Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698930097176.pdf (South Africa)
Wednesday, 19 May 2021] No 64—2021] THIRD SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ WEDNESDAY, 19 MAY 2021 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Introduction of Bills ......................................................................................................... 2 COMMITTEE REPORTS National Assembly 1.
Women, Youth and Persons with Disabilities .................................................................. 3 Basic Education ................................................................................................................ 5 2.

3. International Relations and Cooperation ........................................................................ 58 Trade and Industry .......................................................................................................... 87 4.

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Trade and Industry .......................................................................................................... 89 National Council of Provinces 1.

Public Enterprises and Communication ......................................................................... 94 1 2.

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Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour .......................................................116 Cooperative Governance and Traditional Affairs, Water and Sanitation and Human Settlements ............................................................................... 144 Land Reform, Environment, Mineral Resources and Energy ...................................... 152 ANNOUNCEMENTS National Assembly The Speaker 1.
Introduction of Bills (1) The Minister of Justice and Correctional Services (a) Land Court Bill [B 11 - 2021] (National Assembly – proposed sec 75) [Explanatory summary of Bill and prior notice of its introduction published in Government Gazette No 44480 of 23 April 2021.]

Introduction and referral to the Portfolio Committee on Justice and Correctional Services of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160.
In terms of Joint Rule 154 written views on the classification of the Bill may be submitted to the JTM.

The Bill may only be classified after the expiry of at least three parliamentary working days since introduction.

COMMITTEE REPORTS National Assembly 2 1.


Report of the Portfolio Committee on Women, Youth and Persons with Disabilities on the Draft Notice on the Determination of Remuneration of Independent Constitutional Institutions, dated 18 May 2021 The Portfolio Committee on Women, Youth and Persons with Disabilities, having considered the Draft Notice on the Determination of Remuneration of Independent Constitutional Institutions, referred to it on 22 April 2021 on 18 May 2021, reports as follows: 1.
BACKGROUND The Speaker of the National Assembly referred to the Committee (ATC 51, 22 April 2021) the draft notice from the President of the Republic of South Africa (dated 13 April 2021) for consideration and report.
The latter notified the National Assembly of the President’s determination of the salaries and allowances of members of the Independent Constitutional Institutions, in terms of the Determination of Remuneration of Office-Bearers of Independent Constitutional Institutions Laws Amendment Act, 2014 (Act No.

22 of 2014).
22 of 2014).

The President received the annual salary recommendations for the Public Office-Bearers of the Independent Constitutional Institutions from the Independent Commission for the Remuneration of Public Office Bearers.
The Commission having considered, amongst others, the fiscal condition of the country, the State's wage bill and the impact of Public Office Bearers' salary increment on the fiscus and general economic status of the country which has been negatively affected by the Covid-19 pandemic, affordability of the fiscus, recommended 0% salary increment for all public office bearers for the financial year 2020/21.

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CONTEXT Section 8(1) of the Commission for Gender Equality Act 39 of 1998 provides that the full time and part time members of the Commission on Gender Equality are entitled to an annual salaries and such allowances or benefits as determined by the President from time to time by notice in the Gazette and approved by the National Assembly.
1 3 The President reports that he has taken into consideration the economic challenges the country is experiencing, as well as the current fiscal constraints and thus intended to make the determination on the matter, with effect from 01 April 2020, as follows: • Chairperson: R1 149 716 • Deputy Chairperson: R984 162 • Commissioners: R915 818 • Part-time members: R3 634 per day 3.
COMMITTEE CONSIDERATION The Portfolio Committee on Women, Youth and Persons with Disabilities considered, supported and approved the intended Determination by the President of the Republic, in relation to the members of the Commission for Gender Equality given the fiscal constraints.

Report to be considered.

2 4 2.

Report of the Portfolio Committee on Basic Education on Budget Vote: Basic Education, dated 18 May 2021.
The Portfolio Committee on Basic Education having considered Budget Vote 16: Basic Education, together with the Basic Education 2020/21 – 2024/25 Strategic Plan and 2021/22 Annual Performance Plans of the Department of Basic Education and its Statutory Bodies, reports as follows: 1.
Introduction 1.1 The Portfolio Committee on Basic Education and Select Committee on Education and Technology, Sports, Arts and Culture, considered the 2021/22 Annual Performance Plan (APP) and 20/21 – 2024/25 Strategic Plan of the Department of Basic Education on Wednesday, 17 March 2021 as well as the review of its two statutory bodies i.e.

the South African Council for Educators (SACE) and the Council for Quality Assurance in General and Further Education and Training (Umalusi) on Friday, 7 May 2021.
1.2 The budget review briefings served to acquaint the 6th Parliament Portfolio Committees with the mandates, programmes and priorities of the Department.
1.3 Those that appeared before the Portfolio Committee during the Budget Review sessions included the following: 1.3.1 Department of Basic Education (DBE): Hon A Motshekga: Minister of Basic Education, Hon M R Mhaule: Deputy Minister of Basic Education, Mr H M Mweli: Director-General, Mr P R M Khunou: Chief Finance Officer, Mr S G Padayachee: Deputy Director-General, Dr G Whittle: Deputy Director-General, Dr S Simelane: Acting Deputy Director-General, Ms C Nuga-Deliwe: Chief Director, Mr D Ntloana: Director, Ms S Mbonambi: Director, Dr F Kumalo: Acting Chief Director, Ms Z Sattar: Personal Assistant, Mr S Mabua: Advisor, Ms S Ramohapi, Ms S Geyer: Director, Mr E Mhlanga: Chief Director, Mr D Van Der Westhuijzen: Director, Ms L Matshaba, Ms N Molai: Director, Ms T Mohlala: Parliamentary Liaison Officer, Mr L Mahada: Director , Ms L Carolissen: Liaison Officer, Ms S Lubisi: Liaison Officer and Mr M Matthews: Liaison Officer.
5 1.3.2 South African Council for Educators: Ms E Mokgalane: Chief Executive Officer, Mr M Mapindani: Chief Finance Officer, Mr B Bushe: SACE Head, Ms Y Lechaba: SACE Head, Mr M Rakgoale: Communications Assistant Manager, Ms J Boikanyo: Communications Assistant Manager, Ms L Twala: Assistant Manager Research and Mr T Njongo: Assistant Manager.
1.3.3 The Council for Quality Assurance in General and Further Education and Training (Umalusi): Dr M Rakometsi: Chief Executive Officer, Mr H van der Walt: Chief Finance Officer, Mr E Sibanda: Executive Manager, Mr D Maluleke: Senior Manager, Mr L Ditaunyane: Senior Manager and Ms M Madalane: Senior Manager.
1.4 This report gives a brief summary of the presentation made by the Department of Basic Education (DBE) to the Committees, focusing mainly on the Department’s 2021/22 Annual Performance Plan, the 2020 Medium Term Expenditure Framework (MTEF) allocations, and the overview of allocations per programme.

The report also provides the Committee’s key deliberations and recommendations relating to the Vote.
1.5 Copies of all presentations on the Budget Review of the Department of Basic Education (DBE), SACE and Umalusi were available from the office of the Committee Secretary.

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Department of Basic Education (DBE) Overview of the Annual Performance Plan (APP) for 2021/22 2.1 Strategic overview by the Department of Basic Education (DBE) The Minister of Basic Education, Hon A Motshekga, Deputy Minister Hon M R Mahaule and the Director-General, Mr H Mweli led a delegation from the DBE to present on the 2021-22 Annual Performance Plan and the Budget of the Department of Basic Education.
2.1.1 Background and Context - The Joint Committees was presented with some background and context to the 2021-22 Annual Performance Plan (APP).

The Annual Performance Plan (APP) sets out what the Department intends doing in the financial year and during the Medium-Term Expenditure Framework (MTEF) period to implement its 1 6 Strategic Plan.

In fulfilling its legal obligation, the Department must produce and table an APP annually to Parliament.
The Strategic Plan should cover a period of at least five years and can be amended during the five-year period it covers.

The 2021/22 APP represents the first year of activities towards achieving the objectives contained in the DBE Strategic Plan 2020/21-2024/25.

The DBE’s Strategic Plan is anchored on the Government’s long-term plan; the National Development Plan 2030: Our future – make it work, the MTSF 2019-2024 and the draft Action Plan to 2024.
By 2030, South Africans should have access to education and training of the highest quality, leading to significantly improved learning outcomes.

The performance of South African learners in international standardised tests should be comparable to the performance of learners from countries at a similar level of development and with similar levels of access.
The Department gave a detailed overview by outlining the shape and the size of the basic education sector giving a comprehensive breakdown of the number of learners, educators and schools in the ordinary school sector by province for 2020.

In respect of education statistics, the Department further outlined the size of the schooling system with figures for the number of learners, educators, schools and languages.
2.1.2 Impact of COVID-19 – the World Health Organisation (WHO), in 2020 indicated that during the Coronavirus Disease (COVID-19) pandemic, prolonged school closures may result in a reversal of educational gains, limiting children’s educational and vocational opportunities as well as their social and emotional interactions and development.

The longer a student stays out of school, the higher the risk of dropping out.
Additionally, students who are out of school – and particularly girls – are at increased risk of vulnerabilities (e.g.

subject to greater rates of violence and exploitation, child marriage and teenage pregnancy).

Furthermore, prolonged school closures interrupt and disrupt the provision of, and access to, essential school-based services such as school feeding and nutrition programmes, immunisation, and mental health and psychosocial support.
2.1.3 Schooling and the Pandemic (Evidence, Conclusions and Recommendations) – The Department of Basic Education’s main findings were as follows: • Attendance rates had bounced back significantly since July 2020 when not all grades were open, but this ignored the effect of rotational timetabling which was resulting in further lost time at school.

• Attendance rates remained relatively high despite high levels of worry.
2 7 • More children received school meals in November 2020 compared to July 2020, but still not the usual percentage (about 65% of Households).

Children were still at substantially lower risk to COVID-19 than adults, especially young children.

The Department of Basic Education concluded the following recommendations: • Schools should remain open as far as possible, with all precautionary mechanisms in place, and priority given to early grades if a phased approach was needed.
• Prioritise recovery of learning, which would also mitigate against dropout.

• Implementation of school feeding should continue to be strengthened.
2.1.4 Progress on Selected Key Deliverables - The Department further listed the progress on selected key deliverables as follows: • Performance of the Class of 2020 NSC (Progressed learners excluded); • NSC performance from 2014 – 2020; • Bachelor passes per province in 2020; • Special Needs Education (SNE) learners by qualification type; • National School Nutrition Programme (NSNP) Quarter 1 – Quarter 3 of 2020-21; • Filling of Posts 202-21; • Funza Lushaka placements 20120-21; • Volume 1 Grade 1 to Grade 9 and Grade R Workbooks (2020); and • Volume 2 Grade 1 to Grade 9 Workbooks (2020).
2.1.5 Key Government Priorities – The MTSF 2019–2024 translates the ruling party’s electoral mandate into government’s priorities over a five-year period.

Basic Education is critical in priority 2, 3 and 6: • • • • • • • Priority 1: A capable, ethical and developmental state.

Priority 2: Economic transformation and job creation.

Priority 3: Education, skills and health.

Priority 4: Consolidating the social wage through reliable and quality basic services.
Priority 5: Spatial integration, human settlements and local government.

Priority 6: Social cohesion and safe communities.

Priority 7: A better Africa and world.

3 8 2.1.6 MTSF 2019 – 2024 Outcomes (Education) – The Department also detailed the following Education Outcomes for the 2019 – 2024 MTSF: • Outcome 1: Improved school-readiness of children.

• Outcome 2: 10-year-old learners enrolled in publicly funded schools read for meaning.
• Outcome 3: Youths better prepared for further studies and the world of work beyond grade 9.

• Outcome 4: Youths leaving the schooling system more prepared to contribute towards a prosperous and equitable South Africa.

• Outcome 5: School physical infrastructure and environment that inspires learners to learn and teachers to teach.
2.1.7 The Significance of the State-of-the-Nation-Address (SONA) – The Presidential pronouncements set the key government priorities and deliverables for the year: • In turn determine the priorities of the DBE and the basic education sector broadly.

• The pronouncements commit the DBE in public to key activities and outcomes.

• Alignment to current annual plans of those key areas have tangible implications, not only for the DBE, but for the sector.
SONA 2021: • Learning Disruptions and Issues affecting learners - “Schooling disruption placed a huge burden on learners, teachers and families.” “It is our priority for this year to regain lost time and improve educational outcomes, from the early years through to high school and post-school education and training.” • Early Childhood Development (ECD) and Early Learning - “Equally we need to give attention to issues affecting children including improving school-readiness, ECD planning and funding.” SONA 2020: • Early Learning: Reading and Numeracy.
• Migration of ECD.

• Fourth Industrial Revolution and ICTS/Operation Phakisa.

• Competencies and Skills for a Changing World.

• Coding and Robotics.

4 9 • Learners with Special Needs (LSEN) Support: South African Sign Language (SASL) as Home Language (HL).

2.1.8 ECD Function Shift – The different work streams have made substantial progress in leading and guiding the provinces in preparing for the function shift.
Concurrence had been reached between the two Departments regarding the scope of the function shift.

The final Proclamations, the President’s Minute and the President’s Note have been sent to the Office of the Chief State Law Advisor.

A comprehensive diagnostic report has been completed on the resources that have been identified for transfer.
The Vision for ECD with DBE – The Department noted that during the SONA, the President announced the implementation of the Early Grade Reading Programme, which consisted of an integrated package of lesson plans, additional reading materials and professional support to Foundation Phase teachers.
This formed part of the broader efforts to strengthen the basic education system by empowering school leadership teams, improving the capabilities of teachers and ensuring a more consistent measurement of progress for grades three, six and nine.

There was a need to prepare young people for the jobs of the future.
2.2 Strategic Objectives, Indicators and Targets in the 2021 - 22 APP 2.2.1 The Action Plan to 2024 – The Action Plan to 2024: Towards the Realisation of Schooling 2030 was the sector plan for basic education.

It has been reviewed and strengthened for the 2020-2021 planning cycle.

The Action Plan was based on 27 national goals that were intended to improve basic education across all levels.
Thirteen (13) of these goals, were output goals, dealing with better school results and better enrolment of learners in schools.

The remaining 14 goals dealt with things that had to happen for the output goals to be realised.
2.2.2 Council of Education Ministers (CEM) Priorities for the 6th Administration – These priorities were approved by the Council of Education Ministers to lay a solid foundation for quality education, in support of improved reading and learning outcomes: • Improving foundational skills of Numeracy and Literacy, especially reading which should be underpinned by a Reading Revolution.
5 10 • Immediate implementation of a curriculum with skills and competencies for a changing world in all public schools (Three Stream Model, Fourth Industrial Revolution, Entrepreneurship, Focus Schools, etc.)
• Deal decisively with quality and efficiency through the implementation of standardised assessments to reduce failure, repetition, and dropout rates and introduce multiple qualifications such as General Education Certificate before the Grade 12 exit qualification • Urgent implementation of two years of ECD before Grade 1, and the migration of the 0 - 4 year olds from Social Development to Basic Education.
• Complete an integrated Infrastructure Development Plan informed by infrastructure delivery and regular maintenance which is resourced.

• Work with Sport and Recreation, Arts and Culture, Health, and South African Police Services to teach and promote Social Cohesion, Health and School Safety.
2.3 Performance Measurement 2.3.1 Strategic Plan 2020/21 – 2024/25 – The Department gave a detailed overview of the impact statement, outcomes and indicators (including baseline and five-year target) for the following: • Outcome: 1: Maintain and develop the system of policies, including the curriculum and assessment, governing the basic education sector to advance a quality and inclusive, safe and healthy basic education system • Outcome 2: Maintain and develop information and other systems which enable transformation and an efficient and accountable sector.
• Outcome 3: Maintain and develop knowledge, monitoring and research functions to advance more evidence-driven planning, instruction and delivery.

• Outcome 4: Advance the development of innovative and high-quality educational materials.

• Outcome 5: Conduct strategic interventions to assist and develop provincial education systems.

2.3.2 MTSF 2019-2024 Review - The Medium Term Strategic Framework (MTSF) was led by the Presidency and Department of Planning, Monitoring and Evaluation (DPME.)
The DPME presented the MTSF review to the HEDCOM Subcommittee for Planning, 6 11 Monitoring and Evaluation on 18 February 2021.

The Presidency has submitted the MTSF revisions for Cabinet approval.
The MTSF revisions were as follows: • Impact 1: Ø Migration of ECD to be concluded by 2024; Ø baseline for percentage of 5 year olds (Grade RR) enrolled in educational institutions by 2024, has been corrected from 2017 to 2018; and Ø School readiness system and target for learners ready has been moved from 2021 to 2022.

• Impact 2: Ø Targets for Systemic Evaluation to be determined after first assessment conducted in October 2021.
Ø The approved curriculum for Coding and Robotics should be in place by 2022.

Ø A new indicator has been added “Number of learners with disabilities in appropriate formal education programmes” and the target to be achieved by 2024.

Ø The target for learning outcomes in Grade 6 Mathematics and Reading according to the international SACMEQ has moved from 2020 to 2022.
• Impact 3: Minor revision-target for SEAQMEC moved from 2020 to 2022 • Impact 4: Ø The Second Chance Matric Programme has been redesigned and reconfigured to include a new indicator: “Introduce a programme to train unemployed youths in general maintenance of schools”.

At least 710 youth should be trained within the 71 education districts.
Ø The Three Stream Model indicator has been revised from “fully implemented by 2024” to be specific and also split into two indicators “% of Schools of Skills implementing technical-occupational curriculum and “Number of ordinary schools implementing technical- occupational curriculum” with measurable targets.
7 12 • Impact 5: Ø The whole impact has been revised from “Learners and Teachers Feel Respected and Learning Improves by 2024” to Improved Quality of Teaching and Learning Through Provision of Appropriate Infrastructure.

2.4 DBE Programme Performance - The Annual Performance Plan (APP) summarised the priorities of the Department as aligned to the MTSF 2019 – 2014 and the draft Action Plan to 2024: Towards the Realisation of Schooling 2030.
The activities of the Department had been structured into five programmes as elaborated in the Annual Performance Plan: • Programme 1: Administration; • Programme 2: Curriculum Policy, Support and Monitoring; • Programme 3: Teachers, Education Human Resources and Institutional Development; • Programme 4: Planning, Information and Assessment; and • Programme 5: Educational Enrichment Services.
For the 2021 – 22 Annual Performance Plan there was a combined total of 70 performance indicators for all five programmes of the Department – and could be broken down into 58 (83 percent) annual targets, 10 (14 percent) quarterly targets, one (1.5 percent) bi-annual targets and one (1.5 percent) bi-ennial target.
2.4.1 Programme 1 – Administration 2.4.1.1 Annual Outcome Indicators: • Annual Performance Plan approved by 31 March each financial year – The Department’s target was to have the 2022-23 APP approved by March 2022 which they achieved.

• Number of capacity building programmes offered to the DBE officials – The target set by the Department stood at 12 capacity building programmes for 2021-22.
8 13 2.4.1.2 Quarterly Outcome Indicators: • Percentage of valid invoices paid within 30 days upon receipt by the Department – The target set by the Department stood at 100 percent.

• Number of reports on misconduct cases resolved within 90 days – The quarterly target set by the Department stood at four (4) reports.
• Quarterly Reports submitted to National Treasury(NT) and the DPME 30 days after the end of each quarter – The Department’s target was to submit four (4) quarterly reports to National Treasury and the Department of Performance Monitoring and Evaluation (DPME) 30 days after the end of each quarter.
2.4.2 Programme 2 – Curriculum Policy, Support and Monitoring: 2.4.2.1 Annual Outcome Indicators: • Number of Children/ Learners with Profound Intellectual Disability (C/LPID) using the Learning Programme for C/LPID using the Learning Programme for C/LPID – The Department’s target is set at 3 727 children/learners • A National Report is produced on monitoring of the implementation of the Policy on Screening, Identification, Assessment and Support (SIAS) as a mechanism for early identification and intervention – The target was for an approved National Report on monitoring of the implementation of the policy on SIAS as a mechanism for early identification and intervention.
• A National Report is produced on the amended legislation to regulate the new ECD landscape - The target was for an approved National Report on the amended legislation to regulate the new ECD landscape.

• A National Report is produced on the development of a new funding model for ECD - The target was for an approved National Report on the development of a new funding model for ECD.
• A National Report is produced on conducting an Early Childhood Development census to inform the integration of ECD into EMIS - The target was for an approved National Report produced on conducting an 9 14 Early Childhood Development census to inform the integration of ECD into EMIS.
• A National Report is produced on developing and operationalising an Early Childhood Development Human Resource Development Plan - The target was for an approved National Report produced on the development of a new ECD service delivery model and its workforce implications.

• Number of districts monitored on implementation of the National Curriculum Statement (NCS) for Grades 10 -12 – The Department’s target is set at eight (8) districts monitored.
• Number of provinces monitored on extra-support classes to increase the number of learners achieving Bachelor level passes - The Departments target is set at nine (9) provinces monitored.

• Number of schools monitored for implementing compulsory entrepreneurship education - The Departments target is set at 135 schools (15 schools per province).
• An Annual Sector Report is produced on the implementation of the General Education Certificate (GEC) – The target is an approved Annual Sector Report on the implementation of the General Education Certificate (GEC).

• An Annual Sector Report is produced on schools that are prepared to respectively implement and pilot the Technical Occupational Stream – The target is an approved Annual Sector Report on ordinary secondary schools that pilot the Technical Occupational Stream in 2021/22.
• Number of schools monitored for piloting the Coding and Robotics Curriculum – The target is set at 18 schools i.e.

two schools per piloting province.

• Number of schools monitored on the implementation of the reading norms - The Departments target is set at 18 schools.

• Number of schools monitored on the implementation of the Incremental Introduction to African Languages (IIAL) - The Departments target is set at 18 schools.
10 15 • Number of underperforming schools monitored on the implementation of the Early Grade Reading Assessment (EGRA) - The Departments target is set at 18 schools.

• Number of schools with multi-grade classes monitored for implementing the multi-grade toolkit - The Departments target is set at 32 schools.

• An Annual Sector Report is produced on the implementation of the National Reading Plan - The target is an approved Annual Sector Report on the implementation of the National Reading Plan.
• An Annual Sector Report is produced on the number of public schools monitored on the availability of readers - The target is an approved Annual Sector Report on the number of public schools monitored on the availability of readers.

• Number of schools per province monitored for utilisation of Information and Communication Technology (ICT) resources - The Departments target is set at 27 schools (three per province).
• Percentage of public schools with Home Language workbooks for learners in Grades 1 to 6 per year, after having placed an order - The Departments target is set at 100 percent for 2021-22.

• Percentage of public schools with Mathematics workbooks for learners in Grades 1 to 9 per year, after having placed an order - The Departments target is set at 100 percent for 2021-22.
• Percentage of public schools with workbooks for learners in Grades R per year, after having placed an order - The Departments target is set at 100 percent for 2021-22.

• An Annual Sector Report is produced on the learners provided with Mathematics and English First Additional Language (EFAL) textbooks in Grades 3, 6, 9 and 12 - The target is an approved Annual Sector Report on the learners provided with Mathematics and English First Additional Language (EFAL) textbooks in Grades 3, 6, 9 and 12.
• The number of schools monitored for home languages in which Literacy Grades 1-3 Lesson Plans have been developed for terms 1 to 4 - The Departments target is set at 10 schools.

11 16 • Number of special schools with access to electronic devices - The Departments target is set at 32 schools.
• An Annual Sector Report is produced on the monitoring of procurement and distribution of ICT devices - The target is an approved Annual Sector Report on the monitoring of procurement and distribution of ICT devices.

• An Annual Sector Report is produced on the number of teachers trained on inclusion - The target is an approved Annual Sector Report on the number of teachers trained on inclusion.
• An Annual Sector Report is produced on the number of learners in public special schools - The target is an approved Annual Sector Report on the number of learners in public special schools.

• An Annual Sector Report is produced on the percentage of public special schools serving as resource centres - The target is an approved Annual Sector Report on the percentage of public special schools serving as resource centres.
• An Annual Sector Report is produced on the establishment of Focus Schools per PED - The target is an approved Annual Sector Report on the establishment of Focus Schools per PED.

2.4.2.2 Quarterly Outcome Indicators: • Number of Technical schools monitored for implementation of Curriculum and Assessment Policy Statements (CAPS) – The target set by the Department is 18 schools monitored.
2.4.2.3 Bi-Annual Outcome Indicators: • Number of learners per year obtaining subject passes towards a National Senior Certificate (NSC) or extended Senior Certificate, including upgraded NSC, through the SCMP - The target set by the Department is 45 000 learners.
12 17 2.4.3 Programme 3: Teachers, Education Human Resources and Institutional Development 2.4.3.1 Annual Outcome Indicators: • Percentage of School Governing Bodies (SGBs) that meet the minimum criteria in terms of effectiveness – The Departments target is set at 90 percent of 100 sampled schools.

• Percentage of schools producing the minimum set of management documents at a required standard - The Departments target is set at 100 percent of 100 sampled schools.
• Number of Funza Lushaka bursaries awarded to students enrolled for Initial Teacher Education - The Departments target is set at 11 500 bursaries awarded.

• An Annual Sector Report is produced on the number of qualified teachers aged 30 and below entering the public service as teachers - The target is an approved Annual Sector Report on the number of qualified teachers aged 30 and below entering the public service as teachers.
• A National Report is produced on monitoring the functionality of Provincial Teacher Development Institutes and District Teacher Development Centres – The target is an approved National Report is produced on monitoring the functionality of Provincial Teacher Development Institutes and District Teacher Development Centres.
• A National Report is produced on monitoring the implementation of Teacher Development Programmes by PEDs with special focus on EFAL, Mathematics, Physical Sciences and Accounting – The target is an approved National Report is produced on monitoring the implementation of Teacher Development Programmes by PEDs with special focus on EFAL, Mathematics, Physical Sciences and Accounting.
• Number of PEDs that had their post- provisioning processes assessed for compliance with the post-provisioning norms and standards - The Departments target is set at nine.

13 18 • An Annual Sector Report is produced on the number of Grade R practitioners with at least NQF level 6 and above qualification - The target is an approved Annual Sector Report is produced on the number of Grade R practitioners with at least NQF Level 6 and above qualification.
2.4.3.2 Quarterly Outcome Indicators: • Number of quarterly monitoring reports tracking the percentage of Funza Lushaka graduates placed within six (6) months upon confirmation that the bursar has completed studies - The Department’s target is set at four reports.

• Number of quarterly monitoring reports indicating the number and percentage of schools where allocated teaching posts are all filled - The Department’s target is set at four reports.
• Number of PEDs monitored on the implementation of the Performance Management Service for school-based educators - The Department’s target is set at nine PEDs.

• Number of PEDs monitored on the implementation of Education Management Service: Performance Management and Development System (EMS: PMDS) - The Department’s target is set at nine PEDs.
2.4.4 Programme 4: Planning, Information and Assessment 2.4.4.1 Annual Outcome Indicators: • Number of new schools built and completed through ASIDI - The Department’s target is set at 21 schools.

• Number of schools provided with sanitation facilities - The Department’s target is set at 1 000 schools.

• Number of schools provided with water facilities through ASIDI - The Department’s target is set at 100 schools.
• Number of General Education and Training (GET) test items developed in Language and Mathematics for Grades 3, 6 and 9 - The Department’s target is set at 500 test items developed.

14 19 • Number of NSC reports produced - The Department’s target is set at four reports.

• Number of question papers set for June and November examinations - The Department’s target is set at 294 question papers.
• Percentage of public schools using the South African School Administration Systems (SA-SAMs) for reporting - The Department’s target is set at 98 percent of public schools.

• A National Report is produced on the number of provinces monitored for implementation of Learner Unit Record Information and Tracking System (LURITS) – The target is an approved National Report on the number of provinces monitored for implementation of Learner Unit Record Information and Tracking System (LURITS).
• A National Report is produced on learning outcomes linked to the National Assessment Framework (NAF) – The target is an approved National Report on learning outcomes linked to the National Assessment Framework (NAF).

• A National Report is produced on developing and operationalising a school readiness assessment system – The target is for an approved National Report on the First Early Learning National Assessment.
• Number of officials from districts that achieved below the national benchmark in the NSC participating in a mentoring programme - The Department’s target is set at 60.

• Percentage of District Directors who have undergone competency assessment prior to their appointment - The Department’s target is set at 96 percent of District Directors.
• Percentage of underperforming schools monitored at least twice a year by district officials - The Department’s target is set at 80 percent of underperforming schools monitored.

• Number of District Director forums held - The Department’s target is set at three forums.

• Number of districts in which teacher development has been conducted as per District Improvement Plan - The Department’s target is set at 60 districts.
15 20 2.4.4.2 Biennial Outcome Indicators: • Percentage of school principals rating the support services of districts as being satisfactory - The Department’s target is set at nil (zero) for the 2021-22 APP.

2.4.5.

Programme 5: Educational Enrichment Services 2.4.5.1 Annual Outcome Indicators: • Number of PEDs with approved annual business plans for the HIV/AIDS Life Skills Education Programme - The Department’s target is set at nine PEDs.
• Number of districts monitored in the implementation of the National School Safety Framework (NSSF), Social Cohesion, Sport and Enrichment Programmes - The Department’s target is set at 75 districts monitored.

2.4.5.2 Quarterly Outcome Indicators: • Number of schools monitored for the provision of nutritious meals - The Department’s target is set at 120 schools monitored.
• Number of learners, educators, parents, SGBs and other education stakeholders reached through social cohesion programmes - The Department’s target is set at 3 000.

