Report of the Portfolio Committee on International Relations and Cooperation on the Strategic Plan and Budget Vote of the Department of International Relations and Cooperation, dated 25 May 2011

The Portfolio Committee on International Relations and Cooperation (the Committee), having considered the Strategic Plan and the budget of the Department of International Relations and Cooperation (the Department), Vote 5: International Relations and Cooperation, reports as follows:

1. Introduction

The Committee considered the Strategic Plan and the budget of the Department on 9 March 2011. The purpose of the meeting was primarily for the Department to outline its Strategic Plan for 2011-2014 and its budget for the 2011/12 financial year.

The delegation representing the Department comprised Dr A Ntsaluba, Director-General; Mr A Moodley, Chief Financial Officer; Mrs M Joyini, Deputy Director-General – Human Resources; Ms Dlomo, Deputy Director-General – Diplomatic Academy; Ms N Mxakato-Diseko, Deputy Director-General – Americas and Mr N Soso, Chief Director – Internal Audit.

In his presentation of the Department’s Strategic Plan 2011-2014 and the Budget Vote, the Director-General recalled that according to the South African Constitution, the President has the ultimate responsibility for foreign policy and international relations in South Africa. The Department has been entrusted with the formulation, promotion and execution of South Africa’s foreign policy and with the daily conduct of its international relations. He pointed out that the mandate was also influenced by a number of key global principles, including:

Promoting multilateralism to secure a rules-based international system;

Peaceful settlement of disputes;

Contributing to the formulation of international law and enhancing respect for the provisions thereof; and

Strengthening bilateral relations and development support within the African continent.

It was reported that the Budget Vote was primarily informed by South Africa’s strategic vision for the country, the region, the continent and the world. In pursuit of the country’s foreign policy objectives, the Department would be acting in support of Government’s medium term strategic objectives, with particular focus on job creation as pronounced by the President in the 2011 State of the Nation Address (SONA). The main goal was expressed as ensuring that South Africa’s foreign relations contributed to an environment that is conducive to sustainable economic growth and development, and serve as a basis for addressing government priorities.

With regard to the immediate strategic objectives of the Department in terms of the 12 national outcomes, the Department contributed to Outcome 11, which was reported as speaking to creating a better South Africa and contributing to a better and safer Africa and a better world.

2. Overview of the Department’s Medium Term Strategic Framework 2011-2014

The Director-General presented the Department’s strategic plan. He provided more detail on the Department’s Medium Term Strategic Framework (MTSF) for 2011-2014 and elaborated on the background for the distribution of the budget. He made an important announcement regarding policy initiatives to the effect that during the MTSF period, the Department would further develop the White Paper on Foreign Policy leading to the proposed Foreign Service Act. Furthermore, the Department would finalise the establishment of the South African Development Partnership Agency (SADPA) and establish the proposed South African Council on International Relations (SACOIR).

The Strategic Plan, which was presented in two parts, namely, the Department’s legislative mandate, which defined its key stakeholders and explained its vision, mission and aspirations, and the second part, which has been devised to set out the strategic outcomes that the Department has adopted and gives details of its programmes (as found in the Estimates of National Expenditure (ENE)).

The Director-General prefaced his presentation by stating that the Department’s strategic priorities for the period 2011-2014 would seek to pursue an enhanced African agenda and sustainable development, strengthen political and economic integration of SADC, strengthen South-South relations, strengthen relations with strategic formations of the North and participate in the Global System of Governance as well as strengthen political and economic relations.

The Department would pursue the implementation of the New Partnership for Africa’s Development (NEPAD) and the African Peer Review Mechanism (APRM) at the national level. A key activity in that regard is the strengthening of NEPAD and APRM strategic coordination mechanisms in South Africa. The African Union (AU) Assembly’s Decision regarding Heads of State and Government Priority Programmes of the AU/NEPAD Africa Action Plan 2010-2015 projects required that the Department focus on the implementation of the President’s infrastructure project of the North-South Corridor, championing road and rail. The Department would also support the Department of Public Service and Administration (DPSA) as the APRM focal point in South Africa on the implementation of South Africa’s APRM National Programme of Action. The African Diaspora would be actively engaged, in particular in relation to the promotion of the African Agenda. Internationally, NEPAD and APRM had been positioned to form the core of Africa’s South-South and South-North relationships.

