Securitised national number plates: Uniplate briefing, Cross Border Transport Agency Strategic & Annual Performance Plans 2014/15

Meeting report

The Chairperson briefly announced that it was important, when hearing the presentations in this meeting, to consider how the entities could contribute to improving the lives of ordinary people, both in South Africa and on the Continent.

Securitised national number plates: Uniplate briefing
Mr Nizoo Chagan: Head Director, Uniplate, explained that Uniplate was one of the member entities of the South African Numberplate Association (SANA. He indicated that at the moment, South Africa had over 300 variations on number plates for vehicles, and this had resulted in law enforcement being unable to prosecute illegal and non-complying number plates. The problem had been particularly highlighted by the e-tolls, which had confirmed the suspicions that 30% of the number plates in South Africa were illegal, cloned or non-complying. These had major impact on the economy, since it was difficult to collect the revenue or traffic fines from non-complying vehicles. South African Number Plate Association (SANA) was struggling to control and monitor more than 1 000 embossers – those who put the numbers on the plates - throughout South Africa. He stated that the problems faced by SANA had first emanated 20 years ago and the number of variants now had complicated the situation.

Mr Chagan suggested that South Africa needed to have one type of number plate through all the provinces, which should be standardised. This would make it easier for the traffic officers to spot illegal, cloned or non-complying vehicles. There was also a need to incorporate the maximum security features in the number plates, similar to what was done with the country’s banknotes. It was also difficult to check at the moment whether the number plate rightly belonged to the vehicle, and this was how cloning of number plates took place. He also stated that technological advancement had meant that security features were of vital importance, and it was of concern that South Africa had not made any changes or additions to number plates since 1977. It was important to protect the content that was contained in security features so as to make it impossible for them to be tampered with, or changed. The SANA also recommended the use of a human and machine readable sequential number, to be applied by each authorised blanker. In order to combine the serialisation of blanks with an anti-counterfeit device, SANA also recommended the use of a hot-stamped vertical Optical Variable Device (OVD) stripe incorporating this sequential number, which was repeated in a quick response (QR) barcode.

Mr Chagan added that the OVD stripes could be issued by the National Provincial authority to the authorised blanker, who would then affix the stripe on each blank plate. The banker thereby validated each blank by permanently applying a serial number, which was human and machine readable to each blank. Due to its incorporation in a holographic OVD stripe, the serial number could not be reproduced, tampered or transferred, so each blank identity would be unique. The sequential number could further include a prefix to identify the blanker - such as one letter followed by an 8 digit sequential number.

Mr Chagan indicated that the OVD stripe must:
- be tamper-proof and not transferable, to avoid transfer from one vehicle to another
- be weather and ultra violet (UV) resistant
- include a sequential number in open test and as machine readable code
- must have a customised high security holographic design controlled by the National authority

Furthermore, the manufacture of the OVD stripe must be a security hologram manufacture with suitable certification such as CWA 14641:2006 security certification

Mr Chagan also encouraged the use of smart-phones to scan the QR and vehicle data, which was mostly used to verify the vehicles. Applications were available for on- and off-line verification, and this process was always free of charge. Due to the Digital Signature used, the QR code content could only be read, and cannot be changed, tampered or reproduced. He said the South African Bureau of Standards (SABS) had proven, over 20 years, that it was unable to carry out its mandate of testing the authenticity and standards of the number plates. This suggested that SABS was more interested in collecting the money than maintaining and monitoring the standard. He also openly said that SANA rejected the use of stickers by SABS, as these could easily be tampered with and reproduced. Mr Chagan suggested that the Department of Transport (DoT) needed take away the certification from the SABS and set up a compliance unit that would be dedicated to controlling and ensuring that the certification and testing of number plates was done professionally. The setup of a new compliance unit would also ensure that the illegal operators were arrested and prosecuted. The funding for the new compliance unit could come from the money that was presently being given to the SABS without it doing proper certification.

