W&RSETA, MerSETA & TETA on their Annual Performance Plans

Higher Education, Science and Innovation

21 June 2017
Chairperson: Ms C September (ANC)
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Meeting Summary

The Portfolio Committee on Higher Education and Training convened with three Sector Education and Training Authorities (SETAs) to deliberate on their strategic plans for 2015/16 to 2019/20, and their 2017/18 annual performance plans. The SETAs were the Manufacturing, Engineering and other Related Services SETA (MERSETA), the Transport Education and Training Authority (TETA), and the Wholesale and Retail SETA (W&RSETA).

MerSETA said its strategic plan aimed at having improved responsiveness of research to the transformation and transitional needs of the sector, better governance, deployment and management of resources, and a skilled and capable workforce for the manufacturing sector in respect of current, emerging and future occupations and skills. The total planned budget for learning interventions amounted just over R953 million.

Members asked why the engineering sector seemed to be failing to create more jobs, and what measures MerSETA was implementing to prevent unemployment. They said it was commendable that the SETA was hiring 1 500 individuals based on Recognition of Prior Learning (RPL), and wanted to know what challenges had been encountered. What type of cooperatives did it support, where were they located, and what were the criteria for their selection? Why was innovation through research not taking place in the engineering sector? Had MerSETA considered working with technical and vocational education and training (TVET) colleges as means of enhancing their academic offerings, as this would prove beneficial for the sector in the long run? It was suggested the MerSETA should liaise with National Treasury to devise proposals to alter legislation that would empower the domestic economy, particularly when foreign investors pulled out of the country as they pleased.

TETA said that in order to enhance its performance, efficiencies, compliance and responsiveness to emergent industries and national priorities, its strategic choices would include:

  • Espousing and giving prominence to road safety as a priority in its strategic goals;
  • Refocusing the Adopt-A-School programme, plus creating a pipeline of support from bursaries to work placement;
  • Optimisation of TETA’s business processes and an enabling information communication technology (ICT) environment;
  • Early contracting to ensure early implementation of contracts;
  • Early identification of non-performing contracts for proactive remedial actions;
  • Stronger collaboration with stakeholders and training institutions, especially TVET colleges;
  • Stemming the tide of learner dropouts through a rigorous selection and approval process;

The budget in the annual performance plan amounted to R569 million for 2017/18.

Members commented that since the majority of TVET colleges did not offer qualifications specific to the transport sector, what was TETA offering as a means of qualification, or an alternative to it? It had claimed that 100 Matriculants would be trained within internships, but why was the target so low given the thousands of scholars in Grade 12/Matric? Could the amount of intake increase as a means of improving the quality of living for more Matriculants? Had the SETA considered partnering with community education and training colleges (CETCs), since those colleges incorporated aspects of the sector and it could guarantee employment for those who were studying for a matriculation in the sector? As road and rail infrastructure was a foundation of civil society, was the manufacture of rail coaches really as complex as it seemed, and was it not possible for South Africa to produce its own rail coaches? The loss of job opportunities was a major factor due to natural resources leaving the country and then being imported as a finished commodity. What could be done to enable South Africans to beneficiate its own raw materials.

The administrator W&RSETA explained that the SETA had received two audit qualifications in 2014/15 and 2015/16, and had been put under administration in October 2016. However, there was an ongoing court case between the dissolved W&RSETA Board and the Minister of Higher Education and Training. Key interventions for 2015-2020 covered small enterprise development, youth employment, qualification development, sector transformation, learning programmes, disability programmes and “green” skills. The total budgeted W&RSETA expenditure for 2017/18 amounted to R10.2 million.

Members were puzzled that the W&RSETA had indicated that the environment was largely untransformed, but had then further indicated that the majority of employees were black people, and asked for its understanding of equity transformation. What contraventions had led to the SETA being placed under administration? They pointed out that it could effectively address the issue of unemployment more than most other SETAs, yet it appeared that recruitment was so slow that indifference was evident. There was also a lack of presence of the SETA in the rural parts of the country. They urged it to focus on the development of information communication technology (ICT) skills, and to work closely with the Department of Small Business Development (DSBD) to promote growth in the country, especially in the rural and township areas. They questioned the re-appointment of Board members who had previously been suspended, saying that not only would the prosecution be impaired, but it would nullify scrutiny of information in an unbiased fashion and so would compromise the entire point of the adjudication.

It was commented that the general notion in South Africa was that there was an enormous need for training. However, huge amounts of funds were spent annually on training. Even the Minister had noted the nonsensical fact that a three to four week course cost more for a SETA to execute than a year of tuition at a Higher Education Institution (HEI). Therefore, the SETAs were asked what should be changed for them to become more cost effective. 

Meeting report

Manufacturing, Engineering and other Related Services SETA (MerSETA)

Dr Raymond Patel, Chief Executive Officer, Manufacturing Engineering and other Related Services SETA, presented the strategic plan 2015/16 – 2019/20 and annual performance plan (APP) for 2017/18 against the

Government’s priorities and industry developments.

The strategic plan included having improved responsiveness of research to the transformation and transitional needs of the sector; increased functional efficacy of good governance and deployment and management of resources, and a skilled and capable workforce for the manufacturing sector, focusing on current, emerging and future occupations and skills. The National Development Plan (NDP) entailed the following aspects for the SETA: strategic integrated projects (SIPs); New Growth Path (NGP); Industrial Policy Action Plan (IPAP); the Green Economy; the Comprehensive Rural Development Programme; the National Skills Development Strategy; the White Paper on Post School Education and Training; human resource development strategy; the Oceans Economy, and small, micro, cooperatives and informal enterprise development. The total planned budget for learning interventions amounted R953 229 000

(Please see attached documentation for comparison of targets versus achievements of learners, and for budget breakdown, income and expenditure and committed funds).

The New Growth Path entailed the re-industrialisation of the economy and expansion of the manufacturing sector, and aimed to create 5 million jobs, focusing on skills development, particularly artisanal and engineering skill, with the aim of developing  50 000 artisans by 2020.