It was confirmed that as a member of the United Nations Security Council (UNSC) for 2011-2012, South Africa would contribute to the work of the UNSC in the maintenance of international peace and security, especially in Africa. South Africa would continue its contribution in Africa, in particular the Democratic Republic of the Congo (DRC), Sudan, and Comoros, in continuation of the work already initiated in those countries. Under the SADC and AU mandates, South Africa would continue to facilitate mediation and peace-building efforts in Sudan, Zimbabwe, Madagascar and the Great Lakes Region.

South Africa would assume the chairship of the SADC Organ on Politics, Defence and Security Cooperation in August 2011. The country would support and work towards the effective functioning of the recently launched Regional Early Warning Centre (REWC) as a key instrument for conflict prevention. Efforts would be geared towards deepening regional democratisation processes through participation in the newly-established SADC Electoral Advisory Council (SEAC), with a view to enhancing regional electoral standards. South Africa would work towards the consolidation of mediation efforts in Zimbabwe and Madagascar and also encourage the implementation of agreements. The security and stability of the DRC would continue to be a key focus, including support to processes leading to the presidential and legislative elections due to take place in 2011. South Africa would continue to contribute towards the readiness of the Southern Africa Standby Force as part of the AU’s Standby Force.

Concerning recent political changes in Tunisia, Egypt and Libya, South Africa would continue to monitor these developments and support the ongoing efforts to ensure that peace, security and stability return to these countries. In respect of Western Sahara, South Africa would continue its efforts to engage with Morocco, support UN and AU initiatives and encourage the disputing parties to find a just and lasting solution, based on self-determination and decolonisation. South Africa would continue its humanitarian assistance programme to the Saharawi Arab Democratic Republic.

The Department undertook to engage relevant departments and stakeholders in ensuring that South Africans, especially young officers/cadets, are adequately trained and assisted to fill quota positions allocated to South Africa in international organisations, including the UN, SADC, AU, WTO, IMF and the Commonwealth, in order to build up capacity which would eventually advance South Africa’s aspirations on the agenda of these bodies.

During the period in question, the Department reported that it would ensure that strategic positions in international organisations are filled by South Africans in order to achieve the level of influence in decisions taken by these organisations.

2.1 Challenges

The Department faced several challenges in carrying out its mandate. There was a high mobility of skilled workers as all government departments drew workers from the same resource base. The Department had to re-skill workers to new and also ever-increasing requirements. The Department required cooperation from business units on providing inputs for the development of Demand Management Plans and would have to implement department-wide records management systems. It would have to ensure accuracy and completeness of the asset register, including conducting monthly reconciliation and liaising with missions across time differences.

The Department’s transversal systems were outdated, non-integrated and could not support new financial requirements. The Department would have to clear its old debts and advances. It faced tight deadlines from the National Treasury on its budget and annual audit. It also faced a huge demand for continually reducing its financial resource base and balancing its division of budget according to priorities. The delayed security clearance for missions’ deployment and upgrade of ICT infrastructure presented further challenges. The Department needed to maintain a relationship with its service providers and suppliers. It needed to operationalise the Consular Emergency Response Team, implement a “One-Stop-Service” for legalisation of public documents for use abroad, and deploy adequate security measures at foreign missions and better vetting of all departmental officials.

3. Distribution of the Budget

The budget allocation to the Department included provisions for the four core programmes, namely Administration, International Relations and Cooperation, Public Diplomacy and Protocol Services, and International Transfers.

Table 1: Budget Allocation – International Relations and Cooperation

Programme	Budget		Nominal change (Rands)	Real change (Rands)	Nominal % change (%)	Real % change (%)	Percentage share (%)
R million	2010/11	2011/12	2010/11-2011/12		2010/11-2011/12		2010/11	2011/12
Administration	1 278.6	1 245.5	- 33.1	- 90.1	-2.59	-7.05	27.11	25.97
International Relations and Cooperation	2 375.1	2 529.8	154.7	38.8	6.51	1.63	50.36	52.74
Public Diplomacy and Protocol	233.9	211.5	- 22.4	- 32.1	-9.58	-13.72	4.96	4.41
International Transfers	828.2	809.9	- 18.3	- 55.4	-2.21	-6.69	17.56	16.88
TOTAL	4 715.8	4 796.7	80.9	- 138.8	1.72	-2.94	100.00	100.00

Source: Own calculations based on National Treasury (2011)

Table 1 above was used to indicate that the Department’s total allocation for the 2011/12 financial year amounts to R4.79 billion, relative to R4.71 billion in 2010/11. The Department’s budget was reported to have increased in nominal terms and decreased in real terms compared to the previous year’s budget. It has increased by R80.9 million in nominal terms, which shows a decrease of R138.8 million in real terms. It was expected that over the medium term, expenditure would increase the budget to R5.6 billion due to an increase in recapitalisation for the African Renaissance and International Cooperation Fund (ARF); the payment of unitary fees for the head office campus, (as the Department has a management contract with a private company to manage and maintain the property over a period of time); and the increased membership contributions for international organisations, such as SADC and the UN.

