior to thecommencement of the Act, whereby certain portions of portsunder the control of Transnet were excluded from coastalpublic property, which resulted in unintended and undesirableconsequences for both Transnet and the Department.Transnet found itself in a worse position after the exclusion,as the ports which were previously coastal pubic propertynow became state-owned land, placing them in an equallyANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4903precarious situation regarding their ownership status. Froman environmental perspective, an unintended consequenceof exclusion of an area of sea and sea-bed from CPP meantthat the excluded portion of the sea and sea-bed could beprivately owned, thereby subverting the principle establishedin the Act – that the sea and sea-bed cannot be ownedprivately. It is therefore necessary to delete the provisionempowering the Minister to exclude coastal public property,as clarity relating to what constitutes coastal public propertyhas now been addressed in section 7 as amended.The reclamation provision in section 27 of the Act wasinserted late during the parliamentary process to address adhoc concerns that arose when the Act was being consideredby the Portfolio Committee. It was inappropriately placed andthe current provision in section 27(6) of the Act is inadequate.Two new clauses have been drafted and more appropriatelyplaced through an insertion of sections 7B and 7C.20 Amendment of section 28: Adjusting coastal boundariesThis amendment inserts similar wording to what is containedin section 22 to make it clear that where such powers, asdescribed in section 26, are exercised in certaincircumstances in the coastal protection zone, they must beexercised by the Minister.21 Amendment of sections 33 and 34: Estuary managementprotocol and estuary management plansSection 33 was amended to change the terminology to reflectthat the National Estuarine Management Protocol should bepublished in the Gazette by notice and not prescribed byregulations. Section 34 was amended to insert additionalcriteria when compiling a management plan and also insertedadditional reporting criteria for monitoring progress ondevelopment and implementation of these plans.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4904 [Tuesday, 29 October 201322 Amendment of sections 35 – 37 and section 39: NationalCoastal CommitteeThe sections of the Act, relating to the National CoastalCommittee have been revised to streamline the provisions andcreate more flexibility with the appointment of representatives.This flexibility will allow the functions to be performed by anyexisting forum such as a MINTEC working group.23 Amendment of sections 38, 51 and 56: Corrections andimprovements to textThe Amendment Bill proposes to correct a cross-reference insection 38 of the Act, align the wording of section 51 withNEMA, and make a textual improvement to section 56 of theAct.24 Amendment of section 59: Extending powers of MECsThe Act erroneously failed to give an MEC the power to issuecoastal protection notices and coastal access notices. Clause30 of the Amendment Bill proposes to correct that omissionand to cover a loophole in the criteria for issuing such notices.In addition, the wording in section 59(3) of the Act appears tobe in conflict with the powers of the MEC as it relates todelegations in terms of section 91. It is therefore proposedthat section 59(3) be deleted.25 Amendment of section 60: CorrectionSection 60(3) of the Act erroneously gives the Minister thepower to delegate a power to the MEC, while subsection (1)already assigns the original power to the MEC. TheAmendment proposes to correct this. There is also asignificant typographical error which will simultaneously beaddressed.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 490526 Amendment of section 62: EIA reportSection 62(2) of the Act requires an organ of state to firstconsider an environmental impact assessment report beforeauthorising land to be used for activities within the coastalprotection zone which may have an adverse effect on thecoastal environment. Since the NEMA Environmental ImpactAssessment (EIA) Regulations already cover activities whichmay have an adverse effect on the coastal environment, thissection is unnecessary. In addition, it is unclear what is meantby an "environmental impact assessment report" and it isassumed to be a reference to the report under the EIARegulations, although it is not clearly stated so. An EIA reportis only one component of an environmental authorisationprocess so this terminology is inaccurate. It is thereforeproposed to delete subsection (2).27 Amendment of section 63: Criteria for considering EIAsfor coastal activitiesThe criteria in section 63 of the Act have given rise tointerpretational difficulties for competent authorities. Thefactors listed for which authorisation must be refused are sobroad, that it could potentially prevent competent authoritiesfrom granting authorisations. The amendment proposes toaddress this problem by incorporating the exclusionary criteriaas part of the general criteria to be taken into account bycompetent authorities when considering EIA applications.28 Amendment of section 64: Minister’s overrideThe Amendment Bill proposes the deletion of section 64 of theAct. This section currently gives the Minister an overridepower over a competent authority to issue an environmentalauthorisation in certain circumstances, which creates aparallel process to the appeal process in NEMA and causesconfusion.