The Industrial Policy Action Plan, including the Green and Oceans Economy, involved the metal and steel industries, local procurement, beneficiation and tax incentives for investment. It was also comprised of automotive industry development, involving investment in local original equipment manufacturing (OEM) and components; boatbuilding; plastics: recycling for local manufacturing; the Black industrialists Scheme; Operation Phakisa (marine economy); green industries, such as renewable energy (wind and solar), and the creation of new jobs.

Strategic Integrated Projects entailed having 18 catalytic projects at local level to fast track development and growth whilst providing essential infrastructure for service delivery, together with the development of artisans, technologists, engineers, and project managers.

Small, micro, cooperatives and informal enterprise development entailed industrial park revitalization, industrial development zones (IDZs) and special economic zones (SEZs), as well as community-based education and training for cooperatives and informal entrepreneurs.

The Comprehensive Rural Development Programme focused on rural development, sustainable livelihoods, skills development and the economic empowerment of rural communities.

The priorities set for the human resource development and national skills development strategies, and the White Paper on post-school education and training were:

  • Foundational Education; 
  • Technical and Vocational Education and Training (TVET) for mid-level skills development;
  • Higher education institutions (HEIs) for research and innovation (high-level skills development);
  • Skills for the economy (workers’ career advancement, adults and youths who were neither in employment, education or training (NEET), addressing socially and economically excluded;
  • The developmental state -- building the capability of the state as an employer to expand workplace skills training opportunities;
  • “Turning every workplace into a training space.”

Advanced Manufacturing, Innovation and Growth entailed the following priorities:

  • Disruptive technology -- robotics, artificial intelligence;
  • Changing manufacturing production processes;
  • Flexibility and adaptability of skills;
  • Critical thinking skills;
  • Unemployment of 11 million by 2020 (ILO);
  • Decline in unskilled and semi skilled workers, and an increase of skilled and highly skilled workers;
  • 39% of core skills in South Africa completely different by 2020.

Stabilising current industries and stemming job losses entailed a focus on job shedding, disinvestment, the effects on industry, high unemployment levels and the need to improve the ratio of skilled and highly skilled workers.

Transport Education and Training Authority (TETA)

Ms Maphefo Anno-Frempong, Chief Executive Officer, TETA, said the 2015/16 to 2019/20 strategic plan embraced the government’s priorities and had the following goals:

  1. Skills planning and research;
  2. Access to occupationally directed programmes;
  3. Strengthening the quality assurance system;
  4. A post-school strategy for youth for further access and work experience to improve employability;
  5. Support for small enterprises, cooperatives, non-government organisations (NGOs) and community-based organisations (CBOs);
  6. Skills development support for Safety initiatives.

Describing the performance of TETA on the above goals, she said there had been a significant increase in career guidance and exhibitions for school learners. The number of small businesses supported  linked to business opportunities and agents, such as the Small Enterprise Development Agency (SEDA) and Small Enterprise Finance Agency (SEFA), had increased by 137% -- from 217 to 515 -- compared to 2015/16. The mandatory grant participation by small firms had grown by 22%. The TVET graduate placement target had been exceeded by 132%.

Ms Anno-Frempong said 2016 had seen the launch of the TETA Unemployment Insurance Fund (UIF) Recognition of Prior Learning (RPL) programme for backyard mechanics, panel beaters, spray painters and their assistants for 3 600 candidates across nine provinces. This programme would empower the mechanics with skills and tools to work on late model cars, gain access to insurance contracts and create jobs for at least 900 assistants. Partnerships with TVET colleges had ensured the training of at least 250 lecturers as assessors and moderators.

Other performance highlights included:

  • R59 million had been invested in the taxi industry in professional driving, road safety and other related interventions;
  • TETA was working with taxi stakeholders, such as the South African National Taxi Council (SANTACO) to encourage formalisation, levy contributions and the development of a collection mechanism;
  • Over 2 700 artisans were trained during the 2015/16 and 2016/17 period;
  • Training for 200 artisans had been awarded to Transnet under the TETA-UIF 2016/17 funding;
  • Small, medium and micro enterprise (SMME) support was provided by TETA, ensuring public procurement in the Free State and black economic empowerment (BEE) opportunities within MTN;
  • 100 small businesses which had been supported by TETA were handed over to SEDA for further incubation opportunities;
  • A six-month mentorship programme for work readiness for 200 learners had seen permanent employment for five learners within the first three months. Based on this, the forecast was for at least 50% absorption by the end of the programme;
  • Collaboration with other SETAs had seen some successes in the expediting of moderation and certification processes, and career exhibitions had received abigger footprint;
  • TETA had successfully created a platform for TVET/HEI-employer relationship building and pledging through a highly successful graduate appreciation conference.

The 2017/18 APP required TETA to make the following strategic choices to enhance its performance, efficiencies, compliance and responsiveness to emergent industry and national priorities:

  • Espousing and giving prominence to road safety as a priority;
  • Refocusing the Adopt-A-School programme, plus the creation of a pipeline of support from bursaries to work placement;
  • Optimisation of TETA business processes and an enabling information communication technology (ICT) environment;
  • Early contracting to ensure early implementation of contracts;
  • Early identification of non-performing contracts for proactive remedial actions;
  • Enhancing internal and stakeholder contract/project management capabilities through capacitation;
  • Engendering stronger collaboration with stakeholders and training institutions, especially TVETs;
  • Improving TETA’s information management and statutory reporting capability;
  • Achieving harmonious alignment between Education and Training Quality Assurance (ETQA) quality assurance endeavours and contract management service demands, e.g. moderation timing, etc.;
  • Stemming the tide of learner dropouts through rigorous selection / approval processes;
  • The recovery of poor performing contracts and elimination of ‘legacy contracts’ that date back to between 2010 and 2013

Wholesale and Retail SETA (W&RSETA)

Mr Pascalis Mokupo, Administrator: W&RSETA, said that the entity had received two qualifications in 2014/15-2015/16, and had been put under administration in October 2016. However, there was an ongoing court case between the dissolved W&R Seta Board and the Minister of Higher Education and Training.