• Number of districts implementing the programme on school assemblies to end school-related gender-based violence - The Department’s target is set at 75 districts.
2.5 Update on the 2021-22 Standard Output Indicators (SOIs) for the Sector (Provincial Alignment Work) The draft 2021/22 SOIs were sent to PEDs on 14 August 2020 for submission of inputs by 24 August 2020.

No inputs were received.

Letters were sent to HODs on 21 September 2020, to note the decisions and agreements of the sector in relation to the 2020/21 SOIs and request them to adopt the 2021/22 SOIs in their plans.
The letters to HODs also requested PEDs to 16 21 include inputs emanating from the 2019/20 audit on the SOIs document in track changes, to incorporate any issues from the 2019/2020 audit, with responses on 29 September 2020. Letters were received with inputs from PEDs except Eastern Cape.

Inputs from all PEDs were consolidated into the final document, indicating what was incorporated and what was not, with reasons.
The analysis showed that only 3 indicators were agreed on by all PEDs without issues raised.

Consultations were held with individual PEDs to secure sufficient consensus on indicators that the majority had agreed to, i.e to increase the number of standardised indicators in the sector.

As a result of consultations, the standardised output indicators increased from 3 to 20, which were then approved by the Director-General (DG) with letters to HODs on 6 November 2020.
A total of seven PEDs have formally adopted the SOIs through HOD letters.

The two outstanding PEDs are Western Cape (that raised additional issues through an email) and Mpumalanga (that committed to submit the formal adoption letter).

The whole sector does not have standardised indicators, but is working towards it led by the Head of Department for Free State as the Chairperson for the HEDCOM Subcommittee on Planning, Monitoring and Evaluation.
2.6 Comments by Oversight Structures on the 2021-22 APP - Comments were received from the following oversight structures: • Auditor-General South Africa (AGSA); • National Treasury; • Department of Planning, Monitoring and Evaluation; and • Internal Audit.

The Department also had collaborations with other government and non-government stakeholders.

This also included the implementation of the Management Performance Assessment Tool (MPAT ) recommendations.
There were further engagements with Statistics South Africa on outdated data.

Policies crucial for inclusion of persons with disabilities, women and youth should be referenced.

The Department further outlined its responses and amendments on comments by the oversight structures on the 2021-22 APP.

The Department further gave a detailed overview of 17 22 the Technical Indicator Description (TID) Amendments as well as the strategic areas identified as gaps in the 2021-22 APP.
2.7 Budget Review – 2021 2.7.1 MTEF (2021) Cabinet Baseline Reductions 2021/22 2022/23 R’000 R’000 2023/24 R’000 2021 Indicative Allocation 27 332 964 28 592 395 29 714 789 Less: Conditional Grants Learners with Profound Intellectual Disabilities Grant (72 299) (13 462) (89 348) (16 316) (47 571) - Maths, Science and Technology Grant (10 775) (13 960) (23 945) Education Infrastructure Grant (21 362) (25 590) - HIV and AIDS ( Life Skills) National School Nutrition Programme Grant Baseline reduction Goods and services Non-profit institution (National Education Collaboration Trust) School Infrastructure Backlog: Building and other Infrastructure Departmental agencies and accounts Foreign Governments and International organisations Households (NSFAS) Interest and rent on land Compensation of Employees (16 628) (10 072) (242 587) (85 789) ( 4 839) - (10 672) (882) (54 620) (1 630) (84 155) (21 150) (12 332) (328 375) (116 879) (6 296) - (13 764) (1 149) (71 678) (2 120) (116 489) (23 626) - (863 180) (211 981) (11 418) (413 287) (15 226) (2 082) (128 484) (3 845) (76 857) Baseline Budget Review 27 018 078 28 174 672 28 04 038 2.7.2 Departmental Appropriation The Department had been allocated R27 billion in 2021/22, R28.2 billion in 2022/23 and R28.8 billion in 2023/24.
Included in these allocations is Compensation of Employees amounting to R538 million, R532.7 million and R535.6 million respectively over the Medium- Term Expenditure Framework (MTEF) years.
18 23 Departmental Appropriation Less: Compensation of Employees Departmental Appropriation excluding compensation of employees 2021/22 R’000 2022/23 R’000 2023/24 R’000 27 018 078 (538 011) 26 480 067 28 174 672 (532 730) 28 804 038 (535 567) 27 641 942 28 67 471 2.7.3 Programmes Allocations over the 2020 MTEF PROGRAMME BUDGETS 2021/22 R’000 2022/23 R’000 2023/24 R’000 Administration 523 198 531 121 Curriculum Policy, Support and Monitoring Teachers, Education Human Resource and Institutional Development Planning, Information and Assessment 2 034 347 2 069 537 538 414 2 084 265 1 448 059 1 493 625 1 500 273 14 580 177 15 260 705 15 485 048 Educational Enrichment Services 8 432 297 8 819 684 9 196 038 Total 27 018 078 28 174 672 28 804 038 2.7.4 Details of Earmarked Allocations (R’000) over the 2020 MTEF EARMARKED FUNDS 2021/22 2022/23 R’000 R’000 2023/24 R’000 Workbooks 1 197 218 1 207 033 1 204 870 Matric Second Chance Programme Oversight-Maths, Science and Technology Learners with Profound Intellectual Disabilities Conditional Grant 58 482 6 614 3 201 58 162 6 779 3 320 58 057 6 767 3 468 19 24 Examiners and Moderators National School Nutrition Programme 55 352 19 519 57 272 19 655 63 224 19 643 TOTAL: EARMARKED FUNDS 1 340 386 1 352 221 1 356 029 2.7.5 Details of Conditional Grants Allocations/Transfers (R’000) over the 2020 MTEF CONDITIONAL GRANTS 2021/22 R’000 20222/23 R’000 2023/24 R’000 Learners with Profound Intellectual Disabilities Grant Maths, Science and Technology Grant 242 760 249 430 260 424 412
 134 424 528 433 079 Education Infrastructure Grant 11 688 936 12 229 436 12 768 433 HIV and AIDS (Life Skills) Grant 241 914 241 054 241 653 National School Nutrition Programme Grant 8 115 269 8 504 132 8 878 942 TOTAL CONDITIONAL GRANTS 20 701 013 21 648 580 22 582 531 2.7.6 Details of Transfers (R’000) over the 2020 MTEF OTHER TRANSFERS 2021/22 R’000 2022/23 R’000 2023/24 R’000 Unesco Membership Fees 17 317 17 7773 17 841 ADEA Guidance Counselling and Youth Development Centre: Malawi Childline South
 Africa National Education Collaboration Trust 160 199 78 164 204 82 165 205 86 117 558 120 738 121 515 20 25 Southern and Eastern Africa Consortium for Monitoring Educational Quality 3 720 3 816 3 831 NSFAS: Funza Lushaka Bursaries 1 308 024 1 355 113 1 360 320 Transfers to Public Entities 1 447 056 1 497 890 1 503 963 Umalusi ETDP SETA South African Council for Educators TOTAL TRANSFERS 137 404 459 17 985 155 848 142 031 142 945 472 18 528 474 18 599 161 031 162 018 2.7.7 Detailed Breakdown of the Budget over the 2020 MTEF Compensation of Employees Goods and Services School Infrastructure Office Accommodation Departmental Projects Transfers Conditional Grants Total 2021/22 2022/23 R’000 R’000 2023/4 R’ Earmarked Funds (including CoE) 1 340 386 1 352 221 2.7.8 General Budget Support General Budget Support 2021/22 R’000 2022/23 R’000 2023/24 R’000 Rural Education Assistance Project Systemic Improvement of Language and Numeracy in Foundation Phase 19 955 16 201 - - - - 21 26 2.8 Portfolio Committee Observations Members raised the following with the Department of Basic Education in respect of Budget Vote 16: Basic Education: • Due to the late submission of the presentation to Members, there was a query whether Members could submit
 written questions to the Department for written reply and follow- up.
• In respect of issues pertaining to budget cuts and the financial economic environment, Members raised some of the following: o Had the Department considered more innovative ways of providing quality learning and teaching.

o How was the Department looking to ensure this did not impact negatively on many of its programmes and functions?

o How was budget cuts affecting the work of the Department in reaching its targets and objectives.
o How was the current economics influencing budgets for programmes and projects – were infrastructure projects included in the budget • What were the strategies in place to assist and support teachers going forward – how was the Department managing the loss of teachers leaving vacancies in the system.

Further to this, Members queried the measures in place for those teachers at risk of contracting the COVID -19 virus – as well as the management of the filling of vacant positions in the system.
• Members took the time to raise their concerns around developments in the country around student registration at Higher Education Institutions – at the start of every year, students had challenges with registration.

Members queried whether there was any role to be played by the Department of Basic Education in assisting and supporting learners wishing to enroll at Higher Education Institutions.
• Members queried the plans in place to ensure teachers, as frontline workers, were able to be prioritised for COVID-19 vaccinations.

22 27 • In respect of the roll-out of Coding and Robotics, Members queried the provinces being targeted for implementation and roll-out; and the rationale for choosing these specific provinces.
2.9 Responses by the Department of Basic Education Minister A Motshekga – Minister Motshekga alluded to the various challenges in respect of the ECD function shift and also noted that facilities needed the necessary upgrading by using the Social Development model.

She indicated that the Department was in continuous and ongoing engagements with the Department of Social Development regarding the ECD function shift.
During this period of COVID-19, much was learned in helping to demystify our thoughts on education.

Most rural schools had innovative ways for teaching and learning but it was clear that this could not replace the teacher for face-to-face teaching and learning.

A teacher in a classroom remained central in enhancing learner performance.

The Department had received numerous reports from school principals who spoke of the many challenges with virtual teaching.
Other initiatives that was bearing fruit was the Woza-Matric Programme.

The Department was lucky that they had a pool of Funza Lushaka graduates to fill gaps in vacancies – unfortunately, not all could be absorbed in current context.

Regarding budget cuts and dwindling finances, the Department was forced to postpone some programmes and projects but key projects would not be compromised.
Director-General, Mr H M Mweli – Mr Mweli assured Members that the Department would strive to ensure reports and presentation be submitted at least a week in advance for Members to peruse prior to meetings.

The Department would ensure all written questions received would also be responded to in good time.

He agreed that there were many lessons learned with the advent of the COVID-19 pandemic.
The Department was able to engage and collaborate within the region and continent to learn from each other on navigating the pandemic.

Many teachers utilised WhatsApp to communicate and keep contact with learners.

The Department had further developed strategies and plans to combat fatigue by way of motivation programmes amongst others.

23 28 The Director-General agreed that issues of oversight and monitoring needed to be strengthened in respect of the Annual Performance Plan programmes and targets.
The country as a whole was in a difficult fiscal space in respect of budget cuts and its impact on programmes and projects.

The Department was learning to stretch its budget to deliver on key programmes and projects.

The Department had also become more innovative with the fiscal constraints to ensure programmes and projects could be realised e.g.

use of ICT and virtual meeting options.

The Department realised that virtual devices could not replace face-to-face teaching and learning.
It was mentioned that provinces had set aside a budget to provide virtual devices to teachers and learners – with different provinces being at different levels in respect of providing online teaching and learning.

The Director-General mentioned that he attended regular NATJOINTs of DGs to deal with COVID-19 work-streams and further advised Health to prioritise teachers at frontline with vaccinations in the next drive.

This was agreed to.
This was agreed to.

With the assistance and support from the various Network Providers, it was envisaged that all Special School would be fully connected by the end of the year.

The Department was also working to ensure the digitization of all content.

The diminished budget posed a huge challenge in respect of filling of vacancies – but the Department was continuously engaged on the matter.
The Department would ensure that issues of Human Resources and Labour in relation to the ECD function shift would be maintained and improved.

Mr Mweli acknowledged the challenges faced each year with enrolment of student at Higher Education Institutions (HEIs) – this was amplified when, historically, most learners came from no-fee-paying schools.

The Minister also agreed that the matter was a national concern.
This has prompted a report through a Cabinet Sub-Committee on trends and challenges in respect of registration at HEI.

The biggest challenge identified was not space but historical debt of students, low completion/pass rates and student readiness.

3.
Department of Basic Education Audit Committee The Audit Committee is responsible for the following: • Oversight over Internal and External Audit; 24 29 • Oversight over the implementation of Internal and External Audit recommendations; • Oversight over Risk Management; • Oversight over the quality of Financial Statements; and • Oversight over the system of internal control for the generation, collation and reporting of Performance Information The Internal Audit conducted twelve audits as per the approved risk-based audit coverage plan as well as audits at three Implementing Agents (IAs) on SCM processes, contractor’s payments, project management, quarterly performance information and follow-ups on AGSA findings and review of the PPP agreement procurement process.
The Audit Committee further presented the quarterly progress reports against the approved plan at the Audit Committee meetings.

Further to this, the Audit Committee also coordinated the audit steering committee meeting with management to discuss all audit reports and audit action plans prior the audit committee meetings.

The Audit Committee advised management through audit assurance by providing recommendations to improve internal controls.
They also coordinated a workshop together with AGSA and Office of the Director-General for ASIDI and Finance and all implementing agents on areas that must be improved to strengthen internal controls.

The Audit Committee also conducted investigations on irregular and fruitless and wasteful expenditure, and reports were referred after the DG consideration to Labour Relations for consequence Management and Legal Services to start the recovery process.
3.1 Assurance Model In respect of the Assurance Model, the Audit Committee gave a breakdown as follows: • Management - First line: the way risks are managed and controlled day-to-day.

Assurance comes directly from those responsible for delivering specific objectives or processes.

It may lack independence, but its value is that it comes from those who know the business, culture and day-to-day challenges.
• Risk and Compliance - Second line: the way the organisation oversees the control framework so that it operates effectively.

The assurance provided is separate from those responsible for delivery, but not independent of the management chain, such as risk and compliance functions.

• Internal Audit - Third line: objective and independent assurance, e.g., internal audit, providing reasonable (not absolute) assurance of the overall effectiveness of governance, 25 30 risk management and controls.
The level and depth of assurance provided will depend on the size and focus of the internal audit function and management’s appetite for internal audit assurance.

• External Audit - Fourth line: assurance from external independent bodies such as the external auditors and other external bodies.

External bodies may not have the existing familiarity with the organisation that an internal audit function has, but they can bring a new and valuable perspective.
Additionally, their outsider status is clearly visible to third parties, so that they can not only be independent but be seen to be independent 3.2 Improvements In respect of improvements, the Audit Committee highlighted the following: • Monitoring the Performance Information on a quarterly basis and annual target milestones achievements through internal audits to verify reliability of evidence reported; • Enhanced effective coordination of verification of reported evidence with Strategic Planning and Branches; • Reviewing and monitoring of the evidence that support performance indicators for changes on the Revised APP due to COVID -19; • Reviewing and follow up audits on ASIDI on the control's effectiveness of qualification areas, commitment (provision and retention disclosure); • Reviewing and monitoring the improvement on non-compliance regarding Supply Chain Management for three (3) Implementing Agents.
3.3 Challenges Challenges identified by the Audit Committee included the following: • Strengthening of quality assurance by some Branches still need to improve.

• Lack of capacity in ASIDI and Supply Chain management.

• Prior audit findings have not been addressed fully - management was still working on addressing them.

• A lack of synergy between Finance and ASIDI (There is an improved working together process between Finance and ASIDI).
26 31 • ASIDI and Finance needed to strengthen quality assurance and accountability of work done by Implementing Agents.

The Audit Committee also touched on the Audit Outcomes in respect of the following: • Regularity Audit which highlighted ASIDI material misstatements, irregular expenditure and commitments (provision and retention).

• Performance Information The Audit Committee gave a detailed breakdown of the above Audit Outcomes with details on root causes and proposed improvements.
The Audit Committee recommended the following: ASIDI: • Improve monitoring of Implementing Agents, Programme Support Unit (PSU) and ASIDI staff to improve the process.

• Full set of half-year financial statements are prepared, enhance the accurate records.

• Submission of information for preparation of AFS timely.

• Regular monthly reconciliations to be prepared to prevent misstatements in the financial statements.

• More internal audit effort directed.

• Interim audit by AG.


• Possible disciplinary action against persons that caused irregular, fruitless and wasteful expenditure.

Performance Information: • Management to strengthen quality assurance of reported information timely.

• More detail work by Internal Audit on quarterly performance information reports and financial statement reviews.

• Management to improve or address the capacity challenges in Strategic Planning, Finance, and ASIDI.
• Strengthens accountability and monitoring of Implementing agents, especially the penalty clauses in the MOA’s 27 32 The annual report was reviewed prior to the submission to the AGSA and management worked with the Internal Audit to correct other gaps identified during the review meeting prior to the submission date.

Some branches needed to improve on the quality of evidence and ensure timely submission.
The Audit Committee has received a management action plan to address AG findings and has monitored progress.

The Audit Committee approved follow-up audits to be conducted by Internal Audit for ASIDI irregular expenditure completeness and commitment/provision.

Internal Audit in collaboration with DG’s Office, and AGSA held a comprehensive workshop with ASIDI, Finance and Implementing Agents in November 2020 to discuss improvement actions and to determine whether it will address the root cause of findings.
The Audit Committee would continue to address all matters within its mandate and responsibility and pay specific attention to the high risk and high impact issues and monitor implementation of consequence management to assist in moving towards a clean audit.

3.4 Portfolio Committee Observations (Internal Audit Committee) • Members raised concern that ASIDI remained an area of challenge but was satisfied with the progress by the Department to date.
• Members queried the actions taken by the Department in respect of the recommendations from the Audit Committee • Regarding the recouping of money, Members queried the status and progress in respect of the recouping of money owed to the Department in respect of ASIDI projects – and the methods utilised for such recouping.

Further to this, Members queried the consequence management action taken against errand officials, contractors or implementing agents.
3.5 Responses from the Department of Basic Education (Internal Audit Committee) For the Department, issues pertaining to ASIDI remained their main area of focus.

The Department wanted to ensure that there was improvement on management of the ASIDI project.

The Department was certain that they would see much improvement closer to the end of the year.
Having engaged the Director-General on the matter of ASIDI, there was a need to ensure supplementing the capacity within the Department or outsource the capacity if needs be.

The recouping of money was ongoing and continuous.

28 33 4.
28 33 4.

Overview of Strategic Imperatives and Budget Allocations of the Department’s Statutory Bodies 4.1 South African Council for Educators (SACE) SACE (the Council) presented the Council-approved 2021/2022 Annual Performance Plan (APP), with the 2021/2022 Budget which were tabled in Parliament, through the Minister of Basic Education.
The Council has aligned its programmes with the SACE mandate and the budget programme structure, and has thus had to review its strategic plan 2020-2025 in order to adequately respond to its mandate and priorities.

There were now six programmes that the Council will be implementing through this APP 2021/2022.

The presentation commenced with details pertaining to the background, policy and legislative mandate of the Council – including the values, vision and mission.
The Council detailed the revised programme budget structure as follows: • Administration o Executive and Governance o Planning, Monitoring and Evaluation and Reporting o Corporate Services o Financial Management o Information and Communication Technology • Professional Registration o Registration of Educators and Lecturers o Registration of Student Teachers • Ethical Standards o Investigations o Disciplinary Hearings o Sanctioning • Professional Development o Continuing Professional Teacher Development o Member Support o Quality Assurance • Professional Standards o Initial Teacher Education o Newly Qualified Educators 29 34 o Practicing Educators • Research o Research Reports o Data Management o Research Dissemination o Virtual Library 4.1.1 Key Strategic Priorities that are informing the SACE Agenda for the next five- years • Teacher Professionalisation across the teacher education and development continuum – maintenance of the professional and ethical standards • Promotion of the reading and learning teaching profession - SACE-established internal Resource Centre for employees and Council members, the SACE Virtual Library for registered educators, and SACE Constituencies and Stakeholders- ‘READ to TEACH AND SERVE’ • Teacher Wellbeing, Rights, Responsibilities, and Safety • Values and Ethics for the Teaching Profession • Strengthened and Integrated Information and Communication Technology • Heightened Communication - Educators, Stakeholders and the Public • Data, Information and Knowledge Management – Lead the profession from an informed position and provide evidence-based advice to the Ministers, Council and the teacher education and development sector at large.
4.1.2 Annual Performance Plan 2021 – 2022 4.1.2.1 Programme 1: Administration - The purpose of this programme is to implement and manage the policy directives and priorities of the Council to ensure the functional proficiency of SACE through appropriate support services.

Outcome – Efficient and Effective governance • Number of Council and EXCO meetings convened – The SACE target is set at 12 meetings convened.
30 35 • Number of quarterly performance reports submitted to DBE – The SACE target is set at four reports submitted.

• Percentage of employees assessed through performance development system – The target is set at 100 percent • Percentage of trained employees – The target is set at 30 percent • Number of SACE promotion and advocacy activities on the selected core mandates – The target is set at four activities.
• Percentage of invoices paid within 30 days – The target is set at 100 percent of invoices paid.

• Percentage of Digitised system in a year – The target is set at 60 percent.

Governance Matters for Noting - The 31st July 2021 marks the end of term of office for the current serving Council.

The Council was in preparation for the nomination, selection and appointment of the 2021-2025 Council members.
A guideline on the nomination, selection and appointment of Council has been developed and approved by Council for implementation from the 1st April 2021 onwards.
SACE Constituencies engaged in a process to nominate prospective Council members, from the 1st – 31st April 2020, as follows: • Eighteen (18) members from the organised profession (SADTU – 12 out of 18); • Two (2) members from the National School Governing Bodies Association; • One (1) member from the independent schooling sector; • One (1) member from the Council on Higher Education; • Five (5) members from the Department of Education; and • One (1) member from the Technical and Vocational Education and Training sector.
4.1.2.2 Programme 2: Professional Registration - The purpose of this programme is to ensure that Council registers college lecturers and teachers who are fit to practise.

Council must keep an up-to-date register of fit-to-practise educators and college lecturers.

Sub-Programme 2.1 – Registration of Student Educators Outcome: Fit-to-practise-registered educators and lecturers 31 36 • Number of educators registered – The SACE target is set at 25 000 educators registered.
• Percentage of educators applying through the online system for professional certification – The target is set at 50 percent of educators.

Sub-Programme 2.2 – Registration of Student Educators Outcome: Fit-to-practise-registered educators and lecturers • Creation of additional specified categories for student educators - The SACE target for a pilot five-year registration of first-year student educators with 12 universities.
Professional Registration Challenges (2020/2021) • COVID – 19 pandemic impact of registration outcomes; • New-normal and working from home; • Slow turn-around time; • Cancelled graduations by Higher Education Institutions impacting on newly qualified educators – and updating their provisional to full registration status; • SA Post-Office bulk-mail closure impacting on the posting of registration certificates; • SAPS not providing police clearance certificates; • Preference of walk-ins over online registration system by applicants; • 2020 Academic Year overlapping into 2021 – Implications for the newly qualified educators • Generally, inadequate communication from SACE to the teaching profession.
4.1.2.3 Programme 3: Ethical Standards - The purpose of this programme is to promote and maintain ethical standards in the profession.

The programme has three sub- programmes.

Sub-Programme 3.1 – Investigations 32 37 Outcome: Maintained ethical standards • Percentage of investigations on new cases finalised – The SACE target is set at 80 percent of investigations.

• Percentage of investigations on roll-over cases finalised – The target is set at 80 percent of investigations.
Sub-Programme 3.2 – Disciplinary Hearings Outcome: Maintained ethical standards • Percentage of disciplinary hearings on new cases finalised – The SACE target is set at 50 percent of disciplinary hearings.

• Percentage of disciplinary hearings on roll-over cases finalised – The SACE target is set at 60 percent.

Sub-Programme 3.3 – Sanctions Outcome: Maintained ethical standards • Number of monitoring reports produced on sanctioned educators - The SACE target is set at two monitoring reports.
The Council further gave a detailed overview of the following: - Top 10 cases reported to SACE in 2020/21; - Sexual misconduct cases from 2014 – 2020; - Nature of professional misconduct; and - Sanctions 2020/2021.
Ethical Standards Challenges - Challenges encountered by SACE in the execution of its duties while implementing the code of ethics include among others: • COVID -19 pandemic lockdown, particularly during the first six months; • Parental refusal to permit children to testify as a result of COVID-19 pandemic; • Closure of schools; • Challenges with online disciplinary hearings; • Restricted access to schools; and • Slow turnaround time in concluding the cases.
33 38 4.1.2.4 Programme 4: Professional Development - The purpose of the programme is to ensure that educators engage in life-long learning to improve their professional competence.

The programme has three sub-programmes.

Sub-Programme 4.1: Continuing Professional Teacher Development (CPTD) System Outcome: Improved teacher competence • Percentage of selected practising signed-up educators verified for the continuing professional development uptake – The SACE target is set at 30 percent.
• Percentage of signed-up final-year initial teacher education students – The SACE target is set at 55 percent.

Sub-Programme 4.2: Member Support Outcome: Improved teacher competence • Number of educators supported on professional matters – The SACE target is set at 20 000 educators.

Sub-Programme 4.3: Quality Management Outcome: Improved teacher competence • Percentage of professional development providers approved – The SACE target is set at 75 percent.
• Percentage of professional development activities endorsed- The SACE target is set at 85 percent.

• Percentage of endorsed activities monitored- The SACE target is set at 10 percent.

The mandate of SACE is to instil life-long learning in educators.

For this financial year, Professional Development will provide more support to the five percent of randomly selected educators in each province, as in the previous financial year Covid-19 posed some challenges.
The planned contact sessions for supporting teachers’ participation in the CPTD system and how to develop the Professional Development Portfolios did not take place due to 34 39 social distancing and travel restrictions under COVID 19.

This Programme will work collaboratively with Communication and ICT in developing virtual, online and digitised systems and PD material to assist teachers in Developing Professional Development Portfolios, and participate in the CPTD system.
The CPTD Information system functionality will be enhanced to ensure maximum participation 4.1.2.5 Programme 5: Professional Teaching Standards - The purpose of the programme is to improve and maintain the status and image of the teaching profession, and ensure the quality of initial teacher education and ongoing professional development through quality assurance mechanisms and standards.

The programme had three sub- programmes.


Sub-Programme 5.1: Initial Teacher Education Outcome: Improved teacher professionalism • Development of teacher professionalisation policy – The target of approved teacher professionalisation policy would be met in 2022/23.

• Policy framework registering student educators from year one – The target for approved policy framework registering student educators from first year of study would be met in 2022/23.
Sub-Programme 5.2: Newly Qualified Educators Outcome: Improved teacher professionalism • Development of a professional certification framework and policy for educators registering with Council – The target is a draft professional certification framework and policy consulted on.

• Development of a teacher designation – The target is for teacher designation communication strategy and plans to be implemented.
Sub-Programme 5.3: Practicing Educators Outcome – Improved teacher professionalism • Development of re-certification framework - The target is for extensive consultation in 2021/22.

35 40 4.1.2.6 Programme 6: Research - The purpose of the programme is to enhance research coordination within SACE in order to strengthen its advisory role and service that is informed by policy, research, and consultative processes.
This programme also aims to promote research on professional matters and any other educational matter relevant to SACE and the educational landscape.

This programme will work to further strengthen its advisory role to the Minister of Basic Education on professional matters.

The programme has three sub-programmes.

Sub-Programme 6.1: Research Reports Outcome: Improved advisory role • Number of research reports produced – The SACE target is three research reports produced.
Sub-Programme 6.2: Data Management Outcome: Improved advisory role • Number of statistical reports produced on the status of the profession – The SACE target is set at two statistical reports produced.

Sub-Programme 6.3: Research Dissemination Outcome: Improved advisory role • Number of SACE journal magazines produced – The SACE target is set at two journal magazines produced.
Sub-Programme 6.4: SACE Virtual Library Outcome: Improved advisory role • Percentage of visits by educators to the virtual library – The SACE target is set at 10 percent.

As part of supporting the Presidential and Ministerial priority on reading, SACE launched a Virtual Library to promote a reading profession.

The Virtual library has over 50 000 free titles available for teachers and SACE stakeholders to access immediately, including the CAPS related ones.
36 41 The Council also alluded to the handbook on teacher safety and security in schools that covered the rights and responsibilities of teachers in respect of the safety programme.

The handbook was a living document that could be reviewed and revised based on the changing nature of the complexities in the schooling environment.
4.1.3 Resource Consideration 4.1.3.1 Medium Term Expenditure Framework (MTEF) Financial performance in R,000 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Audited Audited Audited Budget Revenue Registration fees Subscription fees Reprints of certificates Interest receivable CPTD Subsidy Sundry income Expenditure Administration & Other Related Costs Research Professional Development Registration Code of Ethics Teacher Professionalization Surplus/Deficit Detailed Budget (2021/2022) 4.1.3.3 SACE Notes: • Registration fees remain at R400 for Foreigners, R200 for South Africans and R50 for renewals and updates; • The main funding for Council operation is annual membership fees which is at R180 per educator effective from 01.11.2017; • There is constant level of revenue over the MTEF period; • The reduction of some budget line items is due to the rising fixed costs
 with stable revenue; • The Council is in a process of reviewing its membership fees to counter the pressurizing economic situation and improve delivery capacity; • This process is hampered by the economic conditions severely affecting the educators who are responsible for funding Council.
• Reprioritisation and stringent cost control measures are being implemented to enable sustainability while council is considering alternatives to improve its revenue level.
• Approval has been obtained from The National Treasury to subsidise the implementation for the CPTD Management System for the year 2021/22; 38 43 • The operational budget of the five Provincial offices, including the Eastern Cape and Western Cape, are included in the operating budget; and • The Eastern Cape province has been operational since October 2020 with the Western Cape delayed to start in this financial year owing to acquisition of office space which was concluded at the end of 2021 financial year.
4.1.3.4 Portfolio Committee Observations • In respect of cases (resolved and unresolved) Members queried what SACE was aiming to achieve in respect of targets.