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4906 [Tuesday, 29 October 201329 Amendment of sections 65 and 66: Coastal leases andconcessionsThe original need for coastal leases was to generate fundsand to control activities within coastal public property. Section66 of the Act, which provides for leases of coastal publicproperty is administratively cumbersome, over-regulatory andhas a potential unintended impact on other organs of statethat operate within coastal public property. In addition, it is notpractical to subject every activity on coastal public property toa lease as not all activities have impact and it would thereforeserve no real environmental value. As a result, it was not putinto operation when the Act commenced in 2009.The Amendment Bill is proposing to replace the leases withcoastal use permits whereby the Minister is authorised to listactivities which require a permit, thereby removing the blanketrequirement that all activities on CPP require a lease. It isintended to create a mechanism to only regulate certainactivities which impact on coastal public property but whichare not appropriately dealt with under other environmentallegislation such as the NEMA Environmental ImpactAssessment Regulations. The time limitation of 20 years hasbeen retained as a maximum period for which a permit maybe issued.30 Insertion of a new section 66A: Leases in admiraltyreserveSince admiralty reserve forms part of coastal public property,there needed to be a clause inserted in the Act to determinehow existing leases on admiralty reserve, which are primarilymanaged by Public Works, should be dealt with. The newsection now indicates that such leases should continue to bemanaged by the appropriate authority but in accordance withthe objects of the Act.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 490731 Amendment of sections 68, 74, and 83These proposed amendments are consequential to thechange in terminology from “authorisation” to “coastalauthorisation” – see definitions. The term authorisation wascausing confusion with EIA authorisations and was thereforeproposed for amendment.32 Amendment of section 69: Consequential amendmentThe proposed amendment is a consequential amendment tothe amendment to the definition of authorisation and thereporting with respect to pipelines is now covered under thesection 93.33 Amendment to section 70: DumpingThe proposed amendment is a consequential to theamendment of the definition of ‘coastal waters’ and ‘sea’.‘Coastal waters’ currently covers the Republic’s territorialwaters (12nm) but excludes the exclusive economic zone –200 nm (EEZ). It would mean therefore that cabling andpipelines etc. that require coastal authorisations would requireno authorisation if they extend beyond the 12 nm. It wastherefore considered necessary to extend it to the EEZ as well.34 Amendment of section 71: Dumping permitsThere are a limited number of activities for which the Ministermay issue dumping permits under section 71 of the Act. Theremay be circumstances where additional categories arerequired as changes occur in the international regime whichgoverns dumping, namely the London Dumping Protocol1996, to which South Africa is a signatory. The amendmentproposes to give the Minister the power to prescribe inregulations, additional waste and other material that may bepermitted without the need to continuously amend the Act asand when new categories occur. The amendment alsoANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4908 [Tuesday, 29 October 2013proposed to clarify the time period for validity of a permitwhich is ambiguous.35 Amendment of sections 79 – 81: Offences and penaltiesThere have been complaints that the penalties are inadequateand that there are gaps in the sentencing provisions. Sections79 to 81 of the Act (offences and penalties) have beentightened up. There are now only two categories of offencesinstead of three and the sentences for category two offenceshave been increased. A subsection has been inserted to allowa High Court to impose a higher penalty than stipulated in theAct. In addition, the proposed amendment to section 81 dealswith extra-territorial jurisdiction of South African courts andimproves the text regarding the jurisdiction of courts in respectof offences in terms of the Act.36 Amendment of section 84: TerminologyThe proposed amendment is consequential to the amendmentof the definition of “coastal set-back lines”.37 Amendment to section 85: Penalties for regulationsThere was initially no maximum limit set for offences inregulations but this has now been inserted to provide certaintyas to the upper limit of the Minister’s powers.38 Amendment of section 87: Powers of the MinisterThis section is proposed for deletion as a consequentialamendment to inserting these provisions in each section e.g.sections 22, 26, 28 and 83 where powers relating to thecoastal protection zone must be exercised by the Minister.