Key drivers of change for skills within the W&R sector were:

Growth into Africa -- an increasing focus from the South African retail industry on expansion north of the country’s borders required appropriate skill to deal with the international trading environment and varied market conditions, language and regulations.

Speed to Market -- staying abreast of rapidly changing consumer demand required retailers to improve their skills base with regard to areas such as small batch production in order to ensure the speed to market to respond to these challenges.

Digital Revolution -- the increasing uptake of online shopping, together with opportunities presented by social media, required a new set of skills, particularly in IT development, virtual marketing and sales.

Skills Shortage -- an evolving retail landscape had resulted in skills shortages at both management and the elementary level that presented the sector with challenges requiring urgent remedial action.

Responsible buying -- the emergence of socially responsible buying patterns (e.g. a preference for organic food, green technologies, and socially-conscientious purchases) required an appropriate set of skills from the sector.

Key interventions planned for 2015-2020 were:

  • Small Enterprise Development. The W&RSETA had prioritised the development of small enterprises through partnerships with stakeholders that would enable and facilitate skills development for SMMEs, including alternative approaches such as mentoring and coaching.
  • Youth Employment. Interventions in support of increased youth employment included increasing access through awareness strategies, improving skills development capacity, and workplace experience and work readiness.
  • Qualification Development. The need to develop the required qualifications, which would focus on key skills requirements that had been identified.
  • Sector Transformation. The W&RSETA would support sector transformation by providing access to bursaries through targeted initiatives, and through the facilitation of linkages such as the Future Manager’s Programme, in partnership with Pick and Pay and Wits University.
  • Learning Programmes. These would  focus in particular on enabling supervisory skill development.
  • Disability Programmes. The W&RSETA would be implementing learning programmes targeted at the people with disabilities in the sector, as well as sensitisation programmes to employers. Bursaries and learnerships were among the targeted interventions in empowering people with disabilities within the sector.
  • Green Skills. The W&RSETA interventions would also be aimed at promoting green skills in the sector by establishing the necessary and relevant partnerships with other organisations. Capacity development sessions and awareness programmes would be used in addressing the green skills in the sector.

Discussion

Mr E Siwela (ANC) said the W&RSETA presentation indicated that the environment was largely untransformed, but had then further indicated that the majority of employees were black people. Given the context of his statement, what was his understanding of equity transformation? Since the SETA was under administration, who had been the initial administrators and what factors had led to it being placed under administration? Regarding the MerSETA, it seemed the engineering sector was failing to create more jobs. What measures were MerSETA enforcing to prohibit unemployment? With regard to TETA, since the majority of TVET colleges did not offer qualifications specific to the transport sector, what was TETA offering as a means of qualification or an alternative to it?

Ms M Nkadimeng (ANC) said the merSETA audit report by the Auditor General had made findings that nine performance indicators were not well defined in Programmes 1, 2, 3 and 4, which involved the ability to measure targets. Therefore, would MerSETA revise their 2017 APPs to ensure that performance indicators were well defined and that targets were specific? Secondly, it was commendable that the SETA was hiring 1 500 individuals based on RPL, but what had been the success and challenges with regards to the implementation of RPL? On the issue of corporations, the SETA claimed to support 20 cooperatives -- what type of cooperatives were they, what criteria were used to select them, and in which provinces were they based? TETA had said that 100 Matriculants would be trained within internships, which posed the question: why was the target so low, given the thousands of scholars in Grade 12/Matric? Could the amount of intake increase as a means of improving the quality of living for more Matriculants? Also, would those who were enrolled in the Community Education and Training Colleges (CETCs) who were studying towards a Matriculation, be eligible to apply for these internships as well? Had the SETA considered partnering with the CETCs, since those colleges incorporated aspects of the sector and it could guarantee employment for those who were studying for a matriculation in the sector? Lastly, the W&RSETA was a training entity that could effectively address the concern of unemployment more than most other SETAs, yet it appeared that recruitment was so slow that indifference was evident. There were still challenges with employment, coupled with a lack of presence of the SETAs in the rural parts of the country.

Mr C Kekana (ANC) asked for clarity, because the presenter for W&RSETA had said that the majority of employees in the sector were black, yet the sector lacked equity transformation. This had seemed as a contradiction of concepts. The retail sector dominated growth in the economy, irrespective of its ratio, because it upheld service delivery. Thus, if the sector employed mainly blacks, why was the supposed lack of transformation a concern?

TETA had said that road and rail infrastructures were the infrastructural foundations of civil society. However, was the manufacture of rail coaches really as complex as it seemed? Was it not possible for South Africa to produce its own rail coaches? This had pertained to the scope of MerSETA as well. The loss of job opportunities had been a major factor since the first days of independence, due to natural resources leaving the country then being imported back for purchase as a finished commodity. South Africans were obligated to purchase their own natural minerals, materials and other resources, because the ability to design and manufacture was supposedly not available in the country. South Africans were therefore more likely to sell a BMW than to play a part in its manufacture, despite the fact that the iron and steel to manufacture the vehicle had originated from South Africa. Would development take place to ensure that the ability to design and manufacture raw materials such as rail coaches took place, as opposed to importing particular items for infrastructure since it was so fundamental for the mobility of civil society? These phenomena could extend to many spheres, as currently South Africa was at the heart of an international value and supply chain. However, it was somewhat a disadvantage that South Africa merely played a part at the outset with the raw materials and then at the end by means of the import and sale of items to the citizens. Therefore, there was no interest or vision embraced to upgrade the skills set in the sector domestically so that the international system inherited would no longer be perpetuated to the extent that it was? If the SETAs were not willing to start somewhere, non-activity would contribute to the cycle of dependence on international bodies for items that locals had the potential to produce.

He said the former French colonies in Africa were still paying taxes to France to the value of R600 billion annually. Therefore, a large amount of funds were leaving the continent, whether directly in monetary terms or by means of natural resources, to its former colonial powers. It was a political system that made poverty inevitable not only for the living generations, but for the unborn African generations to come. In his personal view, the day had come to challenge the system and its economic oppression.

