Briefing by Department of Defence on their Strategic Plan and Budget

Meeting report

Discussion on Department’s absence from previous meeting
The Chair stated that he wanted to allow Members to reflect on the Department’s absence at a meeting that was held the previous week.

Mr R Shah (DA) stated that he was sure that the Department was aware of the dismay that Members felt when they were absent from that crucial meeting. It was the Committee’s considered opinion that the budget of any department was the most critical and crucial item on the Parliamentary agenda. Therefore, it was essential that the Department and its accounting officer were present. He asked that the Department account for their absence from the meeting.

Mr S Ntuli (ANC) agreed saying that the ANC felt that the Director-General should have been present at the meeting the previous week, as the Committee was discussing his budget.

Mr January Masilela (Director General: Department of Defence) apologised for the Department’s absence from the meeting. He understood that his presence was important when issues such as the budget was being discussed, however this was the first time that he was absent from a meeting. He explained that the Department could not be present at that meeting because they had to honour a previous engagement that they had committed to at the beginning of the year. The Minister had approved of this engagement long before the Committee invited the Department to attend the meeting. The Department realised the importance of the meeting but this engagement was an equally important objective to accomplish. He suggested that communication between the Committee and the Department be improved.

Mr Shah stated that the Department had a predetermined agreement and therefore should have informed the Committee long before the meeting that they were not going to attend. The Committee would even have considered an alternative date, as Members were aware of the consequences of not letting the Department attend their engagement.

The Chair stated that the Committee accepted the Department’s apology and explanation. He stated that the meeting was important, as there were only a few months left before Parliament closed and the Committee wanted to look at the challenges that the Department faced. It was imperative that the Department and the Committee work together to address these issues

Briefing by the Department of Defence: Strategic Business Plan and Budget
Mr January Masilela (Director General: Department of Defence) informed the Committee that its concerns about several issues that were affecting the Department of Defence (DoD) were noted and incorporated in the DoDs operational plans. The Strategic Business Plan (SBP) provided an overview of the DoDs planned activities for the year.

In Chapter 1 of the SBP, the strategic overview focused on the DoD’s strategic framework, strategic focus, mission success factors, the Minister of Defence’s priorities, the value system and strategies.

The Medium Term Strategic Focus (MTSF) in Chapter 2 addressed the influences on programme spending plans over the Medium Term Expenditure Framework (MTEF) period. The influences were policy developments and legislative changes. The first priority focused on light and mobile forces, airborne forces, intelligence and engineer elements while the second priority focused on the conventional elements of the South African National Defence Force’s (SANDF) landward capability such as mechanised infantry, artillery and armour. Legislative changes that affected programme spending plans included changes to the Military Discipline Bill, the National Conventional Arms Control Amendment Bill, the Defence Amendment Bill and the Castle Management Act Repeal Bill. There were also changes made to the Prohibition or Restriction of Certain Conventional Weapons Bill and the Geneva Conventions Bill.

The MTSF looked at its alignment with Government priorities by ensuring that the defence capabilities of the DoD were enhanced and maintained, by promoting regional security and participation in peace missions, by systematically reducing SANDF’s routine internal deployments and by actively striving to contribute towards APEX priorities.

In terms of the MTSF, outputs of the DoD included defence administration, force employment, landward defence, air defence, maritime defence, military health support, defence intelligence and general support.

The MTSF also focused on the defence budget allocation. The programmes to which the budget was allocated included administration, landward defence, air defence, maritime defence, military health support, defence intelligence, general support and force employment. In terms of the budget allocations, landward and air defence were allocated the most money while defence intelligence was allocated the least.

The DoD was faced with challenges that hindered the realisation of the Department’s strategic objectives. Challenges included the continued deterioration of infrastructure, equipment and facilities, the continual loss of scarce skills to the private sector and the provision of updated defence-related internal administrative systems for finance, human resources and procurement.