In general terms, therefore, the department’s budget showed a decrease in real terms. The phenomenon was attributed to the fact that South Africa was still recovering from the effects of the world economic meltdown, which had been characterised as the worst since the 1930s great depression. Government’s ability to collect revenue has thus been affected, and its response since the start of this crisis has been with efficiency saving plans which target non-essential spending. The Department has responded by targeting items such as domestic travel, catering, entertainment, telecommunication and administrative support services.

A saving of R15.3 million is expected over the medium term period from efficiency policies and R105 million from the slower than the budgeted spending in ARF projects related to post-conflict reconstruction and development in Africa. The ARF funds have been reprioritised to the Department to fund costs related to South Africa’s participation in the United Nations Security Council as a non-permanent member as well as to increase funding for departmental operations.

Over the medium term, the infrastructure spending focus would be on the renovation of the chancery in Washington DC and official residences in Tokyo, and construction of the chancery and official residences in New Delhi. Capital projects completed in 2010/11 include the diplomatic villages in Maseru and Abuja and renovations of the chancery in Athens and South Africa House in London.

There were 499 vacancies reported in the Department, of which 423 were reported as on levels 1-10 and 76 on levels 11-16. The plan was to fill the posts over the medium-term period.

It was reported that the Department has been receiving consistent unqualified reports.

3.1 Expenditure per programme

The Department reported on its four programmes, namely Administration, International Relations, Public Diplomacy and Protocol Services, and International Transfers. According to the estimates[1], the largest part of increase in allocation per programme has been towards International Relations. It has been allocated R2.5 billion, which represented 53 per cent of the total budget.

Programme One

The Administration programme is responsible for policy development and management of the Department. It was reported that the programme has been allocated R1.2 billion, which represented 25.97 per cent of the overall budget vote. The budget allocation for this programme has decreased in both nominal and real terms. The programme’s budget decreased by R33.1million or 2.59 per cent in nominal terms, which translated into a budget decrease of R90.1million which was 7.05 per cent in real terms. It was expected that there would be an increase to R1.4 billion in expenditure over the medium term due to an increase in spending on goods and services related to lease and property payments. The expected increase was also due to the payment of unitary fees for the head office campus and payments for consultants used to conduct feasibility studies for infrastructure projects (Pan African Parliament, properties in missions).

Programme Two

The International Relations and Cooperation programme is responsible for promoting relations with foreign countries and participating in international organisations and institutions in line with South Africa’s national values and foreign policy objectives. The programme has been allocated R2.5 billion which represented 52.74 per cent of the overall budget vote. The budget allocation for this programme has increased in both nominal and real terms. It was reported that the programme budget increased by R154.7 million or 6.51 per cent in nominal terms, which translated into a budget increase of R38.8 million or 1.63 per cent in real terms. It was expected that there would be an increase to R3 billion by 2013/14. The increase was attributable to the fact that this programme covered the core business of international relations.

The Department would be focussing on facilitating South Africa’s participation in the UN Security Council as a non-permanent member in 2011 and 2012. The programme would continue to support activities of the missions abroad and focus on the implementation of foreign policy objectives under the African Agenda, South-South relations, NEPAD and in the engagements with the countries in the North. The number of missions abroad increased to 124 in 2010/11. This factor precipitated the need to strengthen capacity in those missions, and address related costs such as the cost of living, and inflation-related adjustments on obligatory expenses, such as foreign allowances and rent. Expenditure in the programme was significantly affected by exchange rate fluctuation. The strengthening of the Rand was expected to offset increases in expenditure incurred in foreign currency.