Regarding MerSETA, on the issue of engineering and manufacturing, since South Africa was a developing country, other educational streams took priority. However, why was innovation not taking place within the engineering sector, as one would expect, by means of research? Also, groundbreaking research regarding engineering would usually take place within facilities such as the University of Stellenbosch, while those on the lower levels were incapable of producing basic quality engineering services. Thus, why was the disparity of engineering services not narrowed down to quality norms and standards, irrespective of the level of engineering that was practised, whether it was a PhD scholar or an entry level practitioner?

Ms H Bucwa (DA) agreed with the plans to expand the South African workforce, which essentially was very critical for the growth of the economy. Thus, education and training within the cited programmes should provide entry to employment to youth -- those currently employed within the system, as well as those who were not yet employed. The TVET colleges had the commitment to offer education and training that was typically theoretical, just like the universities. Therefore, the sector should firstly revamp the TVET colleges in such a manner that they would complement the theoretical-based university education, while offering the skills necessary for the economy. Given such a context, this posed a generic question: What in the view of each SETA were the key shortfalls experienced during learnerships and internships? And what were the training and skills developments required to produce an effective adult education innovation that would cover the current shortfalls?

MerSETA had made the comment that there was continually a national ‘attempt to fix basic education problems at universities or TVET colleges, but it does not always work’, so had the SETA gone out to the community to involve grade 10 learners or other scholars up to university level with initiatives in order to captivate the youth while in high school? Consideration of the challenges to fix the basic education system was paramount, but beyond that what were the initiatives and programmes being implemented to ensure proper cognitive development or enhancement for the youth that already had a faulty academic foundation? Those currently in the academic system experienced a disparity of quality of education, with many disadvantaged by a poor foundation, so how could they be captured and adequately trained so that in spite of this background, they could perform competently and contribute positively towards the economy?

MerSETA had also cited the need to transform the sector, which had been somewhat achieved by means of targets, but in terms of the industry itself, was the quality of content adequately transformed, since South Africa was a society in which the youth was taught to seek employment, as opposed to creating it? Therefore, if the youth became prone to starting small businesses, there was a need for a paradigm shift to produce innovation coupled with skill seta to negate the collapse of businesses within their early stages.

On another note, society was moving into a digital era and the challenge that it posed was technical literacy and its accessibility throughout the country. This also posed the concern: how would the current workforce and those who would enter it, be adequately capacitated regarding technology to ensure that they were both currently competent and possessed the technical skills that would keep up with rapid digital enhancements? For instance, a 55-year-old man might not be as technically savvy as a 20-something-year-old. Thus, how would the digital gap be bridged to accommodate both levels of technological skills, whilst producing a common level that ensured prospective technological growth as new inventions were developed? Had MerSETA considered working with colleges and TVET colleges as a means of influencing dynamics that would be useful in their academic offerings, as such would prove efficacious for the sector in the long run?

Regarding TETA, there was an allusion that the SETA was challenged with having the industry on board, which inevitably would pose as a challenge regarding how effectively the SETA could be involved in change. Since these challenges existed, what could the Portfolio Committee do to promote harmony or co-operation within the sector, ensuring that the transport industry stakeholders were unafraid to collaborate with TETA? In terms of the priorities, since the Oceans Economy was a common factor among the SETAs present, why had collaborative budgets not been devised? Regarding transport within the communities, had TETA made itself sufficiently visible so that the communities were aware of it? She said the W&RSETA’s proposed turnaround strategy to take the SETA out of administration appeared brilliant, and the way forward was commendable.

Mr A van der Westhuizen (DA) said that the general notion in South Africa was that there was an enormous need for training. However, huge amounts of funds -- millions -- were spent on training annually. Even the Minister had noted the nonsensical fact that a three to four week course cost SETAs more to execute than a year of tuition at a higher education institution (HEI). He asked each SETA to indicate what should be changed for them to become more effective. The current system might not be working as it should be -- which elements were lacking? What was needed for its improvement? For example, in terms of the structure of qualifications, learners were expected to pass all of the prerequisites or unit standards before certification was granted. Thus, if there were 27 units and the student passed 26 out of the 27, s/he would not be provided with certification. Yet, if such was compared to other forms of qualification -- for instance, the Matric certificate -- there was some leeway evident and the pupil would still walk away with certification having had passed the minimum standards. Had these stringent requirements stemmed from the fact that too much ad hoc training was being done? This would relate particularly to training providers who would pop up as mushrooms and sometimes present programs in the current year which became obsolete in the following year, and render the student still unemployable. Therefore, there was a lack of continuity and subsequently a lack of cost effectiveness. What could Parliament do to change the system to ensure that civil society would gain better value for their money regarding training?

Ms S Mchunu (ANC) asked MerSETA for the reason behind the reduction of the target for unemployed graduates in subsequent years. This query stemmed from the fact that not only was unemployment a concern in the country, but unemployed youth alone amounted to approximately 3.5 million. Given such magnitude, the targets set initially by each SETA to address the matter, or positively contribute towards it, was already quite low. Secondly, within each programme’s budget there was an allocation for goods and services expenditure, in which Programme 1 (Administration) had an allocation of R2.9 million. However, expenditure on nine items of goods and services, including its receipts, was not included. Such omissions made it difficult for the Portfolio Committee to assist SETAs, particularly the on-line core functions, as well as assist the SETAs with adherence to National Treasury’s instructions on cost-cutting.

Regarding TETA, the target for the number of learners that entered the offered skills programme was around 500, but the amount of those completing it had been over 1 000. Why was the number of those completing the programme much higher than those who had begun it? How long was the duration of the skills programme? The medium term strategic framework (MTSF) target mandated over 140 000 students from TVET colleges to gain work experience, but TETA had a low target of merely 150 students. Why was the target for work experience set so low?