Members ought clarity on the number of unresolved cases and the effectiveness of the investigators in dealing with these cases.

Members also queried how many cases of Gender Based Violence and sexual misconduct SACE processed in a year – and how many were rolled over.
In respect of cases, Members also queried whether SACE experienced a recurrence of similar conduct by educators.

What cases, according to SACE qualified to be dealt with internally and those dealt with by law enforcement agencies.

• Regarding errand educators found guilty of serious offences and having been struck-off the roll – Members queried whether there was a mechanism in place to track and trace such educators in the system.
• There was concern raised over the backlog of registration/certification of unregistered teachers and queried the minimum qualification to be a registered teacher.

Further to this, Members queried whether SACE was quality testing educators to be registered with SACE.

• Concern was raised over the accessibility of SACE in the country and queried whether SACE had offices in all provinces.

If not, how was SACE accessible in provinces where they did not have offices.
Members requested information on provinces that did not have walk-in offices.

Members noted that there were complaints that SACE was not communicating issues of registration status timeously.

• In respect of ethical standards, Members queried how SACE was able to accomplish heightened ethical standards during the COVID-19 pandemic period.

39 44 • With COVID-19, Members sought clarity on how registration of teachers had been affected.
Members also questioned if SACE had considered online registration and the effectiveness of online registration.

• How had SACE been able to succeeded in converting COVID-19 challenges into strengths.

• In Respect of the BELA Bill, Members noted that, in respect of SACE, certain sections had been removed from the Bill.

Members sought clarity on this and queried how SACE amendments would be accommodated and processed.
• Members sought clarity on the plans in place the function shift of ECD to DBE – and what role SACE played in the function shift.

There were ECD practitioners who lacked formal qualification but had extensive experience.

Members queried how they would be accommodated and recognised.

• Members queried whether all schools had the necessary sexual harassment policies in place.

• In respect of the SACE budget, Members queried the impact of the lower budget on the work and programmes of SACE.
• On Professional Development of Educators, Members queried whether SACE would consider incentives for educators to improve and develop their qualifications.

4.1.3.5 Responses from SACE The matter of linking salary increment/remuneration with teacher qualification has been a matter for debate in the Council for a long time.

SACE had considered broad- banding and had later moved to Occupational Specific Dispensation (OSD) in this regard.
SACE currently did not have mechanisms in place for further incentives for educators.

SACE also a Teacher Development Summit where it was recommended that there be a separation of performance appraisal and incentives.

SACE currently had five provincial offices (Limpopo, Eastern Cape, Western Cape, Free State and KwaZulu-Natal).

SACE was planning, in the next five years to acquire offices in the remaining provinces depending on the economic situation.
40 45 Regarding registration, SACE had challenges during the COVID-19 lockdown, especially in the first six months of the year.

Although there were backlogs, SACE was working tirelessly to ensure these are processed and cleared.

The role of SACE was also to advise the Department and Ministry as clearly stated in the Act.

The role of SACE in ECD migration included the registration of ECD educators at NQF 4 provisionally.
SACE was looking to professionalise ECD and resolved to establish an adhoc-committee to collaborate with the Department on issues pertaining to the function shift.

SACE agreed that Gender Based Violence (GBV) was becoming a huge problem that was filtering into schools.

On average SACE dealt with around 100 reported cases of sexual misconduct and ensured that these cases were prioritised.
Further to this, SACE also established a trilateral with DBE and PEDs to trace and track educators found guilty of an offence and ensure they did not enter the system again.

In this regard SACE was also working with Independent Schools in the sector and request that they check and verify with SACE prior to employing any educators.

SACE could not be entirely sure if all schools had, and implemented any sexual harassment policy.
In respect of issues pertaining to the BELA Bill, there was an explanation on the issues of SACE having to expand its mandate to include TVET Colleges.

SACE had argued the functions to run between schools and colleges as well as possible review of the entire SACE.

The clauses had been removed from the BELA Bill – and SACE would keep the Portfolio Committee abreast of these developments.

SACE did have the necessary resources for online registration for first-time registrants.
SACE had also integrating its ICT systems for further alignment.

Although access to data was a challenge, SACE was engaging network service providers to consider possible zero-rating of SACE applications – as well as consideration for reverse billing.

41 46 In respect of the low budget allocations – the impact on the mandate was minimal as SACE was funded by its own members which were educators – and SACE determined the membership fees rate between reviews.
Rising cost would catch up with SACE and pressure the total revenue which may lead to a reduction of delivery capabilities of SACE.
4.2 The Council for Quality Assurance in General and Further Education and Training (Umalusi) The mandate of Umalusi was determined by the following: • Chapter 2 of the Constitution: Everyone has a right to education; • National Qualifications Framework: The establishment of Umalusi as a Quality Council; and • GENFETQA Act: Assigns Umalusi the responsibility for quality assurance of general and further education and training.
Umalusi is the quality Council responsible for qualifications registered on the general and further education and training qualifications sub-framework (GFETQSF) on the National Qualifications Framework (NQF).

The Council ensures that the providers of education and training have the capacity to deliver and assess qualifications and learning programmes and are doing so to expected standards of quality.
4.2.1 Reflections (2020/21) Implementation of the first Annual Performance Plan (APP) of the current five-year strategic plan was disturbed by the COVID-19 pandemic – with the initial targets in the 2020/21 APP being significantly affected.

Umalusi therefore revised the APP and the Minister re-tabled it in Parliament in July 2020.

As a result, not all out targets would be achieved for 2020/21.
Despite the challenges, Umalusi had managed to remain focused on its five-year strategic priorities reflected as follows: • Reviewing the quality assurance of assessment approach so as to accommodate new qualifications; • Evaluating and appraising new qualifications – e.g.
General Education Certificate (GEC); 42 47 • Amending the founding Acts to accommodate new qualifications and desired extensions in the mandate of quality assurance; • Intensifying research on educational developments to innovate and advise the Ministers of Education; • Intensifying advocacy on qualifications within the sub-framework; and • Seeking for an alternative funding model to increase revenue.
4.2.2 Strategic Focus • External Environment o COVID-19: Negative impact on evaluation and accreditation, verification, certification, quality assurance of assessment, monitoring, advocacy and research activities o Roles and Responsibilities: Umalusi is part of a process of amending the NQF Act regarding Umalusi’s role as a Quality Council o Policy Performance: Ongoing policy development based on research – to remain relevant and competitive o Quality Assurance Approach: Innovative approaches on quality assurance were developed during lockdown; these will be continued and improved o Communication: There is a steady growth of utilisation of digital media platforms o Qualifications, Certification and Accreditation: Trends on the number of certificates issued for all five qualifications; our numbers are constant on verification of qualifications o Quality Assurance of Assessment: Trends on the moderation of question papers, monitoring of examination centres during writing, monitoring of marking centres, verification of marks for various subjects o Evaluation and Accreditation: Trends on institutions granted seven- year accreditation, more institutions placed on a window period indicating that they have few issues to address towards accreditation o Evaluation and Appraisal of New Qualifications: GEC qualification, NASCA curricula 43 48 o Empowerment of Women, Youth and People with Disabilities: Through Credit Accumulation and Transfer policy, SCM processes, staff establishment provisions • Internal Environment o
 Organisational Structure and Human Resources Capacity: Small organogram (140 posts); workload challenges, the need for alternative funding to create more posts; vacancy rate under 10% o Facilities: Umalusi 41 (Umalusi house) project on course; occupancy of parts of the building has eased pressure on Umalusi 37 (Thuto-Mfundo) to allow for social distancing o Financial Resources: Clean audit for 2019/20; budget cut in 2020/21, more funds on ICT services to allow working remotely; there is a need to attract sufficient funding o Information and Communication Technology: More ICT equipment purchased to enable service delivery during lockdown – also with the migration to Microsoft 365.
Vulnerability management solution implementation.

o Communication Management: Usage of eight communication platforms as well as webinars for stakeholder engagement.

4.2.3 Measuring Performance 4.2.3.1 Programme 1: Administration – The purpose of the programme is to provide strategic leadership, management and administrative services to the organisation.
Sub-programmes include: • Strategy and Governance (S&G); • Public Relations and Communications (PR&COMS); • Information and Communication Technology (ICT); • Human Capital Management (HCM); and • Finance and Supply Chain Management (F&SCM).

Programme 1 Targets: 44 49 • Number of advocacy webinars conducted – The annual target is set at four webinars (one per Quarter).

• ICT Network health score maintained at ≥95 percent - The annual target is at ≥95 percent.
• Vacancy rate maintained at ≤ 10 percent - The annual target is set at ≤10 percent.

• Percentage of valid invoices of creditors and suppliers paid within 30 days – The target is set at 99 percent of valid invoices paid.

4.2.3.2 Programme 2: Qualifications and Research - The purpose of the programme is to develop and manage an efficient and effective GFETQSF within the NQF and to undertake strategic research in support of that goal.
Sub-Programmes included the following: • Qualifications, Curriculum and Certification (QCC); and • Statistical Information and Research (SIR).

Programme 2 Targets: • Number of reports produced on the management of qualifications in the sub-framework – The target is set at one report produced annually.

• Percentage of error-free learner records for which a certificate is printed – The target is set at 100 percent error-free records.
• Percentage of verification requests received that are completed in terms of the service level agreement: two working days – The target is set at 96 percent of verification requests.

• Number of research reports completed in various formats – The target is set at five research reports annually.
4.2.3.3 Programme 3: Quality Assurance and Monitoring – The purpose of the programme is to ensure that the providers of education and training have the capacity to deliver and assess qualifications registered on the GFETQSF and 45 50 are doing so to the expected standards and quality.

Sub-Programmes include the following: • Quality Assurance of Assessment: School Qualifications; • Quality Assurance of Assessment: Post-School Qualifications; and • Evaluation and Accreditation.
Programme 3 Targets: • Number of quality assurance of assessment reports published for qualifications registered on the GFETQSF – The annual target is set at 10 assessment reports.

• Percentage of question papers approved per qualification – The target is set at 100 percent of question papers approved.

• Number of assessment bodies audited for their state of readiness to conduct examinations – The annual target is set at four assessment bodies audited.
• Number of subjects for which verification of marking is conducted- The target is set at 88 subjects.

• Number of subjects for which moderation of internal assessment is conducted – The annual target is set at 125 subjects.

• Percentage of accreditation outcomes for private education institutions finalised within 12 months of the site visit – The target is set at 85 percent of accreditation outcomes.
• Percentage of identified private education institutions monitored after being granted accreditation – The target is set at 90 percent of identified institutions.

4.2.4 Budget Presentation (2021/22 – 2023/24) The total budget for 2021/2022 equaled R 175 Million.

The Department of Basic Education (DBE) grant was expected to decrease by 1 percent from the prior year.

Umalusi’s own generated income was projected to increase by 14 percent.
The impact of COVID-19 continued to put the organisation under financial strain.
Table: 1 Revenue Projection 46 51 Revenue 2018/1 2019/20 2020/2 2021/2 2022/2 2023/2 9 2 0 n s millio 129 11 10 6 5 7 millions millio 135 12 8 2 5 6 139 10 4 4 3 12 1 n s million 13 11 7 6 4 9 3 s 2 2 s 7 million 14 13 10 7 4 10 166 167 172 175 185 4 s 3 million 14 13 10 7 4 10 5 193 DBE Grant Verification of certification Accreditation of Providers Certification Interest Other income- quality assurance Reserves TOTAL Table: 2 Expenditure Projection Expenditure 2018/19 2019/20 2020/21 2021/2 2022/23 2023/24 Compensation of Employees Goods and Services 2 0 millions millions millions million 74 103 177 84 89 173 85 87 172 86 89 175 2 s millions millions 86 99 185 86 107 193 • Expenditure per programme stood as follows: o Administration – 37 percent; o Qualifications, Curriculum and Certification – 11 percent; o Quality Assurance of Assessment – 30 percent; o Evaluation and Accreditation – 14 percent o Statistical Information and Research – 8 percent • Financial Challenges: o Umalusi has had an increase in its mandate with no further funding (GETC, NASCA) o Further projects that required funding included the modernization of ICT infrastructure and refurbishment of the Thuto Mfundo building.
4.2.5 Conclusion 47 52 Umalusi management was committed to maintain a clean audit report.

The achievement of APP targets was part of the SMS members’ Performance Agreements.

Executive Management would monitor the implementation of the APP and the utilisation of the budget monthly.
Overall performance and reporting will be monitored by: • Performance Information Verification Committee (PIVC); • Internal Auditors; • Quarterly Review Meetings; and • Oversight structures (Audit and Risk Committee, Executive Committee of Council (EXCO) and Council).

4.2.6 Portfolio Committee Observations • Members noted that, in respect of infrastructure, this was not adequate as the Department sought to introduce distance learning.
Many areas did not have network connectivity and learners had no smart gadgets.

Members queried the challenges faced by Umalusi during the COVID-19 pandemic and the measures in place to mitigate such challenges.

• Was Umalusi empowered to exempt smaller viable performing schools from fees payments.

• In respect of the National Senior Certificate for Adults (NASCA) qualification, Members queried how this would work and when this qualification would become available.
Members also sought clarity on the funding required for NASCA qualification - and whether Umalusi had budgeted for this qualification.

• Had Umalusi considered the possibility of the professionalisation of independent religious institutions who produced good results.

How could Umalusi assist with the professionalisation of such institutions.
• Regarding the negative impact on the budget of Umalusi due to COVID-19, Members queried how and which targets had been affected – and the financial implications of this.

Further to this Members also queried how the increase mandate was impacting on the work of Umalusi.

• In respect of the Umalusi staff complement, Members queried how many were persons with disabilities.

• Members queried the turn-around time for the verification of qualifications.
• With bogus/non-accredited schools, Members queried how Umalusi was able to verify these and alert communities of un-accredited schools.

48 53 • In respect of the 2020 leaked exam papers, Members queried how this may have impacted on learners trying to gain access to universities.

Members also queried the role played by Umalusi regarding the leaked papers – and the approval of the new question papers where there were leaks.
• Members queried whether Umalusi had considered a review of the preparation of question papers beforehand- and possibly reset such question papers in view of the COVID-19 pandemic.

• In respect of the TVET Colleges certification backlog, Members queried how the progress by Umalusi in reducing the backlog on certification.
With classes not fully resumed as yet, Members queried whether there was concern at the possible lowering of the academic standards with a possibility that the syllabus may not be completed.

4.2.7 Responses from Umalusi Umalusi was also experiencing the pouching of its professional staff.

Due to the COVID-19 pandemic the Council was not able to attend fully to some of its targets – but through innovations and lessons learned, the Council was looking to attend to targets.
Much of the work of the Council was now done online covering much more ground.

The Council was aware of the inequalities being faced in the sector but also learned that the education system in SA was resilient.

The Council insisted that the curriculum not be trimmed down – and universities had no complaints with accepting Grade-12 learners of 2020.

The Council also learned that the time allocated for quality assurance was too compressed – and needed to be reviewed.
Regarding the NASCA, the Council gave a detailed explanation on the qualification and a possible pilot only in 2023 due to the COVID-19 pandemic.

There was some concern with the readiness of DHET to implement the NASCA.

Umalusi would keep the PC abreast of developments in respect of the new qualification.

The Council would forward official correspondence, through the Chairperson, on issues of independent schools with budget constraints and possible fees indemnity.
Due to the pandemic, Umalusi did not visit and monitor schools as usual as travelling had been affected.

Umalusi did not have any staff with disabilities because their movement would be limited and constrained due to the building lay-out.

Umalusi was working on making building more disabled-friendly facility.

49 54 Umalusi was able to process the verification of qualifications within three days – but other verifications for registration on the sub-framework was a lengthier process.
Umalusi vacancies are capped at less than 10 percent – and there was agreement that when vacancies arose, they would not automatically be filled but the posts would be frozen for a period of time until the financial situation improved.

The Council was not in favour of retrenchments and was in discussions with DBE on an alternate funding model.

The Council, under Lockdown Level 3 – 5, operated completed remotely with alternate days and a hybrid model during Levels 1 and 2.
Umalusi found it difficult to identify unaccredited institutions due to internal capacity constraints – but if reported to Umalusi they are reported to the authorities.

The paper leaks had no impact on the NSC of 2020. last year.

The matter with contractors is in for arbitration and needed to be concluded by July 2021.

5.
5.

Portfolio Committee Recommendations: The Portfolio Committee on Basic Education, having considered Budget Vote 16: Basic Education, together with the Annual Performance Plan of the Department of Basic Education recommends that the Minister of Basic Education ensure the following: 51.

Department of Basic Education • The Department ensure that structural support is provided for migration of ECD to DBE.
• The Department in partnership with DHET play a role to ensure that the issue of learner registration in Higher Education at the beginning of each year is dealt with systematically.

• The Department keep Committee abreast on progress with regards to Coding and Robotics • The Department ensure that the Provincial Education Departments (PEDs) that are struggling in respect of infrastructure projects, work in collaboration with other PEDs to yield the desired results.
• The Department ensure that with regards to infrastructure backlogs, the implementing agents are held accountable to the extent that those that are unreliable are taken off the system, so that they cannot continue and they should be deregistered.

• The Department should appoint credible Engineers as project managers so that issues of infrastructure are dealt with.
50 55 • The Department keep the Committee updated on a monthly basis and quarterly basis on the extent to which progress is achieved, and also report on infrastructure grant, (ASIDI and SAFE).

• The Department should ensure that PEDs are compliant with the COVID - 19 regulations, also considering that there might be an anticipated 3rd wave.
• The Department ensure that PEDS plan effectively for COVID – 19, put measures in place in schools to maintain the social distance, safety protocols and staggering of classes so that learners are not accommodated in overcrowded classrooms.

• The Department ensure that assistance and support for learners with special educational needs are prioritized and that they are provided with necessary resources.
• The Department ensure that schools have access to ICT, more especially those in underprivileged communities and rural areas.

Further recommendation also alluded to the need for review of learner transport to ensure learners safety to and from school.
• The Department in collaboration with the Department of Health, should ensure that everyone is healthy, in collaboration with the Department of Social Development the issue of Psycho – Social support is addressed • The Department ensure that its presentations and other documents reach the Committee at least seven days before presentation to the Committee.

5.2 South African Council for Educators (SACE) • SACE ensure that offices are established in the remaining provinces where they were not accessible.
• SACE to ensure that they bring online registration of teachers, and vetting of registered educators on board including teachers in remote /rural areas.

• Ensure that teachers are identified as early and when they accomplish the qualification, that they get registered.
• In line with SACE programme on Professional Development, the Committee made recommendation for Training of ECD care givers be given priority, • SACE ensure that they support professionalization of the ECD practitioners below NQF level 4, to acquire a qualification at NQF level 4, 51 56 5.3 Council for Quality Assurance in General and Further Education and Training (Umalusi) • Umalusi ensure that the Council maintain the Clean Audit status as the entity is performing well.
• Umalusi ensure that the vacancies are filled and closed.

• Umalusi ensure that staff salaries to be on par with public service to avoid movement of people to other organisation, a situation that impacts on staffing.

6.
6.

Conclusion Having satisfied itself in its engagement with the Department of Basic Education and Statutory Bodies on their Annual Performance Plan and the Budget, the Portfolio Committee on Basic Education recommends that Budget Vote 16: Basic Education be adopted and that the House approves Budget Vote 16: Basic Education.

Report to be considered.

52 57 3.


Report of the Portfolio Committee on International Relations and Cooperation on Budget Vote 6: International Relations and Cooperation, dated 19 May 2021 The Portfolio Committee on International Relations and Cooperation (the Committee), having considered Budget Vote 6: International Relations and Cooperation of the Department of International Relations and Cooperation (the Department) 2021/22, reports as follows: 1.
Introduction The Committee held a virtual meeting due to the restricted movement amid the Covid-19 pandemic.

The Committee met on 5 May 2021 for the Department’s presentation on its Strategic Plan 2020- 2025 and its Annual Performance Plan (APP) 2021/22.

The Committee further discussed the Strategic Plan 2020-2025 of the African Renaissance and International Cooperation Fund (ARF) and its Annual Performance Plan 2021/22, together with the Department’s overall budget allocation for 2021/22.
1.1 Opening remarks by the Chairperson of the Portfolio Committee of International Relations and Cooperation, Honourable Ms Tandi Mahambehlala In her opening remarks, Honourable Mahambehlala welcomed all the attendees.

She further reminded the members that the Committee was in a virtual meeting because of the Covid-19 pandemic and all its related circumstances.
The Chairperson observed the challenges facing the Department, of remote work and digital diplomacy occasioned by the new normal, necessitating a hybrid approach to international work.

Ms Mahambehlala noted that the Committee had noted that the Department had identified policy initiatives including the reduction of missions; organisational review; and the revival of the Partnership for Development Bill, as deliverables for the 2021/22 financial year.
She highlighted the strategic importance of these policy initiatives, and urged the Department to accomplish the work it has set for itself.

She emphasised the challenges created by the archaic nature of ICT systems of the Department.

While noting the existence of the digital strategy, she cautioned that it should be implemented 58 to gauge its effectiveness.

Personnel should be availed the tools of trade in order to drive service delivery on the mandate of the Department, she said.
Ms Mahambehlala said the Committee was looking forward to the Department fulfilling its undertakings, regarding the review of the structured bilateral mechanisms, review of membership to international organisations, and the promulgation of the Foreign Service Act 2019.
The Chairperson observed that Africa remained central to South Africa’s Foreign Policy, and that the Committee expressed a desire to witness the implementation of the African Continental Free Trade Area for a self-sufficient Africa, that would have a thriving inter-Africa trade.

The importance of having progress towards regional economic integration with immediate neighbours in SADC was emphasised.
It was indicated that the Committee remained convinced that the Department should keep the reform of the UN systems, especially the UN Security Council, on the agenda.

It should maintain relations with the Global South, and the historical relations with the North.

The Chairperson pointed out that South Africa’s Foreign Policy continued to be perceived as elitist.
The Department should that foreign policy decision making process include outreach activities to communities, and create access for Public Participation.

She further observed that the pandemic has opened up increased need for consular services by South Africans abroad.

She again applauded the work of the Department and Missions abroad in this regard.
1.2 Overview of the Annual Performance Plan 2021/22 by the Deputy Minister of International Relations and Cooperation, Mrs C Mashego-Dlamini The Deputy Minister thanked the Chairperson for her succinct opening remarks which would help guide the work of the Department.

In her overview, the Deputy Minister hastened to acknowledge that the COVID-19 pandemic has brought about challenges in carrying out international work.
The outbreak of the COVID-19 pandemic severely impacted on the Department’s ability to meet pre-determined objectives.

It was however expected that, during 2021-22, many of the restrictions that were put in place last year in an attempt to contain the pandemic, would remain, such as limitations on international travel and face-to-face meetings.
Page | 2 59 This has had an impact on how the Department approached its work during the 2020-21 financial year, and are still doing so at the start of the current financial year.

The Department had to find innovative ways, such as making use of digital diplomacy, to achieve its objectives.

Deputy Minister highlighted that in the midst of the pandemic, during November 2020, the Department held its annual strategic planning session to review its achievements in terms of the Strategic Plan 2020-2025.
At the conclusion of the Session, it was agreed that the following value proposition would serve as the guiding principle in the execution of our foreign policy: “Reposition South Africa as a respected global leader and as a key contributor to the achievement of our domestic priorities.” She went further to point out that despite the “new normal” that all have grown accustomed to, the Department still remained “a Department committed to the excellent execution of South Africa’s foreign policy, placing South Africa as an influential actor and partner on the international stage, while effectively contributing to the delivery of the country’s domestic priorities and advancement of the African Agenda”.
The Department has, therefore, had to reflect on how to achieve this in the midst of the pandemic.

2.

Briefing by the Department on Budget Vote 6: International Relations and Cooperation 2.1.

Presentation by the Department on its 2021/22 and Medium Term Expenditure Framework (MTEF) expenditure focus The Department presented on its work towards the realization of South Africa’s Foreign Policy objectives.
This was reported done through: • coordinating and aligning South Africa’s international relations, • monitoring developments in the international environment, • communicating government’s policy positions, • developing and advising government on policy options, and creating mechanisms and avenues for achieving objectives, • protecting South Africa’s sovereignty and territorial integrity, • contributing to the creation of an enabling international environment for South African businesses, Page | 3 60 • sourcing developmental assistance; and assisting South African citizens abroad1.
2.2 Strategic linkages to the National Development Plan (NDP) 2030 It has been highlighted that South Africa’s Foreign Policy finds its inspiration on the country’s domestic agenda.

It endeavours to address the triple challenges of poverty, inequality and unemployment through the implementation of an independent foreign policy, within a highly volatile, uncertain, complex, ambiguous (VUCA) and dynamic international environment.
According to the Annual Performance Plan (APP), the conduct of South Africa’s foreign policy would be driven by the quest to realise the aspirations of the NDP Vision 2030 and its development trajectory.

This would be done with full recognition of the challenges posed by international environment the Department operates in.
With regard to international relations and cooperation Chapter 7, the NDP focuses on the need to enhance South Africa’s position in the region and the world, and to increase trade and investment.

The plan further states that the country’s foreign policy should be shaped by the interplay between diplomatic, political, security, environmental, economic and regional dynamics that define international relations.
The plan envisions the country positioning itself as one of Africa’s powerhouses, leading development and growth on the continent; and deepening integration with the Brazil-Russia-India-China-South Africa (BRICS) group of countries.

There has been a clear and deliberate move to ensure there is a link between the activities of the Department and the implementation of Chapter 7 of the NDP Vision 2030.
The NDP underscores the importance of building a nation that contributes to the prosperity of the southern Africa region, the African continent and the betterment of the lives of the marginalised throughout the world.

The NDP further requires that South Africa build a resilient economy which would contribute towards creating a working nation, in order to narrow and eventually eliminate the gap between the rich and poor.
The Department recognises that the national priorities as contained in the NDP are inextricably-linked to the aspirations of the African continent.

Hence, economic diplomacy would 1Annual Performance Plan 2021/22, Department of International Relations and Cooperation Page | 4 61 be used to promote the country as a trade and investment destination, thereby attracting foreign investment and also boosting its tourism sector2.
The aspirations of the NDP have also found expression in the Southern Africa Development Community (SADC)’s development mechanism, the Revised Regional Indicative Strategic Development Plan (RISDP).

These aspirations are also found in the continental programme as encapsulated in the African Union’s (AU) Agenda 2063 Vision, and in the UN 2030 Agenda on Sustainable Development Goals.

The economic development integration of SADC remains a key focus area3.

3.
3.

Planned policy initiatives The Department intends to enhance its operational capacity in three key areas in the medium term4: 1.

The revival of the Partnership for Development Bill 2. Review of organisational structure 3.

Reduction of Missions 4.


Legislative mandates of the Department According to the Strategic Plan 2020-2025, the Department is further responsible for regulation and implementation under the following Acts5: • The African Renaissance and International Cooperation Fund (ARF) Act, 2001 (Act 51 0f 2001): The Act establishes the Fund to enhance cooperation between the South Africa and other countries, in particular, African countries.
This is achieved through the promotion of democracy, good governance, the prevention and resolution of conflict, socio-economic development and integration, humanitarian assistance and human resource development.

• The Foreign States Immunities Act, 1981 (Act 87 of 1981): This Act regulates the extent of the immunity of foreign states from the jurisdiction of courts of the Republic and provides for matters connected therewith.
2 National Development Plan 2030, Chapter 7 thereof 3 Annual Performance Plan 2021/22 of the Department of International Relations and Cooperation 4 Ibid 5 Strategic Plan 2020-2025, Department of International Relations and Cooperation Page | 5 62 • The Diplomatic Immunities and Privileges Act, 2001 (Act 37 of 2001): This Act provides for the immunities and privileges of diplomatic missions and consular posts and their members, heads of state, special envoys and certain representatives of the United Nations and its specialized agencies, and other international organizations and of certain other people.
Provision is also made for immunities and privileges pertaining to international conferences and meetings held in South Africa.

• The Measures and Guidelines for Enhanced Coordination of South Africa’s International Engagements and its annexures, approved by Cabinet in 2009, establish more effective measures and mechanisms to coordinate the conduct of international relations and the implementation of South Africa’s foreign policy.
• The White Paper on Foreign Policy, approved by Cabinet in 2011, assesses South Africa’s foreign policy against the rising expectations of the critical role of foreign policy to meet domestic priorities.
• Foreign Service Dispensation (FSD) is implemented in terms of the provisions of Section 3(3) (c) of the Public Service Act, 1994 (Act 103 of 1994), as amended, and is applicable to designated employees who serve in a foreign country at a South African mission abroad and fall within the scope of the Public Service Coordinating Bargaining Council.
The Department is also a custodian of international agreements (bilateral and multilateral) concluded by the Republic in terms of relevant constitutional provisions (sections 231(2) and 231(3) of the Constitution.

5.

Overview of the Department’s strategic outlook and budget for 2021/22; and the MTEF expenditure focus 5.1 Strategic outlook in the Strategic Plan 2020-2025 Page | 6 63 International responsibility is to build the country’s role as an influential continental and global actor and partner.
Key deliverables would be around the participation of South Africa in the Southern Africa Development Community (SADC) Organ on Politics Defence and Security Cooperation (Troika) as an in-coming Chairperson of the SADC Organ.
The key priority areas of the Department for the next five years were reported as follows: • Enhancing the African Agenda and Sustainable Development; • Enhancing the African Agenda and Sustainable Development; • Strengthening political and economic integration of the Southern African Development Community (SADC); • Strengthening of South-South Relations; • Strengthening of Relations with the strategic formations of the North; • Strengthening of Political and Economic Relations; and • Participation in the Global System of Governance.
5.2 Annual Performance Plan 2021/2022 (APP) of Department Performance delivery environment At the outset, it was highlighted that, in 2020-21, the outbreak of the COVID-19 pandemic severely impacted on the Department’s ability to meet pre-determined objectives.