Chapter 3 of the Report focused on the defence administration programme. The purpose of the programme was to conduct policy development, management, and administration of the programme. Chapter 4 addressed force employment and stated that the Joint Operations Division’s (JOD) purpose was to provide and employ defence capabilities to successfully conduct all operations, and joint and multinational military exercises.

In Chapter 5, Landward Defence, the programmes purpose to provide prepared and supported landward defence capabilities for the defence and protection of South Africa. The air defence programme in Chapter 6 looked to provide prepared and supported air defence capabilities for the defence and protection of the country while the maritime defence programme aimed to provide prepared and supported maritime defence capabilities to the country. The purpose of the military health service programme was to provide prepared and supported health capabilities and service for defence while the defence intelligence programme would provide defence intelligence and counter-intelligence capabilities.

The amount of the budget allocated to the administrative programme doubled due to the devolution of funds from property management. Property management showed an 18% average growth over the MTEF. There was also a 36.1% increase in the general training budget. There were also increases in infantry, support and operational intelligence due to provisions for the new generation infantry fighting vehicle, mobile intelligence processing system and the operational supply support product system.

Mr Masilela stated that the SBP and the Estimates of National Expenditure (ENE) were fully aligned and that the DoD was on track to meet the National Treasury’s requirements for full performance reporting by 2010.

Discussion
The Chair directed Members to ask questions on Programme 1: Administration in the Report first.

Dr G Koornhof (ANC) noted that the largest components of Programme 1 were property management, as shown in the Budget. However, this component was not present in the strategic business plan. He asked for clarification. Secondly, the Department was saying that they wanted to revitalise Reserves, however, the Defence Reserve direction figure showed a decrease in real terms. He wanted to know how the decrease was going to affect the implementation of the business strategy.

Mr Masilela informed Mr Koornhof that property management was catered for in the budget, as maintenance of objective capabilities was an objective across the Department.

General Wikus van Rensburg (Chief of Corporate Services, DoD) explained that the information was included in the explanatory notes of the budget. There was an increase in the tariffs provided by the Department of Public Works, which consisted of water, electricity, sewerage and other components. The MTEF showed a growth of 18% in property management.

Mr Koornhof stated that the Report did not mention property management. The strategic business plan needed to be tidied up.

Ms Nandipha Ntsaluba (Director of Planning and Programming DoD) said that property management was not visible in administration, however it was dealt with in the Report under logistics.

General van Rensburg addressed Mr Koornhof’s second question and stated that utilisation of the Defence Reserves lay within the army programme, air force programme, navy programme and the military health service programme. The Department was recruiting more Reserves and was in actual fact increasing the Reserve budget in the allocations given to the army, air force, navy and military health service. There definitely was not a decrease in the Defence Reserve overall.

Mr J Schippers (ANC) noted that the strategic business plan showed that effective and efficient services rendered to the DoD military veterans would be allocated for from the budget. He asked what percentage of the money would be allocated for the improvement of the services for military veterans.

Dr Mary Ledwaba (Director for Human Resources, DoD) explained that the total budget allocated to HR was R10.8 billion. This was allocated to the active members in the Defence Force. Unfortunately, veterans were not part of the active members of the DoD and therefore were not allocated part of the budget. The DoD realised that this was part of its responsibility; however, it was a challenging issue.

General van Rensburg added that part of the budget was allocated to the Directorate of Veteran Support, as he was part of that staff activity. At this point, however, part of the budget was not allocated for services for veterans.

Mr Masilela stated that the Department was working towards a veteran association.

Ms P Daniels (ANC) asked if the Human Resources (HR) strategy also catered for medical insurance for Reserves that were on call.

General van Rensburg stated that the Department’s current policy said that a Reserve Force member that was called up was fully covered by medical insurance. There was no differentiation between a regular force member and an officially called-up Reserve Force member.

Mr Shah asked how the budget was going to affect the Department in terms of foreign relations. He also wanted to know if the increase in the budget would be sufficient to help the Department fulfil its obligations in military diplomacy projects.