Mr Chagan mentioned that one of the reasons why the wrong number plates were sometimes put to the wrong vehicles was because of unskilled people employed at the SABS who were unable to check that they were acting correctly. He added that the establishment of a compliance unit had the potential to create more than 20 000 small entrepreneurs, who would be trained by the SANA, and they would have the potential to earn around R8 000 to R10 000 a month. Malawi was the first country to have a secured number plate system. Each and every number plate had a serial number, which was laser-marked, in a similar way to a banknote, so it was almost impossible to clone it. Moreover, the lifespan of the laser-marked vehicle identification in Malawi was five years and the number plates were synchronised throughout the country.

Mr Chagan believed that it was a huge mistake for the DoT to give the MECs power to put whatever they wanted on the number plates, and called for the DoT to ensure that there was a standardisation of number plates throughout all provinces.  

Discussion
Mr C Hunsinger (DA) remarked that even if South Africa had good security features in the number plate, this could still be subjected to cloning when it was difficult to link the number plate to the vehicle. He also expressed concern that the country had different number plates for each province, said that some people actively sought to register their vehicles in the province where this could be done the most cheaply. He was in support of the standardised system throughout the provinces.

Mr M de Freitas (DA) said that it was almost impossible to convince provinces to change the localised look of the number plates, but he was in support of the standardised security features. He added that the establishment of the compliance unit fell within the terrain of the Road Traffic Management Corporation (RTMC) and he asked whether there were any entities, with modern systems infrastructure already available, who could immediately comply with the requirements outlined in this presentation. He also agreed that SABS was ineffective and there was a need to establish a compliance unit that would create job opportunities

Ms D Carter (COPE) also supported the call for the standardised system, but said it was important to target the people producing the numbers, as this was where corruption was rife. She commended the use of modern technology to verify the vehicle data, but warned that there was still a possibility of corruption if this was in the hands of the wrong people. She also requested a brief explanation of what the SABS presently did.

Mr M Sibande (ANC) stated that he had a problem with the presentation, as there was no evidence of any clear consultation between Uniplate and the Department of Transport (DoT). He also stated that it was worrying that Mr Chagan seemed to lack confidence in the SABS, MECs and the DoT, saying that no one entity could survive and be effective on its own. He wondered if the creation of the jobs for 20 000 small entrepreneurs would represent permanent or temporary jobs. He commented that it was worrying to hear that the last interaction between the association and the Minister of Transport had been as far back as 1997.  

Mr G Radebe (ANC) asked whether Uniplate or SANA had plans in place to curb corruption and reduce the 300 variations so they could be manageable and controlled. He asked how it could be ensured that provincial number plates complied with the national standard. He questioned whether funding suggested for the establishment of the compliance unit would be sufficient. He also agreed that Uniplate needed to work closely with the DoT to engage on the challenges that needed to be addressed. He also remarked that it was important to have measures in place to control the existing equipment centres, in order to curb corruption and ensure compliance, and added that he would be happy if the face-value document could be linked to the owner of the vehicle.

Mr T Mulaudzi (EFF) also expressed his concern on some aspects of the Uniplate presentation. It seemed to point to inconsistencies between provincial and national spheres of government and added that it was unfair to criticise the MECs and the SABS as they were not present to respond. He also said that the criticisms levelled against the SABS were disingenuous, considering that Mr Chagan served the entity for more than 39 years without having achieved any success in curbing corruption and cloning of number plates. He said it was actually possible to link the new number plates with the vehicle. The cost implications of the new number plates issued in Gauteng were also not clear. He too wanted clarity on the suggestion that there could be 20 000 job opportunities. 

Ms E Masehela (ANC) remarked that she did not believe the problems raised by Uniplate were created 20 years ago, but in fact had begun long before 1994. The problem of corruption in the equipment centres needed to be addressed, as it had already been noted that it was impossible to collect the licensing revenue or fines for cloned or tampered number plates. He asked whether, in Malawi, there was a clear strategy that South Africa could copy, in respect of the laser-marked number plates, and enquired what the cost implications of such innovation would be.