It was expected that, during 2021-22, many of the restrictions that were put in place the previous year would assist contain the pandemic.
As South Africa’s foreign policy implementation is guided and shaped by its national interest, South Africa would, during 2021-22, continue to utilise high-level multilateral and bilateral meetings to advance the national interest.
In order to contribute to the Economic Recovery and Reconstruction Plan, announced by President Ramaphosa in 2021, the Department would, continue to focus on the following objectives, in line with the MTSF 2019-24: • • Increase Foreign Direct Investment (FDI) into South Africa and Africa; Improve South African access to foreign markets; • Contribute to increased tourism arrivals to South Africa; and Page | 7 64 • Improve investor confidence.

Africa remains central to South Africa’s foreign policy.
In this context, it is therefore important that, in 2021-22, there should be a continuation of the focus areas identified in terms of the Strategic Plan for 2020-25, namely: • A united and politically cohesive continent that works towards shared prosperity and sustainable development; • Enhanced regional integration with increased and balanced trade within SADC and on the Continent by supporting the creation of the African Continental Free Trade Area; • Promotion of greater peace, security and stability on the continent; and • Using South Africa’s membership and engagements in various international forums to advance the Africa Agenda.
South Africa would, during 2021-22, continue to fulfil its obligations towards SADC and the African Union (AU).

This would include South Africa’s obligations as Incoming Chair of the SADC Organ on Politics, Defence and Security Cooperation, providing, once again, a greater opportunity to influence regional policies and outcomes.

During its Chairpersonship of the AU during 2020, South Africa actively sought to promote equal access for all African countries to COVID-19 vaccines.
The 34th Ordinary Assembly of the African Union (virtual) on 6 and 7 February 2021 appointed President Ramaphosa as the Champion for the COVID-19 vaccine strategy and acquisition.

In his role as the Champion for the COVID-19 vaccine strategy, the President is expected to advocate for an equitable and timely, access to the COVID-19 vaccine for all Member States of the AU, which would require additional mechanisms to ensure at least 60% of the Continent’s population is vaccinated.
During The APP provides that the Department would continue to seek to strengthen bilateral international relations through Structured Bilateral Mechanisms, high-level visits and political work aligned to the NDP and MTSF.

During 2020-21, the Department introduced the concept of country strategies, which will be finalised during 2021-22.
The aim of the strategies is to focus South Africa’s engagement with its political partners to ensure that these relations contribute towards the achievement of the objectives of the NDP and MTSF.

Page | 8 65 The economy of South Africa, like the rest of the world, was negatively impacted by the COVID-19 pandemic.
The focus of bilateral relations during 2021-22 would, therefore, be to increase investment in South Africa, through focussed investment promotion; pursuing increased exports and identifying new markets; and promoting South Africa as a preferred tourism destination.

South Africa remains firmly committed to multilateralism and would, continue to advocate for the reform of international multilateral organisations, inter alia, with a view to their becoming more representative of the changed world order.
According to the APP, South Africa would, therefore, continue to pursue the focus areas identified in the 2020-25 Strategic Plan namely: • Active participation in institutions of global governance; • Peace, Security and Development Agenda; • South-South Cooperation; and • Cooperation with the countries of the North.

The focus of these engagements is integral to the promotion of the African Agenda.
In order to effectively deliver on the mandate of the Department, a need was identified for a better Department, that is well equipped to deal with the current challenges, with expertise that can contribute to achieving South Africa’s foreign policy objectives.

It is provided in the APP that the Department has committed to sound corporate governance and has developed various internal control mechanisms to strengthen corporate governance.
In the 2019/20 financial audit, the Department was qualified on current receivables.

As a result, it would implement effective financial management through the application of good financial management systems, including financial accounting, supply chain management, and risk and internal controls in line with the requirements of the Public Finance Management Act, 1999.
The Department would continue to communicate South Africa’s role and position in international relations in both the domestic and international arenas.

The Department would also continue to provide the requisite protocol and consular services.

Page | 9 66 During the financial year, the Department would continue with the closure of identified Missions, in an attempt to deal with the reduced budget at its disposal.
The drafting of regulations, codes and directives to operationalise the Foreign Service Act would also be finalised and approved.

6.
Expenditure trends for programmes of the Department Table 1 Budget Allocation-Vote 6: International Relations and Cooperation 2021/22 Programme (R million) 2020/21 2021/22 1: Administration 1 470 051 1 687 558 2: International Relations 3 147 201 3 207 408 3: International Cooperation 489,652 513,664 4: Public Diplomacy & Protocol 304,070 294,642 5: International Transfers 903,994 749,100 Total 6 314 968 6 452 372 Source: 2021/22 Annual Performance Plan of the Department According to Vote 6 of the 2021 Estimates of National Expenditure, the Department received a total budget allocation of R6 452 372.
In terms of allocations per programme: Programme 1 received a budget allocation of R1 687 558, Programme 2 received a budget allocation of R3 207 408, Programme 3 received a budget allocation of R513.7 million, Programme 4 received a budget allocation of R294.6 million and Programme 5 received a budget allocation of R749.1 million.
6.1 Program 1: Administration The Diplomatic Academy would be a centre of excellence in foreign service training and the plan is to conduct a gap analysis on delivering training in AU/UN languages.

The Department recognised that ICT is the foundation of an effective Department.

It would also improve its digital environment through its Digital Strategy.
Through a process of digital Page | 10 67 transformation, the Department could utilise it as an avenue to positively respond to the fiscal constraint and innovate and improvise, and yet still be effective in what it does.

It is further committed to place ICT as an enabler in the process to improve organisational functioning, working towards the automation and modern digitisation of business processes, to reduce turnaround time and improve service delivery.
This has become more urgent in the light of the new normal the world is operating in.

There is an increasing demand for secure online platforms which was necessitated by the dramatic increase for virtual engagement.

Due to the reducing budget for the compensation of employees, it has been difficult for the Department to fill current vacant posts.
This has led to a further process to review the structure of the Department to find ways to optimise the current staff establishment to maximise delivery on its ever-increasing mandate.

International law provides the rules regulating diplomatic interaction and relations between states and the operation of international organisations.
In this regard, the APP provides that the Department, through the Office of the Chief State Law Adviser (IL), would continue to support the Government to achieve its foreign policy objectives by providing legal advice on international law.

The Foreign Service Act is in existence.

The Department has reported currently in a process to draft the required regulations, codes and directives to enable the implementation of the Foreign Service Act, 2019.
However, the Committee noted that the Department has missed its deadline of April 30, 2021 for the promulgation of the Act.

The allocated budget for Administration amounted to 26.2% of the total Departmental budget for the 2021/22 financial year6.
The budget allocation for this Programme would increase from R1 470 051 the previous year, to R1 687 558 in 2021/22 The increase is mainly for capital infrastructure for the construction, refurbishment and renovations of State-owned properties abroad, as well as the Information and Communication Technology (ICT) budget for the implementation of the ICT strategy7.
6.2 Programme 2: International Relations 6 Estimates of National Expenditure 2021 7 Estimates of National Expenditure 2021 Page | 11 68 The APP provides that the Department is to review structured bilateral mechanisms to align them to the aspirations of the NDP and MTSF.

The review was aimed to be completed in quarter 2 of 2020/21.

So far 9,42% (13 out of 139) of structured mechanisms have been honoured and reported on8.
The Department has planned to strengthen political bilateral relations through Structured Bilateral Mechanism and High level visits.

In this new reality, the APP provided that the Department would aggressively embark on economic diplomacy in order to contribute in a more direct and concrete manner to achieve poverty eradication, job creation and socio- economic development and growth, primarily by utilising the resources it has in its missions abroad.
This would ensure that political work is aligned to the NDP and MTSF as identified in the country strategies.

There would be bi-annual assessment report of South Africa’s contribution towards: Peace, stability, socio-economic development, good governance, democracy; regional integration; and the implementation of the Revised Regional Indicative Strategic Development Plan (RISDP).

In the APP, the Department has reported having a dynamic role to play in the improvement of the lives of South Africans.
It would utilise its bilateral relations and global footprint in identifying strategic opportunities for South Africans.

These would include skills and knowledge development, targeted investments and growing markets for South Africa’s products and services, in an integrated and inclusive manner.
The budget allocation for Programme 2 would increase over the MTEF from R3.1 billion (2020/21) to R3.2 billion in 2021/229 and includes allocations for 120 missions in the Africa, Americas, Europe, Asia and Middle East regions.

The increase in the budget allocation for this programme is mainly on goods and services.

This is reported due to the escalations on contractual obligations for the leases of offices and residential accommodation abroad10.
6.3 Programme 3: International Cooperation 8 Annual Performance Plan 2021/22, Department of International Relations and Cooperation 9 Estimates of National Expenditure 2021 10 Annual Performance Plan 2021/22, Department of International Relations and Cooperation Page | 12 69 The Department has planned to develop a long term strategy for South Africa’s membership and candidatures to international organisations11.
This would enable it to identify strategic international organisations that would respond to national interest; and which strategic positions to campaign for.

In the 2020/21 financial year, the Department had aimed to review and identify which memberships to pursue.

This was crucial as it would enable the Department to assess the continued relevance and usefulness of existing memberships.
This financial year, the indicator talks to the implementation of the approved strategy for South Africa membership on which membership to pursue.

Bi- annual progress report on the implementation of the approved strategy would be the output12.

The Department would ensure that South Africa’s interests are promoted and reflected in the outcomes of multilateral and multistate organisations dealing with Peace and Security, Human Rights, Economic and Social Development.
It would also ensure that the country complies with its international reporting obligations.

It would further maintain 60 positions on identified influential multilateral bodies.

It would also produce bi-annual monitoring reports on South Africa’s contribution to the operationalization of identified Agenda 2063 flagship projects.

In terms of continental cooperation, the Department would contribute to the operationalization of identified Agenda 2063 flagship projects13.
It would also support Africa partnerships to be recalibrated for the effective implementation of the African Union’s (AU) Agenda 2063.

The Department would ensure South Africa’s fulfilment of its obligations towards the Southern African Development Community (SADC) and the AU.

South Africa would also honour its commitment to support efforts to resolve continental conflicts.

South Africa would continue to extend support for elections through the SADC mechanism, SADC Election Observer Mission (SEOM).
In terms of International cooperation, the Department would ensure that South–South cooperation is utilised to pursue South Africa’s participation and interest including that of the African Agenda.

On the other hand, North – South cooperation would be utilised to pursue South Africa’s participation and interest including that of African Agenda.
11 Ibid 12 Ibid 13 Ibid Page | 13 70 The budget allocation for Programme 3: International Cooperation has experienced an adjustment with an increase in allocations to sub-programmes 1, 2, 3 and 4.

From R489.7 in 2020/21 to R513.7 million in 2021/22.

6.4 Programme 4: Public Diplomacy and State Protocol According to the APP, the Department aims to implement and monitor the effectiveness of the Public Diplomacy strategy.
Through this programme, the Department would ensure rapid and timeous support to missions on domestic and global developments.

Key messages would be distributed to missions on domestic and global developments.

Several platforms would be utilised to inform and promote South Africa’s foreign policy to domestic and international audiences, thus making an effort to ensure that foreign policy decision-making process reach the grass roots.
The budget allocation for Programme 4: Public Diplomacy and Protocol Services has experienced a decrease in allocation; from R304.0 million in 2020/21, to R294.6 million in 2021/22.

6.5 Programme 5: International Transfers The Department would continue to transfer payments, which arise from obligations undertaken by South Africa at international, regional and subregional multilateral levels, and to its entity, the African Renaissance Fund14.
The MTSF (2019 – 2024) requires that South Africa contributes to a better South Africa and better region and to secure the advancement of South Africa’s national interest.

This could only be realised through the payment of South African contributions to international organisations in full and on time.

Therefore, under its Outcome, “Agenda 2030 and Agenda 2063”, it is required that South Africa honours its obligations towards the UN, SADC and the AU, including the institutions hosted in South Africa (i.e.
Pan-African Parliament, New Partnership for Africa’s Development, African Peer Review Mechanism, African Commission on Nuclear Energy and Pan-African University on Space Science (PAUSSI) and trans-frontier conservation areas.

This would require the settlement of all assessed contributions as required by the respective international organisations.
1414 Estimates of National Expenditure 2021 Page | 14 71 The budget allocation for Programme 5: International Transfers for the 2021 MTEF, consists of the Departmental Agencies’ allocation to the African Renaissance and international Cooperation Fund (R50 056 million), as well as international membership contributions to organisations such as, among others, the AU, SADC, UN, India-Brazil-South Africa Trust Fund, and the Commonwealth of Nations.
The allocated budget amounts to 11.6% of the total departmental budget for the 2021/22 financial year.

The budget allocation for this programme is determined based on the assessment letters from each organisation South Africa is a member of.

The budget allocation for Programme 5: International Transfers experiences a decrease from R904 million in 2020/21 to R749.1 million in 2021/22.

7.
7.

The African Renaissance and International Cooperation Fund (ARF) 7.1 Strategic Plan 2020-2025 African Renaissance Fund The Department has one entity, the African Renaissance and International Cooperation Fund (ARF).

After 1994, the democratic government took a deliberate decision to establish a Fund, to promote development assistance and consolidate peace and reconstruction in Africa.
The African Renaissance and International Cooperation Fund was thus established in 2000 pursuant to an Act of Parliament, the African Renaissance and International Cooperation Fund Act (Act 51 of 2000).

The fund’s mandate is to enhance cooperation between South Africa and other countries, particularly African countries15.

The ARF continues to be an invaluable instrument in pursuit of the priorities identified in the MTSF.
As foreign policy is an extension of national priorities, the ARF will contribute to the seventh priority of “A Better Africa and World” through “enhancing cooperation between the Republic and other countries, in particular African countries, through the promotion of democracy, good governance, the prevention and resolution of conflict, socio-economic development and integration, humanitarian assistance and human resource development”.
Therefore, as South Africa engages with the region, continent and international community, it seeks to build an environment in which we can realise our national socio-economic agenda as well as South Africa’s political and security interests.
15 Strategic Plan 2020-2025, African Renaissance Fund Page | 15 72 ARF projects are implemented outside of the country and require regular monitoring, to ensure that the funds that are utilized are accounted for in accordance with the concurrence granted by the Minister of Finance.
The monitoring of ARF projects and ensuring that supply chain prescripts are adhered to during project implementation continues to be the core focus of the Secretariat, whilst also managing other aspects of the Fund and positioning South Africa as a development cooperation player on the continent.

The Strategic Plan is a roadmap, which serves as a guide to realise the strategic objectives of the ARF in pursuing South Africa’s foreign policy.
7.2 Annual Performance Plan of the African Renaissance Fund The APP of the ARF appreciated the strain exerted on the fiscus, as South Africa continue to battle the pandemic.

It further conforms to the mandate that is assigned to as the entity in terms African Renaissance Fund Act.

For the 2020/21 financial year, the ARF has mainly funded humanitarian assistance projects in response to the COVID-19 pandemic.

The Department anticipated performing successfully in other objectives, in line with the ARF Act.
The Department has noted the urgency regarding the finalisation of the Partnership Fund Bill which would be the guiding tool in the migration into SADPA, and discussions were currently under way on the approach to be adopted to ensure progress on the matter.

7.2.1 African Continental Free Trade Area (AfCFTA) In the next five years, the ARF would focus on projects that support the operationalisation of the AfCFTA.

This would be in line with the socio-economic strategy.
In terms of participating countries, it would be the largest free trade area since the formation of the WTO, has the potential to boost intra-Africa trade.

The objective is to create a single continental market for goods and services.

South Africa is of the view that AfCFTA would accelerate progress towards continental unity and integration for sustainable growth, trade, exchange of goods, services and free movement of persons and fast-track economic integration.
The ARF would implement projects that Page | 16 73 would improve the socio economic conditions of citizens16.

The funding of projects that would fast- track the operationalisation of the AfCFTA would realise a shared prosperity for Africa.

The ARF would continue to provide technical support for elections in the SADC region.
South Africa’s participation in the Southern Africa Development Community election observer missions (SEOM) demonstrates its commitment to free, fair and credible elections, and further encourages democratic practices and good governance in the region.

South Africa’s participation in SEOM also contributes towards creation of constitutional frameworks and a climate conducive for holding credible elections.

8.
8.

Findings by the Committee 8.1 The processes for the implementation of the Digital Strategy are painstakingly slow.

The Department still has to acquire the necessary tools of trade like, laptops, tablets, desktops; to enable it to embrace the 4th industrial revolution ushered in by the COVID-19 pandemic.

It had issued tenders three times for the procurement of the tools of trade, without success.
It was however, observed that the critical position of the Chief Information Officer was filled, and there was hope for improvement.

8.2 The implementation of the 2009 Cabinet decision for the establishment of the South African Development Partnership Agency is still outstanding.

The issue also featured to be achieved in the 2020/21 financial year.

8.3 The Department has missed its deadline of 30 April 2021, for the promulgation of the Foreign Service Act 2019.
There was no explanation, nor a roadmap for the entry into force of the Act in the APP 2021/22.

This is despite the fact that the Act brings about many new important roles, including coordination of international relations, custodianship of state-owned properties abroad.

8.4 The Committee sought the criteria followed in the identification of Missions in five countries for refurbishment.

It was further noted that those Missions, except for Namibia, were all in Europe.
16 Strategic Plan 2020-2025, African Renaissance Fund Page | 17 74 8.5 It was observed that the Department was planning to undertake infrastructure projects without a ‘milestone report’.

Such a report would be necessary to clearly outline how it would detach itself from the professional assistance in the built environment which was provided by the Department of Public Works (DPW).
The milestone report would also serve as a handing over document from the DPW detailing the state of affairs in the property portfolio which they had been managing.

It should also inform the Department how many properties there are, monies spend on maintenance and rentals, cleaning and all other related matters.

In essence, the Department would not be able to take over with custodianship of state owned properties abroad without some form of a handing over report.
8.6 The Committee has on several occasions asked the Department to develop a turnaround strategy responding to the challenges raised in the successive reports of the Auditor-General and the Committee, regarding the inadequacies in the Finance and Asset Management branch; and to separate Property Management from Finance.

8.7 A need was identified for the Department to develop a plan aimed at improving office and residential accommodation for transferred officials abroad.
8.8 The breakdown of cost of renting properties abroad, was needed, especially where there were vacant state-owned properties and land parcels.

8.9 The compensation of employees ceiling remains a challenge.

The budget is therefore lower than the current employees in the Department.

Upskilling of personnel was regarded as an ad-hoc solution, which would not address the real root cause of challenges with maintaining the cost within a determined ceiling.
8.10 There would be a need for a review of South Africa’s Foreign Policy, and how it will be aligned to the post pandemic global order.

8.11 It would not be a strategic move to subject the decision for the migration of the ARF to the South African Development Partnership Agency to a mere name change, without taking into consideration the governance structure of the ARF, which is one of the key objectives for the migration.
Page | 18 75 8.12 There were many responsibilities to be performed by the Office of the Chief State Law Adviser.

More information was needed on whether it was well capacitated to do its work, and whether it was transformed.

8.13 The Committee should have been taken into confidence and informed of the decision to close down some of the Missions abroad, as opposed to such announcements being heard from the media.

The process should not impact on Missions in Africa.
8.14 A request was made for an update on the consequence management processes in the Department, and in particular the suspension of the DG and the Chief Financial Officer and related charges against them, if any.

A further follow-up was made for the Department to confirm whether the suspension of the two officials was related to the irregular expenditure incurred in the New York project as alluded to by the Acting DG in her presentation.
It was subsequently so confirmed by the Acting DG that it was the case.

8.15 South Africa, in collaboration with other SADC countries, should be more supportive to the people of Mozambique, because of the insurgency in the Cabo Delgado province.
8.16 The Department was called upon to report, within a month, on the following: • The roadmap with timeframes for the entering into force of the Foreign Service Act 2019, in terms of processes for consultations on the regulations, codes and directives, with relevant stakeholders • Briefing on South Africa’s performance during its tenure as a non-permanent member of the Security Council for the 3rd time • South Africa’s performance in conflict resolution during its Chairship of the African Union in 2020 • Implementation plan with timeframes developed in line with the Digital strategy • Turnaround strategy to stay within the compensation of employees ceiling as set by the National Treasury • Filling of critical positions, including building capacity in the property management unit with skills in the built environment field • Progress report on implementation of consequence management • Quarterly reports on the implementation of the Digital strategy Page | 19 76 • Progress on improving of residential and office accommodation for transferred officials abroad • South Africa’s implementation of international obligations borne out of international agreements • Regional integration reflecting on South Africa’s contribution to peace, stability, good governance and democracy and on the implementation of the SADC’s Regional Indicative Strategic Development Plan • Outcomes of high level visits and how they contribute to MTSF priorities and NDP objectives • South Africa’s contribution to the operationalisation of the identified Agenda 2063 flagship projects 8.17 It was felt that the Department needed to be more proactive and visible through Public Diplomacy initiatives, and educate South Africans on the importance of relations with other Africans in and outside the country.
It was said there ought to be open support for, and condemnation of ill-treatment of, African foreign nationals in South Africa.

8.18 It was noted with sadness that a South African national, Mr Lindani Myeni, was shot dead by police in Honolulu, Hawaii in the United States.

The Committee expressed discontent and displeasure on the United States, for ill-treatment of black people, more so, after the murder of a South African.
The Chairperson had already issued a statement expressing condolences to the bereaved family.

The Department was asked to assist the family in every way possible for justice to take its course.

8.19 It was noted with appreciation that South Africa was leading an initiative in the World Trade Organisation (WTO), requesting for a temporary TRIPS waiver for patents on COVID- 19 vaccines.

Parliament would express its support and present a political view on the matter.
Furthermore, the Department was asked why among the BRICS countries, South Africa only sought COVID-19 vaccines from India, and not also from Russia and China.

8.20 An update was requested on the proposed withdrawal by South Africa from the International Criminal Court.

Page | 20 77 8.21 It was recalled that the Committee had initially, during the law making processes, agreed with the Department that it would be given an opportunity to be part of the stakeholders’ consultations on the draft regulations.
8.22 There was a concern that the Chief Director: Property Management was allowed to resign without having been put through consequence management for the issues identified in both the Committee’s and the Auditor General reports on the New York project.

9.

Responses by the Department 9.1 The Department confirmed that in the organisational review project, the Property Management unit is established as a stand-alone, separate from the Finance branch.
9.2 The Department is doing all in its ability to finalise the processes towards stakeholders’ consultations on proposed regulations, codes and directives aimed at the entry into force of the Foreign Service Act 2019.

9.3 The media reports on the closure of some South African Missions abroad were as a result of a leak.

The information was not an official announcement and was regrettable.

The Department still wished to formally inform the Committee.

Indeed 11 Missions were earmarked for closure in 2021.
Cabinet took the decision in 2020 that the Department should explore how to save costs, while ensuring that relations and services to the affected countries remained the same.

The other departments and other clients also had to be consulted, just as the Minister had to engage the affected countries politically, to assure them that relations would remain the same.
With regard to the Locally Recruited Personnel (LRPs), the Department had to comply with retrenchment laws of those countries, where some had a moratorium on retrenchments during the pandemic.

9.4 Indeed, the Department missed its deadline of April 2021, for the promulgation of the Foreign Service Act 2019.
The 5 work streams are busy with a target of having draft regulations by 15 June 2021; by 15 July there would be a stakeholders’ forum, with a target of end of August 2021, as the timeframe for the completion of the process.

Page | 21 78 9.5 The Department does not have an approved property management strategy.

It has a draft framework property management to carry on the repairs and disposals identified in the interim.
The repairs, renovations and intended disposals were agreed upon in consultation with affected Missions.

There are 19 properties to be disposed of by the end of July 2021.

9.6 The ICT unit has a project implementation plan, progress made would be presented to the Committee on a quarterly basis.

The project is estimated to overrun into the next financial year, and ICT hubs would be consolidated from six to three.
The procurement of tools of trade like laptops, desktops, is with the supply chain management unit for processing.

9.7 With regard to the infrastructure plan, the capital projects that were planned for 2020/21, were rolled over to 2021/22.

This was because the Department had to surrender money for the adjusted budget.
For renovations, each affected mission was consulted and asked to submit their maintenance plans, to show how much the Mission would have available to do the repairs, and the rest would be taken over by the Department.

The responsible DDGs were also involved in the decision making.

At the end of the exercise R155 million was allocated for the 2 capital projects identified in the APP 2021/22.
9.8 Following the resignation of the Chief Director: Property Management, Ms Africa, at the end of April, the Department wrote to National Treasury for a secondment of a person with requisite qualifications in the built environment for a period of 6 months to a year.

Once a head of the unit is recruited in alignment with the Foreign Service Act, then other relevant personnel would also be recruited.
Currently the Department spends R949 million a year on rentals; R21 million on rentals where there are state-owned land parcels; R16 million per year where properties are not used.

Properties have been identified for renovations in Europe, Africa and Asia.

9.9 With regard to disposal of properties, the mandate was still with the Department of Public Works because the Foreign Service Act is not yet in force.
The Department has done an assessment with the help of Public Works, resulting in 19 properties having been identified for disposal in July 2021.

There is an interdepartmental committee with Public Works, which is assessing the economical usefulness of the properties.

Page | 22 79 9.10 There are discussions aimed at assisting with the migration from the ARF to SADPA.

The ARF Act would be repealed to pave the way for the new agency.
Challenges with staying within the ceiling on the compensation of employees persists.

The Department is reviewing the organisational structure coupled with the closure of some missions as a turnaround strategy.

9.11 The transferred personnel are now required sign an indemnity certificate which makes them liable for any damages caused to buildings, utensils, and deposits are being collected.

A deposit amount of R10 million has already been lost.
9.12 The partnerships such as IBSA, IORA, BRICS, remain relevant to the interests of South Africa and the African Agenda.

All BRICS countries are committed to reaping the benefits from the BRICS Bank, South Africa has benefitted twice with R2 billion for addressing the pandemic.

South Africa is in BRICS for a long haul, as it supports South-South cooperation and the grouping is working together to have a representative multilateral system.
The IBSA Fund is very effective as a new template for development assistance.

Projects have been funded in Africa and Palestine among others.

9.13 President Biden has had a telephone conversation with President Ramaphosa, and the US Secretary of State Blinken also called Minister Pandor, undertaking to work with South Africa to reverse the damage in relations by former President Trump.

They also undertook to assist in the matter of Lindani Myeni.
South Africa and India have led discussions at the WTO, asking for the temporary waiver of patent controls to allow developing countries to produce the vaccines to cope with the demand for global need for vaccines.

President Biden has said that the US will support the temporary waiver for the benefit of the developing world.

10.

Conclusions After discussions during the briefing, the Committee concluded as follows: The Department has received an increased budget for financial year 2021/22.
The budget would still be further affected by the imminent foreign exchange currency fluctuations and unavoidable mandates and responsibilities in its diplomatic intercourse and conduct of Page | 23 80 international relations.

Its main operations abroad have previously been affected by currency fluctuations.

The situation with COVID-19 has meant that, like other departments, this Department would have to work within a tight budget and reprioritised targets.
The mandate of the Department is largely abroad, most of the activities it had planned would be severely impacted upon as there would be no travel due to the travel restrictions and lockdowns in many countries.

However, the Committee was encouraged by the Department’s commitment and resolve to achieve its strategic objectives albeit with budgetary constraints.
Graduation from the qualified audit opinion baseline to a clean audit should be the Department’s goal for the medium term; and it should implement the audit action plan and adhere to the cost containment measures it has agreed to with the National Treasury.

The Department has to carry out its mandate within unpredictable, at times turbulent, external environment to advance South Africa’s national interest.
The National Development Plan prescribed that the Department should position itself to assume greater leadership role in Africa, leading development and growth in the continent.

The interplay between foreign policy and national interest continue to be the baseline for the Department’s success in the conduct South Africa’s foreign policy.
Following from the above conclusions, it has, therefore, become important for the Department to have continued with clear and focus driven plans which remain aligned to the budget allocated, and the continued vigour to respond to the domestic challenges as per the aspirations of the NDP.

The Committee has accepted the challenges imposed on its oversight work by the pandemic restrictions on travel.
It has continued its trend of a robust approach to oversight over the activities of the Department, South Africa’s Missions abroad and the entity, the African Renaissance Fund, through a virtual oversight visit.

More of such oversights would follow.

The Committee would also engage in various issues aimed at enhancing the conduct of South Africa’s foreign policy.
The Committee would continue to make a number of recommendations to the Department, as part of its oversight, and in an effort to enhance the way South Africa relates and engages in international relations.

The Department has responded positively in some aspects, and Page | 24 81 benefitting from guidance from the Committee.

There is room for improvement, as the Committee is encouraged by the responsiveness of the Department to the oversight interventions.

11.
11.

Recommendations Having considered the Strategic Plan 2020-2025 and the Budget Vote 6 of the Department 2021/22 and its entity, the Committee recommends that the Minister should consider the following and report on progress within three months of adoption by the National Assembly of this report: 11.1 Conduct a full assessment of the effect of COVID-19 and its impact on the budget allocation of the Department, predetermined objectives, and service delivery.
11.2 Finalise the implementation plan and relevant processes and meet the deadline of end of August 2021 for the promulgation of the Foreign Service Act 2019 to come into force.

