nkandla - correspondence from president of the republic on investigation into allegations of...

8/18/2019 Nkandla - Correspondence from President of the Republic on investigation into allegations of improper or irregular…

1/62

Friday, 22 April 2016 ] 1

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 49 ─ 2016

No 49—2016] THIRD SESSION, FIFTH PARLIAMENT

PARLIAMENT

OF THE

REPUBLIC OF SOUTH AFRICA

ANNOUNCEMENTS,

TABLINGS AND

COMMITTEE REPORTS

FRIDAY, 22 APRIL 2016

TABLE OF CONTENTS

ANNOUNCEMENTS

National Assembly

1. Correspondence from President - reprimands to Ministers .................. 1

COMMITTEE REPORTS

National Assembly

1. Tourism ................................................................................................. 6

2. Justice and Correctional Services ....................................................... 29

3. Public Enterprises ............................................................................... 47

ANNOUNCEMENTS

National Assembly

The Speaker

1. Correspondence from President - reprimands to Ministers

(1)

Correspondence from President of the Republic on investigation

into allegations of improper or irregular conduct relating to

security upgrades at Nkandla – reprimands to Ministers.


2/62

2 [Friday, 22 April 2016



3/62




4/62




5/62




6/62



COMMITTEE REPORTS

National Assembly

1. Report of the Portfolio Committee on Tourism forBudget Vote No. 33: Tourism, dated 21 April 2016

The Portfolio Committee on Tourism, having considered Budget Vote No.

33: Tourism, together with the Strategic Plans and Annual Performance Plans

of the National Department of Tourism (NDT) and the South African

Tourism (SAT), reports as follows:

1. Introduction

The Constitution of South Africa (Act No. 8 of 1996) recognises that

Parliament has a significant role to play in overseeing the performance ofgovernment departments and public entities. In terms of section 10 (c) of the

Money Bills Amendment Procedure and Related Matters Act (Act No. 9 of

2009), strategic plans must be tabled in Parliament after the adoption of the

fiscal framework. This being the second year of the implementation of 2014 -

2019 Medium Term Strategic Framework (MTSF), the Department and South

African Tourism tabled their five-year strategic plans and annual performance

plans for 2016/17. The Department of Tourism therefore complied with the

provision of the Act as the strategic plan and annual performance plan were

tabled within the stipulated period. This is commended as it gave the

Committee ample time to go through a due process of considering these

documents.

It is imperative that the Strategic Plan and Annual Performance Plan of the

Department are to government priorities and policies. This is emphasised in

the Public Service Commission (PSC) report on evaluation of department

annual reports as an accountability mechanism. The PSC stipulates that the

emphasis on measurable objectives, which should be part of the strategic

plan, is to create a contract between Parliament and the relevant Minister

regarding specific deliverables for which the Minister can be held

accountable. The strategic objectives of the Department are therefore

important to ensure that the budget appropriated for tourism is utilised

effectively and efficiently. This accentuates the significance of the process of

considering the budget and strategic plan in the calendar of Parliament, and

the necessity for departments to table these instruments on time to ensure

Parliament is provided with information required for its oversight work.

In line with the oversight mandate of the Committee, this report provides the

scrutiny of the Strategic Plans; Annual Performance Plans; and budgets of

both the National Department of Tourism and South African Tourism with

regard to their alignment to government priorities and the National

Development Plan.


7/62



2. The Committee process

The purpose of Vote No. 33 - Tourism is to promote and support the growth

and development of an equitable, competitive and sustainable tourism sector,

and enhancing its contribution to national priorities.

The national budget with the Estimates of National Expenditure (ENE)

detailing the appropriated budget for Vote 33-Tourism was tabled in February

2016. This was followed by the Department and South African Tourism

tabling their Strategic Plans and Annual Performance Plans, which provides

specific deliverables and targets for 2016/17 on the 10th

March 2016. These

oversight instruments were subsequently referred to the Committee for

consideration and report on 16 March 2016. The extended briefing sessions

were scheduled for the National Department of Tourism and the South

African Tourism to proffer to them an opportunity of presenting their

strategic plans, annual performance plans and budgets respectively.

Prior these engagements, as part of the review process, the Committee had an

opportunity to engage the Office of the Auditor-General (AGSA). This

meeting was aimed at providing the Committee with audit insights on the

interim review of the Department’s draft annual performance (APP) in order

to add value and enhance the oversight work.

The Committee then extensively engaged the South African Tourism, later

referred to as SAT, on the 8th

April 2016, and the National Department of

Tourism, later referred to as the Department, on the 14th

April 2016, on their

strategic plans and annual performance plans. The Committee engagements

simultaneously reviewed the past performances and interrogated plans for

future implementation.

3. The National Department of Tourism

The Department aims to promote and support the growth and development of

an equitable, competitive, and sustainable tourism sector in order to enhance

the Department’s contribution to national priorities.

3.1 The policy environment

In the State of the Nation Address (SoNA) 2016, a continued emphasis was

placed on active monitoring and accountability measures on infrastructuralprojects and marketing of South Africa as a preferred destination. This is a

welcome development as the Department had also struggled in the past to

effectively monitor infrastructural projects implemented as part of the

Expanded Public Works Programme under the Social Responsibility

Implementation (SRI) Programme. More intense oversight on these projects

would greatly assist the Department in ensuring that projects are completed

within the given framework, and has the desired impact in terms of job

creation. Challenges in the past included amongst others: incomplete projects;

poor workmanship and poor project management which resulted in criminal

charges filed with the South African Police Service (SAPS). The

pronouncement on the importance of monitoring and accountability measureson infrastructural projects will further insure that recommendations of

forensic reports are taken into consideration and fully implemented.


8/62



It is noteworthy that a portion of the seven billion earmarked for new port

facilities will also be highly beneficial to cruise tourism and has a potential to

increase tourism revenue generation. Oversight visits undertaken by the

Committee has consistently outlined the lack of infrastructure in some

provinces as the biggest hurdle towards ensuring that the country’s tourism

potential is realised.

The policy uncertainty with regard to immigration regulations has also

negatively affected the tourism sector. A progressive policy shift in this

regard is welcomed by the Committee whereby the Inter-ministerial

committee on Visa regulations has made notable concessions such as:

• Capturing of biometrics at ports of entry, starting with a pilot at OR

Tambo, King Shaka and Cape Town airports;

• Introduction of an Accredited Tourism Company Programme

(ATCP) for countries like China, India and Russia;• Consideration of a long-term Multiple Entry Visa for a period

exceeding three months, up to three years, for frequent travellers (for

business meetings), business people and academics;

• Letters issued by principals confirming permission for children to

travel on school tours; and

• Extension of the validity of the parental consent affidavits to six

months.

The Department has identified key priorities in line with the New Growth

Path (NGP), the current SoNA, and the National Development Plan (NDP).

Since tourism is one of the priority sectors in the NGP and the NDP, theDepartment is implementing interventions that seek to ensure that their

activities are well aligned and lead to desired outcomes.

3.2 Strategic goals

The strategic goals over the medium term as identified by the Department are

as follows:

• Ensure economic, efficient and effective use of departmental

resources.

•

Enhance understanding and awareness of the value of tourism and itsopportunities.

• Create an enabling legislative and regulatory environment for

tourism development and growth.

• Contribute to the economic transformation in South Africa

• Accelerate the transformation of the tourism sector

• Facilitate tourism capacity-building programmes.

• Diversify and enhance the tourism offerings.

• Provide knowledge services to inform policy, planning and decision-

making.

•

Develop new source markets.•

Enhance regional tourism integration.

• Create employment opportunities by implementing tourism projects

targeted at the unemployed.