Mr Masilela stated that one of the challenges that Department was facing was that the budget was not adequate enough for all the operations. However, the Department was continually prioritising their budget. The Department was also trying to align themselves with foreign relations, however this was a challenge and the budget had to be reprioritised constantly.

Mr Koornhof commented that he had looked through the other programmes and noticed that all of them were very specific. However, Programme 1 was not specific and the targets and deadlines were not the same. He found that there was lack of preciseness in Programme 1. He then looked at the budget allocation trend and noted that most of the budget allocation had been halved since 1994. He asked what the consequences were of the figures that the Department had presented to the Committee. Also, as the principal policy adviser of the Minister, had the Department informed the Minister of the implications of the figures that the Committee was presented with?

Mr Koornhof said that he was upset that the Defence Update was not available to Members. The Department had asked the Committee, in the ENE, to approve of the Defence Update. However, the Committee had not yet received the document and therefore did not even know what the Defence Update included. The Defence Update was vitally interlinked with the Department’s budget, as the budget would fund the Update. He also wanted to know how the Department explained to the Minister that it was receiving a 0% increase in the budget in real terms because the Department had not taken inflation into account.

Mr Masilela agreed that the Department had experienced challenges with the budget. The Department briefed the Minister on the strategic plan and the challenges that the Department faced. In actual fact, the Department was presenting the Report on the Minister’s behalf. The funding dilemma would be addressed through a series of meetings where all Department officials were to agree on the broad strategic framework and the actual budget allocations.

Mr Shah agreed with Mr Koornhof, as the Committee was concerned about the Defence Update. The Committee did not know how it linked with the budget, what the Department had purchased and what they were going to purchase.

The Chair stated that the Committee was addressing the issue of the Defence Update, which they had not seen. He asked the Department to provide Members with a draft of the update.

Mr Masilela told the Committee that the Department would provide Members with the draft.

Mr Schippers noted that the strategic plan showed a 23% increase in acquisition services, yet projections for the next few years did not indicate sub-programmes for acquisition services. He asked how performance would be measured against those sub-programmes.

Ms Dudu Mutloane (Acting CFO, DoD) replied that the strategic business plan did not make reference to the acquisitions because Programme 9, the Special Defence Account, in which acquisitions were included, was done away with. The Department now had a separate line item in services for projects and Spatial Development Plans (SDPs) so that acquisitions were more accounted for. The acquisition division was still there; it was just accounted for in a different way.

Ms Daniels asked the Department how much of the budget was used for peace missions and unforeseen peace missions.

General van Rensburg stated that the amount that was used for peacekeeping missions was more than was allocated.

Mr Masilela informed Members that the Department had spent almost a billion on peace missions.

Ms Mutloane stated that the Department spent R853 million on peacekeeping missions. Also, R904 million was allocated to peacekeeping missions for the current financial year. She stated that the Department received requests that were not budgeted for and this was submitted in the adjusted budget as unforeseen, unavoidable missions that the Department had to undertake. There was an incident where the National Treasury refunded the Department for the unforeseen mission that was not budgeted for. However, the Department was usually told to request money from the Department of Foreign Affairs (DFA). The Department was engaging with the DFA and awaiting the outcome of the request.

The Chair asked if this matter was discussed between the Department, the National Treasury and the DFA and if any key proposals were made.

Mr Masilela answered that the three departments met regularly and that the DoD co-chaired the cluster. The departments tried to coordinate on the issue but so far, this had not been effective. The Department begged and pleaded with DFA and told them that there were some missions that were not budgeted for. The Department had asked the DFA to commit to funding the missions by submitting a letter to the Department saying that they would pay for the mission. The DFA had provided a letter saying they would fund the missions but the DoD had never received the money.

Mr Koornhof asked if the Department had engaged with the Minister to find out what they could and could not do with the budget.