TETA had set a target for the number of sub-sector stakeholder events as means of increasing brand visibility -- had it considered the National Treasury’s core instruction about such payments? The concerns expressed regarding road safety was agreed upon, and due to the serious nature of the topic, it should be expanded amongst the other programmes, especially by means of awarding bursaries for the acquisition of market-related skills. Regarding the support for safety initiatives, it was imperative to be realistic and take into account that in many schools the pupils were transported by their relatives or car-pooled with vehicles that were not roadworthy, or the driver did not have a Professional Driving Permit (PDP) or the vans were overloaded. Therefore, the programme should highlight the reality of such taking place and ensure that an impact was effectively made on civil society.

Regarding W&RSETA, it had been noted that online purchasing served as a major challenge, but had possessed much potential for opportunities. Therefore, were plans under way to develop new ITC skills, other related skills and cyber security for rural corporations, emerging corporations and SMEs? What partnership had this SETA with the Department of Small Business Development (DSBD) to ensure the growth of industry in the country, especially in the rural and township areas? This would eradicate the need for cheap foreign imports, whilst empowering civil society by means of material disposition and economic activity. Lastly, she asked each SETA whether there was any certification backlog evident, and if so, what the turnaround time of resolve the situation was? Moreover, were there backlogs of certification regarding cooperative training with the TVET colleges?

Mr M Mbatha (EFF) asked TETA to elaborate on its 3 600 learners enabled with assistance. Had they come from local communities, urban areas or across the board amongst the provinces? Could a breakdown of skills be given, along with the range of ages of the trainees? With regard to the issues that derived from the previous years that were cited as closed, had all the outstanding balances of money been retrieved, and what had been the final outcome of those involved regarding the court cases?

Regarding MerSETA, it was no longer viable to train persons concentrating on only one skill. For instance, with the withdrawal of General Motors, it was inevitable that retrenchment would occur. It might be advocated that employees should be absorbed, but even so, a minor segment of them would be absorbed while the bulk of employees became unemployed. If American companies had considered it feasible to close their local operations and relocate to their own country for the sake of domestic employment, it should be respected, as the option to do so had always existed, due to the manner in which South Africa accepted foreign investment. South Africans had the tendency to accept foreign investment with naivety that disadvantaged prospective economic growth, because foreign investors could pull out whenever and however they desired, as per contract. Foreign investment was never pursued with a guarantee for the domestic environment that it would trade in, particularly in the event of an exit, as this aspect of fairness was always omitted upon receipt of the foreign investment. South Africans should stop believing that foreign investors could not withdraw their foreign investment as though the investment was an obligation. Even worse was the resultant disenchantment that foreign investors were afforded free rein to trade as much as they have wanted, and to gain as much profitability as they could, and then leave on their own terms. Foreign investors were given a complete right to trade without any obligation for the South African Government to monitor it. MerSETA, along with National Treasury, should devise proposals to alter legislation that could empower the domestic economy, particularly without an impediment should foreign investment pull out as it pleased.

He asked W&RSETA whether any Board members who were previously suspended had been re-appointed. If the Board were to be adjudicated, but midway some Members were reappointed, not only would the prosecution be impaired, but it would nullify the scrutiny of information in an unbiased fashion and would therefore compromise the entire point of the adjudication. External analysts in such a situation could be manipulated.

The Chairperson said that both MerSETA and TETA had referred to the Oceans Economy, so had the SETAs collaborated with each other, and why was there a need for ocean economy demarcation by both SETAs? Regarding TETA, even though it had been pointed out that minibus taxi derivers and their associations were taught or motivated to pay a levy, could the law not be applied to the taxi industry instead? Using funds that were derived from the SETA’s budget was not viable if the approach was one of “massaging” or coaching. The Department of Higher Education and Training (DHET) should be requested to assist TETA to ensure that the taxi industry became compliant, since if taxi drivers had all the energy to block the main roads, surely they should have the energy to be compliant with legislation. Regarding the trains, it might not be the problem of TETA entirely, but the country had an economic problem that proved to be a crisis, because the trains never ran on time. Subsequently, workers who used trains as a mode of transportation would suffer deductions from their wages, because their employers wanted to compensate for the loss of time. The lack of full wage packets would perpetuate the cycle of poverty, despite work-activity, as a result of the recurring lateness of the trains. Train security was a factor, as not only were commuters late for arrival at work due to factors beyond their control, but they would arrive late at home as well, which was unsafe in some areas at particular times. Even though these issues might not derive from the sector itself, to what extent did TETA address itself to these problems that had emerged? Was TETA involved in the deficiencies of the sector and service delivery?

Regarding W&RSETA, could the DHET account for the issues of administration at this SETA? It should note the responsibilities executed by the Department regarding high schools. Even though high schools were within the scope of the Department of Basic Education, it seemed that the DHET intervened from time to time, so how had collaboration taken place? The question by a fellow Parliamentarian on diverse inclusion had been interesting, but was South Africa really at the point of having an inclusive mindset? The US had tried to adopt inclusion, and it had failed hopelessly. Therefore, the DHET should account for the question on diverse inclusion.

Department’s response

Mr Maliviwe Lumka, Chief Director, Department of Higher Education and Training (DHET), accounted for the collaboration at high school level by noting two campaigns, the ‘Apply Now’ Campaign and the Artisan Campaign. The Department had decided that for the promotion of artisan development, it was better to go to the high schools and advise both pupils and career guidance teachers about pursuing artisanship as a choice of study at the TVET colleges. It had been found that if one waited for pupils to reach matriculation/Grade 12, most pupils had already made a primary choice for study. The ‘Apply Now’ Campaign would advise Matriculants to apply as early as possible for Higher Education Institution (HEI) admission and for financial aid funding.