9/62



These key priorities of the Department are aligned with the key national

priorities which seeks to significantly reduce the unemployment rate,

especially among the young people in South Africa. Through its programmes,

the Department also seeks to tackle the triple challenge of poverty, inequality

and unemployment.

3.3 Spending focus during the Medium Term Expenditure Framework

(MTEF)

The Department carries out its mandate through four programmes, namely,

Programme 1: Administration; Programme 2: Policy and Knowledge

Services; Programme 3: International Relations; and Programme 4: Domestic

Tourism. During the Medium Term Expenditure Framework (MTEF), the

Departments’ focus will be on encouraging domestic tourism and stimulating

transformation. It will develop new tourist attractions, and support rural

enterprises to grow tourism. The budget is expected to grow at a moderaterate over the MTEF period reaching R2.1 billion. SAT’s budget is also

expected to increase by an additional R105 million allocation for 2016/17 for

the improvement of domestic marketing programmes. The expected increase

in domestic trips is 359 thousand from 2.7 million in 2015/16 to 3.05 million

in 2016/17. This is a cause for concern as during the 2013/14 financial year

domestic tourism trips reached 3.1 million without the R105 million cash

injection. It is therefore expected that the Entity would perform better than

preceding years in domestic trips. International tourist arrivals will be

expected to increase from 8.9 million in 2015/16 to 9.05 million in 2016/17.

It is expected that the increase in tourist arrivals will positively contribute

towards the broader objective of growing the GDP and creating jobs.

The Tourism Incentive Programme (TIP) has been created as a sub-

programme under the Policy and Knowledge Services, the Programme will

receive a budget allocation of R575.7 million over the MTEF, and this

allocation is earmarked for the facilitation of market access for local tour

operators and tourism businesses in recognised local and overseas

exhibitions. Some of the projects for the TIP will include assistance towards

the grading of tourism establishments and retrofitting renewable energy

initiatives for sustainable tourism. The SRI Programme is expected to support

the creation of 3 488 full time equivalent jobs in 2016/17, a mere 480 full

time equivalent jobs increase when compared to 2015/16. This, however, isnot adequate seeing that funding for this sub-programme has increased from

R253 million in 2015/16 to R386 million in 2016/17. Table 1 shows the

programme allocation for the Department of Tourism’s budget.


10/62



Table 1: Programme allocation

Source: National Treasury (2016) – Vote 33 Tourism

4

Programme Analysis

The activities of the Department of Tourism are organised in the following

programmes:

4.1 Programme 1: Administration

The purpose of this programme is to provide strategic leadership, centralised

administration, executive support and corporate services. The budget

allocation to the Administration Programme is for strategic leadership

management and support services to the Department. The total

Administration budget has increased from R233.7 million in 2015/16 toR237.5 million in 2016 as indicated in Table 2. However this represents a

nominal increase of 1.6 per cent, a decrease of 4.67 per cent in real terms.

This Programme constitutes 11.82 per cent of the Department’s total budget,

most of which will be spent through the Corporate Affairs sub-programme

which accounts for 65.9 per cent of the Administration programme, this sub-

programme’s role is to enhance management oversight to create an enabling

policy and legislative environment.

Table 2: Budget allocation for Programme 1

Programme Budget NominalIncrease /

Decrease

in 2016/17

RealIncrease /

Decrease

in 2016/17

NominalPercent

change in

2016/17

Real Percentchange in

2016/17

R million 2015/16 2016/17

Ministry 36.1 32.4 -3.7 -5.7 -10.25 per

cent

-15.81 per

cent

Management 18.9 19.3 0.4 -0.8 2.12 per cent -4.21 per cent

Corporate Affairs 150.2 156.5 6.3 -3.4 4.19 per cent -2.26 per cent

Office

Accommodation

28.5 29.3 0.8 -1.0 2.81 per cent -3.56 per cent

TOTAL 233.7 237.5 3.8 -10.9 1.6 per cent -4.67 per cent


Programme Budget Nominal

Increase /

Decrease in

2016/17

Real

Increase /

Decrease

in 2016/17

Nominal

Percent

change in

2016/17

Real

Percent

change in

2016/17R million 2015/16 2016/17

1 Administration 233.7 237.5 3.8 -10.9 1.63 per

cent

-4.67 per

cent

2 Policy and

knowledge Services

1 181.2 1 272.6 91.4 12.6 7.74 per

cent

1.07 per cen

3 International

Tourism

47.3 54.7 7.4 4.0 15.64 per

cent

8.48 per cen

4 Domestic Tourism 307.0 444.7 137.7 110.2 44.85 per

cent

35.89 per

cent

TOTAL 1 769.2 2 009.5 240.3 115.9 13.6 per

cent

6.55 per cen


11/62



The growth in expenditure for the Administration programme is accounted

for in compensation of employees which accounts for 54.1 per cent of the

programme’s budget. The Sub-programme Ministry has decreased from

R36.1 million in 2015/16 to 32.4 million in 2016/17, the decrease in

expenditure will be on goods and services specifically travel and subsistence

which has decreased from R27.1 million to R8 million.

4.2 Programme 2: Policy and Knowledge Services

The budget allocation for Programme 2 is illustrated in Table 3. The purpose

of this programme is to support sector policy development and evaluation,

research and knowledge management, promotion of transformation, and

responsible tourism.

Table 3: Budget allocation for Programme 2Policy and

KnowledgeServices

Budget Nominal

Increase /Decrease in

2016/17

Real

Increase /Decrease

in 2016/17

Nominal

Percentchange in

2016/17

Real

Percentchange in

2016/17R million 2015/16 2016/17

Policy andKnowledge

Services

Management

6.8 4.7 -2.1 -2.4 -30.88 percent

-35.16 percent

Policy

Development

and Evaluation

21.3 27.7 6.4 4.7 30.05 per

cent

22.00 per

cent

Research and

Knowledge

Management

29.9 26.4 -3.5 - 5.1 -11.71 per

cent

-17.17 per

cent

South African

Tourism

977.7 1 024.8 47.1 - 16.3 4.82 per cent -1.67 per

cent

Tourism

Incentive

Programme

170.5 188.9 18.4 6.7 10.79 per

cent

3.93 per cent

TOTAL 1 206.2 1 272.5 66.3 -12.5 5.5 per cent -1.04 per

cent


The budget allocation for the Policy and Knowledge Services Programme,

which has received the largest allocation in the budget representing 63.3 per

cent of the total Departmental budget decreased by 1.04 per cent in real termscompared to the 2015/16 financial year. This Programme is entrusted with

ensuring strategic policy development, monitoring and evaluation, and

research and knowledge management services. The South African Tourism

(SAT) sub-programme, which is tasked with responsibility of stimulating

sustainable international and domestic demand for South African tourist

experiences, consumes 80.53 per cent of the Programme’s budget. The South

African Tourism Budget will grow at an average growth rate of 5.2 per cent

over the MTEF.

Another noteworthy sub-programme growth is the Tourism Incentive

Programme (TIP), and this sub-programme has experienced an increase of5.72 per cent in real terms. This programme experienced under expenditure

during the 2015/16 financial year of R10 million as a result of unspent funds

due to the delay experienced in the appointment of technical advisors for the


12/62



Robben Island renewable energy retrofitting project. It is not the first time

that the Department lost funds from TIP as during the 2014/15 financial year

the Department lost R78 million from the same programme, which was

redirected to Eskom. The Programme was introduced during 2014/15,

however, the programme did not deliver on the set mandate to help SMMEs

and established businesses to grow through improved market access. Towardsthe end of 2014/15 financial year, TIP was moved to the Policy and

Knowledge services sub-programme and it became fully operational during

the 2015/16 financial year. This is worrisome as the purpose of this particular

programme is not in line with the TIP, it is however better placed within the

Domestic Tourism Programme. It is stated that the programme will support

tourism attractions to enhance destination competitiveness, however the

Estimates of National Expenditure (ENE) highlights that the Department will

develop new tourism attractions. Furthermore underutilised and unutilised

public recreational facilities and resorts will be redeveloped as tourists’

attractions.