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 490939 Amendment of section 89: Delegations by the MinisterThis clause clarifies the powers which the Minister may notdelegate.40 Amendment of section 90: CorrectionThe proposed amendment is consequential to the amendmentof the definition of ‘coastal set-back lines’. It also proposes acorrection to subsection (1)(d) of the section for claritypurposes.41 Amendment of section 91: Delegations by MECsThe Act erroneously does not allow an MEC to delegate to anofficial within his or her department. This amendmentproposes to correct this.42 Amendment of section 92: Urgent action by MinisterFollowing requests during the public comment period, it wasconsidered appropriate to give this power to the MEC to allowfor improved efficiency in urgent situations, hence theproposed amendment to subsection (1). This proposedamendment to subsection (3) is consequential to the proposedamendment to section 59 of the Act.43 Amendment to section 93: ReportingThis section has been amended to create more specificprovisions with regards to reporting by the Minister.44 Proposed insertion of new section 94AThere is a probability that many organs of state may requireexemptions from certain provisions. Unforeseen situationsneed to be accommodated without the need for anunnecessary statutory amendment. It is therefore proposedthat an exemption provision be inserted so as not to hinderservice delivery. The provision is similar to that it in the MarineANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4910 [Tuesday, 29 October 2013Living Resources Act (MLRA), 1998 (Act No. 18 of 1998),which exemption clause has been approved by the courts.45 Amendment to section 95: Transitional provisionsrelating to leasesSince it is proposed that the concept of leasing in section 65be replaced with coastal use permits for activities which areyet to be listed, there is no need to keep existing leases alive.The reason being that some activities which are currentlygoverned by leases may not require a permit in terms of thenew section 65. An example of this is the use of slipways, forwhich there is no real need for a permit as they would alreadyhave undergone environmental scrutiny through theEnvironmental Impact Assessment process. The only valuetherefore in asking for all existing leases, would be to assistthe Department in determining which activities currently underlease (in terms of the Sea-Shore Act, 1935 (Act No. 21 of1935), would need to be listed as requiring a coastal usepermit under the new section 65. It is therefore proposed thatcopies of all existing leases be submitted to the Minister within24 months. In addition, more specific subsections have beeninserted to clearly indicate what process a person must followwhen the section comes into effect and whether their leaselapses or whether they must apply for a permit.46 Amendment to section 96: Transitional provisionsrelating to unlawful structuresThe proposed amendments are consequential to theamendment to section 65 of the Act – i.e. the new regime ofcoastal use permits which replace leases and explains thedetailed processes that must be followed by the public.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 491147 Correction by deleting section 97A transitional provision based on earlier versions of the Act,which were subsequently changed, was erroneously retainedand is creating confusion. Section 97 currently saves activitieswhich were previously listed in a schedule. It was subsequentlydecided to integrate these activities with the NEMA EIAprovisions and this section no longer serves a purpose.48 Proposed insertion of new section 97AParliament excluded certain portions of ports from coastalpublic property prior to the Act commencing in 2009. Theexclusion had unintended and undesirable consequences forboth Transnet and the Department. Transnet found itself in aworse position after the exclusion, as the ports which werepreviously coastal pubic property now became state-ownedland, placing them in an equally precarious situation regardingtheir ownership status. From the environmental perspective, anunintended consequence of exclusion of an area of sea andsea-bed from coastal public property meant that the excludedportion of the sea and sea-bed could be privately owned,thereby subverting the principle established in the Act – that thesea and sea-bed cannot be privately owned and is held in trustby the State. It is necessary to nullify that exclusion in thelegislation, as section 7 of the Act dealing with coastal publicproperty, now clearly excludes port infra-structure andstructures/assets from coastal public property and there is nolonger a need for exclusions from coastal public property. It isimportant to retain the principle that the sea and sea-bed is notcapable of ownership and is held in trust by the State. Allowingfor exclusion subverts this principle.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4912 [Tuesday, 29 October 201349 Amendment of section 101: Short title and commencementThere is no legal or practical impediment to allowing all of theproposed amendments to come into effect six months afterpublication of the assented Amendment Bill. Therefore, theAmendment Bill will come into operation six months afterbeing published by the President in the Gazette in terms ofsection 81 of the Constitution of the Republic of South Africaof 1996 or an earlier date if proclaimed by the President.B. Resolution dealing with outstanding mattersDuring the processing of the Amendment Bill three major issuesrelevant to the implementation and subject matter of the AmendmentBill became apparent, which aspects are hereby recorded for futureaction by the Department:(a) Sea mining: It is noted by the Portfolio Committee that thisAmendment Bill does not deal with the important issue of seaand seabed mineral and resource exploration and exploitation.There is currently a gap in the environmental legislativeframework as regards specific legislation relating to seabedexploration and exploitation. The