Mr L Ramatlakane (ANC) indicated that he was concerned about the criticism of the legitimate agencies, and wondered if the Uniplate or SANA had had any engagement with the DoT before making the presentation. If there was no cooperation or trust, then the DoT could help the agencies achieve their mandate. He indicated that the presentation was flawed and suggested that SANA needed to engage with the DoT on the proposed solutions to curb corruption and cloning of number plates.

Mr Msondenzi Futshane: Acting Deputy-Director General: Road Transport, Department of Transport, indicated that the issue of number plates had already been discussed in two meetings, one in July 2014 and the other one in August 2014, with the next meeting scheduled for September 2014.

Ms Masehela agreed with Mr Ramatlakane that this presentation appeared premature if the SANA Had not engaged with the DoT.

The Chairperson also supported the suggestion that Uniplate needed to engage with the Department on the fundamental issues raised in the meeting, although she did commend the engagement with the Department of Trade and Industry (dti) and the SABS. She said there was therefore no need for Uniplate to respond now to the questions raised by the Committee Members. They should, however, be regarded as suggestions to look at in order to assist the SANA on issues that required more work and emphasis.

Cross-border Road Transport Agency: Strategic and Annual Plans 2014/15
Mr Sipho Khumalo, Chief Executive Officer, Cross-border Road Transport Agency, indicated that the presentation would cover the strategic and annual plans of the Agency (C-BRTA). He noted that the strategic thrust of the C-BRTA was set out in Chapters 4 and 7 of the National Development Plan (NDP), and regard must also be had to the State of the Nation Address (SONA) and the Presidential inaugural address.

The Medium Term Expenditure Strategic Framework (MTEF) Priority 11 focused on creating a better South Africa and contributing to a better Africa and a better world, and these included increasing the foreign direct investment, increasing South Africa’s exports, and furtherance and strengthening of regional integration. Mr Khumalo also added that the government key strategic focus areas were to enable regional growth, increase intra-regional trade and making South Africa a globally competitive economy.

Mr Khumalo e briefly described other strategic priorities included in the Minister of Transport’s delivery agreement and in the NDP, which included job creation, women empowerment, youth development, skills development, empowering of those living with disabilities, capacity building of staff at all levels, capacity building of state owned  enterprises and implementation of a focused regional integration strategy

Mr Khumalo stated that the mandate of the C-BRTA was derived from the Cross-Border Road Transport Act, No.4 of 1998. It stated that the C-BRTA should, amongst others:
- improve the flow of passengers and freight by road transport in the region
- introduce regulated competition in cross-border road passenger transport
- reduce operational constraints for the cross-border road transport and support trade facilitation
- support the development of the cross-board transport industry and establish meaningful industry partnerships
- strategically reposition the work of the C-BRTA

Mr Khumalo said that in achieving its vision for the C-BRTA to be the leading cross-border road transport agency within the region of Africa and the world, it would need to work together with different stakeholders, not only in South Africa but throughout the Continent. Its mission was to spearhead social and economic development within the South African Development Community (SADC) region, by facilitating unimpeded cross border road transport. The C-BRTA’s Strategic Outcome Oriented Goals included facilitating unimpeded flow of cross-border transport, promoting regional integration and safe and reliable cross-border transport, and strategically positioning the work of the C-BRTA in order to enhance organisational sustainability.

He pointed out the background, noting that at the beginning of the 20120/11 financial year, C-BRTA was on the brink of collapse, financially and because of lack of technical skills that were needed for it to execute its duties. This was detailed in slide 11. However, it subsequently produced and worked to a 10-point plan that would drastically improve the situation. Amongst others, it had:
- recruited suitably qualified personnel
- reached consensus on the mandate and legitimacy of the C-BRTA
- engaged in image rebuilding, and had obtained an unqualified audit opinion which assisted it to do so
- resolved governance lapses at Board level
- developed a funding model responsive to operational imperatives
- started to work within an organisational structure that was consistent with the mandate
- developed leadership and managerial cohesion at all levels
- developed a responsive organisational culture and values
- worked to inculcate performance standards and accountability
- developed strategic partnerships with key stakeholders

Mr Khumalo indicated that the C-BRTA had attained its first-ever unqualified audit opinion since it was established, 15 years ago, for the 2012/13 year, following it up with another unqualified audit in 2013/14. These were achieved through ensuring that the previous lack of systems to allow the Agency to account for revenue receiving, expenditures and other expenses had been properly addressed.