11.3 Oversee the implementation of effective financial management through the application of sound financial management systems, including management and financial accounting, as well as supply chain management.

11.4 Improve the internal control environment in line with the requirements of the Public Finance Management Act, 1999.
11.5 Obtain a milestone report from the Department of Public Works as a handing over brief on state owned land and properties abroad.

11.6 Ensure that a property management strategy is developed as a guiding framework for the custodianship of the property portfolio, in line with the Foreign Service Act.

11.7 Develop an implementation plan with timeframes, in order to determine the course of action needed for all state owned land parcels and properties abroad.
Page | 25 82 11.8 Develop an implementation plan with timeframes for the Digital strategy to have the necessary impact, prioritizing the procurement of tools of trade and the ICT infrastructure to respond to the demands for robust digital diplomacy, a situation created by the pandemic.

11.9 Utilize the bilateral mechanism with the US to express concern on the fatal shooting of Mr Lindani Myeni by the US police, and seek assistance in bringing to justice those involved.
11.10 Develop a strategy for South Africa’s engagement with the United States, in order to benefit from the open door policy of the Biden Administration, and reporting on the progress made in advancing South Africa’s national interest.

11.11 Revise the strategy for South Africa’s participation in BRICS, to ensure the forum’s continued relevance in advancing South Africa’s national interest and the African Agenda 2063.
11.12 Finalise the processes aimed at reviewing the responsiveness of Structured Bilateral Mechanisms existing between South Africa and other countries, to achieve the objectives of the National Development Plan.

11.13 Ensure a clearly defined process and criteria for the implementation of the cost-reduction initiatives through closure of some South African Missions abroad.
11.14 Finalise the strategy for South Africa’s membership in international organisations, guided by the continued relevance and value-added for participation in such bodies.

11.15 Conduct a review of South Africa’s Foreign Policy, and how it will relate to the post COVID-19 pandemic world order.

11.16 Negotiate with all members of BRICS, for the procurement of COVID-19 vaccines.
11.17 Finalise the process of review of the departmental organisational structure and prioritise the filling of critical posts in order to align with the implementation of the Foreign Service Act, 2019.

Page | 26 83 11.18 Ensure continued leading role by South Africa and India in the World Trade Organisation (WTO), on the request for a temporary TRIPS waiver for patents on COVID- 19 vaccines, and reporting on progress thereof.
11.19 Finalise and report on all processes regarding matters of consequence management in the Department.

11.20 Fast-track the processing of the Partnership for Development Bill including the repealing of the African Renaissance and International Cooperation Fund (ARF) Act 2000, in order to operationalise the South African Development Partnership Agency (SADPA).
11.21 Consult with Minister of Public Works for the fast-tracking of the processes for the provisioning of a headquarters for the Pan African Parliament.

11.22 Ensure that the Diplomatic Academy is established in line with the criteria outlined in the Foreign Service Act.

11.23 Seek a secondment from the Department of Public Works for an official with requisite qualifications in the built environment and who will be able to carry forward the duties relating to property and facilities management.
11.24 Report within a month on the items listed in paragraph 8.16 of this report.

To the National Assembly 11.25 The Parliamentary Oversight Model must be reviewed to allow the Portfolio Committee on International Relations and Cooperation to have more regular oversight visits to South African Missions abroad, in order to have a holistic approach on the performance abroad of the Department of International Relations and Cooperation.
Being mindful that cost considerations may not allow oversight visits to all the South African Missions abroad, the Portfolio Committee has adapted to the new normal, and has conducted a novel oversight visit, virtually.

It is the hope of the Committee that Parliament will embrace this innovation into Oversight and Accountability Model.
Page | 27 84 11.26 The Parliamentary Oversight Model should allow the Portfolio Committee on International Relations and Cooperation to have more regular oversight visits to project areas of the African Renaissance and International Cooperation Fund (ARF), in order to have a holistic approach on the performance abroad of the entity of the Department of International Relations and Cooperation.
11.26 The Portfolio Committee should be allowed to conduct oversight visits to international organisations that the Republic of South Africa is a state-party.

This would enable the Committee to assess the impact of the Department’s participation on the overall outcomes at such forums.

11.27 The Committee recommends that Budget Vote: 6 International Relations and Cooperation 2021/22 be passed.

Report to be considered.

Page | 28 85 Sources and references 1.


National Treasury, 2020 Estimates of National Expenditure Budget: Vote 6 International Relations and Cooperation 2.

Constitution of the Republic of South Africa 1996 3.

Department of International Relations and Cooperation: Strategic Plan 2020-2025 4.

Department of International Relations and Cooperation Annual Performance Plan 2021- 2022 5.

African Renaissance and International Cooperation Fund: Strategic Plan 2020-2025 6.
African Renaissance and International Cooperation Fund: Annual Performance Plan 2021-2022 7.

State of the Nation Address, February 2021 8.

The National Development Plan 2030: Chapter 7 9.

Government’s Medium Term Strategic Framework 2019-2024 10.

Priority 7 of Government’s Medium Term Strategic Framework 2019-2024 Page | 29 86 4.
Report of the Portfolio Committee on Trade and Industry on the President’s reservations on the Performers’ Protection Amendment Bill, dated 14 May 2021 The Portfolio Committee on Trade and Industry, having reconsidered the Performers’ Protection Amendment Bill (PPAB) [B24B-2016] (introduced in the National Assembly as a sec 75 Bill), as well as the President’s reservations on the constitutionality thereof (Announcements, Tablings and Committee Reports, 24 June 2020, p 3-13), and having conferred with the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour thereon, reports as follows: 1.
In a letter dated 16 June 2020, the President of the Republic of South Africa informed the National Assembly that he had reservations about the constitutionality of the Performers’ Protection Amendment Bill [B24B-2016] (National Assembly – sec 75) and that, consequently, he was referring the Bill back to the National Assembly for reconsideration in terms of section 79(1) of the Constitution of the Republic of South Africa, 1996 (Constitution).

2.
2.

The President’s reservations related to the following, that: 2.1 The Bill had been incorrectly tagged as a section 75 Bill.

He was of the view that it should be a section 76 Bill because of provisions that substantially affect the area of cultural matters as listed in schedule 4 to the Constitution.

This might have been the case as the Bill affects performances and performers of “traditional works” including cultural expressions or knowledge, and the rights in these performances.
It further regulates the manner in which related performances are made and shared.

2.2 The Bill might not comply with international treaty obligations specifically in relation to the WIPO Performance and Phonograms Treaty.

3.
The Committee, having considered the President’s reservations, reports as follows: 1 87 3.1 The Committee, after due consideration and having decided to rather err on the side of caution, agrees with the President’s reservation that the Bill should have been tagged as a section 76 Bill and resolved that it would request the House to submit the Bill to the Joint Tagging Mechanism for reconsideration of its classification and to specifically consider whether the Bill should be dealt with in terms of section 76 of the Constitution.
3.2 With respect to the President’s reservations that the Bill may not comply with international treaty obligations specifically in relation to the WIPO Performance and Phonograms Treaty, and the Committee is of the view that the reservation related to international treaties can be dealt with in conjunction with a call for public comment.
In considering such inputs, the Committee may then appraise itself of whether the Bill does indeed comply with treaties or not and, if necessary, effect amendments to the Bill.

4.
After deliberations, the Committee recommends: That the National Assembly should consider– 4.1 rescinding its decision, on 5 December 2018, to pass the Performers’ Protection Amendment Bill [B24B-2016] as a section 75 Bill; 4.2 referring the Bill [B24B-2016] referred to in 4.1 above to the Joint Tagging Mechanism to consider whether it agrees with the President’s reservation that the Bill should have been tagged as a section 76 Bill; 4.3 referring the Bill [B24B-2016] to the Portfolio Committee on Trade and Industry to correct the procedural and substantive concerns in the manner proposed by it, and for report; and 4.4 agreeing to the Committee, in addressing the reservations it supports and how it intends correcting it, incorporating in its work the proceedings and all the previous work of the Committee up to the Second Reading of the Bill.
Report to be considered.

2 88 5.
Report of the Portfolio Committee on Trade and Industry on the President’s reservations regarding the Copyright Amendment Bill, dated 14 May 2021 The Portfolio Committee on Trade and Industry, having reconsidered the Copyright Amendment Bill (CAB) [B13B-2017] (introduced in the National Assembly as a sec 75 Bill), as well as the President’s reservations on the constitutionality thereof (Announcements, Tablings and Committee Reports, 24 June 2020, p 3-13), and having conferred with the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, reports as follows: 1.
In a letter dated 16 June 2020, the President of the Republic of South Africa informed the National Assembly that he had reservations about the constitutionality of the Copyright Amendment Bill [B13B-2017] and that, consequently, he was referring the Bill back to the National Assembly for reconsideration in terms of section 79(1) of the Constitution of the Republic of South Africa, 1996 (Constitution).

2.
2.

The President’s reservations related to the following, that: 2.1 The Bill had been incorrectly tagged as a section 75 Bill.

He was of the view that it should be a section 76 Bill because of provisions that substantially affect two areas listed in schedule 4 to the Constitution, namely cultural matters and trade.

Specific areas where this might have been the case were: 2.1.1 Sections 6A, 7A, 8A, 39(cG) and (cI), 22(3), 7B-F and 22A provide for how copyright may be traded.
2.1.2 Indigenous works will become eligible for payment of royalties which affects cultural matters.

The definition of “indigenous work” and the fact that the Bill was referred to the House of Traditional Leaders for comments support the view that it deals with cultural matters.

2.2 The retrospective provisions contained in the Bill may constitute arbitrary deprivation of property.

This specifically related to clauses 5, 7 and 9 inserting sub-sections 6A(7), 7A(7) 1 89 and 8A(5).
These provisions applied retrospectively resulting in copyright owners being entitled to a lesser share of the ‘fruits of their property than was previously the case.

The impact of these provisions reaches far beyond the authors it seeks to protect – those that live in poverty as a result of not having been fairly protected in the past.
The retrospective provisions would deprive copyright owners of property without sufficient reason and would therefore result in substantial and arbitrary deprivation of property.

In addition, the uncertainty created by its unlimited retrospective operation, how assignment by multiple authors would work or what would happen if the owner of the copyright was a non-profit organisation aggravates the situation.

2.3 The “fair use” provisions as amended had not been put out for further public comment.
The President referred to the substantial amendments that had been effected to various sections of the Bill following public hearings in August 2017, including section 12A, which deals with fair use of a work or a performance of a work.

These amendments had not been put out for public comment before the final version of it had been published.
The changes made to this particular section were material to the scheme as a whole and the failure to consult, in the face of such materiality of the amendments, could render the provisions constitutionally invalid.

2.4 The Bill conferred substantial discretionary powers on the Minister in sub-sections 6A(7)(b), 7A(7)(b) and 8A(5)(b), which could well constitute an impermissible delegation of legislative authority.
These sections permit the Minister to make key decisions regarding the deprivation of property (copyright) from those to whom it was assigned in the past.

It also has the effect that there is no participation process to which legislation is generally subjected.

The Bill in this regard also failed to provide for an oversight role for the National Council of Provinces (NCOP).

This decision-making process is in fact within the domain of the National Assembly and is therefore impermissible delegation.
2.5 The copyright exceptions might constitute reasonable grounds for constitutional challenges.

This related to the following: 2.5.1 The Bill introduces copyright exceptions in the new sections 12A to 12D, 19B and 19C.

These sections may encounter constitutional challenges for the following reasons: 2 90 2.5.1.1 Sections 12A, 12B(1)(a)(i), 12B(1)(c), 12B(1)(e)(i), 12B(1)(f), 12D, 19C(3), 19C(4), 19C(5)(b) and 19C(9) may constitute deprivation of property.
2.5.1.2 Sections 12A and 12D may further violate the right to freedom of trade, occupation and profession.

2.5.2 These sections may also be in conflict with the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performance and Phonograms Treaty, both of which had been signed by South Africa, although they are not yet acceded to.
2.5.3 There was also a contention that the Bill breached the ‘Three-Step’ test, first established under article 9(2) of the Berne Convention, to which South Africa is bound in terms of section 231(5) of the Constitution, 1996.

This test involves that an exception or limitation shall only cover special cases; shall not conflict with the normal exploitation of the work; and shall not unreasonably prejudice the legitimate interests of the rights- holder.
2.6 The Bill might not comply with international treaty obligations specifically in relation to the WIPO Copyright Treaty, the WIPO Performance and Phonograms Treaty, and the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled.

3.
The Committee, having considered the President’s reservations, reports as follows: 3.1 The Committee, after due consideration and having decided to rather err on the side of caution, agrees with the President’s reservation that the Bill should have been tagged as a section 76 Bill and resolved that it would request the House to submit the Bill to the Joint Tagging Mechanism for reconsideration of its classification and to specifically consider whether the Bill should be dealt with in terms of section 76 of the Constitution, 1996.
3.2 With respect to the President’s reservation regarding public participation in relation to sections of the Bill, including section 12A, which deals with the fair use of a work or the performance of a work, the Committee agrees with the President’s reservation and would accordingly request further submissions and that the relevant clauses be advertised for public comment.
3 91 3.3 With respect to the President’s reservation that clauses 5, 7 and 9 of the Bill, inserting sub- sections 6A(7), 7A(7) and 8A(5) with retrospective effect, may constitute arbitrary deprivation of property, the Committee agrees with the President’s reservation and would accordingly amend the affected clauses to provide for prospective operation only.
3.4 With regard to the President’s reservations that the Bill confers substantial discretionary powers on the Minister, which may well constitute an impermissible delegation of legislative authority, the Committee was of the view that with the deletion of sub-section 6A(7) in clause 5, sub-section 7A(7) in clause 7 and sub-section 8A(5) in clause 9, the reservation becomes moot.
The Committee accordingly does not have to agree or disagree with the President’s reservation related to impermissible delegations as the delegations are already deleted.

3.5 With regard to the President’s reservation that the copyright exceptions may constitute reasonable grounds for constitutional challenges, the Committee does not have to agree or disagree with the President’s reservation as it is recommending a call for further comments.
Constitutionality of these clauses will thus in any event be revisited and any necessary amendments effected.
3.6 With respect to the President’s reservations that the Bill may not comply with international treaty obligations specifically in relation to the WIPO Copyright Treaty, the WIPO Performance and Phonograms Treaty, and the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled, the Committee is of the view that the reservation related to international treaties can be dealt with in conjunction with the call for public comments to be done on other reservations.
In considering such inputs, the Committee may then appraise itself of whether the Bill do indeed comply with these treaties or not and, if necessary, effect amendments to it.

4.
After deliberations, the Committee recommends: That the National Assembly should consider– 4.1 rescinding its decision, on 5 December 2018, to pass the Copyright Amendment Bill [B13B-2017] as a section 75 Bill; 4 92 4.2 referring the Bill [B13B-2017] referred to in 4.1 above to the Joint Tagging Mechanism to consider whether it agrees with the President’s reservation that the Bill should have been tagged as a section 76 Bill; 4.3 referring the Bill [B13B-2017] to the Portfolio Committee on Trade and Industry to correct the procedural and substantive concerns in the manner proposed by it, and for report; and 4.4 agreeing to the Committee, in addressing the reservations it supports and how it intends correcting it, incorporating in its work the proceedings and all the previous work of the Committee up to the Second Reading of the Bill.
This report replaced the previous report on the Copyright Amendment Bill and the Performers’ Protection Amendment Bill dated 14 May 2021.

Report to be considered.

5 93 National Council of Provinces 1.


Report of the Select Committee on Public Enterprises and Communication on Budget Vote 10: Public Enterprises and the Annual Performance Plan and Strategic Plan for 2021/22 of the Department of Public Enterprises, dated 19 May 2021 The Select Committee on Public Enterprises and Communication, having received a briefing from the Department of Public Enterprises on its Strategic Plan, Annual Performance Plan and Budget Vote (Vote 10) on 12 May 2021, reports as follows: 1.
Introduction Guided by the Rules of Parliament, promulgated in terms of the Constitution, the Select Committee on Public Enterprises and Communication plays an oversight role on the Ministry, the Department of Public Enterprises and various State-owned Companies under its auspices.
The Committee scrutinises and deliberates on the Strategic Plan and Annual Performance Plan of the Department and its entities to ensure that funds requested and allocated to the Department and its SOCs are aligned to the country’s developmental objectives and are clearly stated in their respective Strategic Plan and Annual Performance Plan documents.
1.1 Background The State has a developmental role to play and to realize this objective uses State-owned companies as key drivers of the country’s developmental agenda.

The state’s developmental agenda, amongst other key strategic priorities include making available the necessary infrastructure to unlock growth potential in key sectors; and support the wider economy and marginal business sectors including the recently adopted economic recovery plan where needed.
The State requires strategic, organizational and operational capacity to play its developmental role and State-owned companies (SOCs) fulfil this role by acting as implementing agents for national development strategy.

94 2.

Annual Performance Plan of the Department of Public Enterprises The Department of Public Enterprises presented its Annual Performance Plan for 2021/22 financial year to the Committee.
The Department described the overarching policy and strategic direction and priorities of Government, as articulated by the 2021 State of the Nation Address by President Cyril Ramaphosa, the National Development Plan (NDP) and the Presidential Review Committee on State-owned enterprises (SOEs).
The Department’s allocation is a product of a budget process done in conjunction with the National Treasury starting in July of the previous year and culminates in the Medium Term Budget Policy Statement (MTBPS) in November of the same year.

Confirmation of budget allocations take place in February during the Minister of Finance’s Budget Statement (Estimates of National Expenditure), with a three-year forecast that is outlined in the Department’s Annual Performance Plans.
The Department in the Annual Performance Plan includes the priorities set out in the Medium-Term Strategic Framework which are to be implemented by either the Department directly or indirectly through State-owned companies.

The Department has had to prioritise key project within the current budget expenditure to mitigate the impact of COVID19 on its operations.
2.1 Mandate of the Department of Public Enterprises The Department of Public Enterprises (DPE or the Department) undertakes shareholder oversight for Government and is currently instructed by the Executive Authority to oversee strategic State-owned companies (SOCs).

Currently, the DPE does not have a legislated constitutional mandate in the execution of its oversight responsibilities over State-owned companies.

The DPE is recognised as a Government Department through Proclamation No.
82 of 1999 and has an agreed and assigned dual responsibility to: • Direct and support improvements in the financial, commercial and operational performance of the SOCs and their contribution to the South African economy; and • Make a positive contribution to the transformation of the South African economy in line with the National Development Plan (NDP) objectives of creating a better and sustainable economic environment for all South Africans.
2 95 The DPE aims to drive investment, productivity and transformation in the Department’s portfolio of State-owned companies (SOC), their customers and suppliers to unlock growth, drive industrialisation, create jobs and develop skills.

The Department’s portfolio has seven State-owned companies namely; Alexkor, Denel, Eskom, South African Forestry Company (SAFCOL), South African Airways (SAA), South African Express Airways (SAX), and Transnet.
The vision of the Department is to create an enabling environment in which SOCs add real economic value by focussing on operational excellence, commercial viability and fiscal prudence.

This will drive developmental objectives, industrialisation, job creation and skills development.
The mission of the Department is to provide clear strategic direction and oversight to the Department’s SOCs, seeking to ensure that SOCs: • Are financially sustainable, adequately funded and operationally robust; • Have operating models that keep pace with global developmental and innovative advancements; • Provide reliable, high-quality and cost-effective services and infrastructure to industry and our citizens; • Secure investment and funding for strategic industrial development; and • Align with national developmental objectives.
The Department’s overall mandate is to ensure that the SOC within its portfolio are directed to serve Government’s strategic objectives as outlined in the NDP and further articulated in the New Growth Path, and the Industrial Policy Action Plan.

The Department does not directly execute programmes but seeks to leverage state ownership in the economy to support the delivery of key outcomes outlined in the NDP and the Medium Term Strategic Framework (MTSF).
The expansion of rail capacity, productivity improvements at the ports and the delivery of the current build programme are key deliverables that have been highlighted in the MTSF.

2.2 Strategic Objectives of the Department 3 96 The Department adopted a new Strategic Plan in line with the National Development Plan (NDP) and Medium-Term Strategic Framework (MTSF) in response to changes in the internal (enterprise) and external (sector) environment.
The strategy seeks to respond to prevailing macro-economic challenges and to best utilise scarce resources through creating of maximum efficiencies and effectiveness in its execution.

The department has a significant role to play in the South African economy and is, albeit indirectly, a key enabler of economic stability and growth.
It is the department’s intention to progressively reposition the department from a largely compliance-driven focus to being a major contributor to the reindustrialisation of the economy through the capacity that exists within its portfolio of SOCs.

This repositioning also re- emphasises the leading role that the DPE must take to set standards that guide the oversight function across Government.
Several of the SOCs under the department’s oversight have problems, due to not only operational challenges and the legacy of state capture, but also the increasingly difficult and complex challenges of sustainably balancing financial and commercial viability and the needs of the markets they serve, with meeting the socio-economic commitments of the NDP.
In executing this function, the department has identified three programmes in its Annual Performance Plan (APP) which are the following; Administration and Corporate Management, SOCs Governance Assurance and Performance, and Business Enhancement and Industrialisation.

The Administration and Corporate Management programme has prioritised one outcome, namely, strengthen the governance system of SOCs and promote institutional alignment in the execution of the oversight function.
The SOC Governance Assurance and Performance in 2021/22 has identified the following outcomes; strengthen the governance system of SOCs and promote institutional alignment in the execution of oversight function, and improved governance and accountability.
The indicators include annual assessment of independent board performance evaluation framework, development and implementation of SOCs Risk Integrity management framework, Government Shareholder Management Bill adopted into law by 2023 and review previously undertaken forensic audits and ensure recommendations are 4 97 implemented including (State Capture Commission).
The sub programme on financial assessment and investment support has an outcome on improved financial sustainability of SOCs with the following outputs: outlook on SOC financial position, alignment of SOC plans to key priorities outlined in SIS and SHC, monitor the implementation of SOCs external auditor’s audit findings and payment of SOCs proportion of earnings.
The Business Enhancement and Industrialisation programme is intended to provide sector oversight of SOCs by advancing industrialisation, transformation, intergovernmental relations and international collaboration services; and support the Shareholder to strategically position and enhance the operations of SOCs.
The outcomes of the programme are the following; Increase the contribution of SOCs to support the transformation of the South African economy, support the development of small, medium, and micro enterprises (SMMEs), economic transformation and job creation, position SOCs to support the reindustrialisation of the SA economy and position.
The outputs for this programme includes; increase percentage spend on locally manufactured goods and services, improved SOCs contribution to the transformation agenda, socio-economic development of SOCs, improved spend on enterprise development a minimum % of leviable amount (excluding statutory skills development) on essential skills development, adaptation to climate change impact, monitor implementation of SOCs climate change response and plans to reduce emissions and increase resilience to climate change impact.
2.3 Policy Priorities for 2020/21 The Department of Public Enterprises oversees seven State-owned companies, namely Alexkor, Denel, the South African Forestry Company (SAFCOL), Eskom, South African Airways (SAA), South African Express Airways (SAX) and Transnet.

The President made the following pronouncements in his State of the Nation address in February 2021: § Government priorities for 2021: § Defeat the coronavirus pandemic.

§ Accelerate economic recovery.


§ Implement economic reforms to create sustainable jobs and drive inclusive growth.

§ Fighting corruption and strengthen the State.

§ Since the launch of the plan, Government has focused on four priority interventions: § § a massive rollout of infrastructure throughout the country, a massive increase in local production, 5 98 § § an employment stimulus to create jobs and support livelihoods, and the rapid expansion of our energy generation capacity.
§ The fourth priority intervention of the Economic Reconstruction and Recovery Plan is to rapidly expand energy generation capacity.

§ Restoring Eskom to operational and financial health and accelerating its restructuring process is central to this objective.

§ Eskom has been restructured into three separate entities for generation, transmission and distribution.

This will lay the foundations for an efficient, modern and competitive energy system.
§ Eskom is making substantial progress with its intensive maintenance and operational excellence programmes to improve the reliability of its coal fleet.

§ Government is working closely with Eskom on proposals to improve its financial position, manage its debt and reduce its dependence on the fiscus.

This requires a review of the tariff path to ensure that it reflects all reasonable costs and measures to resolve the problem of municipal debt.
§ In December 2020, government and its social partners signed the historic Eskom Social Compact, which outlines the necessary actions we must take, collectively and as individual constituencies, to meet the country’s energy needs now and into the future.
§ Over the last year, we have taken action to urgently and substantially increase generation capacity in addition to what Eskom generates: § The Department of Mineral Resources and Energy will soon be announcing the successful bids for 2 000 megawatts (MW) of emergency power.

§ The necessary regulations have been amended and the requirements clarified for municipalities to buy power from independent power producers.

Systems are being put in place to support qualifying municipalities.
§ Government will soon be initiating the procurement of an additional 11 800 MW of power from renewable energy, natural gas, battery storage and coal in line with the Integrated Resource Plan 2019.

§ Despite this work, Eskom estimates that, without additional capacity, there will be an electricity supply shortfall of between 4 000 and 6 000 MW over the next five years, as old coal-fired power stations reach their end of life.
As part of the measures to address this shortfall, we will in the coming weeks issue a request for proposals for 2 600 MW from wind and solar energy as part of Bid Window 5.

This will be followed by another bid window in August 2021.

6 99 § Recent analysis suggests that easing the licensing requirements for new embedded generation projects could unlock up to 5 000 MW of additional capacity and help to ease the impact of load shedding.
Government will therefore amend Schedule 2 of the Electricity Regulation Act, 2006 (Act 4 of 2006) within the next three months to increase the licensing threshold for embedded generation.

This will include consultation among key stakeholders on the level at which the new threshold should be set and the finalisation of the necessary enabling frameworks.

Eskom has already started work to expedite its commercial and technical processes to allow this additional capacity onto the grid without undue delay.
§ As government mobilise all of the resources at its disposal to support economic recovery, it cannot lose sight of the threat that climate change poses to our environmental health, socio-economic development and economic growth.

Government is, therefore, working to fulfil its commitments under the United Nations Framework Convention on Climate Change and its Paris Agreement which include the reduction of greenhouse gas emissions.
§ Eskom, is largest greenhouse gas emitter, has committed in principle to net zero emission by 2050 and to increase its renewable capacity.

§ Eskom will be looking to partner with investors to repurpose and repower part of its coal fleet.

This will be done in a way that stimulates investment, local economic activity and local manufacturing, as part of a just transition.
§ Government work on climate change will be guided by the Presidential Coordinating Commission on Climate Change, which is meeting for the first time this month.

The commission will work on a plan for a just transition to a low-carbon economy and climate resilient society.

The priorities for the Department for the Medium Term Expenditure Framework period are the following: a) Oversight model: Develop an enhanced and internationally benchmarked SOC oversight model.
b) Private Sector Participation: Mobilise the private sector to stimulate capital investment.

c) Research-based Restructuring of SOCs: DPE research capacity needs to be improved to attain the goal of developing world class SOCs.

d) Restructuring office: The restructuring of SOCs require skills not found in the public sector.

This office will then be staffed by professionals sourced through partnerships with the private sector either through sourcing contracts or through initiatives such as Thuma Mina.
7 100 e) Innovative Funding Solutions: Development of strategies on management of existing capital and attraction of new capital to fund the enormous infrastructure and industrial development effort required of Government.

f) SOC Leadership model: Development of dedicated leadership development programmes.

g) Corruption and Malfeasance: An internal unit will be established to ensure that historical malfeasance is correctly addressed.
h) Performance tracking solution: In order to obtain reliable and immediate data on performance on SOCs, the DPE will ensure that enabling infrastructure is developed.

i) Innovative Empowerment and Community Development Solutions: The SOCs’ approach to Corporate Social Investment (CSI) and empowerment needs to be reviewed and aligned with the developmental needs of communities and comply with environmental regulations.
j) Localisation and Industrialisation: The buying power of the SOCs will be used to ensure the various procurement leverage programmes of government are utilised to ensure localisation of critical industrial capabilities.

3.

Programmes of the Department 3.1 Programme 1: Administration and Corporate Management The purpose of this programme is to provide strategic management and support services to the Department.

The programme includes the Office of the Director-General/Management.
The programme is currently made up of the following sub-programmes: Management; Security and Facilities Management; Information Management and Technology; Office of the Chief Financial Officer; Human Resources; Communications; Strategic Management; and Internal Audit.
The Department’s core functions require significant administrative support, and a substantial portion of the budget is in the Administration programme, an amount of R159.8 million for 2021/22, which has cross-cutting sub-programmes providing for intergovernmental and international relations, strategic planning, monitoring and evaluation, and communications.

The majority of the budget, R88.9 million, is for 8 101 compensation of employees, while R67.3 million is for goods and services.
The balance of R3.7 million is for machinery and equipment.

The spending focus over the medium term will be on supporting the Department to play its oversight role on SOCs by providing administrative support services to the Department.

Over the medium term, the majority of the allocation is within compensation of employees, which will provide technical and administrative support to the Department.
The programme has four output indicators for the year, relating to skills development, the Human Resources plan, implementation of the Architecture Masterplan and the Stakeholder Engagements Plan.

Over the medium term, the majority of the allocation is within compensation of employees, which will provide technical and administrative support to the Department.

The overall budget for the programme increases by 12.1 per cent from R142.5 million in 2020/21 to R159.8 million in 2021/22.
Expenditure on compensation of employees constitutes 58.2 per cent over the medium term.

Over the medium term, expenditure on compensation of employees declines by 0.8 per cent from R92.3 million in 2020/21 to R90.2 million in 2023/24.