National EnvironmentalManagement Act, No. 107 of 1998 (NEMA), does containprovisions which will cover certain aspects of sea mining,including the environmental impact assessment regulationsand general duty of care, which can be applied to sea mining.There is, however, no specific provisions in the AmendmentBill or other specific environmental management acts whichdirectly relate to sea mining. It is noted that the Department isin the process of developing an Oceans Policy, which doesdiscuss the impacts and need for monitoring of mining in thesea, but there is no legislation which adequately regulates thisaspect and it is therefore essential that once this policyprocess is concluded, appropriate legislation is introduced toANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4913create an environmental framework to regulate and monitorthis activity.(b) The Portfolio Committee noted the recent occurrences ofshipping incidents along the South African coastlineaccompanied by coastal oil pollution; and noting the report ofthe Department on the legal, institutional and operationalarrangements for response to such incidents, including theinherent challenges of such arrangements, and historicalaspects, resolves:(i)(ii)that a review is carried out on the legal frameworkgoverning the Department’s pollution combatingfunctions and the overlapping mandate with theDepartment of Transport and their role and functionwith regard to shipping and marine pollution; andnoting the serious effects that such incidents couldhave on the coastal and marine environment, includingthe potential for significant prejudice to the public, theDepartment should enter into negotiations with theDepartment of Transport to identify options forrationalisation of the marine pollution function as itrelates to shipping.(c) Clause 13 amending section 18 of the Act, relates to thedesignation of strips of coastal access land by municipalitiesand the subsequent registration of a public servitude. Thisclause and the Act itself rely on the cooperation and effectiveimplementation and action by all three spheres of government.One of the essential functions which have been assigned tomunicipalities is section 18 of the Act, which relates to thedesignation of strips of coastal access land and the subsequentregistration of servitudes in favour of the public. This provisionwill ensure that the public has reasonable access at designatedpoints along the coast to the beach and sea areas as part ofcoastal public property. In light of this important function,ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4914 [Tuesday, 29 October 2013section 18 has been amended to include a provision whichallows the Minister to perform the function of designatingcoastal access land in the event that a municipality fails to doso. It is therefore resolved that the Department will investigatethe extent to which municipalities have, since thecommencement of the Act, implemented this section and in factbegun the process of designating strips of coastal access land.In addition, there should be an assessment of how far theregistration of servitudes has progressed. The Departmentmust table a report in Parliament dealing with these threeissues before the end of January 2014.Report to be considered.9. Report of the Portfolio Committee on Water andEnvironmental Affairs on the National EnvironmentalManagement: Air Quality Amendment Bill 2013 [B 27- 2013][National Assembly – section 76], dated 29 October 2013.The Portfolio Committee on Water and Environmental Affairs (thePortfolio Committee) having deliberated and considered the subjectmatter of the National Environmental Management: Air QualityAmendment Bill [B 27- 2013] (National Assembly – section 76) (theAmendment Bill), referred to the Portfolio Committee and classifiedby the Joint Tagging Mechanism (JTM) as a section 76 Bill, agreeswith the classification as a section 76 Bill and reports theAmendment Bill with amendments [B27A – 2013].ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4915The Portfolio Committee further notes that after having consideredthe subject of the Amendment Bill, decided to support the followingamendments:1. Clause 2 will amend section 13 of the Act, to empower theMinister to establish the National Air Quality AdvisoryCommittee to advise him or her on any air quality relatedmatter. The clause will also allow the Minister to prescribe byregulation any other matter related to the Advisory Committee.2. Clause 3 inserts a new section 22A in the Act, to provide forthe consequences of unlawfully conducting a listed airemission activity without the necessary authorisation. Thisclause will address three scenarios, namely, to provide forthose activities related to air quality emissions: whereatmospheric emissions take place without an EnvironmentalImpact Assessment (EIA), which must be addressed throughsection 24G of the National Environmental Management Act,1998 (NEMA); where those activities operated without thenecessary air quality licence under the Atmospheric PollutionPrevention Act, 1965 (APPA) which must be addressedthrough section 22A; and where those activities operated hadan EIA environmental authorisation granted but no air qualitylicence was issued, which must be addressed through section22A. This clause, which emulates section 24G of the NEMA,sets out the process and the information required for such anapplication. The clause also provides the licensing authoritywith various options when considering such an application.The clause also provides for the payment of an administrativefine not exceeding five million rand before the processing ofthe application. Furthermore, the submission of such anapplication does not indemnify the person from criminalprosecution.