Mr Masilela stated that the Department engaged regularly with the Minister. The Minister was given information on what the Department’s shortfalls were and the critical minimum amount of funding that was needed. The Minister then tells the Department to reprioritise their budget, what they could do and what they may not do.

Mr Shah addressed management of assets. He asked if management of assets fell under property management and if property management had anything to do with military equipment. He wanted to know where loss of equipment was categorised.

General Justice Nkonyane (Acting Chief for Logistics, DoD) informed the Committee that all assets were managed differently. Category 1 assets such as weapons were managed centrally and had specific serial numbers. It was more difficult to detect loss of weapons depending on the frequency of stock taking. Stock taking took place every year or every three years depending on the size of the depot. Category 2 assets such as laptops and vehicles were easier to detect and were reported immediately if stolen. These assets were also easier to evaluate than weapons.

Mr Ntuli stated that there were mechanisms to keep some of the assets in check. The person responsible for logistic stock should have been able to account for the losses. He wanted to know how the Department planned to deal with theft using the current budget.

Mr Shah commented that the mechanism that the Department was using did not seem to be working, as there were so many losses. He wondered why the Department was not recovering the losses.

Mr Nkonyane replied that the Department was in the process of acquiring tenders for building tracking capabilities for inventory. The Department was also looking to acquire tenders that would allow them to track their vehicles so that the theft of vehicles would be minimised. This would enhance the Department’s capability to recover their losses.

Mr Masilela added that inventory losses were a great challenge to the DoD and that the Department would be holding a two-day conference to focus on this matter.

Mr Koornhof suggested that the Committee, the Department and the military leaders work together to find the best way to proceed with the strategic business plan.

The Chair stated that the Committee was going to write a report and make recommendations to the Department.

Ms Daniels asked if the Department had dealt with the outsourcing issue that they had experienced before.

Mr Masilela stated that the Department was in the process of rebuilding the capacity that they had previously outsourced.

The Chair proposed that the Committee ask questions based on Programme 2 in the Report.

Mr Ntuli commented that the Military Skills Development System (MSDS) would not function without an exit mechanism programme. The Report did not make reference to this programme. He wondered what would happen to those people with military skills that did not get absorbed in to the programme.

Mr Masilela stated that the Department was creating a new works regiment that would serve as an exit mechanism for all the personnel about to exit the programme. The works regiment in the army would teach people practical skills such as mechanics and maintenance. These people would be used in the defence environment to maintain buildings and to service the vehicles. The works regiment was formally launched the previous week. Some would be deployed in the army or police force while others would be absorbed in to the works regiment and exit mechanism strategy.

Mr Shah noticed a 39% decrease in the general training capability area. This concerned the Committee, as it was one of the Department’s top ten priorities. The decrease would have a negative impact on the MSDS programme and the Department’s ability to train people in the landward forces. He wondered why the Department decreased this area. He also wondered if the Department wanted to increase landward forces capacity over a period of thirty years. He was concerned, as the equipment that was bought now could reach its shelf life in thirty years and become obsolete. He wanted to know why general training capability was decreased and why the time in which landward forces would be improved was extended.

Mr Schippers noted that there was going to be a major lack in training.

General van Rensburg tackled the first question from Mr Shah. He stated that there were 3900 people in specialist training; however, the number of people training was much higher, as they were people involved in core training. The number of 3900 trainees shown in the Report was involved in common training across the board. He assured Members that the number of trainees in the South African army had not decreased.

Mr Masilela looked at the second question. He stated that the Department was in possession of a guideline that they had received from Parliament, which stated that long term planning should be done over 25 years. The DoD aligned their plans with the general government guideline, however the plans were realigned regularly.

Mr Koornhof reminded the Department that the Committee was looking at monetary figures in terms of general training capability and not the amount of trainees.

General Ansuyah Fakir (Director for Strategic Planning, SANDF) stated that the Department seemed to be looking at training in the old plan where the MSDS would be distributed between many programmes. The MSDS was now taken out and allocated to armour, artillery and engineering. Therefore there was no real decrease in the funds; the money was allocated to other programmes. She stated that the Department would write a reply to this question and fax it to the Committee the following day.