Programme Three

The Public Diplomacy and Protocol Services programme was responsible for communicating South Africa’s role and position in international relations in the domestic and international arenas and to provide protocol services. The programme was allocated R211.5 million, which represented 4.41per cent of the budget vote. The budget allocation for the programme has decreased in both nominal and real terms. The programme’s budget decreased by R22.4 million or 9.58per cent in nominal terms, which translated into a budget decrease of R32.1 million or 13.72 per cent in real terms. Under State Protocol subprogramme, funding would be used to cover costs relating to managing the state protocol guesthouses and VIP lounges at the three international airports (Cape Town, OR Tambo and King Shaka International).

During the 2010 FIFA World Cup, the subprogramme facilitated logistics and accommodation for visiting dignitaries. The Department would facilitate logistical arrangements of the invited heads of state and government, and eminent persons attending the 17^th Conference of the Parties to the United Nations Framework on Climate Change in Durban in December 2011. The spending focus over the medium term period would be on providing protocol support services during incoming and outgoing state visits. The Department has also been building capacity to respond to the increased demand for protocol and diplomatic services. Expenditure was hence expected to grow in spending on the compensation of employees.

Programme Four

The International Transfers programme is responsible for funding membership fees and transfers to international organisations. It also provides transfers to the African Renaissance and International Cooperation Fund (ARF). The programme has been allocated R809.9 million, which represented 16.88 per cent of the budget vote. The budget allocation for this programme has decreased in both nominal and real terms. The programme budget decreases by R18.3 million or 2.21 per cent in nominal terms, which translated into a budget decrease of R55.4 million or 6.69 per cent in real terms. The transfers over the medium term will be on membership fees to international organisations and the ARF, which would help the Department, reach its medium term strategic goals of advancing the African Agenda and participating in the global system of governance. Expenditure was expected to increase mainly due to the increase in the transfer payment to the ARF and an increase in membership fees to the UN and SADC.

The ARF was established in terms of the African Renaissance and International Cooperation Fund Act, 2000. Its activities have been administered and managed by an advisory committee, under direct supervision by the Department. The Fund promoted good governance and democracy through providing financial support for holding of elections, government reform, post-conflict reconstruction and development, skills development, humanitarian assistance, disaster relief, and the implementation of bilateral agreements signed in areas such as agriculture and health. The Fund generally supported projects in designated countries that contribute towards South Africa’s foreign policy priorities in the consolidation of the African Agenda.

The Fund has identified savings of R105 million in 2011/12, from slower-than-budgeted spending on projects related to post-conflict reconstruction and development in designated African countries. These savings were reprioritised to the Department to fund costs related to the country’s participation in the UN Security Council as a non-permanent member and inflation-related adjustments to missions’ operational costs. The Department has stated that the South African Development Partnership Agency (SADPA), which would be initiated in 2012/13, would incorporate the ARF.

4. Observations and concerns raised by the Committee

In its deliberations on the Strategic Plan and Budget Vote of the Department, the Committee made the following observations:

4.1 During the MTSF period, the Department has planned important policy initiatives which would include further development of the White Paper on Foreign Policy leading to the proposed Foreign Service Act. It would also be finalising the establishment of South African Development Partnership Agency (SADPA) and the proposed South African Council on International Relations (SACOIR).

4.2 In light of the Department’s commitment to enhancing the African agenda, there seemed to be little or no progress by other African countries to ratify the African Charter on Democracy, Elections and Good Governance. The Charter needed ratification by 15 countries in order to enter into force. It was felt that South Africa was not coming out strongly to encourage other countries, especially within SADC, to ratify

4.3 The Department’s internship/cadet programme was not doing enough in terms of talent management at tertiary institutions for students who wish to join the Department. There was a need for accomplished and talented people in management positions, and the Cadet programme would assist with that if better managed.

4.4 South Africa should take a proactive stance on its endeavors to enhance the African agenda, particularly in managing conflict situations and human rights abuses. South Africa should therefore use its upcoming chairship of the SADC Troika to put pressure on conflicting parties in Zimbabwe to reform the political system and implement the provisions of the Global Political Agreement.

4.5 The Presidency has been leading the drive for enhanced economic diplomacy with countries of strategic economic importance, in order to attract investment and partnerships to create jobs. There has been little indication that embassies are up to this challenge with personnel adequately skilled in economic diplomacy.

4.6 The high vacancy rate remained a challenge. The Department explained that these vacancies were mostly at low management level. The Department had the necessary capacity at senior management levels. The Department was requested to report back to the Committee when reporting on the progress made towards addressing the vacancy rate, bearing in mind that President Zuma in his 2011 address to the nation has directed that positions be filled to provide jobs.