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4916 [Tuesday, 29 October 20133. Clause 4 will add a new subsection (4) to section 29 of theAct, to provide for monitoring, evaluation and reportingrequirements on the implementation of the approved pollutionprevention plan.4. Clause 5 will also insert new subsections in section 36 of theAct. The additions propose that in instances where thelicensing authority fails to take a decision within the timeperiod set out in the Act, an applicant may request the MEC orMinister, as the case may be, to take the decision, and in theevent that the MEC does not have the capacity or the MECdoes not deal with the matter within the reasonable period oftime, the Minister may be requested to take the decision.When considering this subsection the Portfolio Committeewas mindful of sections 125(2)(b) (Executive authority ofprovinces) and 156(1)(b) (powers and functions ofmunicipalities) of the Constitution of the Republic of SouthAfrica of 1996, which provides that the Province or theMunicipality, respectively, is vested with the power toimplement all national legislation within the functional areaslisted in Schedule 4 of the Constitution, except where theConstitution or an Act of Parliament provides otherwise.The licencing authority to issue an atmospheric emissionlicence is usually vested in the relevant local authority.However, this clause will designate the Minister to be thelicensing authority: where the applicant for atmosphericemission license is a provincial organ of state who has beendelegated by the municipality the power to issue atmosphericemission licenses; where the air emission activity falls withintwo provinces; whenever the air emission activity forms part ofa national priority project approved by Cabinet; where the airemission activity is also related to the activities listed underthe NEMA, (1998) and the National EnvironmentalManagement: Waste Act, 2008, designating the Minister asANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 4917the competent authority; or where the air emission activity isrelated to a prospecting, mining, exploration or productionactivity in an area for which the right has been applied for.When the Minister decides on an atmospheric licence in amining area, he or she must do so after consultation with therelevant Municipality. The clause will further allow for theissuing of integrated environmental authorizations for relatedactivities under the NEMA (1998) and a specific environmentalmanagement Act.5. Clauses 6, 7 and 8 will amend sections 38, 39 and 40 of theAct, respectively, in order to delete references to section 22 ofthe Environment Conservation Act, 1989, as theEnvironmental Impact Assessment Regulations, 1997 andrelated notices have been repealed. Clause 8 will furtheramend section 40, to clarify the intention of this section and toprovide that where the air activity relates to a prospecting,mining, exploration and production activity in the area forwhich the right has been applied for, the Minister afterconsultation with the relevant licensing authority must decidethe application within the timeframes set out in the NEMA(1998).6. Clause 9 will insert a new subsection (3) in section 41 of theAct, to provide for a period of validity of one year for aprovisional atmospheric emission licence from the date ofcommissioning, and with an option of extension for anotheryear based on good cause shown to the licensing authority.7. Clause 10 will amend section 49 of the Act, to provide claritythat the licensing authority must take into consideration eitherof the listed criteria when deciding an application for anatmospheric emission licence.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4918 [Tuesday, 29 October 20138. Clause 11 will amend section 51 of the Act, to ensure thatnon-compliance with the controlled fuels standardsestablished in terms of section 28 of the Act is a criminaloffence.9. Clause 12 will amend section 53 of the Act, to provide theMinister with a legal mandate to develop regulations on theprocedure and criteria to be followed in the determination ofthe administrative fine contemplated in the new section 22Aand on climate change matters.10. Clauses 13, 14 and 15 will repeal sections 62, 63 andSchedule 2 to the Act, as they are no longer relevant.11. The Portfolio Committee is of the view that no aspect of theamendments being processed requires preparatory workbefore these amendments are put into operation. Therefore,the Amendment Bill will come into effect on the date ofpublication in the Gazette, by the President in terms of section81 of the Constitution of the Republic of South Africa, of 1996The Portfolio Committee further notes that some aspects of theClimate Change Policy, adopted last year, must be implementedthrough the National Environmental Management: Air Quality Act,2004 (Act No. 39 of 2004). To this end, the Portfolio Committeerequests the Department of Environmental Affairs to comprehendsivelyinvestigate and provide the Portfolio Committee with a reporton possible options to address the desired emission reductionoutcomes before the end of January 2014.Report to be considered.