The number of personnel is expected to increase from 98 employees to 117 employees over the medium term.
Spending on consultants is expected to increase by 485 per cent from R2 million in 2020/21 to R11.7 million in 2021/22 and increase by 59 per cent over the medium term and constitutes 4.8 per cent of the budget over the medium term.

Goods and services increases by 44.7 per cent from R46.5 million in 2020/21 to R67.3 million in 2021/22, and constitutes 39.4 per cent of the programme budget over the medium term.
Travel and subsistence constitute 17.2 per cent of the Goods and services budget for 2021/22, and increases by 6.1 per cent over the medium term, which is required by the programme to carry out its oversight function of the state-owned companies, situated throughout South Africa.
3.2 Programme 2: SOCs Governance Assurance and Performance The purpose of this programme is to provide and enforce SOCs’ governance, legal assurance, financial and non-financial performance monitoring, evaluation and reporting systems, in support of the Shareholder, and to ensure alignment with Government’s priorities.
9 102 Over the medium term, the programme will ensure the effective shareholder oversight of state owned companies by: • • • Providing governance and legal systems; Developing and maintaining shareholder risk profiles and mitigating strategies; and Monitoring, evaluating and reporting on the financial and non-financial performance, and proposing intervention measures when required.
The programme has the smallest budget of the three programmes of the Department, amounting to R61.7 million for the 2021/22 financial year.

The majority of the budget goes to compensation of employees, with the balance going to goods and services.

3.2.1 The Sub-programmes include: The Management sub-programme comprises the office of the Deputy Director General, which provides strategic leadership and management of the programme personnel.
The sub-programme Legal provides external legal services and oversight support to sector teams.

This entails providing legal services, including transaction and contract management support to the Department, as well as work specifically related to sector teams’ oversight of commercial activities of state-owned companies within their portfolios.
The sub-programme Governance develops, monitors and advises on legislative, corporate governance and shareholder management systems for the Department and its portfolio of state-owned companies.

Risk and compliance management is a component of this unit, which is responsible for developing and implementing risk and compliance with laws and regulations.

Sub-programme 2: Governance, legal assurance, risk profiling and mitigation has 4 performance targets.
The sub-programme will oversee board performance, the development of the policy for shareholder management and the implementation of the SOC Risk and Integrity Management Framework (RIMF).

Financial Assessment and Investment Support analyses SOCs’ capital plans, operational performances, execution of capital programmes and proposed restructuring proposals; and advises on appropriate action.

The sub-programme has four performance targets for the 10 103 year.
The sub-programme will review SOC quarterly financials and corporate plans, and monitor SOCs implementation of audit findings.

The budget for the programme increases by 35.6 per cent from R45.5 million in 2020/21 to R61.7 million in 2021/22.

Over the medium term, 56.8 per cent of the programme 2 budget is allocated for spending on compensation of employees over the medium term, with the number of personnel expected to increase from 31 employees in 2020/21 to 35 employees over the medium term.
Compensation of employees decreases by 2.9 per cent from R34.8 million in 2020/21 to R33.8 million in 2021/22.

Goods and services increase by f160.7 per cent from R10.7 million in 2020/21 to R27.9 million in 2021/22, and increases by 46.8 per cent over the medium term.

Expenditure on consultants is expected to increase by 53.5 per cent over the medium term from R6.0 million in 2020/21 to R21.9 million in 2023/24.
Legal services increase by 31.5 per cent over the medium term, while travel and subsistence increased by 57.2 per cent from R1.2 million in 2020/21 to R4.5 million in 2023/24.

3.3 Programme 3: Business Enhancement, Transformation and Industrialisation The purpose of the programme is to provide sector oversight to ensure that state-owned companies contribute to the advancement of industrialisation, transformation, intergovernmental relations and international collaboration services.
The programme will also support the shareholder in strategically positioning and enhancing the operations of state-owned companies.
Through this programme, the Department will contribute to the enhancement of the performance of SOCs on an ongoing basis by: • • • Conducting reviews, research and modelling of pipeline and new business enhancement opportunities within SOCs; Assessing operations of SOCs and developing mitigation instruments in conjunction with policy departments, regulatory bodies and industry; and Conducting research, modelling job creation and transforming instruments for SOCs to inform compact alignment imperatives, promote SOCs’ contribution to inclusive economic growth, unlock bottlenecks affecting SOCs and inform evidence-based policy formulation.
The budget for the programme amounts to R36.3 billion for the 2021/22 financial year, mostly due to R36 billion appropriated for the payment for financial assets.

Eskom is to 11 104 receive R31.7 billion to provide financial support to assist with their debt-service obligations, while R4.3 billion for SAA for the repayment of government guaranteed debt.
The sub-programme Business Enhancement Services develops and coordinates the implementation of SOCs’ strategies to leverage localisation programmes; provide intergovernmental coordination and support to programmes and SOCs in relation to economic development programmes, as agreed with provincial and local governments.

It will also maintain a register of commitments made by SOCs and lobbies for the implementation of special programmes focusing on skills development, transformation and the youth.
The sub-programme has seven performance indicators for the year.

The sub-programme will monitor SOC spend on local content, preferential procurement and compliance with Broad-Based Black Economic Empowerment (B-BBEE), CSI spend, enterprise development contributions, and produce a report on SOC Climate Change Response initiatives.

The sub-programme Energy Resources exercises shareholder oversight over Eskom, Alexkor and the South African Forestry Company (SAFCOL).
The sub-programme has seven performance targets for the year.

The Department will continue to monitor SAFCOL’s Timbadola re-investment project, Alexkor’s optimal operating structure, Eskom’s infrastructure programme, performance of its generation fleet and implementation of the Eskom Road Map for reformed electricity supply industry.

The sub-programme Transport and Defence exercises shareholder oversight over Transnet, South African Airways, South African Express Airways and Denel.
The sub- programme has six performance indicators related to the above mentioned entities.

The sub-programme will monitor Denel’s performance against client-agreed milestones on significant contracts.

With regards to Transnet, the Department will monitor the entity’s investment programme in rolling stock and rail infrastructure, implementation of the separation of Transnet National Ports Authority (TNPA), port equipment reliability and implementation of the corridor strategy.
There is not performance indicator relating to the performance of SAA.

The sub-programme Research and Economic Modelling conducts cost-benefit analysis reviews on business enhancement and transformation initiatives, and develops economic 12 105 sustainability models for proposed work packages and projects.

The sub-programme has 3 performance indicators for the year.
The Department will develop a “Just” Energy Transition Framework in collaboration with Eskom, review the Global, Regional and Local Economic report and conduct two industry-specific research for the year to inform policy decision-making.

The sub-programme’s budget decreases in nominal terms by 27.6 per cent from R23.9 million in 2020/21 to R30.5 million in 2021/22.
Compensation of employees constitutes 0.2 per cent of the programme’s budget over the medium term, with goods and services accounting for 0.1 per cent.

Compensation of employees decreases by 42.6 per cent from R58.0 million in 2020/21 to R33.3 million in 2021/22.

Personnel in the programme is projected to increase from 51 employees in 2020/21 to 54 employees over the medium term.

Goods and services is projected to decrease by 22.6 per cent from R19.5 million in 2020/21 to R15.1 million in 2021/22.
Consultants will decrease by 47.0 per from R16.8 million in 2020/21 to R8.9 million in 2021/22.

Payments for financial assets constitutes 99.8 per cent of the programmes budget.

Payments for financial assets decreases by 53.5 per cent from R77.4 billion in 2020/21 to R36.0 billion in 2021/22.

Eskom will receive an additional R31.7 billion in 2021/22 in addition to the allocations of R49 billion in 2019/20 and R56 billion in the 2020/21 financial year.
Over the medium term period, South African Airways has been allocated an amount of R6.1 billion (R4.3 billion in 2021/22, and R1.8 billion in 2022/23) for the repayment of government guaranteed debt.

South African Express Airways has been allocated R164 million in 2020/21 to eliminate government’s contingent liability exposure, relating to aircraft lease payments and letters of credit.

Denel will receive R526 million in 2020/21.

No further allocations will be made to the SOCs over the medium term.

4.
4.

Budget Over the medium term the Department will continue to focus on enhancing reforms to stabilise SOCs, and strengthening its oversight capacity to ensure that the SOCs in its portfolio are sustainable and contribute to investment in key infrastructure.

Table 1 below gives the department’s medium term allocation with the real and nominal increase over the current financial year.

13 106 Table 1.
Estimate of Expenditure over the 2021 medium term Programme Budget 2020/21 2021/22 2022/23 2023/24 142,5 159,8 159,8 158,7 2: 45,5 61,7 67,6 68,9 16,2 13,7 Real Nominal Rand Rand change change 2020/21-2021/22 17,3 10,9 Nominal % change Real change % 7,62 per cent per 2020/21-2021/22 12,14 cent 35,60 cent per 30,14 cent per 1: and R million Programme Administration Programme SOC Governance Assurance Performance Programme Business Enhancement, Transformation and Industrialisation TOTAL 3: 77 419,0 77 606,9 36 070,3 1 845,2 68,8 - 41 348,7 -42 802,6 -53,41 per cent -55,29 per cent 36 291,8 2 071,6 297,6 -41 315,2 - 42 778,0 -53,24 per cent -55,12 per cent Source: National Treasury (2021) Table 1 describes the changes in allocations from the years 2020/21 and 2021/22, and the outer years of the MTEF.
From this, the following can be concluded: • Programme 1: Administration, has a nominal increase of 12.14 per cent in 2021/222, with a real increase of 7.62 per cent.

Programme 1 accounts for the second largest allocation of the Department’s overall budget in 2021/22.

• Programme 2: State-Owned Companies Governance Assurance and Performance receive the smallest allocation in 2021/22.

The programme increases by 35.60 per cent nominally in 2021/22 or in real terms by 30.14 per cent.
• Programme 3: Business Enhancement, Transformation and Industrialisation accounts for the largest allocation of the budget, due to transfers to SOCs under Payments for financial payments.

Programme 3 allocations has decreased by 53.41 per cent due to the inflated 2020/21 budget of the substantial allocations made to Eskom and South African Airways for the settlement of government guaranteed debt and the implementation of SAAs business rescue plan.
Overall, the Department’s budget decreases by 53.24 per cent in nominal terms from R77.607 billion in 2020/21 to R36.291 billion in 2021/22.

Compensation of employees amounts to R176.0 million for 2021/22, an decrease of 5.0 per cent on R185.2 million in 2020/21.

Goods and services amounts to R110.2 million in 2021/22, an 14 107 increase of 43.7 per cent on R76.7 million in 2020/21.
Of the goods and services budget, the use of consultants constitutes 34.4 per cent while travel and subsistence accounts for 27.9 per cent of the budget for 2021/22.

Compensation of employees is set to decrease at an average annual rate of 0.9 per cent, from R185.2 million in 2020/21 to R180.0 million in 2023/24, which constitutes the Department’s largest administrative cost driver.
Travel and subsistence increases from R5.4 million in 2020/21 to R22.0 million in 2023/24; while consultants increased from R24.8 million in 2020/21 to R38.0 million in 2023/24.
4.1 Report of Auditor-General on the Annual Performance Plan of the Department of Public Enterprises for 2021/22 financial year By the time of the consideration of the annual performance plan and budget of the Department of Public Enterprises, the Auditor-General had not yet completed the auditing of the annual performance plans of the department and its State-owned companies.

5.
5.

State-Owned Companies Performance State-owned companies are experiencing governance, financial and operational challenges that have affected their performance and weakened their governance structures.

5.1 Alexkor Alexkor was established in terms of the Alexkor Limited Act (1992) to mine marine and land diamonds in Alexander Bay, Northern Cape.

Over the medium term, the company will focus on normalising operations in the wake of the COVID‐19 pandemic.
The Alexkor Richtersveld Mining Company Pooling and Sharing Joint Venture, in which Alexkor holds 51 per cent share continues to face operational and financial challenges.

These include a lack of adequate funds to undertake exploration activities and deteriorating weather conditions.

The joint venture generated revenue of R334 million in 2019/20, a 20 per cent decrease from the previous year.

This was due to a decrease in carat production, from 68 000 carats in 2018/19 to 28 700 carats in 2019/20.
While the Alexkor group generated revenue of R170 million in 2019/20, it reported a loss of R99 million.

As such, the company is dependent on self-financing to settle operational expenses, which is not sustainable and exposes it to the risk of liquidation.

The department’s immediate focus is to restore the joint venture’s sustainability in diamond operations while undertaking an exercise to 15 108 determine Alexkor’s future role.
For this purpose and to determine the final outcome of the restructuring exercise, a technical task team was established.

The task team will report back in the second quarter of 2021/22.

5.2 Denel Denel was incorporated as a private company in 1992 in terms of the Companies Act (1973), with the South African government as its sole shareholder.

It operates in the military aerospace and landward defence environment and provides strategic defence equipment.
The company’s broad focus over the medium term will be on restructuring, which entails optimising its cost structure and reviewing its business model to improve its global competitiveness.

To improve on its finances Denel plans to put emphasis on the company’s internal cost structure, efficiency, effectiveness, disposal of non‐core businesses, improved supply chain policies, and alignment of IT infrastructure with its new organisational structure.
The company commenced with its restructuring process in 2019/20 and is in the process of identifying strategic equity partners.

In 2020/21, the company was given approval to dispose of shares it held in Hensoldt Optronics and LMT Products, a subsidiary of LMT Holdings.

Part of the restructuring process over the MTEF period will involve reducing the company’s number of personnel.
In 2019/20, Denel generated R2.7 billion in revenue, R700 million less than the previous year, translating to an unaudited loss of R1.8 billion in 2019/20 compared to a loss of R1.7 billion in 2018/19.

This was mainly driven by poor programme management and liquidity challenges that constrained operations and affected sales.
However, restructuring and cost‐saving initiatives that are already in place, as well as recapitalised allocations from government (R1.8 billion in 2019/20 and R576 million in 2020/21) are expected to stimulate revenue generation.

5.3 Eskom Eskom is governed by the Eskom Conversion Act (2001) and is mandated to generate, transmit and distribute electricity to industrial, mining, commercial, agricultural and residential customers and redistributors.
In response to the company’s persistent financial, operational and structural challenges, in 2019 it was announced that Eskom will be unbundled into 3 subsidiaries (generation, transmission and distribution) under a holding company, Eskom Holdings.

This announcement led to the drafting and adoption of the 2019 roadmap for Eskom in a reformed 16 109 electricity supply industry.
The roadmap outlines actions to overcome challenges, defines key steps in transforming the electricity supply system and addresses steps to restore the company’s finances, identifies measures to reduce the company’s cost structure, and details the restructuring process.

Although some progress has been made, Eskom’s operational performance remains inadequate, with persistent technical and plant faults.
The company aims to address supply constraints through interventions set out in the 9‐point plan to improve generation, which are short‐term, medium‐term and long‐term in nature.
These interventions primarily involve repairing new plant defects, reducing trips and full load losses, accelerating the return of serviced units on long‐term forced outages, repairing partial load losses and boiler tube leaks, rebuilding coal stockpiles, increasing diesel stocks, and recruiting critical staff for the generation division.

Eskom’s revenue increased from R179.8 billion in 2018/19 to R199.4 billion in 2019/20.
The company’s loss for the year decreased slightly, from R20.9 billion in 2018/19 to R20.5 billion in 2019/20.

The loss is mainly due to high primary energy costs and finance costs.

The company’s financial position remains weak and it is not able to generate sufficient cash from operations to cover debt obligations when they become due.

As a result, government has committed to provide financial support to assist with the company’s debt‐service obligations.
Thus far, R49 billion in 2019/20 and R56 billion in 2020/21 have been provided, with a further R31.7 billion allocated in 2021/22.

5.4 South African Airways South African Airways operates a full‐service network in the international, regional and domestic markets.

The airline is responsible for promoting air links with South Africa’s key business, trading and tourism markets across the world and contributing to key domestic air linkages.
South African Airways was placed under business rescue in December 2019.

In August 2020, the business rescue practitioners published the approved business rescue plan.

To implement the plan, R10.5 billion was allocated in the 2020 second adjustments budget.

Over the medium term, the focus will be on operationalising the restructured airline to enable interconnectivity within South Africa and the Southern African Development Community, including the expansion of regional air services capability.
An amount of R6.1 billion (R4.3 billion in 2021/22 and R1.8 billion in 2022/23) is allocated to the airline for the repayment of government guaranteed debt.

Unaudited financial statements 17 110 reflect that the airline generated revenue of R24.1 billion in 2019/20.

The unaudited net loss for the same year is R5.5 billion.

Implementation of the business rescue plan is expected to improve this position.
5.5 South African Express Airways South African Express Airways has experienced severe operational and financial challenges over a number of years and despite financial support from government, the airline was unable to resolve these challenges.

The airline was placed under business rescue in February 2020 but was unable to restructure, leading to it being placed under provisional liquidation in April 2020.
By October 2020, an interested buyer had been identified and the process of concluding the sale agreement had begun.

This process is expected to be concluded by the end of 2020/21.

5.6 South African Forestry Company The South African Forestry Company was established in 1992 in terms of the Management of State Forests Act (1992).
It is mandated to ensure the sustainable management of plantation forests, increase downstream timber processing, and play a catalytic role in rural economic development and transformation.

Over the medium term, the company plans to continue fulfilling its commitments to communities near its operations, and diversify its product offering by increasing its production of timber for public facilities, poles for the electricity distribution sector, and furniture.
Between 2017/18 and 2019/20, the company reported losses due to operational and accounting inefficiencies.

Operating costs are higher than revenue, which requires the implementation of stringent cost- containment initiatives.

In 2019/20, the company recorded an unaudited loss of R47 million.
To recuperate some losses and stimulate revenue generation, over the MTEF period, the company will continue with the Timbadola reinvestment project, progress on which is monitored by the department on a monthly basis.

5.7 Transnet Transnet provides and operates freight transportation services and infrastructure.

The company’s current operating model is geared towards lowering the cost of doing business in South Africa.
To sustain and expand its capacity, over the 5‐year period ending 2024/25, Transnet plans to invest R127.7 billion, of which 75.7 per cent (R96.7 billion) will be spent on sustaining capital, 18 111 particularly in rail, port and pipeline infrastructure, across its operating divisions as per its 2020 corporate plan.

The department continues to investigate viable options to corporatise the National Ports Authority, as required by the National Ports Act (2005).
Initial studies have indicated adverse ramifications for the South African economy and the company’s operating divisions.

As a result, the department will continue to investigate possible options without compromising the economic competitiveness of South Africa’s transport sector.

In 2019/20, the company spent R18.5 billion on capital projects, bringing its total investment over the past 8 years to R202 billion.
Revenue increased from R74.1 billion in 2018/19 to R75.3 billion in 2019/20, mainly due to a weighted average tariff increase of 2.9 per cent across operating divisions.

Net profit decreased from R6 billion in 2018/19 to R3.9 billion in 2019/20.

The Ports Regulator of South Africa has indicated that no tariff increase will be granted to the National Ports Authority in 2021/22, which is likely to have a negative impact on the company’s overall revenue for the year.

6.
6.

Committee Observations 6.1 The Committee made the following observations: 6.1.1 The Committee welcomed the strategic plan and annual performance plan of the department, but noted with concern budgetary constraints which may negatively impact department’s oversight responsibilities over State-owned companies.
6.1.2 The Committee noted with concern that the Shareholder Management Bill did not feature as a deliverable in 2021/22 financial year, and the absence of such an over- arching legislation continues to weaken the ability of the state to direct SOCs in advancing the developmental objectives of government.

6.1.3 The Committee expressed concern that there are still no remuneration standards guidelines for executives and boards of state-owned companies.
6.1.4 The Committee noted with concern the lack of favourable legislative and policy environment to enable SOCs to operate efficiently and be competitive in the market.

6.1.5 The Committee expressed concern regarding the ageing infrastructure and the lack of investment in capital equipment and machinery in most State-owned companies, something that has affected their productivity.
19 112 6.1.6 The Committee expressed concern over lack of transformation and lack of efforts to ensure an improved percentage of local content in goods and services procured by SOCs.

6.1.7 The Committee notes that whilst there is progress in the appointment of female executives, there is still more to be done with regard to empowerment of youth, women and people living with disabilities.
6.1.8 The Committee expressed concern that in some entities there is still a problem of unpaid workers due to financial challenges experienced by SOCs and that this need to be urgently addressed with the participation of all key stakeholders.

6.1.9 The Committee has welcomed the call to restructure SOCs by the Department, which will focus on Eskom, Transnet, Denel and SAA.
6.1.10 The Committee notes that energy security remains critical for socio-economic growth and will further monitor the restructuring of Eskom into three subsidiaries –Generation, Transmission and Distribution as planned.

6.1.11.

The Committee notes the initiatives by Transnet Port Terminals (TPT) – Cape Town, Richards Bay and Durban as important in driving transformation in ports operations.
6.1.12 The Committee welcomed the role played by the Business Rescue Practitioners in ensuring that South Africans have a fit for purpose national airline and anticipates that the process will yield positive results regarding the proposed new airline.

6.1.13 The Committee notes with concern that the recoveries of money, assets and intellectual properties from SOCs during the state capture period has been slow and need to be accelerated.
6.1.14 The Committee welcomed efforts by the Department to start State-owned company Integrity Risk Unit which will review forensic reports and follow up on Special Investigative Unit (SIU) in pursuing those implicated in corruption and looting of SOCs financial resources.

7.

Recommendations The Committee recommended that the Minister of Public Enterprises should, within the 2021/22 financial year, ensure that the Department of Public Enterprises: 7.1.
Brief the Committee on the establishment and operationalization of the Presidential SOE Coordinating Council including the work the council will be doing in implementing the recommendations of the 2014 report by the Presidential Review Commission on SOEs.

Some of the recommendations were that Government should 20 113 develop: Shareholder Management Bill, the shareholder model, SOE remuneration, etc, to empower the Government in its oversight responsibilities over SOCs.
7.2 Consider introducing a comprehensive plan to expand the corporate social investment of SOCs to rural parts of the country.

7.3 Develop a communication strategy for all State-owned companies in order to promote the companies and educate and inform the public and rural communities about the work of SOCs and opportunities that they offer through their Corporate Social Investment initiatives.
7.4 Consider working with the Department of Trade and Industry and National Treasury in addressing the promotion localization strategies.

Such strategies should include resetting of trade and investment cooperation standards to stimulate and support small businesses and employment initiatives, reduce barriers to trade in services (which are often labor-intensive) and investments in industrial value chains.
7.5 Prioritize development of programs with SOC aimed at equipping young people with appropriate skills for the economy in an effort to address youth unemployment.

7.6 Provide the Committee with shareholder compacts on an annual basis and quarterly reports on how the companies are performing in achieving targets.

7.7 Ensure SOCs accelerate investment and procurement programmes, promote industrialization and support small and medium enterprises that are owned by women, youth and people with disabilities.
7.8 Ensure that SOCs find a balance between advancing their commercial and public mandates without compromising the financial sustainability of the company.

They should not over-concentrate on the commercial mandate while neglecting the developmental mandate of transforming the economy and improving the quality of lives for South Africans.

7.9 Ensure competent executive and board appointments at SOC through conducting security clearances, integrity checks, and lifestyle audits.
7.10 Collaborate with the Department of Rural Development and Land Reform to address long outstanding issues relating to Safcol land claims and Alexkor with regular progress reports (twice a year) to the Committee.

7.11 Ensure that issues relating to the going concern of South African Airways and South African Express Airways are resolved.
7.12 Together with the Department of Transport ensure that a master-plan of the country’s aviation strategy/policy is developed in order to ensure the sustainability of national carrier(s).
21 114 7.13 Work with the Departments of Cooperative Governance and Traditional Affairs, and of Rural Development and Land Reform to ensure that the Richtersveld Mining Company and Communal Property Association are properly constituted to facilitate the successful implementation of the Deed of Settlement, and delivery of socio-economic development programmes to beneficiaries is undertaken.
7.14 Address the financial and governance issues facing State-owned companies within the Department’s portfolio and provide regular feedback to the Committee.

7.15 Work with the Department of Cooperative Governance and Traditional Affairs and other relevant stakeholders to resolve the municipal debt owed to Eskom and provide feedback to the Committee on this process quarterly.
7.16 Ensure that all vacant positions that are funded are permanently filled within the Department of Public Enterprises by the end of the current financial year.

7.17 Develop post COVID-19 strategies, plans and actions and include them in their budget, plans and SOC shareholder compacts.

7.18 Present to the Committee the corporatisation of the Transnet National Port Authority (TNPA) as a business entity.
7.19 Report every second quarter to the Committee on progress being made regarding all matters raised in the report.

8.

Conclusion Having considered the Budget Vote and the Annual Performance Plan of the Department of Public Enterprises, the Committee recommends that the House passes the budget.

Report to be considered.

22 115 2.


REPORT OF THE SELECT COMMITTEE ON TRADE AND INDUSTRY, ECONOMIC DEVELOPMENT, SMALL BUSINESS DEVELOPMENT, TOURISM, EMPLOYMENT AND LABOUR ON A VIRTUAL ENGAGEMENT WITH NATIONAL, PROVINCIAL AND LOCAL GOVERNMENT ON SPECIAL ECONOMIC ZONES AND INDUSTRIAL PARKS ON REALIZING GOVERNMENT POLICY OUTCOMES IN RESPECT OF INVESTMENTS, ECONOMIC GROWTH AND JOB CREATION AT PROVINCIAL AND LOCAL GOVERNMENT LEVEL, DATED 18 MAY 2021 1.
Background The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour (Committee), having had a virtual engagement on 16 March 2021 with national, provincial and local government authorities in relating on the role and contribution of Special Economic Zones and Industrial Parks on realizing government policy outcomes in respect of investments, economic growth and job creation at provincial and local government level, reports as follows: 2.
Introduction South Africa’s industrial development agenda is informed by a realisation that industrial development offers the most sustainable route towards economic prosperity and success.

This is clearly articulated in the National Industrial Policy Framework (NIPF), Industrial Policy Action Plan (IPAP) and National Development Plan (NDP), and recently the Re-imagined Industrial Strategy.
These important policy and strategy documents outline a number of challenges confronting the country’s economy, goals and key drivers, cross-cutting measures as well as sector-specific measures that are critical to drive the country’s industrial and economic agenda.

1 116 The implementation of the country’s industrial development agenda requires adaptable, effective and efficient instruments that are responsive to the strategic needs of the host region, investors and other strategic stakeholders.
To this end, the government has developed Special Economic Zones (SEZs) policy and legislation (Special Economic Zone Act No.

16 of 2014) as one of the key instruments to accelerate the implementation of its industrialisation agenda.
The programme has been designed to attract foreign and domestic direct investments to the designated zones and host regions; expand the manufacturing sector as a critical foundation to grow both the primary and secondary economic activities in the economy; grow and diversify value-added exports; create sustainable and decent jobs in the host regions; and enhance innovation, attraction, development and retention of talent and knowledge.
Industrial Parks serve as catalysts for broader economic and industrial development in host regions.

Amongst its objectives is to accelerate economic development in the lagging regions such as rural areas, and also to support job creation in manufacturing and related sectors so as to reduce the negative impact associated with urban migration.

On the 16 March 2021 the Committee hosted a meeting with selected provincial and local government authorities, and national government departments.
One of the objectives of the meeting was to enable the Committee to track the implementation of the SEZs and Industrial Park Revitalisation Programme.

The meeting included the Department of Trade, Industry and Competition, National Treasury including Eastern Cape, Mpumalanga, North West, Free State and Western Cape provincial departments responsible for the implementation of industrial development programme.
The invitations were also extended to the Nelson Mandela Metro, Coega Development Corporation (CDC), North West Development Corporation, Western Cape Tourism, Trade and Investment Promotion Agency (Wesgro), and eHlanzeni and Bojanala District Municipalities as one of the critical hosting regions for the implementation of the industrial development programme.
The engagement of the Committee with selected provincial and local government authorities, and national government departments was framed around the following key areas: • Share experiences in the implementation of the SEZs and Industrial Park, challenges and opportunities; • Investment in SEZ and industrial parks including Digital Hubs; 2 117 • Funds allocated by provincial and local government; • Status of Digital Hubs; • Local community access to the Digital Hubs.
The following section of the report will be divided into six areas that covers the national development perspective in relation to SEZs and Industrial Parks development programme; provide a brief outline of the selected SEZs-Coega Special Economic Zone, Nkomazi Special Economic Zone, Bojanala Platinum Valley Special Economic Zone, and the Western Cape Province Halal Industrial Park.

The report would also outline issues that were lifted during engagements.
Then, it will provide observations and recommendations.

3.

National Development Perspective in relation to SEZs and Industrial Parks The success of Special Economic Zones in Asia, in particular China compelled many developing countries such as South Africa to adopt SEZs as policy instruments to stimulate industrial development through attracting both domestic and foreign direct investment.
The Department of Trade, Industry and Competition’s policy framework on SEZs advances that SEZ Policy would benefit industrialisation and contribute to the government policy outcomes to attain positive economic growth, development and employment.

The United Nations Conference on Trade and Development (UNCTAD) reported that between 2018 and 2019, Africa’s FDI inflows increased by 11 per cent to US$46 billion, following consecutive decreases in 2016 and 2017.
UNCTAD had also predicted that FDI inflows would rise in 2019 through 2020.

However, due to COVID-19, the continent’s overall FDI inflows is estimated to shrink by 15 per cent.

Further, UNCTAD’s latest projections predict that Africa will also experience foreign capital outflows due to COVID-19.

COVID-19 as evident in many reports would have an impact to the various sectors of the economy including the related industries.