The background behind the administration of the W&RSETA was that the Minister of Higher Education and Training could place a SETA under administration if:

  • the accounting authority of the SETA was not functioning properly;
  • if the financial administration of the SETA was not on par, as it ought to be; or
  • if the SETA failed to comply with the instruction of the Minister in terms of Section 14A

Regarding W&RSETA specifically, it had signed an agreement with the Director General (DG) that had outlined a commitment by W&RSETA to roll out or run a particular project innovation. The then Board  had decided to set aside R107 million of the SETA’s funds for that particular project and commitment. On top of that, the DHET had invested R130 million, because the project was meant to have benefited all of the SETAs, whilst the W&RSETA was the appointed SETA to roll out the project. However, in the middle of its undertakings, the Board of W&RSETA had decided to pull out of that particular project. In response, the Minister had written to them to establish the reason for the pullout before the project was concluded, as this was informed by Section 14 that the Minister was to report by. Only after receipt of the official response by the Board, had it been discovered that some Board members were oblivious to the letter from the Minister, as well as the response given to it supposedly by the Board. The lack of communication had highlighted that there were problems amongst the Board members, because none official decision should be made on behalf of a Board without all of its members being made aware of it. The separate follow-up letter received from the excluded Board members had confirmed the disunity. In addition to this, the qualification audit outcome by the Auditor General had indicated irregular expenditure and mismanagement of funds. According to Section 14, the Minister could request the SETA to submit a turnaround strategy plan.

Another issue of alarm discovered by the Department was that the Acting Chief Financial Officer (CFO) had also been appointed simultaneously as the Chief Executive Officer (CEO). The Auditor General had written to the DG to highlight this error, because it was a serious problem that the same individual filled both significant financial roles, whilst the SETA had received a qualified audit outcome. Subsequently, the Minister had written another letter to the Board requesting transformation of the SETA. Unfortunately, the response received was unsatisfactory, and the Minister had then placed W&RSETA under administration.

Notably, when the SETA was placed under administration, the initial administrator had called a meeting with the Board, but instead of attendance, some of the Board members had taken the Minister to court, where part of their concerns raised was the credibility of eyewitness accounts provided by the appointed administrator. It had since surfaced that the then appointed administrator had received a qualification, as there had been some issues raised against him in Limpopo involving contractual corruption, upon investigation of his background checks. As a result, the Minister had decided in the interest of good governance to ask the initial administrator to step aside and ‘clean out his house first’, because even if those were mere allegations that could not be justified, they first had to be resolved due to the implication of incrimination it would have on the decisions made regarding the matter. At that point, the administrator had been in the role for two weeks, and had been replaced by the current administrator.

The former Board members had then taken the Minister to the labour court, which had ruled in favour of the plaintiffs on the basis that the Minister did not have the power to intervene in the happenings of the SETA. It had judged that the Minister did not have the executive powers or the right to intervene, despite the explicit authority stipulated within the legislation. However, the matter had since been contested very strongly and was currently under scrutiny by the Constitutional Court. The Department had approached the Constitutional Court as a means to make a determination on the powers of the Minister, because the SETAs were agents of government, which meant the Minister should have the right to intervene on programmes conducted by the SETAs. Therefore, the decision on the official powers and limitations of intervention of the Minister of Higher Education and Training was pending at the Constitutional Court.

The Chairperson asked if clarity could be given regarding the powers of the administrator.

Mr Mbatha rectified that such was not the clarity sought for; instead, upon dissolution of the Board had the Minister reappointed any of the Members of the Board or of the Internal Audit Committee? Since if dissolution of a Board takes place, it should be done entirely and thoroughly.

The Chairperson additionally asked for clarification of the access and the powers relating to the Administrator?

Mr Lumka said that the administrator was required to devise a turnaround strategy for the SETA; to revise the job description of the delegation of the Board; to ensure that the SETA performed optimally going forward, and report on a monthly basis to the Director General. However, the outlined job specifications of the administrator were currently not at hand.

The Minister had not appointed any members of the Board TA that had been dissolved. However, the current administrator was the chairperson of the internal audit committee. In terms of the SETA constitution, there were various committees, inclusive of the internal audit and risk committee, which had been dissolved. The Public Financial Management Act (PFMA) mandated that public entities should have an internal audit and risk committee, of which the chairperson of the SETA was an independent person. Even when invited to attend the Board meetings, he was an external and independent person who was not permitted to part-take within the meetings, but could merely oversee the meeting as it took place.

The Chairperson requested that a copy of the Gazette be sent to the Portfolio Committee, and going forward particulars as just described should be included in the Gazette.

Mr Lumka assured her that the Gazette regarding the W&RSETA would be forwarded accordingly.

W&RSETA’s Response

Mr Mokupo apologised for the misinterpretation regarding transformation of employment equity. He clarified that upon review of the spending of the governmental or state grant, particularly the professional grant – the Professional, Vocational, Technical and Academic Learning (PIVOTAL) -- entities such as Pick ‘n Pay would apply for trading through the PIVOTAL grant funding itself. About 90% of the R1.9 billion spent in the outer years had gone to those entities, as they took the greater chunk of the professional grant. In terms of the PIVOTAL grant funding there were the options of either a 20% preliminary grant available, or a 20% discretionary grant. The challenge of the discretionary grant was that the application involved the formation of a draft, which informed part of the conglomerate within the entities and the draft. Therefore, it had been said that the sector was not transformed, because in that space there were insufficient black trading providers. Thus there existed an opportunity to transform that particular aspect in the sector.

The DHET had alluded to some of the reasons why the Minister had placed the SETA under administration, but the cited project involved overall non-compliance. It had been a part of the Nine Point Plan announced by the President, covering rural and human development programmes, as well as the issue of unemployment. Indeed, the SETAs did employ many black people. However, it was white-owned companies who employed the black employees within the retail sector. This did not mean that the companies were not broad-based black economic empowerment (BBBEE) compliant, but that 20 years since the arrival of democracy there was an expectation that more black-owned companies would exist in the retail sector.

He assured the Committee it could be assured that the financial misconduct committee was addressing each matter involving irregular expenditure. The intention was to ensure that each and every issue previously highlighted as irregular would be corrected.

Regarding the issue of suspended managers, Mr Mokupo admitted that subsequent to his appointment he had reinstated the eight suspended managers, because the commissioned audit had been finalised. This had been against the backdrop of the fact that they were senior managers who were required for the running of the organisation, and their absence might have contributed to the SETA performing at only 79%. If at the time that the managers were suspended, the Board had taken a resolution to ensure that those suspended managers would face a “stop-gap” to ensure development somehow, current development would have been at a higher level. Therefore, his personal view of the suspended managers was that upon review of the forensic report, it had highlighted processes that had not been duly followed, and that there were recurring problems within the internal controls of the SETA. This knowledge on its own served as the basis for their reinstatement.