Mr Koornhof wondered where the Department was heading with the personnel, operating and capital budgets within the land forces allocation. He also noted that, in real terms, there was a decrease in landward defence and force employment, yet there was a renewal of landward forces equipment and the Department was participating in more support operations. This seemed to be a contradiction.

Mr Masilela stated that the Department had projected to increase landward capabilities in the future as well as personnel because of the increase in missions. However, if the Department was not properly funded, they would have to decrease these capabilities. There was a challenge with maintenance and acquiring new capabilities.

Ms Daniels wanted clarity on the statement made in the Medium Term Strategic Focus (MTSF), which stated that routine internal deployments would be withdrawn by April 2009. She asked if the Department was referring to landward forces or to all forces.

Mr Masilela answered that there were 2000 soldiers deployed internally, however there were only 504 soldiers deployed now. More troops would be deployed to support police during the 2010 events and they would be withdrawn after 2010.

General van Rensburg added that the Department had not been allocated any funds for 2010 preparations.

Mr Ntuli stated that the Department was to project what the expenditure would be for 2010 operations and include the expenditure in the budget. If the Department had not budgeted for this then they had not identified a task for themselves in the 2010 events.

Mr Masilela stated that the DoD was a supportive division and would provide support capacity during 2010 events.

Mr Shah addressed the operations intelligence capabilities. When the Committee last visited one of the Department’s bases in Kinshasa, in the Democratic Republic of Congo (DRC), they learnt that intelligence personnel from South Africa had to be dispatched to the base to open a safe that contained some jewels. The Committee was yet to receive a report that provided information on this mission.

Mr Masilela informed Members that he would provide a report documenting the details of the mission, as his memory of it at the time was quite vague.

The Chair stated that there were time constraints and questions on the other programmes would have to be combined.

Mr Sayedali-Shah said that the media was reporting that HIV positive people were taking the Department to court. He asked how far the Department was in reassessing its policy on this. He also wanted to know how the new policy would affect the budget.

General van Rensburg informed the Committee that the court case was concluded the previous week and the Department as well as certain Generals were tasked with the responsibility of providing a new health standard policy in the next six months. The Department had never had any problems with people who contracted diseases during the time of their service. However, the recruitment of people with diseases posed a problem. It was too soon for the Department to provide the Committee with this information, as they had just received the judgement from the Court. The Department would come back to the Committee with the relevant information on the development of a policy for the recruitment and handling of people with debilitating diseases.

Mr Masilela added that there were support programmes for people who contracted diseases during their service.

Mr Schippers wondered if the increase in the fuel price affected the number of flying hours in the airforce.

General van Rensburg stated that the fuel price did not affect the number of flying hours. Flying hours had actually increased to 1000 hours, as the combat fleet had been phased out.

Ms Daniels stated that she could not comprehend why the Department wanted to increase maritime capabilities, specifically in the harbours.

General van Rensburg said that although the Department protected the oceans and coastlines of South Africa, they also had to protect the harbours, as harbours were the economic heartland of the country. The Department secured the exit and entrance to harbours when called on to do so.

Mr Shah noted that the CEO of the South African Maritime Safety Authority (SAMSA) had told Parliament that there was a serious lack of technological capacity to track and monitor foreign vessels in South Africa’s waters. He asked if there was naval capacity to track foreign vessels.

General van Rensburg stated that the Navy had the technology and capacity to monitor all foreign military vessels, but not all foreign vessels.

Mr M Moatshe (ANC) asked if there was any progress in training pilots.

General van Rensburg answered that 42 pilots had been trained to the Department’s satisfaction and requirements. There were no shortages at the moment. The numbers represented the best demographics that the Department had in years. He warned, however, that the South African Air Force was losing skills to the Australian Air Force.

The Chair thanked the DoD for their Report. The meeting was adjourned.