The industries’ vulnerability varies.


Others would be more severely impacted than others.

South Africa entered the COVID-19 phase in a bad shape from economic point of view.

Many reports indicate that South Africa’s economy continue to perform below the Advanced Economies including the BRICS countries (National Treasury: 2020 Medium Term Budget Policy Statement including 2021 Budget Review).
The 3 118 Department of Trade, Industry and Competition submitted that due to the unprecedented challenges confronting the globe, the manufacturing sector has experienced a decline in growth.

South Africa, like many other developed and emerging economies continues to experience manufacturing decline due to challenges brought by COVID-19, unreliable power and limited demand for products.
It is indicated in various government policy documents such as the IPAP, NDP and recently, the Re-Imagined Industrial Strategy some of the aims of the SEZs Policy apart from attracting foreign direct and domestic investments, is to integrate local firms into global value chains, increase exports, develop local industrial capabilities, accelerate the beneficiation of natural resource endowments, accelerate the development of the country’s lagging regions and create decent jobs.
The Department of Trade, Industry and Competition reported that as part of the economic recovery plan, government would also use SEZs to reignite manufacturing led industrialisation in an accelerated manner.

Although the SEZ programme is relatively new in South Africa (having started in 2014), it continues to attract a significant number of investments in various regions.
The rapid growth of SEZs’ such as Coega, East London, Dube Trade Port and Tshwane Automotive Sector continue to demonstrate the significant role played by SEZs’ in the country.

SEZs in South Africa date back to 2000 when the Industrial Development Zone (IDZ) programme was introduced by then Department of Trade and Industry under the Manufacturing Development Act of 2000.
From 2016, all existing IDZs became SEZs, while all new SEZs could only be established in line with the provisions of the Special Economic Zones Act 16 of 2014.

Table 1 shows that the SEZs that dominate in terms of investment attraction and employment creation are those which were initially administered as Industrial Development Zones.

The domination of the SEZs are those which were mainly located in coastal areas.

Table 1 shows that provinces that have coastal regions tended to dominate.
The Eastern Cape and KwaZulu- Natal provinces have two SEZs each.

However, following the policy reforms, more areas are beginning to have appetite and to attract interest for SEZs, resulting in an increase in the number of applications for different locations within the country.

4 119 Table 1: Shows Summary of Foreign and Domestic Direct Investment for SEZs that are Operational and have Broken-Ground; 2021 3RD Quarter SEZ Name No.

of Operational Jobs No.
of Secured but Expected Operational Investment Created Secured But Non Jobs Investors (R Non Operational To Be Millions) Operational Investment Created Investors (R Coega ELIDZ MAPSEZ SBIDZ DTPSEZ RBIDZ OR Tambo Atlantis TASEZ Total Source: Department of Trade, Industry and Competition 13 12 6 16 10 3 13 2 12 87 Millions) Table 1 shows that as from 2021 3rd quarter reporting period, the SEZs programme has secured 143 investors.
Most of the investors are located in Coega (49), Dube Trade-Port (43), and East London (33).

Respectively secured operational investment approximately R10, 9 billion, R2 billion, and R4, 1 billion.

The Department of Trade, Industry and Competition that the SEZs programme has shown increasing momentum.

As from 2018/19 financial year to 2020/21 third quarter reporting; Operational Investments increased from R17, 7 billion to R19.5 billion (see table 1).

The number of investors increased from 129 to 143.


Number of direct jobs created increased from 15 392 to 15 747.

According to the Department of Trade, Industry and Competition, the number and value of operational investment are expected to increase by almost R10 billion during 2021/22 financial year due to investments that are currently under construction.
Further, the Department reported that despite the devastating impact of COVID-19 on the economy, the SEZ programme achieved the following during the 2020/21 financial year: 5 120 • Tshwane Automotive SEZ is completing the construction of 12 factories with the private investment value of R 4 33 billion, these investments are expected to create approximately 2088 jobs; • Dube Trade Port secured new investments worth approximately R600 million, the investments are expected to create 841 jobs; • Coega has signed four (4) new investors that are estimated to be valued approximately R49 million and are expected to create an estimated 101 new jobs; • The Saldanha Bay Industrial Development Zone (SBIDZ) is completing the construction of two manufacturing facilities with an investment value of R380 million, they are expected to create approximately 90 direct jobs; • Richards Bay Industrial Development Zone is completing the construction of edible oil factory and Titanium Dioxide factory with a combined private investment value of R5,8 billion, they are expected to create approximately R 600 direct jobs; • It has reached consensus with Department of Public Enterprises and Transnet on the establishment of rail corridor between Ford and Port of Ngqura to support Ford and Tshwane Automotive Special Economic Zone (TASEZ) on the movement of components and finished cars from Pretoria to the Port of Ngqura; • East London Industrial Development Zone (ELIDZ) completed the construction of 9 investor facilities and the expansion of three existing facilities.
These facilities will create an additional 1534 manufacturing and services jobs and these will be operationalised within the next two years; Table 1, further shows that SEZs programme has secured approximately R36 billion valued investment still to be operationalised.

These investments are expected to create 9874 direct jobs, empowered by 87 investors.
Saldanha Bay Industrial Development Zone anticipated to operationalise approximately R11 billion valued investments, followed by the Richards Bay Industrial Development Zone (R6, 7 billion); Tshwane Automotive Special Economic Zone (R4, 3 billion); Maluti-A-Phofung Special Economic Zone (R3, 9 billion); East London (R3, 4 billion and Coega (R2, 6 billion).
In an effort to assist struggling SEZs, dedicated intervention teams consisting of departmental officials have been established to support the following prioritised proposed struggling zones, namely: 6 121 • Vaal River City and Tshwane Automotive SEZ, focusing on manufacturing and logistics (Gauteng); • Nkomazi SEZ, with a specific focus on agric business (Mpumalanga); • Maluti-A-Phofung SEZ will focus on Automotive; Agri-processing; Logistics; General processing; ICT, and Pharmaceuticals (Free State); • Bojanala, focusing on PGM beneficiation and Mining input supplier park (North West); • Namakwa, with specific focus on mineral beneficiation (Northern Cape); • Musina and Tubatse, focusing PGM beneficiation and Mining input supplier park (Limpopo); • Wild Coast, focus on agric business and tourism (Eastern Cape).
Further, the Department of Trade, Industry and Competition reported that the intervention teams would assist provinces in implementing, amongst others the following: • Develop and implement tripartite agreements; • Planning and development of infrastructure for the zone; • Mobilise funding from all spheres of government for operations and infrastructure; • Investment facilitation; • Stakeholder mobilisation and management; • Compliance and institutional development; The intervention team will be supported by SEZ Project Management Unit (NPMU) established at the Industrial Development Corporation (IDC).
The NPMU will work closer with the Development Bank of Southern Africa (DBSA).

This Unit was initiated following Cabinet approval on the establishment of the national implementing mechanism to address challenges confronted by provinces.

Cabinet approval included the reconfiguration of the SEZ Programme to include intimate involvement of national government in planning and management of the SEZs.
It was reported that work has already started in the Limpopo, North West, Gauteng, Northern Cape and Free State Provinces.
The NPMU is specifically established to focus on the following: • Support the Department in its responsibility to be an active participant in the planning, development and management of SEZs and industrial parks; 7 122 • Provide specialist advisory services to assist provinces and municipalities in accelerating the planning, development and management of SEZs and industrial parks; • Support the Department in coordinating the contribution of all national stakeholders to planning, development of SEZs and industrial parks, ensuring that there is alignment and that all synergies are realised; and • Ensuring that sustainable development impact, as measured by the balance between social, economic and environmental needs, is entrenched in the rollout of SEZs and industrial parks, making implementation both inclusive and transformative.
It has been the view of the Committee that more coordinated work needs to be done at all levels of government to translate investment commitments to actual outcomes (operationalise investment commitments).

With better coordination and collaboration in planning, implementation and management would result to speedily delivery of development programmes.

Across government, governance, regulatory regime and policy certainty remains a challenge, and that needs to be addressed.
The Department of Trade, Industry and Competition reported that the work of the NPMU will help alleviate the poor synergy that currently exists at national level.

The Committee emphasised that coordination across levels of government is crucial, in order to allocate scarce resources better and provide support to businesses.

Local government capacity and capability would need to geared-up.
For the SEZs to become effective, it is crucial that capacity and capability in investment facilitation and cluster-oriented management capabilities at provincial and local government be created.

Given the vital role of provinces, local government and private sector in industrial development, including in expansion of SMMEs.

It is critical that an effective multilevel governance in industrial development is promoted and enhanced.
Table 1 shows the potential that SEZs in South Africa can do in terms of attracting investments, and creation of jobs.

However, funding and financing remains a challenge.

In an era of constrained fiscus space, alternative financing would be needed to enhance the role of SEZs as a policy instrument to drive industrialisation, lift value added exports and contribute to the inclusive growth agenda.
8 123 In terms of the Industrial Park Revitalisation Programme (IPRP), the Department of Trade, Industry and Competition reported that the programme is implemented in line with the Department’s Regional Industrial Development Strategy.

The Regional Industrial Development Strategy aims to accelerating economic and industrial development in the lagging regions by attracting business investments to locate in these areas.
The IPRP support and promote the growth and development of the state owned industrial parks, mostly located in the historically disadvantaged areas and former homelands.

It is a key enabler to develop Rural and Township Industrial Economy Acceleration to promote transformation and encourage the establishment of Black Industrialists in the Industrial Parks.
The IPRP focuses on both the physical infrastructure and other governance and compliance support requirements with the key objective of enhancing industrialisation.

The Programme’s objectives is to increase investment and job creation in the identified regions.
The implementation programme is conducted in a phased approach as follows: • Phase 1: Security infrastructure, upgrade, fencing, lighting, critical top structures and electrical requirements- The first phase requirements was requested by industrial parks management agencies who have been experiencing high crime levels; • Phase 2: Compliance to regulatory requirements – Landfill sites; Waste and Water treatment plants, Fire, Health & Safety Requirements, and Renewable energy initiatives; • Phase 3: Engineering designs and construction of new and existing roads, bulk water supply and sewage treatment plants or industrial effluent control; • Phase 4: Upgrading electricity infrastructure, and build new top structures in line with the expansion programme of the Parks; • Phase 5: Development of vacant land and sustainable industrial clusters in the Parks.
Department of Trade, Industry and Competition reported that since the inception of the programme, R720 million was approved towards funding Phase 1 and Phase 2 of the revitalisation programme.

To date, 30 parks have been identified for revitalisation, with 12 Industrial Parks completing Phase 1 revitalisation, 5 parks in progress of Phase 2 revitalisation, and 6 new applications being prepared for Phase 1 revitalisation.
9 124 By the end of 2020/21 financial year, several Industrial Parks were in construction phase and 427 construction related jobs were generated, with 262 representing the youth.

The Department reported that IPRP also focus on supporting local Small Medium and Micro Enterprises (SMMESs) in the respective areas where they are implemented.

Further, 69 SMMEs were used in construction, with a cumulative contract value of R60 million awarded to the SMMEs.
Of which, 10 SMMEs were female owned small enterprises.

The Department of Trade, Industry and Competition reported that it has signed a Memorandum of Understanding (MOU) with United Nations Industrial Development Organisation (UNIDO) for implementation of the Global Eco Industrial Park Programme (GEIPP).
Awareness workshops on Eco Industrial Parks (EIP) framework, including EIP policy and EIP support tools started on 16 February 2021 with regional workshops during the last week of February 21 and during March 21.

The refurbishment of the Botshabelo Industrial Park Phase 2 is nearing completion, which includes a Digital Hub.

The Hub will focus on benefitting youth enterprise development and launching of Fourth Industrial Revolution platforms in the community.
In terms of provincial impact, the Department of Trade, Industry and Competition reported that it is estimated that cumulatively 65 000 people are employed in the first 12 Industrial Parks that underwent Phase 1 revitalisation.

The parks have an occupancy rate of between 60-90 per cent of its Gross Lettable Area (GLA).
In terms of provincial allocation, the Critical Infrastructure Fund has disbursed as follows: • Gauteng R189 million • Eastern Cape R187 million • Free State R123 million • KwaZulu-Natal R99 million • North West R84 million • Limpopo R75 million Further, the Department of Trade, Industry and Competition reported on the work that government is doing in rolling out digital hubs in the State Owned Industrial Parks and Special Economic Zones, under the Digital Hubs Programme (DHP).
The Hubs are aimed at connecting communities through digital information and communication technology (ICT) 10 125 related skills, training, business development, support services.

Further services provided include access to work spaces as well as access to training on cross cutting skills development.
The Digital Hub is designed to provide digital platforms for prospective entrepreneurs and youth interested in the Fourth Industrial Revolution and is an opportunity to access a hybrid of technological services, digital learning skills and the use of shared office space.
The Department’s Digital Hubs Programme priorities for 2021 include the following: • Development of an Industrial Parks Development Policy; • Development of a collaboration compact with all provinces to align with the national implementation strategy framework for industrial parks; • Finalising existing application for 7 Industrial Parks; • Implementation of the Global Eco-Industrial Parks Programme (GEIPP) practices in the Phuthaditjhaba and Ekandustria Industrial Parks; • Establishment of a Digital Hubs in Seshego, Nkowankowa, Babelegi Isithebe, and Vaal Industrial Parks.
The Committee has stressed that it is vital to have Industrial Parks including SEZs aligned with growth opportunities within the region (hosting regions-provinces and local municipalities) and its linkages to other regions.

The Industrial Park Revitalisation initiatives, if properly planned, funded, developed, managed and marketed, can be growth engines supporting industrialisation and local economic development.
The Committee recognised the need to promote private sector participation in the Industrial Park Revitalisation Programme.

Government need to leverage public funds to attract private capital.

Further, Industrial Park Revitalisation, as noted by the Department is one of the critical policy instruments that could be used to drive rural development strategy to materially change rural economies, and improve rural incomes and general standard of living both rural and peri-urban communities.
The importance of Public-Private Partnerships in development was also emphasised in the presentation made by the National Treasury’s Cities Support Programme (CSP).

According to the National Treasury, the Programme aims to support more compact, connected and transit- oriented cities through spatial transformation driven by capable metropolitan governance, and supported by enabling policy and regulatory frameworks and appropriate fiscal incentives.
The mandate of the Cities Support Programme is derived from the National Development Plan and 11 126 the Integrated Urban Development Framework.

South Africa is a signatory to the United Nations Habitat New Urban Agenda which represents a shared vision for a better and more sustainable future.

National Treasury advances that if well-planned and well-managed, urbanization can be a powerful tool for sustainable development for both developing and developed countries.
The CSP advances that although it is recognise the essential role of cities as the drivers of national economic development, South African cities are yielding low urban dividend due to the following factors owing to: • Dislocation of people and jobs; • Low densities; • Dysfunctional residential property markets; • Weak governance; • Fiscal/ financial and sectoral/ policy and investment misalignment; CSP stressed the need for the acceleration of the spatial planning, and transformation of cities to drive development.
Capacity and capability of metropolitans remains a challenge, and that should be addressed.

Governance, and stable policy and regulatory regime should be promoted, and appropriate fiscal incentives should be supported and promoted.

The intended outcomes of the programme is that metros are able to implement strategies to accelerate inclusive economic growth by building inclusive, productive and sustainable cities.
The National Treasury reported that it is envisaged in the five-year objective, the CSP will institutionalise practices and activities to support the development objective and outcome for national departments, provinces and metros policies.

Metropolitans’ economic activity play an essential role in the national economy.

Economic recovery efforts are largely depended on metropolitans’ performance and socio-economic development.
Hence it is critical to tackle spatial economic development challenges including socio-economic ones at metro level.

The National Treasury reported that in South Africa, between 2011 and 2020 metros have reported declining growth rates.

So metropolitans’ economic growth rates have demonstrated weak economic performance even prior to the COVID-19 pandemic.
It is reported that whilst metros recovered faster than small towns and rural areas, metropolitans’ economies still contracted by at least 8 per cent during 2020.

Key 12 127 sectors affected include wholesale and retail due to the significant drop in footfall at city malls and sales.

The automotive sector has also seen a steady decline and the tourism and hospitality sector anticipate a severe and prolonged impact.
Further affected industries include construction and property sectors and the decline in container landing at city ports.

National Treasury advances that one of the mediate measures to boost economic recovery is to reset the cities’ industrial parks.

Taking into cognisance the value of City Industrial Parks to the overall regional and national economies.
The Industrial Park Regeneration Programme was established under the CSP aims to build the capabilities of cities to retain jobs and boost inward investment in well located industrial spaces.
The objectives of the Industrial Park Regeneration Programme is to: • Retain and expand investment by firms through “getting the basics right”; • Retain and expand employment opportunities in proximity to townships and informal settlements; • Put in place institutional urban management mechanisms (including municipal and inter- governmental) to ensure the effective and ongoing management of these spaces; • Build community awareness regarding the value of these spaces in terms of employment generation and economic inclusion and development; and • Build local business networks to facilitate access to available incentives, markets and business support.
Further, the City Industrial Parks are one of vital enablers of economic growth through boosting cities revenue, employment creation.

In addition, the City Industrial Parks contribute to the value addition in the hosting city via manufacturing production, attracts investment, promote innovation, enhance value chain linkages –city, regional, global, and boost industrial clustering to enhance industrial development.
Further, the City Industrial Parks support and promote growth of start-ups and pump-up enterprise incubation.

It was reported that the Cities Industrial Parks Programme would provide over 3 years’ technical support programme to four metros, namely eThekwini, Tshwane, Ekurhuleni and City of Johannesburg.

The following industrial parks within these metros were prioritised, namely Jacobs (eThekwini); Babalegi (Tshwane); Wadeville (Ekurhuleni) and Develand (City of Johannesburg).
The programme service product offering include providing insight 13 128 information to improve planning and decision making, providing Business Retention and Expansion Surveys; Sectoral and spatial mapping of companies; Project packaging/ public investment catalogue; Resource mobilisation; Institution building and Industrial Park Regeneration Plans.
The Programme will be co-implemented by National Treasury’s Neighbourhood Development Partnership Programme and will be rolled out in collaboration with the Department of Trade, Industry and Competition and Gauteng Provincial Government.
It was further reported that in order to have a successful City Industry Parks, the policy instrument should be aligned to the national industrialisation strategy; access to high quality industrial land including superior infrastructure; reliable service delivery; competitive service delivery charges; compliance with environmental regulations; promote and support cluster enhancing activities e.g.

vocational training, logistics, business development services, techno- parks.
Coupled with functional internal land market; good governance –representative structures of entrepreneurs and public sector, and in addition there must be supported with clear visionary leadership.

It was further reported that the outcomes of the Business Retention and Expansion surveys at the four industrial parks prioritised indicated that a number of firms reported issues with extremely or very high crime levels, red tape from metros and unreliable or somewhat reliable municipal services.
Further, the survey shows the impact low investor confidence and declining balance sheets of companies.

Further it was reported that the in terms of the Industrial Park Cost of Crime Framework, number of firms had increased defensive expenditure for crime detection and prevention; increased insurance costs; increased repair costs; loss of output or productivity, increased human costs as a result of physical, emotional and mental harm as well as an increase in police and law enforcement costs.
The industrial parks further reported reduced occupancy rates, reduced lease rates and a decline in property value as a consequence of elevated crime levels.

Out of the survey, the top issues impacting business retention were as follows: • Interrupted and unstable power supply; • Crime; • Market conditions/ foreign competition; • Regulatory environment; 14 129 • Basic service delivery and infrastructure; Industrial Parks are noted as valuable city and national assets, however they are underperforming.
This is evident in declining employment and turnover and are mainly attributed to service delivery constraints, especially energy; safety and security; ineffective park management and inadequate reinvestment in the space for infrastructure investment and maintenance.

It was advanced that there is a need to address service delivery infrastructure and park management issues relating governance and resource management.

The interventions need to be part of an integrated Industrial Parks Turnaround Plans.
Failure to resolve land and governance issues will perpetuate under-performance.

Cities are well placed to co-ordinate development and implementation of the Industrial Parks Revitalisation Plans together with other spheres of government, state owned enterprises and private sector.

National Treasury advances that turning these parks around is a quick-win for government as industrial base and jobs already exist and it is not about pumping more funding.
The Industrial Park Revitalisation approach is in line with the District Development Model (DDM).

The Trade and Industrial Policy Strategies (TIPS) emphasise that the success of SEZs, and extension the Industrial Parks should drive expand exports and replace imports; create backward and forward linkages (demand for intermediate inputs from domestic economy and supply of intermediate inputs for domestic enterprise).
Further, industrial spill overs, via training, innovation and research development would lead to upgrading of practices and technology as well as creation of new production system in domestic activities.

In addition, SEZs and the Industrial Parks should create employment both directly and indirectly and develop the hosting communities.

3.
3.

Special Economic Zones This section should be read taking into account what the section outlining national development perspective has outlined elsewhere this report in terms of dominance relating to SEZs, which were initial administered as IDZs.

These SEZs could be regarded as the forerunners of the current SEZs.

Many, like Coega SEZs were located to coastal areas linked to sea ports an 15 130 advantage in terms of exports driven investments.
As reported in this report, Coega SEZs is one of the dominating SEZs in terms of investment attraction and employment creation.

3.1 Coega Special Economic Zone, Eastern Cape Province The Coega SEZ is located in the Nelson Mandela Bay Metropolitan.

It was developed and managed by the Coega Development Corporation (CDC).

It aims to drive local and foreign direct investments in export-oriented industries - positioning South Africa as the hub for Southern African trade.
The Coega SEZ, while offering global competitiveness through infrastructure, tax incentives, rebates and a duty-free zone, is purpose-built for manufacturing including beneficiation of export goods, investment and local socio-economic growth - skills development and job creation.

Adjoining this, the largest SEZ in the Southern Hemisphere, is the Port of Ngqura - a modern multi-user deep-water harbour developed by the National Ports Authority of SA as a gateway to global markets.
The Coega SEZ and the deepwater Port of Ngqura remain catalysts for investment and local economic development.

It reported that Coega SEZ focuses on offering the best solutions to prospective investors by assisting them every step of the way to ensure projects move from concept to completion.

It was reported that Coega has successfully attracted a healthy mix of both local and international investors.
It has moved from the initial anchor tenant approach to focusing on strategically attracting a range of medium, large and mega projects to diversify and strengthen the industrial base.

It was reported that the achievements and successes of the Coega SEZ over the past couple of years have proven that a mixed approach to attracting investors is working.
Further, over the medium term, a number of catalytic big projects valued over R75-billion, are envisaged which will enhance the attractiveness of the Coega SEZ as an investment destination.

In order to attract investors to establish operations in South Africa, Coega SEZ is offering the following key features: • Clustering for synergy and supply chain integration; 16 131 • Facilitation of access to government incentives (local, provincial and national).
• The suite of incentives includes and is not limited to one-time and/ or recurring grants for: Skills Development; Export Marketing (new market development); Job Creation (the national and provincial grants can be accessed concurrently); Foreign Investment (compensated for the qualifying costs of moving new machinery and equipment [excluding vehicles] from abroad); Investing/re-investing in Productive Assets; Black Business Development, and Customised Solutions for Investors e.g.
serviced sites, fit- for purpose buildings.

Coega SEZs’ priority industries include Chemicals; Automotive; Agro-processing including Aquaculture; Logistics; Energy; Metals, Maritime and Trade Solutions/Training and Development cluster including Services.

It was noted that implementation challenges include regulatory frameworks.

Funding and financing remains a challenge.

As noted elsewhere in this report alternative financing solutions would need to be found.
Further, the cost of doing business and the lack of reliable water and electricity should be tackled.

The Coega SEZ is in the process of launching the Digital Hub.

It was reported that the operating model seeks to promote inclusiveness in the digital economy and further seeks to have a long term impact on youth, including emerging entrepreneurs operating from rural and township economies.

3.2.
3.2.

Nkomazi Special Economic Zone, Mpumalanga Province The Mpumalanga Provincial Department of Economic Development and Tourism and the eHlanzeni District Municipality submitted a joint presentation on the Nkomazi SEZ, which has been formalized to provide a competitive and highly efficient industrial cluster.

The SEZ is positioned to be a leading hub for agro-processing, nutraceuticals and logistics services activities within South Africa.
The process of establishing the Nkomazi SEZ was initiated in 2012 with three distinct phases namely Designation, Interim and Development.

The Designation Phase was approved by 17 132 Cabinet in December 2018 and formally gazetted on the 22nd of March 2019.

The approval of the SEZ carried some conditions, which needed to be adhered to for the special economic zone to be operational.

The conditions were approved by the Minister for Trade, Industry and Competition in January 2019.
The Letter of Designation outlined the following conditions, namely: • Upon designation the province must appoint an operator with the necessary capacity, knowledge and experience to manage the SEZ.
There SEZ must appoint the operator in accordance with the SEZ Act; • The SEZ must comply with B-BBEE and Employment Equity legislation, in particular economic inclusion of black emerging farmers, local sourcing, and black economic participation along the full agricultural value chain; • The Nkomazi SEZ Board must have representation from the Department of Trade, Industry and Competition; and • The applicant must demonstrate private sector participation, particularly in the funding of SEZ infrastructure.
It was reported that the total value of the investment pipeline- post Designation is R9.1 billion creating 18 950 direct jobs, with the largest proportion of investment allocated to logistics and the largest proportion of jobs created in agro-processing.

As of 2020/21 third quarter reporting, the SEZ is recognised as one of the special economic zones that are not yet operational.
The report submitted by the Department of Trade, Industry and Competition indicated that it is estimated that when the economic zone start operating is expected to attract approximately R1 billion.

It has signed 6 investors.

It was reported in this report that the SEZ is one of the prioritised proposed economic zones that are also struggling to take off.
It is anticipated that the SEZ would receive necessary support from the dedicated intervention teams that would be supported by the SEZ Project Management Unit established at IDC.

The SEZ Project Management Unit is expected to work closer with DBSA.

In respect of progress towards establishment of the SEZ Entity, the Interim Board finalised the Memorandum of Incorporation (MOI).
The Auditor General of South Africa (AGSA) has been appointed as auditors by the Interim Board and the SEZ Entity has been registered as the State Owned Company in terms of the Public Finance Management Act.

Further, the process of 18 133 listing within the PFMA has commenced.

Currently, the SEZ is in the process to appoint a full board.
It was reported that issues which require urgent attention include land preparation; access to the SEZ site; institutional arrangements, finalisation of the ownership model and availability of funding from the provincial government through the Equitable Share Funding to fund the SEZ Programme.

3.3.
3.3.

Platinum Valley Special Economic Zone, North West Province The North West Provincial Department of Economic Development and Tourism, the North West Development Corporation and the Platinum Valley District Municipality presented a joint presentation on the Bojanala Valley SEZ.

It is envisaged that the SEZ would be located in a 100-hectare site of the Bodirelo Industrial Park.
The site will be developed into three phases comprising of a logistics park, light manufacturing space and a heavy machineries manufacturing space.

It was reported that the Bojanala Valley SEZ has been established to increase foreign and domestic investment in the Bojanala District; increase exports of value-added manufacturing goods from the region; ensure employment creation, technology transfer and skills development.
Further, to ensure the spread of industrial development regionally and the promotion of industrial agglomeration in the region.

Critical for the project is also building the required industrial infrastructure in the Bojanala District and promoting the coordinated planning among key government agencies.
The key industries identified to drive industrialisation at the SEZ are the following: • Agro-processing • Mining equipment and machinery • Mining and mineral beneficiation • Renewable energy • Mixed use for offices and logistics support The North West Provincial Department of Economic Development and Tourism through its Member of Executive Council (MEC) hosted a dialogue with the private sector to solicit inputs 19 134 and to forge strategic partnerships in implementing economic recovery plans.
These include the upgrading of existing infrastructure such as existing industrial parks revitalisation, storage silos, rail, roads and airport upgrading to drive industrialisation.

New catalytic infrastructure projects have been identified to support industrialisation.

It is anticipated that the Infrastructure Fund would support some of the development initiative.
Further plans include the review and development of the District Infrastructure Master Plans to unlock competitive and comparative advantages for the four districts in the province to support sector plans that are being developed.

Digital Innovation Hubs (DIH) are support organisations that aim to make businesses more competitive by speeding up the development and uptake of digital innovations.
In partnership with the Small Enterprise Development Agency (SEDA), the province has established two digital hubs which are the Mahikeng Start-Up Grind focussing on building capacity on the Fourth Industrial Revolution and deployment of digital technologies mainly to youth.

The second is Leema Township Incubation Hub, focussing on development and manufacturing of electronic products such as laptops, cellular telephones and other electronic gadgets such as alarm routers.
They are licensed by the Independent Communications Authority of South Africa (ICASA) to produce electronic equipment.

The Mahikeng Digital Hub will assist the Province in the roll-out of Buy North West Online SMME Market Platform that will be transferred to the North West Development Corporation in the 2021/22 financial year.

The programme has an allocated budget of R3 million.
The second round requests for proposals have been issued for establishing a Township or Digital Hub in Dr Kenneth Kaunda District and is allocated a budget of R3.5 million.

Provincial incubation and digital hubs are mainly used for skilling youth in electronic and digital technologies.
In terms of progress to date, Cabinet has requested that the province attend to the following: • The Bojanala business case has been reviewed as per Cabinet Recommendations and is ready for re-submission to the Department of Trade, Industry and Competition’s SEZ Board for designation; • Moses Kotane Local Municipality and DBSA are finalising a 30 year Bojanala SEZ Master Plan that will be reviewed every 5 years to align it to investment commitments received; 20 135 • The mining industry intend to set-up a R6 billion Mining Supplier Investment at the SEZ Zone targeted at supplying Platinum (PGM”s) and Chrome Mines in and around; • The SEZ Technical Team has been strengthened to fast-track decision making and support.
The Bojanala SEZ is intended to provide space (host) for all suppliers to the mines.