4.3 Programme 3: International Tourism

The budget allocation for Programme 3 is presented in Table 4. The purpose

of this programme is to provide strategic and policy direction for the

development of South Africa’s tourism potential throughout various regions

of the world.

Table 4: Budget allocation for Programme 3Programme Budget Nominal

Increase /

Decreasein 2016/17

Real

Increase /

Decrease in2016/17

Nominal

Percent

change in2016/17

Real

Percent

change in2016/17R million 2015/16 2016/17

International

Tourism

management

3.5 4.6 1.1 0.8 31.43 per

cent

23.29 per

cent

Americas and

Western Europe

17.3 20.0 2.7 1.5 15.61 per

cent

8.45 per

cent

Africa and Middle

East

14.4 16.3 1.9 0.9 13.19 per

cent

6.19 per

cent

Asia, Australasia and

Eastern Europe

12.1 13.8 1.7 0.8 14.05 per

cent

6.99 per

cent

TOTAL 47.3 54.7 7.4 4.0 15.6 per

cent

8.48 per

centNational Treasury (2016) – Vote 33 Tourism

The International Tourism Growth Programme is responsible for the

development and support of South Africa’s tourism potential throughout the

various regions of the world. This Programme increased by a noticeable

15.6 per cent in nominal terms from R47.3 million in 2015/16 to

R54.7 million in 2016/17. A significant amount of the International Tourism

budget will be focused on the Americas and Western Europe sub-programme,

as it will account for 36.6 percent of the total programme budget. The

majority of the Programmes budget will be allocated for compensation of

employees at 70.5 per cent as well as travel and subsistence at 9.3 per cent fortrips taken to analyse international tourism markets and attend multilateral

fora. The foreign governments and international organisations (which is the

Regional Tourism Organisation of Southern Africa and the United Nations


13/62



World Tourism Organisation) will account for 11.5 per cent of the

Programmes budget. This Programme will also focus its spending on training

South African missions abroad.

4.4 Programme 4: Domestic Tourism

The purpose of the Domestic Tourism Programme is to provide policy and

strategic direction for the development and growth of sustainable domestic

tourism throughout the South Africa.

Table 5: Budget allocation for Programme 4Programme Budget Nominal

Increase /

Decrease

in 2016/17

Real

Increase /

Decrease in

2016/17

Nominal

Percent

change in

2016/17

Real

Percent

change

in

2016/17R million 2015/16 2016/17

Domestic Tourism

management

10.5 13.8 3.3 2.4 31.43 per

cent

23.29 pe

centDomestic Tourism

management Southern

Region

12.1 14.0 1.9 1.0 15.70 per

cent

8.54 per

cent

Domestic Tourism

management Northern

Region

17.3 15.3 -2.0 -2.9 -11.56 per

cent

-17.04

per cent

Social Responsibility

implementation

253.6 386.1 132.5 108.6 52.25 per

cent

42.82 pe

cent

TOTAL 307.0 444.7 137.7 110.2 44.9 percent

35.89 pecent


The Department’s budget allocation for the Domestic Tourism Programme

has increased by 35.89 per cent in real terms from R307.0 million in 2015/16

to R444.7 million in 2016/17 as indicated in Table 5. This programme is

responsible for the promotion, development, and growth of sustainable

domestic tourism throughout South Africa. The spending focus will mostly be

on the Social Responsibility Implementation (SRI) sub-programme, which

focuses on infrastructure projects under the EPWP programme targeting the

youth, disabled, women, and SMMEs. This sub-programme accounts for

82.6 per cent of the Programme. The expected increase to this Programme

will be highly influenced by the increase in the allocation for the SRI sub-

programme, an increase in the transfers to the Strategic Partners in Tourismand training and development. The expected jobs to be created through the

SRI programme will be 3448 for the 2016/17 financial year.

5 South African Tourism

In terms of the Tourism Act (Act No. 3 of 2014), South African Tourism is

mandated to market South Africa internationally and domestically as

preferred tourism destination and to ensure that tourist facilities and services

are of the highest standard. The organisation is also required to monitor and

evaluate the performance of the tourism sector.


14/62



5.1 Strategic Objectives

The strategic objectives for 2016 – 2021 were summarised as follows:

5.1.1 Contribute to the South African economy by increasing the

number of travellers to and within South Africa.5.1.2 Build positive awareness of the South African experience.

5.1.3 Reposition SA Tourism to be recognised as a tourism and

business events industry leader in market intelligence,

insights and analytics.

5.1.4 Collaborate with stakeholders and partners to deliver on SA

Tourism’s mandate.

5.1.5 Improve visitor experience in line with the brand promise;

and

5.1.6 Create an organisational culture of work satisfaction,

excellence and innovation to improve effectiveness and

operational efficiency.

5.2 Strategies to achieve strategic objectives

South African Tourism has developed seven new strategies aimed at

achieving the set strategic objectives. The seven strategies and measures are

as follows:

5.2.1 Invest in selected markets for leisure tourism to deliver

volume (travellers) and value (tourism revenue).

5.2.2 Position South Africa among the top 10 long-haul business

events destinations by 2025 while collaborating to convertbusiness travellers into leisure tourists.

5.2.3 Revamp the value proposition of tourism grading to inspire

partners and stakeholders to deliver on the brand promise and

quality visitor experience.

5.2.4 Work with trade partners to leverage resources to deliver

travellers to and within South Africa.

5.2.5 Position SA Tourism as the foremost authority in tourism and

business events, underpinned by quality assurance.

5.2.6 Collaborate with partners and stakeholders for tourism

growth.

5.2.7 Create a culture of excellence and innovation to improve

effectiveness and operational efficiency.

5.3 International Tourism Marketing

The world has changed considerably since SA Tourism completed the fifth

portfolio review in 2013. SAT’s fifth leisure tourism market portfolio will be

revised in 2016/17 in line with the current market insights. In order to

effectively and efficiently deliver on its mandate, SAT’s operating model will

be as follows:


15/62



• Adoption of a hub approach – this approach involves clustering

markets into regional hubs for ease of marketing operations and

international trade relations.

• Shift from bricks to mortar to virtual offices – this involves

appointing trade relations managers to service “thin” markets so as

to exploit the gains arising from such markets; and

• General Marketing Agency – this approach focuses on appointing a

marketing agency representative to service markets with high set up

costs and lengthy registration processes.

5.4 Regional Africa Marketing

The National Tourism Sector Strategy identifies the rest of Africa as the main

source of foreign arrivals for South Africa and outlines the tourism goals for

continent, and SAT will pursue the following to unlock the regional markets:

•

Increasing regional awareness of South Africa as a tourism andleisure destination.

• Improving market presence in key African markets; and

• Implementing regional tourism programmes.

5.5 Domestic insights study

SA Tourism commissioned the study on domestic insights to revise the

approach to effectively target the domestic market, thereby growing domestic

tourism and building a culture of travel within South Africa. In order to grow

domestic holiday trips and total domestic direct spend, SAT will:

• Create awareness and travel culture amongst South Africans.

• Motivate the market segments to take more holiday trips by

showcasing a variety of desirable experiences through engaging rich

informative content.

• Partner with and educate the channel to promote relevant VFM deals

with supporting content on activities so that prioritised segments are

motivated to book.