4.7 South Africa was reported to be a party to a number of international treaties/conventions. However, it has been noted that very little effort was put towards the implementation of such treaties.

4.8 Some of the embassies abroad had a challenge of accessibility, especially to people with disabilities.

4.9 The regional and continental intra-trade was considered very low, and more should be done to improve that area of the foreign policy.

4.10 It was felt that South Africa’s foreign policy does not yet fully reflect the country’s domestic policy. Public diplomacy programmes must play a major role.

4.11 There was a need in Africa to form a Council of Elders who would travel to troubled parts of the continent and advise African leaders on democratic practices. Such a Council, if formed, would instill a democratic culture for the continent.

4.12 There ought to be regular interaction with the Diaspora for purposes of improving relations with Africans living outside the continent and involving them in the continental developmental programmes.

4.13 The strategic plan has no provision for opening new missions.

4.14 The sources of funding for the Pan African Parliament (PAP) were still not clear.

4.15 The job creation aspect articulated by the President is not clear in the Department’s strategic plan.

5. Responses by the Department

The Director-General informed the Committee that the Department would not be spending any of its MTEF funds on opening new missions, except for one expansion in Cuba. The Department intended to expand in China, Japan and India due to their strategic value but could not do so due to budget constraints.

With regard to funding for PAP, additional funding for the upkeep of PAP should come from the AU and other African countries.

On job creation, every mission was expected to define its contribution towards job creation.

On the UN conventions/treaties and implementation thereof, the Department did not have leverage to enforce and monitor them. The Chief State Law Adviser is the custodian of all the treaties. However, consultation processes were in place with the Presidency, through the office of the Minister for Performance Monitoring and Evaluation, to grant the Department powers to monitor and report on a regular basis.

6. Conclusion

At the end of the deliberations, the Committee thanked the Director-General and his team for the presentation. The Committee further expressed its appreciation to the dedication that the Director-General had displayed over the years of working with the Committee and wished him well in his new life.

7. Committee’s recommendations

Having considered the Strategic Plan and the Budget Vote of the Department, the Committee recommends that the Department consider the following:

7.1 There is a slow process in Africa towards the ratification of the African Charter on Democracy, Elections and Good Governance. The Department should adopt a strategy to enable its missions abroad, especially those in Africa, to encourage other African countries to ratify the Charter. The Department must report progress to the Committee in this regard within two months of the adoption of this report.

7.2 A number of tertiary institutions have students who have an interest in following careers in international relations. There is a need to develop a deliberate strategy to extend the Department’s cadet and talent management programmes to reach out to these students. A progress report in this regard must be submitted to the Committee within a month of the adoption of this report.

7.3 South Africa will be assuming the chairship of the SADC Troika in August 2011. The Department should use the good offices of the SADC Troika to further engage the parties in the Global Political Agreement (GPA), in Zimbabwe, to resolve outstanding issues which impact on the progress towards the implementation of the GPA. The Department must report progress on the Zimbabwean issue to the Committee within a month of the adoption of this report.

7.4 The Presidency is leading the drive for enhanced economic diplomacy with countries of strategic importance to the South African foreign and economic policies. There must be relevant capacity building in the missions which will sustain this economic diplomacy strategy. The Department must, within a month of the adoption of this report, submit a review to the Committee as to how many officers have received this training.

7.5 The vacancy rate in the Department is a cause for concern. The President has made a call for all departments to fill vacant positions. The Department must submit a progress report every month on the status of these vacancies and what would have been done to address the call for job creation.

7.6 The Committee has raised the issue of the need for an enhanced public diplomacy strategy within the Department. There must be a detailed programme for the deliberate elevation of public diplomacy to be more visible and have synergy to national interest. The Department should use ‘soft power’ more to achieve understanding and support for its policies when communicating with both national and international audiences. A detailed programme on public diplomacy plans and goals must be submitted to the Committee within a month of the adoption of this report.

7.7 South Africa is party to a number of international agreements. There is a need for a coordinated mechanism to monitor the implementation of these agreements. The Department must explore how such machinery can be established. This will empower it to monitor and report on the country’s performance on the implementation of its international obligations. The Department must submit a progress report in this regard within two months of the adoption of this report.

The Committee recommends that Budget Vote 5: International Relations and Cooperation be passed.

Report to be considered.

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[1] Estimates of National Expenditure 2011, National Treasury