He noted that the employment equity figures for 2013/14 showed that 83,3% of the people employed in C-BRTA were Blacks, 9, 1% were Whites, 4, 4% were Coloureds and 3, 2% were Indian. Mr Khumalo also added that C-BRTA was proud that females accounted for 50.8% of the people employed,  while males made up 49.2% (further set out in slide 18). There had been a particular focus placed on empowering women from previously disadvantaged backgrounds.

Mr Khumalo stated that the financial performance of C-BRTA as at 31 March 2014 showed that there was a total income of R140 million and the budget was R185 million, thus showing a variance of 24%.The variance was caused by reductions in permit revenue, and a court case that had been lost. He reminded the Members that C-BRTA was one of the few agencies that was self-budgeting, as it did not receive any money from the National Treasury (NT). The revenue was derived from all the permits that cross-border operators purchased, to get their licence. He also mentioned that 6% of the expenditure went to staff costs and Directors’ remuneration. There had been a 1% variance between the actual (R187 million) and budgeted (R185 million) amounts for spending.

Mr Khumalo said there was a regulatory Committee. Section 23 of the C-BRTA Act mandated the Board to regulate access to the cross-border road transport market. A Regulatory Committee was established in terms of section13 of the C-BRTA. This was to assist the Board in the execution of its regulatory functions. The Committee essentially regulated market access through a permit administration process, based on the provisions of the road transport agreements. There was liaison with the Transport Appeal Tribunal on matters of mutual interest.

Mr Khumalo went on to set out some of the strategic objectives for 2014 to 2019, and said that they were all broadly based around introducing and implementing regulated competition in this transport sector. The Annual Performance Plan (APP) for 2014/15 showed that the C-BRTA would intend to:
- revise the C-BRTA mandate
- promote efficiencies in permit issuing
- generate and deploy strategic intelligence capabilities to improve compliance with road transport legislation

Key Performance Indicators  set out in the APP included the following:
- implementation of the scientific tool used by the Regulatory Committee
- taking initiatives to revise the C-BRTA mandate
- developing and implementing the new permit system
- developing and implementing the Operator Compliance Accreditation Scheme (OCAS)
- putting into operation the smart law enforcement system
- setting up the permanent deployment of inspectors within 2 km proximity from major borders
- ensuring that set numbers of inspections were conducted.

Mr Khumalo stated that the MTEF budget classification showed that the total expenditure for C-BRTA for 2014/15 was R234 million and this was expected to increase to R255 million in the 2016/17 financial year. The revenue budget for 2014/15 showed that the permit fees accounted for 86% of the revenue budget, that penalties accounted for 11% and the interest accounted for only 3% (see slide 35). It was also evident that that 61% of the expenditure budget for 2014/15 went to compensation of employees, 31% was for goods and services, and only 8% was for capital expenditure.

Mr Khumalo also told the Committee Members that on-going litigation against the C-BRTA on the increase of permit fees was still a key challenge. The Agency’s application for leave to appeal was unsuccessful and the legal representatives of the Agency were then instructed to petition the Supreme Court of Appeal, and that petition was currently pending.

Another challenge was ongoing with the need to finally resolve the Lesotho/Free State passenger movement issues, which had resulted in non-adherence to the Southern African Customs Union (SACU) Memorandum of Understanding.

The Department of Transport was playing the leading role in the amendment of the C-BRTA Act, and there had been consultation between the Select Committee on Public Services, Executive Council, Free State Province, the Regulatory Committee of the C-BRTA, and Minister of the Kingdom of Lesotho and passenger transport operators who were affected.