• Promote suitable deals and travel packages to improve affordabilityand seasonality; and

•

Maximise use of and leverage on provincial signature events throughactivations and media engagements.

5.6 Working with Trade

SAT will pursue the establishment of a healthy working relationship and

collaboration with the trade through working with trade partners to leverage

resources that will deliver travellers to and within South Africa. Through

partnerships, the South African brand will be built and trade partners will be

empowered and enabled to sell South Africa in the following manner:


16/62



• Creating awareness and positivity for South Africa as a tourism

destination.

• Initiating an integrated approach between SAT and trade.

• Conducting trade mapping in each market.

• Educating the trade to sell South Africa better; and

•

Using cooperative agreements.

5.7 Business tourism

South African Tourism, through the South African National Convention

Bureau (SANCB) will position South Africa in the top ten long-haul business

events destinations according to ICCA and Union of International

Associations (UIA) ranking. SAT will also collaboratively convince key

decision-makers that South Africa can be trusted to deliver memorable

experiences and successful business events. This will require:

• Reconfiguring of the SANCB to generate more quality association

leads that convert into bids, while focusing on African opportunities.

• Empowering SAT offices abroad to generate leads, offer support and

facilitate incentive-driven business leads to achieve a more

integrated organisation and optimal return on investment.

• Enhancing delegate-boosting platforms to leverage SA Tourism’s

marketing campaigns and expertise, in order to convert the business

events delegates into leisure tourists.

• Repositioning the brand to drive awareness, positivity and

consideration of South Africa as the leading meetings destination in

Africa and an appealing destination for delegates.

• Continuing to explore alternative bid support strategies.

• Generating sales using a sales representation model in some markets

and, in others, direct sales using in-house sales teams; and

• Negotiating with and managing the strategic partner for better

positioning of the Indaba and Meetings Africa events.

5.8 Quality Assurance

The Tourism Grading Council South Africa’s pursuit of enhancing visitor

experience and consumer confidence in the tourism products of South Africawill be achieved by implementing the following:

• Review of policies related to grading. A committee has already beenestablished to undertake the process.

• Drive positive perceptions and the appeal of grading in the industry

by refining the grading value proposition in line with the consumer

insights and associated communication plans per client category,

launching in April 2016.

• Grow the customer base through a targeted sales strategy that

emphasises the grading value proposition in consultation with

industry associations using grading support funding; and• Retain the customer base by delivering the grading value

proposition through a Customer Relationship Framework.


17/62



• Enhance and improve the integrity of the grading criteria and

process. A review of the grading criteria was conducted in 2015/16

to be applicable for further three years.

• Implement globally benchmarked capacity-building and knowledge-

transfer programmes to improve the integrity of the grading

assessors, as well as to ensure optimal transitioning from an

outsourced to an in-house assessor model; and

• Partner with tourism quality assurance bodies, universities, thetourism industry and the Culture, Art, Tourism, Hospitality and

Sports Sector Education and Training Authority (CATHSSETA) to

professionalise tourism quality assurance.

5.9 Stakeholder Engagement

Stakeholder engagement is one of the weaknesses revealed by the SAT

Review Report commissioned by the Minister of Tourism in 2015/16. SATwill strive to strengthen its stakeholder engagement and innovatively align

strategies for tourism growth through:

• The organisation implementing the organisational Stakeholder

Management Plan that will have defined and measurable outcomes.

• SAT together with NDT collaborating with trade on key projects

focused on branding (PR and messaging), marketing, market access,

business tourism and transformation.

• Building a case for tourism as a key pillar for accelerated economic

growth and job creation, both in the short-term and in the long-term.

•

SA Tourism continuing to collaborate with provincial and citytourism agencies on initiatives to improve the seasonality and

geographic spread of travel, drive domestic tourism.

• SA Tourism and the provinces continuing to leverage on Joint

Marketing Agreements (JMAs) and market access platforms both

locally and international markets to find synergies, eliminating

duplications and creating efficiencies in how government funding is

spent.

5.10 Energising and empowering people to innovate for excellence

Tourism is an ever changing sector that requires SAT to be a highly

innovative organisation with motivated staff that keep up with international

trends. To achieve innovation:

• The organisations’ staff complement will remain the cornerstone of

its success. The management and the Board will continue to create

an environment conducive to high performance and excellence.

• SA Tourism will implement a human resources strategy that isaligned to its overall business strategy.

• As part of building an inspiring and energised organisation, SAT

will implement the Leadership Development Programmeunderpinned by an executive mentoring and coaching programme.


18/62



• Culture Alignment Programmes will form part of the full Brand

Ambassador Programme, including training, orientation and re-

orientation as well as new-leader on boarding.

• The implementation of the Brand Ambassador will create a

commonly shared organisation DNA / culture for the effective

delivery of strategies.

• SA Tourism will reconfigure itself to deliver on strategy by

conducting capacity assessment, organisational development and

resource placement.

• Implementing an Integrated Talent Management Plan and a

Succession Planning Programme, including a revision of the

organisation’s remuneration philosophy. This will be underpinned

by workforce planning, staff retention and work skills planning; and

• The focus of all the programmes will be based on the strategic thrust

of re-establishing the organisation as a high performance and

innovative environment and defending SAT as a research-leddestination marketing organisation, while energising and

empowering its people and partners to innovate for excellence and

tourism growth.

5.11 Positioning SAT as the foremost authority in tourism and business

events

To deliver the strategy that positions South Africa as a preferred destination

for leisure and business events, SAT will perform the following activities:

•

Rebrand, expand and resource its strategic research function tomarket intelligence, insights and analytics. Market intelligence and

insights will be taken into account in strategic planning and

decision-making.

• Partnerships with tourism-related and other industries, such as

airlines and airports, will also be forged to ensure that new data

feeds are utilised.

• Expand the partnership with Statistics South Africa to include

domestic surveys; and

• Invest in online and offline platforms for the packaging and sharing

of integrated market intelligence, insights, data reports and analytics

for leisure, business and events and grading.

5.12 Organisational Risk Management

At the time of finalising the Strategic Plan, SA Tourism was embarking on a

risk assessment to identify risks that might have a negative impact on the

achievement of its strategic objectives. This process was concluded by the

end of March 2016. The top three risks identified are as follows:

• Currency loss and increased costs of doing business abroad;

• Possible decline in tourism industry performance; and

•

Lack of assurance over tourism statistical data.


19/62



5.13 Sources of revenue for South African Tourism

The total budget for SAT in the 2016/17 financial year is R1 221 835 billion.

The budget is drawn from the following sources:

•

Government Grant is R1 024 847 billion

• TOMSA Levy is R99 450 million.

• Indaba and Meetings Africa R54 506 million.

• Grading Fees is R20 098 million.

• Sundry revenue is R 22 934 million

6 Committee observations

The Committee synthesised all the presentations received from the Auditor-

General, National department of Tourism into observations that will form the

basis of its oversight programme in the 2016/17 financial year. The

observations outlined below are categorised into service delivery and budget

related matters. Observations are also categorised according to the work of

the Department and activities of South African Tourism.

6.1 Observations on the National Department of Tourism

The observations made in relation to the Department are as follows:

6.1.1 Service delivery related observations

The service delivery observations are based on the non-financial

factors that contribute to the poor performance of the sector. Theseinclude internal factors under the purview of the Department and

external factors beyond its control that should however be coordinated

by the Department.