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 491910. Report of the Portfolio Committee on Water and EnvironmentalAffairs on the National Environmental Management:Protected Areas Amendment Bill 2013 [B 28- 2013] [NationalAssembly – section 75], dated 29 October 2013.The Portfolio Committee on Water and Environmental Affairs (thePortfolio Committee) having deliberated and considered the subjectmatter of the National Environmental Management: Protected AreasAmendment Bill [B 28 - 2013] (National Assembly – section 75) (theAmendment Bill), referred to the Portfolio Committee and classifiedby the Joint Tagging Mechanism (JTM) as a section 75 Bill, notes theclassification by the JTM and disagrees with the classification as asection 75 Bill, but agrees with the classification as a section 76 Billand reports the Bill with amendments [B 28A – 2013].The Portfolio Committee after having noted the need:a) for development of our country;b) to effectively track the environmental management systemsand mainstream plans and processes implemented bynational and provincial Departments;c) for uniform and effective management of protected areasacross the Republic;d) to monitor the environmental sustainability of development;e) to facilitate the selection and use of the most appropriate andeffective environmental management instruments and spatialtools in developmental decision-making, including thoseinstruments developed by other parties;f) to monitor and improve the Environmental Managementsystem both in the immediate and longer term; andg) to give proper effect to the Presidential Proclamation, dated 31May 2013, which essentially split the functions contained inthe Marine Living Resources Act, 1998 (Act No.18 of 1998)(MLRA), between the Department of Environmental Affairs(the Department), on the one hand (including marine protectedANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

4920 [Tuesday, 29 October 2013areas with all other environmental functions), and theDepartment of Agriculture, Forestry and Fisheries on the otherhand (including all fisheries related functions), has decided tosupport the following amendments:1. Clause 1 amends certain definitions and inserts definitions in theAct to accommodate the inclusion of the powers to declare andmanage marine protected areas in terms of the Act.2. Clauses 2 and 3 amends one of the objectives of the Act, as aresult of comments from the public, as well as consequentialamendments to the holistic inclusion of marine protected areas inthe Act.3. Clause 4 amends section 14 of the Act, as Section 14 currentlylimits the application of certain Chapters in the Act to marineprotected areas (MPAs) declared in terms of the Marine LivingResources Act, 1998. The clause seeks to remove the limitationand to bring existing MPAs within the ambit of the Act.4. Clause 5 inserts a new section 22A, to insert provisions in the Act(in Part 2A), authorising the Minister to declare MPAs andprescribe the criteria for declaration. It also enables the Ministerto withdraw such declaration or add to or exclude any area from amarine protected area.5. Clauses 6, 7, 8 and 9 contain consequential amendments to theAct, to allow for the holistic inclusion of marine protected areas inthe Act.6. Clause 10 amends section 38 of the Act, to clarify theappointment of management authorities or agents for MPAs andto provide for certain limitations of powers and functions. Theinsertion in section 38(1)(b) seeks to clarify that consentrequirements are only applicable to private landowners withinprotected environments.7. Clause 11 amends section 41 of the Act, to align zoning bymanagement authorities with zoning by the Minister. It isnecessary to retain both powers as they serve differentobjectives.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013

Tuesday, 29 October 2013] 49218. Clause 12 amends section 48(1) of the Act, in order to expandand clarify wording. In the list of activities prohibited withinprotected areas, the mining activities of exploration andproduction have been added as a result of public comments tothe Portfolio Committee.9. Clause 13 inserts a new section 48A in the Act, to set out therestriction of activities within MPAs and to provide for theMinister's powers to prescribe zones and prescribes activitiesrequiring permits. Provision is made for consultation between theMinister and the Minister responsible for fisheries.10. Clause 14 amends section 52 of the Act, to ensure that internalrules of an appointed management authority do not conflict withthe Minister’s zoning or permitting functions within MPAs. It alsorequires the management authorities to consult the Departmentbefore making their internal rules and that all internal rules oramendments to internal rules must be published in theGovernment Gazette before they are valid.11. Clause 15 repeals section 43 of the MLRA currently governingMPAs since provisions of the Amendment Bill now provide forMPAs.12. Clause 16 seeks to save the existing MPA regulations made interms of the MLRA.13. Clause 17 seeks to bring the Arrangement of Sections, whichoccur at the beginning of the Act, in line with the amendmentsproposed in the Amendment Bill.14. Clause 18 states the short title and commencement of theAmendment Act. There is no legal or practical impediment toallowing all of the proposed amendments to come into effectimmediately upon publication of the assented Bill by the Presidentin terms of section 81 of the Constitution of the Republic of SouthAfrica of 1996.Report to be considered.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013