Some of the managers who were not suspended had sought a legal opinion regarding how the forensic report should be dealt with. The legal opinion questioned why the Board had not suspended the balance of the senior managers, because it appeared as though inequality had taken place. However, with the review of the entire operational execution by the SETA, if every senior manager had been suspended simultaneously the organisation would have been rendered dysfunctional.

The W&RSETA had been asked if its committed plans for the year would be achieved. It was a bit of a mountain, but it could be assured that out of the 776 contracts worth about R113 billion -- which had also been identified by the Auditor-General (AG) as not being previously recorded properly on the Commitment Register – progress would be made, with the processes that had been internally followed.

Regarding whether the W&RSETA had any linkages with the Department of Small Business Development, it had a connection called ITUP (Informal Traders Upliftment Project), which addressed the needs of informal traders and small businesses. Originally, the ITUP was to take 1 000 informal traders, which it had in the first phase. The second phase was to uplift 1 500 informal traders. At the time that the Board had approved the project, the target had been for about 6 000 informal traders to be uplifted. Currently, there was a team that worked with the DSBD to ensure that the ITUP continued. Initially, when W&RSETA had taken administrative control of the project, it had been housed among a host of entities. Due to the legal challenges encountered, the Department had decided to pull out, but even so W&RSETA preferred to proceed with partnering with the DSBD to uplift the 1 500 informal traders.

Mr Mlamli Jentile, Advisor to the Administrator: W&RSETA, said that timeous certification still posed a challenge. However, the remedial action at the SETA had gone to the root cause of the challenge. Amongst the findings it had been discovered that many training programmes were being given independently, but the training had required moderation and assessment by a SETA. Unfortunately, the training programmes were reported very late, even as late as after the theoretical aspect of the training had already taken place. Late reporting contributed to the delay of certification, because official certification was subject to the moderation and assessment by the SETA. This was one gap identified amongst many that caused delays. However, with SETA-funded projects, there was no certification outstanding.

Another core component of root causes was that there were SETAs that were course-sectoral. When the training occurred and the inter-relationship should have taken place from the outset, it had unfortunately not taken place at the full scale as required, because the qualifications were operational from one SETA while the registration was done by another SETA. In such instance, it would take a while to get the alignment correct. The good thing was that this problem had been identified, and the SETAs had taken steps to ensure that the reporting time of all learners who experienced training in one sector but awaited qualification in another sector, was minimised. Although technical figures were not at hand, roughly not more than 10% of certification was outstanding.

There had been question about what could be done to demonstrate the return on investment. While W&RSETA had been in charge of qualifications development, an observation had surfaced that the current curricula required three important components -- theory, practical and work-based training. At the moment, work-based training was not done, while practical training was done to some extent. Thus, the curricula required review, even at the professional level, to include occupational qualification exposure whilst leaning, because in so doing learners would be exposed to the work-based dynamics of the qualifications, which were the crux of employability.

TETA Response

Ms Anno- Frempong said she would answer about ten questions which had been posed directly to TETA:

1. TVET colleges. There were about 84 TVET colleges spread across the provinces, but most of them were not keen to offer National Certificate Vocational (NCV) learning, but preferred offering the learnerships that were advanced, as it presented an opportunity for placement at companies with supply chain qualifications.

The Chairperson clarified that the question asked by the Parliamentarian was why this was the situation, and what the SETA was doing about it.

Ms Anno- Frempong replied that a possibly cause of preference might originate from the fact that the NCV had its own issues, particularly that it was much too theoretically based. Therefore the TVET colleges preferred offering learning that had a better opportunity for employability.

2) The low target for Matriculants. This could be accounted for in that TETA supplemented schools with support, and was in the process of identifying community colleges that would be able to offer theory-based learning as well.

3) Internal capacity to develop human capital. There was internal capacity to lecture coaches in the local government (LG) component of the range of professional investments. Currently, the transport sector was revising the problem of food transportation, coupled with the training that was done by TETA to equip efficient delivery. However, over and above this , TETA was launching a programme on local routes and the development of a consortium. It was also focused on training that would develop future academics in the country, including Transnet.

4) Examples given for high school pupils to encourage enrolment at TVET colleges included initiatives as a means of increasing interest for the transport sector. The most important initiative, deemed as a pillar, was to give high school pupils role model schools’ programmes at their meetings, called ‘Career Outreach Programmes.’ These programmes would outline the academic journey undertaken by a student in the transport sector so that newcomers would not make the same mistakes or be subjected to the same frustrations as those who had preceded them, but would be encouraged that the transport sector was not as difficult as it seemed at face value. Additionally, TETA would leave the high schools with the life orientation teachers who were educated to understand the components of the transport sector, what the transport companies available in the country were, and which opportunities existed in those companies and should be sought for. TETA had also discovered that when additional learning aids were provided, such as mobile maps particularly for schools located in rural areas, it had contributed to a culture of leadership.

5) Small business initiatives. TETA did not have several of these types of initiatives, but the current initiatives for small businesses involved mechanics, spray painters and panel beaters. The other initiative entailed the taxi industry, as TETA attempted to regulate it by means of workshops in order to evoke legal compliance by the mini-bus taxi industry. The taxi industry was also encouraged to start non-profit organisations (NPOs).

6) Oceans economy. TETA was involved with the oceans economy relating to the modes of transport used on it, while the other SETAs dealt with the particulars related to it, but where possible, correlation was made.

7) Movement with speed and the involvement of TETA within the sector to ensure public modes of transport moved swiftly, and to which extent was safety by the SETA guaranteed? TETA was not involved with the late arrival of trains, but once TETA identified areas of training to ensure efficiency, it would be offered as a means of involvement.

8) What could Parliament do to change the system or improve the value chain? The transport sector consisted of two sectors that one could not introduce training for, namely national and international. South Africa consisted of international institutions which regulated training across the globe, and therefore training that was done should never be reduced to the point that it undermined the other sub- sectors. However, the possibility might exist to introduce new training that was more focused and reduced the number of transport qualifications, and which served as motivation for TETA to move away theoretical-based qualifications.