6.1.1.1 Cooperative governance

The Committee observed that despite good programmes presented to

the Committee from time to time, there were still challenges with

regard to cooperative governance and implementation of programmes

at a local constituency level. These pertain to programmes that should

have been implemented, but there was no progress due to lack ofcooperative governance amongst stakeholders. This mostly affects

attractions such as the Mandela Capture Site in KwaZulu-Natal where

a project was implemented by the Department of Cooperative

Governance and Traditional Affairs in KZN but there is no signage

from the N3 to the site. This was a matter also identified by the

Committee when undertaking an oversight visit to KwaZulu-Natal in

the 2015/16 financial year. The Committee acknowledges that there is

an interdepartmental committee that addresses these issues, but the

concern is that there are no tangible outcomes on the ground. A call

was made to the departmental to address this challenge through the

coordination of activities at a professional level through recognisedstructures such as the Forum of South African Director-Generals

(FOSAD).


20/62



6.1.1.2 Handling of tourism complaints

The Committee observed that in the past financial year the

Department received thirty four complaints and that a bulk of these

were related to issues of refund between the service providers and the

complainants. Some complaints related to consumer dissatisfactionwith the experience related to breach of product promise when the

experience was purchased. The Committee sees this as a far reaching

matter in terms of the mandate and services provided by the Tourism

Grading Council with regard to establishments complying with

offering standards at an appropriate grading status. The Committee

therefore urges the Department and the Tourism Grading Council to

work closely with the trade associations to ensure that their members

ethically deliver on the brand and product promise to meet consumer

expectations.

6.1.1.3

Capacity building in rural communities

The Committee observed that some rural areas have a potential for

tourism development, particularly those adjacent to busy tourism

attractions. However, communities in these areas are observers and

not participants in the local tourism economy as if they are off the

beaten track to tourists. The Department is urged to look into

possibilities of introducing capacity building programmes to involve

local communities, including converting their homesteads to

homestays. It is acknowledged that the Department has undertaken a

benchmarking study tour to Malaysia in this regard and some

communities, such as the Moruleng in Pilanesberg, have startedreaping the benefits. However, the Department is encouraged to roll

out a nationwide programme to reach as many communities as

possible.

6.1.1.4 Planning for projects

The Committee observed that the Department operates in a fluid

multidisciplinary environment and always plans its projects in

partnership with other partners to maximise impact and stretch its

budget. Infrastructure related projects go through a 14 days cycle

which delays inception and commencement of projects. In otherinstances, such as implementation of signage in World Heritage Sites,

the Department had to go through a lengthy process of signing

Memoranda of Agreement that detail responsibilities for various

organisations. The challenge always arises when procurement has to

be done by partner organisations whereby delays are experienced,

thus affecting the implementation and achieving targets set in the

Annual Performance Plan. The Committee is concerned that

continued failure to meet time frames in the Memoranda of

Agreement would result in failure to meet targets in the Annual

Performance Plan thus leading to poor service delivery. The

Department is urged to develop checks and balances to ensure properplanning and implementation of projects.


21/62



6.1.1.5 Marine and Coastal Tourism

The Committee noted that the Department has introduced the Blue

Flag Beaches programme aimed at facilitating the implementation of

Blue Flag Beaches across the coastal cities and towns in the country.

This Committee further noted that this is in line with therecommendations made by the Committee when the Department

tabled the 2015/16 Annual Performance Plan. The Committee had

identified that the Department was missing an opportunity in

leveraging on Operation Phakisa as there was nothing on marine

tourism. The Committee commends the Department for implementing

its recommendations to develop a programme that links to Operation

Phakisa by introducing the Blue Flag Programme. However, the

Department is urged to develop a comprehensive strategy that will tap

into wider marine tourism development opportunities presented by the

almost 3000 km coastline of South Africa. The Committee

acknowledges that the Department will be embarking on a marinetourism consultation process with a number of stakeholders and urges

the Department to facilitate an outcome of a comprehensive and

inclusive Marine Tourism Strategy.

The Committee also acknowledges that the global cruise tourism

industry has increased and cities such as Durban, Port Elizabeth and

Cape Town were planning to increase their participation in the sector

through having dedicated cruise terminals. The type of development

in cruise terminals such as that in the Cape Town Waterfront was

using a mixed model that caters for seasonality as well. It was noted

that the Minister admitted that the Department traditionally did not

consider cruise tourism a priority, and was aware that cruise tourism

was a growing industry. The Committee notes that the Department

acknowledges that this is a short term thinking and cruise tourism

would be investigated, and if found viable, will be one of the priorities

of the departmental strategies.

6.1.2 Budget related observations

The Committee made the following budget related observations with

regard to the Department:

6.1.2.1 Controls on the budget transferred to South African

Tourism

The Committee noted that 83.3 percent of the budget appropriated to

Programme 2 is transferred to South African Tourism. A significant

transfer of more than 50 percent of the SAT budget allocation is

transferred upfront to deal with issues of currency exposure, which

has been a challenge for SAT for a number of years. The Committee

commends the Department and SAT for addressing this issue which

has caused SAT to lose more than R350 million of its marketing

budget in the past five years.


22/62



The Committee recognises that South African Tourism has a new

Board that looks poised to delivering on their mandate in terms of

both strategy and financial management. However, the Department

should have proper controls in place to ensure that the budget

allocated to SAT is used appropriately as it takes a large portion of

funds appropriated to Vote 33: Tourism. The Department should alsoensure that South African Tourism produces and delivers on

marketing strategy that will maximise return on investment from the

appropriated budget.

6.1.2.2 Compensation of employees

The Committee observed that as part of cost cutting measures, the

Cabinet has approved reductions of R17.5 million in 2017/18 and

R26.6 million in 2018/19 to the department’s compensation of

employee’s budget as part of its decision to lower the national

aggregate expenditure ceiling. The Department has also been directedto not exceed 530 employees in its establishment. The Committee

notes that currently the staff establishment is 550 and the Department

has to decide, if posts become vacant, whether to fill or remove them

from the establishment. The Committee is concerned that this might

lead to the Department failing to fulfil its mandate in future if staffing

matters are not handled with care. The Department is therefore urged

to ensure that the critical posts are always filled to effectively and

efficiently deliver on its mandate. The target of maintaining the

8 percent vacancy rate is also highly commended given the high

unemployment rate in the country.

6.1.2.3 Capital assets

It was observed that there was a steep increase in the capital assets of

the Department from R6.0 million, which accounted for 0.3 percent of

the budget of the Department in 2015/16, to R112.3 million in

2016/17 which accounts for 5.6 percent of the budget. This emanated

from the reclassification of the Expanded Public Work Programme

under Programme 4: Domestic Tourism as capital assets. The

Committee notes that this has settled the matter that has been a

concern for the Committee in the past financial years and which led to

the Auditor-General giving an ultimatum for compliance by theDepartment in the 2015/16 or else risk getting a qualified audit.

6.2 Observations for South African Tourism

The Committee observations with regard to South African Tourism include

both the budget considerations and the service delivery environment. The

observations are as follows:

6.2.1 SAT country offices

The Committee observed that the model of operating country offices

has been proven to be expensive and not cost-effective. South African

Tourism is commended for initiating a process of implementing a hub

strategy which will use virtual offices and ensure that one office in the


23/62



region services a number of markets/ countries. The Committee noted

that in the past, country offices have resulted in overhead costs that

tended to gradually increase due to currency exposure. The Hub

Strategy will lead to closure of some country offices and release the

money for the marketing mandate. The Committee urges South

African Tourism to implement the hub strategy to cover as manymarkets as possible to ensure the presence of South Africa globally

and address issues in emerging markets, including watch-list markets.