Mr Khumalo finally outlined some of the strategic impediments facing the C-BRTA. He said that there was, firstly, a need to focus on the funding model as it was evident that the current model would not be sustainable. He said that joint committees and joint regional groups meetings should be used to achieve outcomes that would add value to the industry. Structured reporting of the outputs of those meetings should be done through the Regulatory Committee, with Ministerial and Parliamentary structures. He said that there was a need to focus on developing country profiles to empower operators in member state countries and focus on “beyond the borders”, where South African operators still faced major impediments.

He added that there was a need to develop a comprehensive plan for addressing the question of un-roadworthy cross-border vehicles and to foster a review of SADC vehicle standards. Road safety should be a prime focus area for all. This suggested the need to develop the capability and competency for championing issues pertaining to “vehicle safety” and introducing the Australian-type accreditation systems within South Africa.

In relation to the border towns, he said that stakeholders needed to appreciate the changing dynamics in border towns and the need to respond to provincial imperatives such as those in Musina and Ficksburg. There was a need to strengthen partnerships with South African Revenue Services (SARS) and other players in the border environment. The South African domestic operators should receive protection in relation to conditions obtaining in neighbouring countries, which implied, in turn the need for a review of bilateral agreements and monitoring of implementation of the SADC Protocol.

The entire mandate of the C-BRTA should be activated, to enable seamless and efficient passenger and freight logistics in the cross-border space. There should be harmonization of regulatory frameworks between the C-BRTA system and other licensing (provincial) authorities. The Profiling Unit should be elevated, to provide intelligence to support the cross-border transport industry. He suggested the need to achieve remote issuance of cross-border permits, within two working days, to enhance customer services and reduce the cost of doing business. Cross-border operators should ideally be empowered to diversify their business models, for instance with service stations and other facilities.

Mr Khumalo then offered some concluding remarks on strategies that were needed in moving forward. He noted that the C-BRTA was geared to demonstrating its full commitment to adding public value through its strategic interventions. It would support the National Programme of Action of government in industrialisation and job creation. It was committed to maintaining an unqualified audit opinion and also intended to improve its service offerings by overhauling its permit administration system.

The Chairperson thanked the C-BRTA for its detailed presentation that covered a lot of issues.

Discussion
Mr Mulaudzi asked the C-BRTA to address the problems between Lesotho and South Africa at the border, and especially the issues of cross-border permits, noting that many vehicles were being impounded. Mr Malaudzi wanted to hear more about any strategies in place to regulate the trailers on the N1 road to Zimbabwe, as they were causing many fatal accidents. He asked if there was a relationship between RTMC and other law enforcement agencies, which might assist in creating a better understanding of the role of the permits. He wondered if there was any possibility of introducing a permanent permit fee for a longer period.

Mr Malaudzi He wondered why the C-BRTA, having not been granted leave to appeal in the court case that went against it, nonetheless considered it worthwhile to petition the Supreme Court of Appeal. He asked the reason why the DoT was not funding the C-BRTA while funding other Agencies. He asked for more details on the smart law enforcement system.

Mr Khumalo responded that the fundamental problem between Lesotho and South African borders was the regulation of cross-border movement of passengers between the two countries. He also added that there was a need for a clear agreement between the two countries on the cross-border movement of passengers. The issue of trailers was indeed a matter of concern and needed to be addressed promptly. This arose partially through people evading paying fees. He suggested that SARS and C-BRTA needed to form a partnership in order to solve this problem. He also responded that C-BRTA needed to tighten the definition of personal effects (for instance, to include luggage, portable and other small items).

Mr Khumalo noted that there was already a partnership between the RTMC and C-BRTA, particularly on the issue of road safety and there was an agreement between the CEOs of the C-BRTA and the RTMC to meet on a monthly basis.

Mr Khumalo said that the Regulatory Committee had taken a decision that permanent permits would not be issued until the work of the Ministerial task-team had reached a permanent solution on the issue between Lesotho and South Africa.

The C-BRTA had considered that the petitioning of the Supreme Court of Appeal was reasonable because C-BRTA felt that there were substantive grounds to challenge the order of the lower court, and he pointed out that the judgment that C-BRTA considered to be incorrect, meant that there would effectively be a loss of R340 million. He explained that the smart law enforcement system involved the use of modern gadgets to scan the barcodes; this was to eliminate cloning, tampering and manufacturing of permits.