9) Regarding the deviation between those completing the skills programmes and those admitted at TVET colleges; the low target set for training at TVET colleges for road safety; and the aftermath of prospective employment for those trained: the deviation occurred, because some programmes took place over 18 months, which was the reason why the total of those completing their training was higher than those admitted within the same year. Regarding cost- determination, it should be highlighted that the industry had low-retention, so TETA had wanted to increase the interest of prospective employers within the industry and had considered reducing the number of staff that worked with the projects, alternatively utilising state-owned enterprises and entities to reduce costs. As far as skills were concerned, a cost-determinant measure would be used.

10) Lastly, regarding the 3 600 breakdown -- it meant that there were about 400 per province, which were made up of 100 mechanics, 100 body mechanics, 100 spray painters and 100 panel beaters.

MerSETA’s Response

Mr Patel answered the query about what MerSETA had done regarding the largely black populated workforce by noting that transformation did not merely mean meeting equity totals, but had to focus on training people at the higher levels. Training people merely to be basic workers was a poor concept of transformation. The new corp of youth had shown its ability for management at high levels too. He said the training of MerSETA was effective in creating more jobs, despite the current economic climate. However, its key role was to improve employability, and it should be clarified that it was not a creator of jobs, but was intended as a support function instead, by training people to ensure that they were capable of delivering within their jobs.

Simultaneously, SETAs had a dual imperative. The first was the economic imperative, which was to ensure that productivity within the country was achieved for the sake of profitability. The second was a social imperative to ensure that more people were educated, while poverty was being reduced in the townships. The latter was the role that MerSETA focused on. Training that led to unemployment was an important concern for the SETA. This was why MerSETA did not train for employment, but looked for employers to ensure that proper training took place during the training, because skills-based training was much more essential than theoretical training. For example, one could not learn to drive by reading a textbook.

Mr Patel admitted there were issues regarding the APPs that had been duly highlighted in the report of the Auditor- General,. However, since the approval for its change by the Minister of Higher Education and Training, there had been remedial action to enable improved performance. The 2017/18 APP refle

The Recognition of Prior Learning (RPL) assessment factor had also brought about challenges. Within the industry, people had worked for years and through their experience had subsequently acquired skills, but businesses were unwilling to train them or send them on further training, because this would mean the employees would become eligible for higher salary scales due to the increased expertise. Therefore, many businesses left their employees at their basic levels of employment. Nevertheless, MerSETA had been successful at producing 1 500 candidates who were RPL accredited. Additionally, when devising a cooperative model to enforce it, collaboration with the DSBD had taken place in a partnered effort to encourage society to participate.

A retrenchment systems plan was used, involving those retrenched from General Motors, Ford and other companies, as means of retraining or reskilling them with new technologies, or for a different business altogether. These endeavours formed part of the small business development plan.

An outstanding programme had been the Eastern Cape model of the Isibileni Climbing Cooperative, which had received a nomination at a BEE Cooperative award function this year. Also, the adopted TVET college model had received R20 million for a cooperative business project.

With regard to research, there were already ground-breaking research achievements within the medical field, although this was not the case in the field of technological developments. This could be attributed to the lack of an active and conducive atmosphere, as the SETAs could contribute only towards supporting research. Contributions towards full technological research had been done made to the Durban University of Technology (DUT), the Nelson Mandela Metropolitan University (NMMU) and Cape Peninsula University of Technology (CPUT) on energy efficient vehicles and Nano technology. Any country that was expected to produce anything had to begin with innovation, for which funding by the government of external innovative ideas could take place.

Work-innovative training was admittedly problematic, as it took place insufficiently. However, recently 200 students from TVET colleges and universities of technology had undergone work-interrelated training in China, and the costs incurred had not been enormous – they had been the same as the expense for a company situated in South Africa.

Mr Patel said that young people needed to be attracted to fields such as robotics at an early age, irrespective of gender, as the ideas of technological innovation encouraged them to be interested, and career guidance might otherwise prove to be too late. There were also many 55-year olds who kept abreast with technological advancements and were subsequently ‘tech-savvy’.

MerSETA had just adopted a college in Cape Town with an initiative that would make it one of the leading colleges for automotive industry technologies, where anticipated work would take place over three years.

Regarding the Oceans Economy, collaboration with other SETAs does take place.

He said he had the privilege of attending a meeting with the Minister of Higher Education and Training in Switzerland to ascertain the costs incurred by their government to train young people. They had been asked why they continued to train youth at the state’s expense, and the Swiss had responded that state training was deemed as a legacy among civil society. Therefore, MerSETA believed that it was a societal need for businesses to become involved in changing society by training the next generation, otherwise the battle would continue.

Regarding the issue of General Motors pulling out of South Africa, he agreed that the international markets had the tendency to exploit South Africa through their multi-national corporations with both their offerings, as well as the manner in which they exited. MerSETA’s motor systems plan was aimed at ensuring support for the workers, whilst the retrenchment systems plan would develop small businesses and cooperatives to supply other businesses. The retraining of those retrenched was essential.

In conclusion, the need for training in South Africa was a societal problem that was enormous, and could not be achieved through self-funding alone. It was imperative that SETAs worked with businesses to address this challenge, because they were all swimming in the same ocean. As long as they swam separately and not together, none of the causal factors of the societal problems would be achieved.

Ms Mchunu asked if the various SETAs had employed any of those trained themselves?

Mr Jentile answered on behalf of W&RSETA, and said that placement of those trained had taken place.

Mr Patel answered on behalf of MerSETA, and said it had recruited over 25 interns into the organisation.

Ms Anno-Frempong answered on behalf of TETA that it had over 25 interns too.

Mr Lumka answered on behalf of the DHET that the Department had a total of over 100 interns annually.

Mr Kekana said that interest in the SETAs was paramount, because if SETAs were working well it would be a milestone for the country.

The meeting was adjourned. 

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