6.2.2 Relationship of SAT with foreign missions

South African Tourism is commended for training the Department of

International Relations and Cooperation (DIRCO) staff that is sent to

the missions abroad. The Committee noted that the DIRCO staff is

trained on a similar course that is provided to tour operators, which

capacitates them to be tourism ambassadors in their respective

embassies. It was noted that the DIRCO staff is also hosted every

year at Indaba and they are trained on how to identify tour operatorsthey can work with, and programmes they can implement with the

media. Secondly, the staff is introduced to local products at Indaba so

that they can get information that could be used when interacting with

tour operators in their own countries.

The SAT had previously briefed the Committee that it was impossible

to use tourism attachés in missions abroad. However, the Committee

noted that some countries in SADC, such as Mozambique, had

tourism attachés stationed at their embassies. The Committee urges

South African Tourism to explore the possibility of using tourism

attachés to maximise on a partnership already established with

DIRCO.

6.2.3 Maximising interventions of the South African National

Conventions Bureau

South Africa is ranked number one in the African continent with

regard to business tourism. The Committee observed that the rating of

the South African National Conventions Bureau (SANCB) was linked

to the International Congress and Convention Association (ICCA) and

that South Africa hosted an average of 120 business events per

annum.

The Committee is however concerned that the SANCB activities are

mostly concentrated around the three major cities, namely,

Johannesburg, Durban and Cape Town. The Committee notes that the

average size of business events in South Africa was 700 to

800 delegates and that not all cities in the country have the capacity to

host such huge events. The Committee will be conducting close

oversight on the NCB to monitor whether smaller meetings are hosted

in smaller towns or big cities. This will be done to track the

implementation of the commitment made by the NCB that some

events in 2016 will be hosted in Mpumalanga and Grahamstown to

address geographical spread and seasonality.


24/62



6.2.4 Improving airlift

The Committee noted that the Western Cape Province had finalised

their Airlift Strategy and KwaZulu-Natal was also working on theirs.

It is commended that SAT had advised the two provinces on the four

core markets being pursued in the marketing strategy, in assistingthem to align their airlift strategies with activations in these markets.

The Committee also recognises that direct routes to the destination are

important and resuscitating direct flights such as the one that used to

exist between Johannesburg and Mumbai would be important for

increasing arrivals from India. The SAT and the Department are urged

to continuously engage the Department of Transport on the prospects

of developing a national airlift strategy that will assist other provinces

and towns in improving international and domestic tourist arrivals.

South African Tourism is also encouraged to engage airlines to open

more direct routes to South Africa.

6.2.5 Addressing challenges in the grading scheme

The Tourism Act (Act No. 3 of 2014) outlines grading as a voluntary

scheme. The Committee has observed that there are numerous

challenges plaguing the grading scheme and there is a need for a

policy review to investigate amongst other things, a possibility of a

free but compulsory system. The Committee notes that the Tourism

Grading Council of South Africa is currently not fully implementing

grading as outlined in the Act as not all tourism services, facilities and

products are being graded. Grading is only limited to theaccommodation sector and has not been extended to other tourism

touch points such as attractions and transportation. The Committee is

concerned that the Tourism Grading Council of South Africa

(TGCSA) considers the extended mandate of the Tourism Grading

Council in Act as unfunded and therefore comprising quality

assurance for destination South Africa. The TGCSA is urged to

engage the Department on funding constraints with regard to the

extended mandate as prescribed in the Act to include all facilities in

the tourism value chain in the grading scheme.

6.2.6

Improving Indaba as Africa’ prime tourism show

The Committee has over the years raised concerns about the waning

impact of Indaba as South Africa’s number one tourism show. This

was based, among other things, on the format of the show, quality of

buyers, value-for-money for participants and lack of tourism research

aspect/ seminars in the show. The Committee is pleased to note that

the decision to have a partner that will plan and coordinate Indaba on

behalf of South African Tourism has not changed. The SAT is

commended for having started with the tender process which is at

advanced state and that the announcement on the successful bidder to

plan and coordinate Indaba would be made soon.


25/62



6.2.7 Prospects for tourism growth in 2016

The tourism industry has been distressed in South Africa due to a

number of factors, including the visa regime and Ebola epidemic in

West Africa. However, the Committee has observed that the industry

has seen an encouraging recovery as tourist arrivals in January 2016started to increase. The recent statistics released by Stats SA indicate

that there were 1 012 641 tourist arrivals which amounts to 15 percent

growth compared to January 2015. The growth was observed in all

major markets with China growing at 93 percent, Germany improving

by 22 percent, United Kingdom growing at 16 percent and America

by 11 percent. This was a positive start and the indicators were

considered positive for a continued growth in 2016. The Committee

notes that the SAT has a forecast of 2 percent growth in the Annual

Performance Plan for 2016/17 but the growth is optimistically going

to be above 2 percent based on the favourable exchange rate whichpositions South Africa as an affordable and value-for-money

destination for foreign markets. The Committee is confident that the

speedy amendment of the unabridged birth certificates requirement in

the immigration regulations as recommended by the Inter-Ministerial

Committee will also have a huge positive impact to the increase in

tourist arrivals.

6.2.8 The role of private sector in marketing South Africa

The Committee noted that South African Tourism has recently signed

a three-year Memorandum of Understanding with TOMSA Levywhich details how the funds will be utilised. It is noted a 15 percent

collaborative fund has been set aside to be implemented by TOMSA

Levy. However, all the initiatives implemented using TOMSA Levy

are done collaboratively with the Tourism Business Council of South

Africa. The levy is used for two key projects. Firstly, there is a short

term project which deals with marketing and promotion in four major

markets, namely Germany, UK, US, and China. The 15 percent

collaborative fund will also be used for PR and branding. It is also

noted that a global campaign is on the cards for a reputational

campaign. Secondly, a domestic campaign called “The Finder’s

Keepers” has been implemented in partnership with the SundayTimes. The project highlights the nine provinces and their “Hidden

Gems”. The Committee is however concerned that the TOMSA Levy

collectors are declining and that many establishments are not

contributing to the levy. This might necessitate a policy review with

regard to the contributions made by the private sector to the marketing

initiatives. The Committee would therefore be commissioning an

internal benchmarking research to gain insights on how other

countries are dealing with this matter, including possibilities of policy

and legislative review proposals for a compulsory tourism tax.


26/62



6.2.9 Unleashing domestic tourism potential

The Committee welcomes the recommendations of panel review

report of South African Tourism commissioned by the Minister. The

panel identified a gap in the relationship between the nature-based

tourism, SanParks and other provincial agencies in terms ofaffordability and accessibility of these attractions to the citizens. The

Committee notes that the SAT has had discussions with SanParks on

domestic tourism discounts, such as using the wild card. This will

make nature-based tourism, including game reserves, nature reserves,

and botanical gardens affordable to citizens. Another area that has

been neglected is arts and culture and it is noted that the SAT has had

discussion with relevant agencies to map out the cultural, arts and

heritage strategy to leverage on these aspects of domestic tourism.

The Committee had also identified this missed opportunity and hence

initiated and undertook a joint oversight visit with the Portfolio

Committees on Arts and Culture and Environment. This was based on

the fact that arts and culture is very important for domestic tourism,

but is not well developed and marketed.

In the insights provided by the Minister of Tourism, improvement of

cultural tourism is based partly on marketing and partly experience,

and the combination of both makes cultural tourism attractions. The

cultural villages, for example, need attention to provide a memorable

experience. The SAT is currently in the process of finalising domestic

consumer insights. The research has come up with findings that the

inspirational campaign “My First Time Campaign” aimed at

encouraging South Africans to travel was successful. Furthermore,

SAT has partnered with organisers of domestic events such as the

biking event that takes place in Limpopo to increase domestic

tourism. The Minister alluded that they are working with the industry

to ensure that domestic tourism is affordable to South Africans. The

private sector should come to the table to make domestic tourism

accessible and affordable.