Ms Masehela asked whether it was possible for the law enforcement authorities within and outside the border to reach a common understanding on how to control the traffic, so as to ensure that there would be consistent penalties against road users, where appropriate.  penalisation of road users was consistent.

Mr Khumalo responded that that each country had its own law enforcement unit that looked after issues of vehicle safety and security, and therefore it was difficult to have a “common understanding” on how to control the traffic. He added, however, that if South Africa was subjected to unfair treatment on the control of traffic in the cross-border areas, the only alternative would be for it to reciprocate the treatment, but that was of course undesirable.

Ms Mashela asked what strategy was in place to ensure that the top management of C-BRTA was transformed in line with the demographics of South Africa.

Mr Radebe congratulated the C-BRTA for obtaining a better audit but indicated that he was concerned that the Agency received an unqualified audit with matters of emphasis in the past two financial years, asking if it could move to a completely clean audit. He asked if there was a strategy to address the problem of capacity in the Agency.

Mr Khumalo responded that the audit outcomes explained the audit results, and admitted that there was a need to move to a clean audit, but pointed out that it had taken the Agency 14 years to get to an unqualified audit. There were plans in place to tighten up and improve the predetermined objectives and measurability of the objectives. 

Mr Sibande asked about the strategies and targets used to solve the on-going problem of litigation against the C-BRTA, on the increase of permit fees. He also recommended that the C-BRTA needed to review its agreements, as some dated back to 1998 already.

Mr Khumalo responded that there were plans in place to deal with the on-going issue of litigation against the C-BRTA on the increase of permit fees. The legal representatives of the Agency were instructed to petition the Supreme Court of Appeal, and that petition was pending. He agreed that there was a need to review the out-dated agreements and indicated that there had been consultation with the Minister of Transport to review these agreements, as they were clearly not aligned to the current trajectories, objectives and foreign policies of the government.  

Ms S Xego-Sovita (ANC) pleaded with the DoT to hold full consultation with its agencies before they made presentations to the Committee meeting, so that Members were not taken by surprise. She asked for further explanation on what Australia was doing differently, in regard to road safety, and how this could be emulated in South Africa.

Ms Khumalo responded that there was a benchmarking study on different systems used by different countries, Australia included, and this particular observation was made on the Heavy Vehicle Operator Accreditation Scheme (HVOAS) that was used by the Australians.

Mr de Freitas requested the C-BRTA to give more detail to the embers about the judgments of the courts so far, and the alternatives available if the C-BRTA petition to the Supreme Court did not find favour.

Mr Khumalo responded that if C-BRTA was unsuccessful in the Supreme Court, the only alternative was to go to the Constitutional Court, although he was confident that the judgment would be in favour of C-BRTA.

Mr Ramatlakane indicated that he was concerned about the sustainability of the Agency and he also added that it was important for the C-BRTA to establish a strategy to acquire a clean audit. He wanted to know the role of the SADC Protocol on the Cross-Border Movement of Passengers.

Mr Khumalo responded that it was indeed important to look at the issue of budget sustainability, which was important for the survival of any Agency. He also said it was unfair to expect C-BRTA to survive solely on the levies obtained from the operators, as this was precisely against the objective of reducing the cost of doing business and transportation in the Continent. He also responded that the objectives of SADC were innovative and had the potential to improve the Continent of Africa, but that the biggest disappointment was that there were no monitoring mechanisms in place that compelled every sovereign country to move towards achieving those objectives.

The Chairperson appreciated the work that was done by C-BRTA and indicated that there was always room for improvement. She emphasised that there was a need to reach permanent resolution on the issue of Lesotho and South Africa cross-border transport. She agreed that capacity building needed to be scrutinised as there was a problem of youth unemployment in the country.

Adoption of Committee Minutes
The Chairperson requested the Members to consider the minutes of 19 August 2014

Ms Carter and Ms Masehela indicated that they were present on the meeting.

Subject to the attendance being amended, Members adopted those minutes.

The meeting was adjourned.