Memorandums of Understanding (MOU’s) are currently under discussion to bring additional R6 billion as an investment to jump-start the initiative.

Jobs creation is anticipated from new investments and during construction phase.

It is envisaged for the Bojanala SEZ to take equity stake in new investment to improve revenue and sustainability.
The plan is to further integrate local SMME’s into new investment value chains brought about by the SEZ which has further been identified as a strategic anchor for the District Development Model.

The Department of Trade, Industry and Competition has submitted to the Committee that the Bojanala SEZ application is still pending.
The following areas need to be addressed: • Acceleration of the revitalisation of the Bodirelo Industrial Park; • The Business Plan for the proposed Bojanala SEZ to be revised by the end of December end of December 2020; • Consolidation of the Investment Pipeline; • The establishment of the SEZ company by end of March 2021; • Strengthening of the governance capacity of the PMU for the effective planning and development of the proposed SEZ, and strengthening project pipe line by end of March 2021.

3.4.
3.4.

Halal Industrial Park, Western Cape Province A Halal Industrial Park is a community of manufacturing and services businesses all located in an industrial park.

Tenants in such an industrial park seek enhanced environmental, economic and social performance through collaboration in managing Halal products and resources required.

The Halal Hub concept follows the feasibility study which was completed to establish a Halal Industrial Park in the province.
The project intended to attract investment for the province into Halal projects, businesses, infrastructure and related assets, with the view to promote the province as a Halal trade and investment destination.

21 136 Agro-processing is one of the key strategic goals of the Western Cape Provincial Department of Economic Development and Tourism and through the Project Khulisa agri-processing Action Plan.
Through capturing a larger share of the global halal market to 2 per cent by 2025, the Halal Industrial Park is one of the three agro-processing intents of the Department.
The Halal Market opportunities for the Western Cape include the following: • The potential to extend into mainstream markets such as the United Arab Emirates (UAE) • Increase supply to food dependant markets, for both primary and premium commodities • Actively involving new consumer segments in market • An opportunity for emerging entrants Through building on the Western Cape asset base, further Halal opportunities are as follows: Production Capacity Market Access • Strong primary production base; • Trade and investment with key • Globally dominant position in Muslim markets; ostrich; • Natural and clean environment, high • Base of well-established halal biodiversity; certification bodies; • Research and Development, genetics • Large number of Halal certified and varietal development, suppliers; innovation; • Some well organised sectors; • Lifestyle: trendy and healthy • Higher education facilities; Tourism and Investment • Recognised international tourist destination; • Relatively Muslim friendly; The integrated Halal Strategy of the Western Cape Province and progress is as follows: Strategy Progress Ensure effective governance in the Halal Structures have been set-up industry Establish a Halal certification standard Final stage in the programme 22 137 Establish a Halal processing hub Feasibility study completed, virtual hub being developed Promote SA Halal products in key markets Ongoing Ensure SMME and previously disadvantaged Halal value chain programme implemented individuals access to the value chain Ensure skills supply meets demand Address paucity in Halal data Data procured The Feasibility Study on Halal Industrial Park was divided into the following two phases.
The Phase One Study was implemented as a Pre-feasibility level study during the period from August 2016 to November 2016 with the following deliverables: • Selection of suitable site; • Feasibility Study on suitable site; Phase Two Study was implemented as a full-scale feasibility study from February 2017 to May 2017 with the following deliverables: • • 3x Investor Prospectuses; 3x Feasibility Studies; • General Investment Case; • Marketing and Promotion Plan; Wesgro was tasked to promote the Western Cape Province as the Halal hub by implementing the marketing and promotional plan produced during phase 2 of this project.
The investor prospectuses promoting Halal investment to the Western Cape were prepared and taken to carefully selected Foreign Direct Investment markets to attract potential developers and/or investors to the Western Cape Province.
The Halal Investment Promotion functions identified for implementation by Wesgro of this plan included the following: • Conducting global Halal FDI flow analysis; • Undertaking Outward FDI recruitment missions; • Marketing the Investor Prospectuses in countries with potential investors and developers; • Hosting inward investor delegation missions; 23 138 • Organising and/or participate in Halal events with the hope of recruiting investment or implementing the marketing and promotional plan and • Implementing the General Investment Case recommendations of recruiting investors for the Western Cape Provincial Halal sector Western Cape Government has recognised Halal as an industry and positive driver for value creation and economic growth.
The objective to establish Western Cape as Africa Halal Park, was considered non-feasible due to the outcomes of the feasibility study as part of Project Khulisa.

The Department is therefore proceeding to support the Halal industry through a range of sector support initiatives linked to the vision of creating a halal hub within the Western Cape.

Although Halal industrial development initiative in the Western Province has shown difficult sign to take off.
The initiative has demonstrated a great potential of Public-Private development initiative to drive industrial development by leveraging public funding to crowd in private capital to boost economic growth, attracting investments and employment creation.

4.

Key Issues Arising from Engagement 1.

Noted the importance of the SEZs and Industrial Parks in the overall economy, particular for the hosting regions, and municipalities.

2.
2.

It was acknowledged the need to deep integration of the rural development strategy in the formulation and implementation of the SEZs and State Owned Industrial Parks including the City Industry Parks (initiative administered by National Treasury).

3.
3.

Poor governance in managing SEZs and Industrial Parks needed to be tackled including scaling up efforts to eliminate high levels of crime and vandalism industrial assets such as State Owned Industrial Parks including industrial parks located in the cities.

4.

It was emphasised that high crime levels and poor governance hinder industrial development as they discourage investments needed to boost economic growth and employment.
To this end, it was agreed that a multi-level approach led by law enforcement agencies (South African Police Services) should be developed to collaboratively address the criminal acts related to the industrial assets.

Further, communities should be incorporated in the broader strategy to address vandalism and crime.

Failure to do so will negate all the economic gains made, and envisaged socio-economic benefits anticipated in the implementation of the development initiatives.

24 139 5.
24 139 5.

Members raised concerns regarding the massive under-investment in infrastructure as well as poor maintenance which inhibits industrial development, and compromise growth and jobs creation efforts.

Partnerships needs to be developed in order to ensure that the responsibility of investment and maintenance of infrastructure is equitable shared amongst all three spheres of government.

6.
6.

It was noted that the Nkomazi SEZ is strategically placed to facilitate cross industrialisation and cross border trade, it is further placed to strengthen regional integration.
Due to serious delays over the past three years with the province and local development agency lack of urgency, Members raised concerns regarding the extent to which new approaches have been explored to strengthening the following: Establishment of operator of the SEZ; Planning and implementation of the development project; resource mobilisation including ensuring sufficiency of budget is allocated; to ensure that investors who initially made commitments are not lost due to delays, and attraction of new investors.
Importantly, institutional and governance issues need to be urgently addressed.

7.
7.

It was noted that due to the African Continental Free Trade Agreement (AfTCA) work needed to be done with the Department of Agriculture and Rural Development including other relevant state departments and entities across spheres of government in order to ensure that there is sufficient agricultural land available to ensure there is sufficient supply of goods needed for both domestic and global market and to take advantage of agricultural trade exports to the African continent.

8.
8.

Members urged that plans need to be fast-tracked to halt urban migration and create more opportunities in peri-urban and rural areas.

Both the SEZs and Industrial Parks Revitalisation programmes should be used as strategic instruments to break the urban and rural economy divide.

Rural development should be strategic incorporated to the trade and industrial development plans.

Investment opportunities must be identified even in peri- urban and rural areas.
This does not under-estimate the potential of cities as significant growth contributors to the overall economy.

9.

It was reported that the Industrial Park Regeneration Programme was part of broader economic reconstruction and recovery initiative.

Further, noted that urban areas are where the majority of the country’s population resides, however there is work being done to establish development corridors cutting across rural areas.

The role of provinces, and local government need no further emphasis.
10.

The Committee noted the need for a balanced approach to economic development in order to address the challenge of migration.

25 140 11.

It was noted that many companies have demonstrated willingness to operate in industrial parks than to SEZs.

Low rental that industrial parks offer to companies particular to SMMEs play as an incentive for many companies to prefer industrial parks than SEZs.
Industrial Parks still over immediate benefit to the investors, particular those focusing to the domestic market.

12.

It was noted that unreliable basic services such was the provision of reliable water and electricity supply hinders industrial development.

It is one of the key challenges affecting the establishment of SEZs particularly in rural areas.

Coordination across government needed to be accelerated to tackle energy, transport, water infrastructure in peri-urban-rural towns and cities.
It was submitted that feasibility studies are being conducted to explore opportunities for the construction of a dam in those areas that have little access to water.

13.

All spheres of government have a responsibility to drive investment initiatives.

Coordination in this regard was emphasised.

National, provincial and local trade and investment promotion agencies need to work in a collaborative manner to attract investments.
It was also reported that various SEZs have the capacity and capability to attract investments as they offer unique value propositions regarding the diverse industries they service.

5.

Observations 1.

Alignment of the SEZs including Industrial Parks with national, provincial and local government economic development strategies is essential.

2.

Location of SEZs including industrial parks should be based on economic advantages to ensure sustainability and attractiveness to investors.
The locations should be strategic to facilitate backward and forward linkages with downstream and upstream industries while also having a pull effect for other locations in the rest of the economy.

3.

Coordination of resources, and inclusion of private sector including development finance institution to ensure that SEZs remain financial and economic sustainable.

4.
4.

Noted that the outcomes of the SEZs seem more promising in account of the level of investment and the number of jobs created (see Table 1, section on national development perspective).

South Africa has high number of unemployment, and with surplus of unskilled labour.

There is a growing concern that the Special Economic Zones should also priorities labour intensive sector, advocates the Centre for Enterprise Development.
Costs in Asia, especially China, are rising and there is much talk of millions of labour intensive firms looking for new regional locations.

26 141 5.

SEZs suffer from the lack of adequate financing.

Further, there is a need to maximise the multiplier effects of SEZs through the effective integration of local suppliers in SEZ value chains.

6.

Manage conflicts or overlaps that could occur with other government programmes on investments and incentives.
To ensure effective and efficient allocation of resources.

7.

Support in preparing justification for SEZs is critical.

It is noted that SEZ application should demonstrate how the SEZs will facilitate the creation of an industrial complex with strategic national economic advantages for targeted investments.
Further, SEZs application has to demonstrate how the SEZ will take advantage of existing industrial and technological capacity by promoting integration with local industry and increasing value-added production, should be promoted.

Building capacity at local government should be prioritised.

8.

The City Industrial Parks Programme has a great potential to boost economic growth, investment and job creation in cities across the country.
It has the potential to deepen private market participation in under developed provinces and cities.

9.

Although political authority is essential to drive policy agenda.

Commercial and economic considerations should determine the establishment of SEZs, and by extension Industrial Parks.

The creation of development partnership that includes labour and private sector is crucial to the success of SEZs including the Industrial Parks.

10.
10.

Infrastructure, including electricity, water, and access to roads/rail facilities are essential.

Slow spending on capital budgets, poor infrastructure management and investment and governance in provincial and local government including SOEs has the potential to hamper the sustainability of SEZs and Industrial Parks initiative.

Inadequate or lack of infrastructure discourage investors.

11.
11.

Promotion of public-private development and management of SEZs (including Industrial Park Revitalisation platform) is essential.

Taking into account that the fiscal purse is constrained.

Alternative financing solutions should be found.

As already stated the role of development finance institutions and private sector is critical.

27 142 6.

Recommendations 1.


Over the 2021 medium term, the Committee directs the Minister, through the Department of Trade, Industry and Competition in partnership with provincial government and local government to accelerate the implementation of the Industrial Park Revitalisation programme.

Further, the Department should formulate and submit a strategy plan to increase participation of private sector to reset operations of the State Owned Industrial Parks.

2.
2.

The Committee noted delays in approval and implementation SEZs in some of the provinces.

Further, the Committee appreciated the establishment of the SEZ Project Management Unit.

In addition to the establishment of the Project Management Unit, the Committee supported the partnership created by the Department with IDC and DBSA in an effort to support and accelerate implementation of the prioritised proposed and struggling SEZs.
By the end of the of the 2021/20 financial year, the Department of Trade, Industry and Competition should submit to the Committee the progress report relating to the implementation plan in relation to the prioritised proposed and struggling SEZs.

3.

Further, the Committee noted funding and financing challenges in implementing SEZs and Industrial Parks industrial development programme.
Over the 2021 medium term, the Minister, through the Department of Trade, Industry and Competition, should collaborate with provincial and local government to submit alternative funding and financing strategy to support growth and sustainability of the SEZs and Industrial Parks industrial programme.

Report to be considered.

28 143 AND 3.
REPORT OF THE SELECT COMMITTEE ON COOPERATIVE GOVERNANCE AFFAIRS, WATER, SANITATION AND HUMAN SETTLEMENTS ON THE 2021/22 ANNUAL PERFORMANCE PLAN AND BUDGET ALLOCATION OF THE DEPARTMENT OF WATER AND SANITATION, DATED 18 MAY 2021 TRADITIONAL Having met with the Department of Water and Sanitation to consider the departmental 2021/22 Annual Performance Plan and budget allocation, the Select Committee on Cooperative Governance and Traditional Affairs, Water, Sanitation and Human Settlements, reports to the National Council of Provinces (NCOP) as follows: 1.
INTRODUCTION 1.1 The Money Bills Amendment Procedure and Related Matters Act (Act No.9 of 2009) empowers Parliament to recommend, reject or amend budgets of National Departments and Organs of State.

The Act also enjoins Committees of Parliament to compile and adopt Budget Vote Reports, based on interactions with the relevant Departments and entities on their respective strategic and annual performance plans and budgets.

1.3.
1.3.

On 14 May 2021, Select Committee had virtual meeting with the department of water and sanitation to consider the departmental 2021/20 annual performance plans and budget allocation.

1.3.

The main objective of the virtual meeting was to ensure executive accountability and perform parliamentary oversight on performance and financial information related to water and sanitation as planned for the 2021/2022 by the Department of Water and Sanitation 1 144 2.
Presentation on the Annual Performance Plan and Budget Allocation of the Department of Water and Sanitation 2.1 The Acting- Director-General presented the 2021/22 annual performance plan and budget allocation of the Department of Water and Sanitation.

The presentation focused on outputs, indicators and annual targets and budget allocation related to Administration, Water Resource Management and Water Service Management Programmes.

3.

Programme 1: Administration 3.1.


The purpose of this programme is to provide strategic leadership, management and support services to the Department.

The programme also develops and promotes international relations on water resources management with neighbouring countries 3.2.
The 2021/22 output indicators of the administration programme include performance and financial information related to targeted procurement budget spent on youth, women and people with disability; implementation of financial recovery plan as well as the implementation of 2021/2022 annual international relation programmes 3.3.

This Programme, which consumes 11.5% of the overall departmental budget, is allocated R1.95 billion in the 2021/22 financial year, up from R1.82 billion in 2020/21.
This reflects a nominal rand increase of R135.7 million, which is a R57 million increase in real terms between 2020/21 and 2021/22, refer to Table 1 for details.
2 145 Table 1: Administration Budget Programme 1: Administration Ministry 2021/22 (R’000) 52 030 2022/23 (R’000) 52 048 2023/24 (R’000) 51 686 Departmental management 146 862 146 871 145 321 Corporate services Financial management Office accommodation Provincial and international coordination Total Economic Classification and Medium Term Expenditure Estimates Rand thousand 2021/22 (R’000) 2022/23 (R’000) 2023/24 (R’000) Compensation of employees 806 078 791 968 769 719 Goods and services 1 010 210 1 048 354 1 073 545 Transfers and subsidies 29 012 30 105 30 859 Payment of capital assets 105 614 102 071 106 850 Total 1 950 914 1 972 498 1 980 973 4.
Programme 2: Water Resource Management 4.1.

The purpose of this programme is to ensure that the country’s water resources are protected, used, developed, conserved, managed and controlled in a sustainable manner for the benefit of all people and the environment.

This is done by developing a knowledge base and implementing effective policies, procedures and integrated planning strategies for water resources.

4.2.
4.2.

This Programme, which constitutes 20.9% of the overall departmental budget, is allocated R3.53 billion in the 2021/22 financial year, up from R3.37 in 2020/21.

This reflects a nominal rand increase of R164.6 million, which translates into a real rand increase of R22 million between 2020/21 and 2021/22, refer to Table 2 for details.
3 146 Table 2: Water Resource Management Budget Programme2: Water Resource Management Water Resources Management and Support 2021/22 (R’000) 6 851 2022/23 (R’000) 6 793 2023/24 (R’000) 6 679 Integrated Water Resource Planning 100 386 101 470 101 492 Water Ecosystems Management 47 375 47 438 47 178 Water Resources Information and Management Water Resources Infrastructure Management Water Resources Policy and Strategy 555 195 558 825 558 495 2 613 439 2 662 057 2 769 826 19 854 19 910 Water Resources Regulation 117 543 90 462 Water Resources Institutional Oversight 77 384 80 689 19 775 86 784 72 127 Total 3 538 027 3 567 644 3 662 356 Economic Classification and Medium Term Expenditure Estimates Rand thousand 2021/22 (R’000) 2022/23 (R’000) Compensation of employees 583 697 557 196 Goods and services 263 038 267 680 2023/24 (R’000) 539407 270873 Transfers and subsidies 2 615 316 2 664 009 2 771 825 Payment of capital assets 75 976 78 759 80 251 Total 3 538 027 3 567 644 3 662 356 5.
Programme3: Water Service Management 5.1.

The purpose of this programme is to develop, rehabilitate and refurbish the raw water resources and water services infrastructure to meet the socio-economic and environmental needs of South Africa.

4 147 5.2.

This appears to be the priority Programme of the Department, as it receives the highest allocation of the entire departmental budget, refer to Table 3 for financial information.
Briefly, this programme receives R11.4 billion in the 2021/22 financial year, which constitutes 67.5% of the overall departmental budget.65 Table 3: Water Service Management Budget Programme2: Water Resource Management Water Resources Management and Support 2021/22 (R’000) 37 625 2022/23 (R’000) 33 877 2023/24 (R’000) 35 394 Water Services and Local Management 422 584 451 230 454 124 Regional Bulk Infrastructure Grant 6 314 100 6 636 539 6 921 302 Water Service Regulation 107 028 113 543 119 234 Water Service Policy and Strategy 1 354 1 312 1 293 Water Service Infrastructure Grant 4 516 844 4 640 449 4 837 184 Water Resources Institutional Oversight 21 604 22 496 23 539 Total 11 421 139 11 899 446 12 392 070 Economic Classification and Medium Term Expenditure Estimates Rand thousand 2021/22 (R’000) 2022/23 (R’000) 2023/24 (R’000) Compensation of employees 415 450 437 836 432 575 Goods and services 417 942 439 748 454 991 Transfers and subsidies 6 569 811 6 782 111 7 078 046 Payment of capital assets 4 017 936 4 239 751 4 426 458 Total 11 421 139 11 899 446 12 392 070 6.
Allocation for Infrastructure Programme 6.1.
This section in terms of the 2021/2022 annual performance plan and budget allocation, provides financial information on overview of regional bulk infrastructure grant, water boards allocation and water service infrastructure and implication to local government Refer to tables 4, 5 and 6 for financial information 5 148 Table 4: Overview of 2021/2022 Regional Bulk Infrastructure Grant (RBIG) Rand thousand Eastern Cape Direct Grant 481 329 Indirect Grant 352 215 Total 833 544 Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western cape Total 213 921 951 316 1 165 237 -------------- 437 407 437 407 238 621 218 806 411 080 106 289 458 318 27 661 ------------ Table 5: Overview of 2021/2022 Regional Bulk Infrastructure Grant (RBIG Water Boards / Rand thousands MagaliesWater Board Total 103 390 UmgeniWater Board SedibengWater Board Total 550 858 136 721 790 969 6 149 Table 6: Overview of 2021/22 Water Service Infrastructure Grant (WSIG) Rand thousand Eastern Cape Direct Grant 527 000 Indirect Grant ------------ Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western cape Total Total 572 000 467 617 206 761 90 000 34 761 ---------------- 897 050 288 402 603 851 150 000 721 000 --------------- 284 138 166 529 516 602 -------------- 129 000 374 617 172 000 897 050 315 449 571 000 284 138 350 073 129 000 3 620 327 729 692 4 350 019 7.
Observations of the Select Committee 7.1.

The Select Committee has welcomed the 2021/2022 Annual Performance Plan and budget allocation of the Department of Water and Sanitation.

The committee has noted that the annual performance plan has been aligned and integrated with the medium term strategic framework and the 2021 state of the nation address (SONA) 7.2.
The Select Committee has however observed, noted and raised several concerns about the performance and budget information contained in the 2021/2022 annual performance plan of the Department of Water and Sanitation 7.3.

The first concern of the Select Committee relates to the allocation to Consultants: Business and advisory services which has increased from R37.3 million in 2020/21 to R65.8 million in 2021/22.

7.4.
7.4.

The second relates to the allocation to travel and subsistence which has increased substantially from an allocation of R2.8 million in 2020/21 to R44.8 million in 2021/22 7 150 (an increase of 1500%).

At a time when it can be reasonably expected that travel has declined significantly.

7.5.

The third concern of the Select Committee relates to non-filling of the appointment of senior management such as the Director-General and the Chief Financial Officer.

7.6.
7.6.

The Select Committee has further noted with concerns about the incomplete water related projects and lack of information in the 2021/2022 Annual Performance Plan on support to Ruth Mmompati, Madibeng and JB Marks Local Municipalities in North West 7.7.
Despite the concerns raised, the select committee has noted and generally welcomed the progress made by the department in stabilizing the water boards and ensuring through transparency the appointment of competent, skilled and qualified board members 8.

Recommendations of the Select Committee 8.1.


The Department of Water and Sanitation should fast-track the process of appointing Director- General and other top officials 8.2. the Department of Water and Sanitation should provide a provincial update report on the status of water and sanitation projects including the support provided to the municipalities in the entire country 8.3.

The Department of Water and Sanitation should provide progress report on war on leaks programmes 8.4.
As part of ensuring executive accountability and performing oversight, the select committee should align its quarterly programme in line with the 2021/2022 annual performance plan and budget allocation of the department of water and sanitation 8..5.

The Department of Water and Sanitation should provide quarterly progress reports on achievements of outcome indicators as contained in the 2021/2022 annual performance plan and budget allocation Report to be considered 8 151 4.
Report of the Select Committee on Land Reform, Environment, and Mineral Resources and Energy on the Budget Vote and Annual Performance Plan 2021/22 of the Department of Environment, Forestry and Fisheries – Budget Vote No 32, dated 19 May 2021.
The Land Reform, Environment, and Mineral Resources and Energy having considered Budget Vote: 32 and Annual Performance Plan 2021/2022 of the Department of Environment, Forestry and Fisheries, reports that the that the committee met with the department on 11 May 2021, where the department briefed the committee on the matter of its APP and Budget.
The committee appreciated the inputs from the Deputy Minister and respective DG’s related to the current APP, budget allocation and performing key responsibilities under Covid-19 restrictions and with a reduced budget.

The committee, in its deliberations, focused on matters of interest to provinces, which include the biodiversity economy, air quality, waste management, the ocean Phakisa, compliance and law enforcement.
The committee was concerned by the fact that budget reductions appeared to be focused in key programmes of the department, namely Regulatory Compliance and Sector Monitoring, Climate Change, Air Quality and Sustainable Development, and Biodiversity and Conservation.

It was felt that reductions in funding for these programmes could have significant impact on the mandate of the department, particularly in provinces.
Issues for consideration pertaining to the department’s Annual Performance Plan Ø Department’s significant decline in budget allocation to Programme 4: Climate Change, Air Quality and Sustainable Development by 22.5 % might affect some of the planned activities.
This despite the fact that this programme receives support from Foreign Donors such as Germany (for Climate Change Support Programme: Implementation of the Climate Change Web-based Monitoring and Evaluation System); Flanders (for Adaptive Capacity Facility); United Nations Environmental Programmes (for South Africa: Enabling activities for the preparation of the third national communications and biennial update report); Norway (for Capacity development within the national greenhouse gas inventory unit, once this is operational); and the European Union (for iThemba Phakama People PPP Model for Human Development and Inclusive Environmental Economic Growth).
Activities likely to be affected if funds are not managed well will be the 1 152 planned National Climate Change Adaptation Strategy and National Climate Change Bill, which will serve as an overarching legislative framework for adapting to and mitigating the effects of climate change, supported by the implementation of the low‐emissions development and growth strategy for South Africa.
The Bill and the strategy are key to ensuring that the country is equipped to manage and mitigate the effects of climate change.

This would lead to much needed development of sector jobs’ resilience plans in the coal, agriculture, tourism, petrol‐based transport and metals sectors, as these are considered particularly vulnerable to climate change; and support provinces and municipalities with the development and implementation of climate adaptation plans.
Ø The allocation to Programme 5: Biodiversity and Conservation is reduced by more than half.

The bulk of the cuts will affect two of the Department’s entities, namely iSimangaliso Wetland Park Authority and South African National Parks.

The Department needs to inform Parliament how it will ensure that this does not negatively affect the two entities’ performance.
Parliament might need to establish what measures are in place to ensure that this significant cuts don’t affect operations in this entities, specifically relating to protection and conservation of endangered species management.

Moreover, the needed measures to curb the COVID-19 infections by way of international travel restrictions and national lockdowns affected and still does impact the entities’ income generation through eco-tourism and research.
Issues for consideration pertaining to the department’s Budget Ø The increase pressure on budget allocation and bleak economic outcomes might require Parliament oversee how Government intends consolidating efforts or realigning activities across its entities whose function and activities overlap.
For example, SAWS under DEFF, South African Environment Observation Network (SAEON) a national facility of the National Research Foundation (NRF), Agricultural Research Council (ARC) under Department of Agriculture, Land Reform and Rural Development (DALRRD) and others all implement and manage terrestrial monitoring (e.g.

weather stations) stations.


Ø The SAWS, iSimangaliso Wetland Park Authority and SANParks need to show how they plan to cover the shortfall in budget allocations for 2021/22 while meeting their set targets.

2 153 Ø Similarly, Parliament would need to ensure that it oversees the MLRF’s implementation of the oceans economy through creating work and licensing in the commercial fishing sector.
Ø Parliament would need to oversee that SANParks has necessary contingency plans in place to continue with its core business of conservation.

This is particularly so owing to the entity’s contributions to local community livelihoods, through programmes that promote access and benefit sharing, socio-economic development and improved living conditions for local communities adjacent to national parks18.
These programmes foster conservation and protection of species, due to loss of revenue from the Tourism sector.

Ø The projected further decline in budget for the mid-term period (2020/21−2023/24) is of concern owing to impacts on critical operations of the Department.
For instance, this financial year the Biodiversity and Conservation programme will be allocated less than half of its previous budget and this directly affected iSimangaliso Wetland Park Authority and South African National Parks, whose role is to protect and conserve biodiversity in South Africa.
Ø The Department identifies “Biodiversity Economy; Chemicals and Waste Economy and Oceans Economy Phakisa” as a target to be achieved in 2021/22, but how does the Department envisage measuring the sustainability of the “Chemicals and Waste Economy Phakisa”?

Ø In which Provinces or Municipalities will the 2000 jobs earmarked through Chemicals and Waste Economy Phakisa be developed?

Ø Waste dumping in rivers and other non-dumping sites is still an ongoing issue.
What environmental impact will the 2000 jobs to be created through Chemicals and Waste Economy Phakisa have?

South Africa Weather Services Ø The growing recurrence and intensity in climate events over the recent years, as well as the gaps in monitoring of climate over South Africa (specifically radar and weather stations in the northern parts of KwaZulu-Natal where Tornados or extreme thunderstorms were experienced).
What plans 3 154 are in place to improve the country’s early warning systems to save lives and protect infrastructure?

Ø What is the weather services doing to provide support to the different economic sectors reliant and affected by weather to mitigate against or capitalise on weather events?

There is a need to look at extreme weather events, such as flooding causing storms, as sources of water, and assist relevant sectors in capitalising on that.
The chairperson also raised the following with the department, namely; 1.

There is a need to fast track the eradication and control of Invasive Alien Plants, specifically those directly affecting our limited water resources and water bodies, such as the Water Hyacinth.
The Committee welcome the targeted Integrated Permitting System that will assist organisations who contribute to controlling the Invasive Alien Plants through processing them into new and useful products (for example, paper, fertilizers, ornaments, etc.).

2.
2.

In light of the ongoing water shortages across most of our Municipalities, waste dumping in our water bodies remained a continuing challenge, such as dumping of disposable nappies and other forms of waste, Provinces and municipalities should be brought on-board in the Waste Economy Master Plan and assisted in waste management to protect our limited resources.

3.
3.

There was a need to continually improve and maintain our weather and air quality monitoring station networks, to enable for the timeous production of early warnings to protect our communities and infrastructure from extreme weather events, and ensure a healthy environment.

The Department should work closely with SOEs performing earth systems observation monitoring to coordinate efforts towards improving the monitoring networks across South Africa.

4.
4.

The Department should work closely with the Provinces and Municipalities, especially those with limited capacity, to assist them in developing and implementing their own Climate Change Adaptation Strategies.

4 155 The Select Committee on Land Reform, Environment, Minerals & Energy having considered Budget Vote: 32 and Annual Performance Plan 2021/2022 of the Department of Environment, Forestry and Fisheries, reports that the Committee has concluded its deliberations thereon.
Report to be considered 5 156