The Committee also observed that there are municipal resorts that are

dilapidated and not functioning optimally, and that if these resorts are

renovated they could make domestic tourism affordable. However,there is not enough budget to make significant contribution to

upgrading municipal resorts. The Committee noted that the Minister

also agreed that municipal resorts could be the solution to addressing

the affordability of accommodation, and that there needed to be a

collaboration with the provinces to address this matter.

6.2.10 Improving implementation of Social Responsibility

Implementation (SRI) projects

The Committee has observed over the years that there was a challenge

in implementing the Expanded Public Works Programme or SocialResponsibility Projects (SRI) projects as part of the programmes

undertaken by the Department. It was noted that the Minister also

alluded that implementing community projects in rural areas was


27/62



sometimes difficult and the failure rate was high. The Department had

commissioned forensic audits and some cases were served before the

courts. The Committee commends the interventions of the Department

whereby efforts were being shifted from developing ad hoc

community projects towards destination enhancement, which will

improve tourist experiences in destination South Africa. TheCommittee notes that community projects in the future will be

carefully selected to enhance product mix, and that products such as

cultural villages could also be an option as cultural diversity is part of

South Africa’s uniqueness.

6.2.11 Ease of travel and accreditation of tour operators abroad

In the update provided by the Minister, the Committee noted that

Brazil does not need visas and the Minister of Home Affairs recently

announced that Russian citizens who want to travel to South Africa

for leisure reasons would be exempted from Visa requirements. Thisis a new dispensation and will address the difficulty of travelling from

Russia, which has been a large visa requiring geographical area.

Furthermore, the accreditation of tour operators is no longer a

requirement from visa exempt countries for leisure tourists. In China,

the need for in-person application is no longer a challenge as all tour

operators are accredited. People wanting to travel to South Africa as

leisure tourists can now apply for their Visa through the accredited

tour operators. It is noted that the same applies in India, but the

outstanding issue in India is the capacity of Home Affairs to process

Visa applications. The Committee welcomes the Cabinet

announcement that Home Affairs will be exempting travellers from

the BRICS countries who hold Visas from countries such as US, UK,

Schengen and all other countries who apply stringent visa application

processes. These tourists will be issued a Visa on arrival. The

Committee, however, notes that this was only a policy statement at a

time and not a decision yet, but it is a matter that will be given serious

attention by Cabinet. The one outstanding matter from the IMC

recommendations is the amendment to the Immigration Regulations

that deals with the requirement of the unabridged birth certificates,

especially from visa exempt countries.

7

Conclusion

The Committee recognises that the tourism industry is impacted by a

number of internal and external factors. Most of the external factors are

fluid and the government has no control over them nor do they fall within

the purview of the private sector. The fluidity of the international tourism

trends in the sector compel well-coordinated efforts between the state and

the private sector. The Department of Tourism and South African

Tourism are therefore charged with a demanding task of ensuring that

they develop strategies that leverage on favourable factors and mitigate

the negative effects to destination South Africa. Some of the favourable

factors are exchange controls that have nonetheless not been harnessed to

give mileage to the country as a preferred and value-for-money

destination.


28/62



The Committee commends the Department and South African Tourism

for stretching the appropriated budget for tourism through a number of

partnerships they have forged with both the public and private sector

partners. Tourism thrives in partnerships and the number of partnerships

realised in the current financial year epitomises the kind of collaboration

that is desirable to grow the sector. The proposed partnerships with regardto heritage, arts and culture organisations in particular, will be tracked by

the Committee with keen interest to monitor how the Department unlocks

domestic tourism to address affordability and accessibility by the citizens.

The Committee is satisfied with how the Department and South African

Tourism will be spending the appropriated budget as outlined in the

Annual Performance Plans for the 2016/17 financial year. The Strategic

Plan and Annual Performance Plan tabled by South African Tourism has

introduced numerous improvements on how the Entity will be conducting

its business in the future. This is a welcome improvement as it gives

effect to the mandate of South African Tourism to market the country

domestically and internationally. The quarterly reports will afford the

Committee an opportunity to conduct oversight on regular basis to track

expenditure patterns and see if the new plans take the sector to a growing

trajectory.

8. Recommendations

The Committee observations led to a number of recommendations that

are consolidated in line with the Committee Strategic Plan and Annual

Performance Plan for the 2016/17 financial year. These

recommendations have both short-term and long-term ramifications.

The Committee recommends that:

8.1 The Minister ensures that the Department devises innovative ways to

ensure the implementation of their Human Resources Strategy

within the confines of the compensation of employee’s budget

approved by the National Treasury, without compromising service

delivery and mandate of the Department.

8.2 The Minister ensures that the Department properly plans for

projects, and that partner organizations implementing projects onbehalf the Department adhere to agreed time-frames to avoid delays

in the implementation of projects and achieving targets in the

Annual Performance Plan.

8.3 The Minister ensures that the Department works closely with other

government departments and agencies through intergovernmental

structures and professional fora to unblock hindrances with regard to

providing signage to major tourist attractions throughout the country

and report to the Committee within six months of adoption of this

report on progress made in this regard.

8.4 The Minister persuades colleagues within the Cabinet for a speedy

and holistic implementation of the IMC recommendations to resolve

all outstanding Visa-related issues, including the requirement for


29/62



unabridged birth certificates, and Cabinet announcement on Visa

exemptions for BRICS countries, to ease travel and increase tourist

arrivals to the country and report to the Committee within three

months of adoption of this report on progress made.

8.5

The Minister ensures that the South African Tourism finalises thenegotiations with the National Treasury and other partners on the

final solution to mitigate currency losses and reports to the

Committee within six months of the adoption of this report on

progress made.

8.6 The Minister ensures that the Grading Council of South Africa

conducts a policy review of its mandate as espoused in the Tourism

Act (Act no. 3 of 2014) and presents the policy proposals to the

Committee during the legislative review process.

8.7

The Minister ensures that the National Conventions Bureau

provides a quarterly breakdown of the 138 meetings planned for

2016/17 and specify the expected number of delegates and revenue

to be generated by each meeting; indicate in which provinces, cities,

or towns the meetings will be held, and a plan to deal with

geographic spread and submit this addendum to the Committee when

South African Tourism comes for the first quarter reporting for

2016/17 financial year.

8.8 The Minister considers a policy review on TOMSA Levy collection

and investigates other modalities for private sector funding of

tourism in South Africa.

Report to be considered.

2. REPORT OF THE PORTFOLIO COMMITTEE ON JUSTICE

AND CORRECTIONAL SERVICES ON BUDGET VOTE 18:

CORRECTIONAL SERVICES, DATED 21 APRIL 2016

The Portfolio Committee on Justice and Correctional Services, having

considered the Department of Correctional Services’ 2016/17 budget (Vote

18) and the annual performance plan, reports as follows:


30/62



1. INTRODUCTION

1.1 Section 27 of the Public Finance Management Act (No. 1 of 1999)

makes provisions for a minister to table the annual budget for a

financial year in the National Assembly before the start of thatfinancial year. Section 10(1)(c) of the Money Bills Amendment

Procedures and Related Matters Act (No. 9 of 2009) makes provision

for ministers to table strategic and annual performance plans for their

respective departments, public entities or institutions, which must be

referred to the relevant portfolio committee for consideration and

report.

1.2 The above-mentioned budget and planning documents were tabled in

March 2016. The Committee subsequently received a political

overview of the budget from the Minister of Justice and Correctional

Services (“the Minister”), Adv. Michael Masutha, and a briefing led

by the National Commissioner for Correctional Services (“the

National Commissioner”), Mr Zach Modise, on the 2016/17 APP and

budget allocation.

1.3 The DCS’s mandate is derived from the Correctional Services Act

(No. 111 of 1998), as well as the white papers on Correctional

Services (2005) and Remand Detention Management in South Africa

(2014). The legislation and policies inform all the DCS’s efforts

towards achieving the safe and humane detention of offenders and

remand detainees, and their rehabilitation and reintegration into

communities.

1.4 The DCS’s strategic planning is informed by the above-mentioned

legislative and policy provisions, as well as the government-wide

Medium-Term Strategic Framework (MTSF) 2014-19, which is

geared towards the implementation of the National Development

Plan’s (NDP) Vision 2030.


31/62



2. POLITICAL OVERVIEW BY THE MINISTER OF JUSTICE

AND CORRECTIONAL SERVICES

2.1 According to the Minister’s foreword in the DCS’s 2016/17 AnnualPerformance Plan (APP), the DCS is making steady progress as far as

the transformation of the correctional system from a punitive system

aimed at punishing offenders, to one that provides rehabilitation

programmes to address offending behaviour, and prepare offenders to

be law-abiding citizens once their sentences have expired.

2.2 In his overview of issues affecting the DCS, the Minister highlighted

the review of the parole regime, the need to reduce recidivism,

developments with regard to the DCS’s IT capabilities and proposals

for how the DCS’s challenges with regard to infrastructure

development and minor maintenance work may be addressed.

2.3 The above-mentioned shift in focus has necessitated several reviews

of the DCS’s policies and practices. For instance, several weaknesses

in the correctional supervision and parole regime have been detected.

The National Council for Correctional Services (NCCS) has therefore

reviewed the entire parole regime. They are expected to present their

findings and recommendations to the Ministry in the near future.

2.4 The correctional system has to be especially responsive to the needs

of young offenders who had to be equipped with skills to

reduce/prevent recidivism. Many ex-offenders complain that their

inability to secure employment contributed to their recidivism. A

criminal record prohibited them from seeking employment in certain

sectors. However, there were many other sectors in which ex-

offenders with could seek employment despite having a criminal

record. Employers had to be sensitised to the difficulties ex-offenders

were confronted with owing to the stigma attached to having been

incarcerated. Society at large, too, has to “open up” to offenders.Recidivism would only be reduced through cooperation between

communities, business, civil society and the government.


32/62



2.5 The DCS’s Information and Communications Technology (ICT)

environment remained a cause for concern. The DCS is key roleplayer

to the success of the Integrated Justice System (IJS), which seeks to

create digital synchrony and modernisation of the Criminal JusticeSystem (CJS). This modernisation of ICT infrastructure and systems

was recommended by the Criminal Justice Review Committee, and

forms part of the Seven Point Plan aimed at enhancing the CJS. The

DCS was in the process of procuring an integrated inmate

management system (IIMS) which is a fully automated transversal

system designed to feed into the IJS. The IIMS will, for the first time,

connect the DCS’s approximately 240 correctional centres, thereby

ensuring that inmate information is instantly and seamlessly

accessible to all relevant stakeholders in the value chain.

2.6 On infrastructure, the Minister reminded the Committee that in the

past the DCS had been almost entirely self-sufficient as far as capital

works projects and maintenance were concerned. Given the

constraints the Department of Public Works (DPW) was contending

with, and in light of the continued government-wide austerity

measures, it may be appropriate to consider restoring the DCS’s

capacity to, as far as is practical, deliver its own infrastructural

projects, and be responsible for maintaining existing infrastructure.

3. STRATEGIC GOALS FOR 2016/17

3.1 According to its 2015/16 to 2019/20 strategic plan, the DCS’s mission

is to contribute to a just, peaceful and safer South Africa through the

effective and humane incarceration of inmates, and the rehabilitation

and social reintegration of offenders. The DCS committed to playing

its role to ensure that the MTSF and the NDP’s strategic outcomes are

achieved. The overarching goal is to build a safer South Africa where

all people are and feel safe.


33/62



3.2 To this end the DCS has committed to:

- providing all remand detainees and sentenced offenders with

safe, secure and humane conditions of detention and

incarceration;- ensuring that remand detainees attend court as

prescribed/required, and that they are provided with services

responding to their needs, including personal wellbeing

programmes; and

- attending to sentenced offenders’ health care, rehabilitation

and social reintegration needs.

4. Overview of the DCS’s budget

4.1 The JCPS cluster will receive approximately R166,892 billion in

2016/17. This constitutes 23 per cent of the total national budget.

Table 1 illustrates the allocation across the cluster.

Justice, Crime Prevention and Security

Cluster

2016/17

(R’000)

% of Cluster Vote

Correctional Services 21 577.3 13%

Defence and Military Veterans 47 169.7 28%

Independent Police Investigative Directorate 246.1 0.14%

Justice and Constitutional Development 16 049.7 9.6%

Office of the Chief Justice and Judicial

Administration865.0 0.52%

Police 80 984.9 48.5%

Total for Cluster 166 892.723.1% of national

budgetTotal appropriation by Vote 721 148.2

4.1 As illustrated above, the DCS received approximately R21,577 billion

i.e. 3 per cent of the national budget, and 13 per cent of the JCPS

cluster’s allocation. Expenditure is projected to increase by 6.3 per cent

annually, to approximately R24,7 billion by 2018/19.


34/62



4.2 The DCS’s budget is distributed across the following five

programmes: Administration (Programme 1), Incarceration

(Programme 2), Rehabilitation (Porgramme 3), Care (Programme 4),

and Social Reintegration (Programme 5).

4.3 As in previous years, the bulk of the allocation, about 81 per cent,

goes towards the Administration and Incarceration programmes

which receive 18 per cent and 63 per cent respectively. The

Rehabilitation and Social Reintegration programmes again receive the

lowest allocations, which when combined only amount to 9.6 per cent

of the total DCS budget – 0.8 per cent less than in 2015/16. As in the

previous year, the Care programme will receive 9 per cent of the

budget. This trend will continue over the medium-term, as is

illustrated in Table 2 below.

PROGRAMME 2016/17 2017//18 2018/19 2016/17 to 2018-19

Programme 1: Administration 3 876,2 4 199,5 4 458,2 12 533,9

Programme 2: Incarceration 13 700,9 14 498,4 15 624,2 43 823,5

Programme 3: Rehabilitation 1 217,3 1 439,2 1 541,4 4 197,9

Programme 4: Care 1 975,1 2 010,7 2 122,8 6 108,6

Programme 5: Social Reintegratio 807,8 901,1 954,2 2 663,1

Total Expenditure Estimates 21 577,3 23 048,9 24 700,8 69 327,0

Table 2: Projected spending over the medium-term

5. Overview of allocations per programme

5.1

Programme 1: Administration

5.1.1. The Administration programme provides for the functions that

underpin the DCS’s service delivery, and comprises administrative,

management, financial, information communication and technology,

research, policy co-ordination and good governance support

functions. The sub-programmes in this programme have increased

from seven to eight: Ministry, Judicial Inspectorate for Correctional

Services (new), Management, Human Resources, Finance, Internal

Audit, Information Technology and Office Accommodation.


35/62



5.1.2. This programme receives the second largest allocation – i.e.

R3,9 billion, which amounts to a 4.92 per cent increase on the

previous year’s allocation. The bulk of the allocation will again go

towards the ‘compensation of employees’ (76 per cent) with ‘goodsand services’ and ‘computer services’ receiving 19 per cent and

3 per cent respectively. Table 3 illustrates the budget allocation

across this programm

nkandla - correspondence from president of the republic on investigation into allegations of...

Documents