Using Banks for Smart ID Card applications; Visa Facilitation Services (VFS) challenges & recommendations: briefing by Department of Home Affairs

Meeting report

Strategies to use Banks for Smart ID Card applications - Briefing by Department of Home Affairs
Mr Mpho Moloi, Chief Director: Channel Management, DHA thanked the Committee for the invitation. He explained that 38 million green ID book still needed to be replaced and service access points for Smart ID Card applications have been increased, and this included services for passport applications. The DHA has been in extensive engagements with South Africa Banking Risk Information Centre (SABRIC) and Standard Bank and First National Bank (FNB) have been responsive. Memorandums of Understanding (MOUs) have been signed with Standard Bank and FNB for the period of February – July 2015. Some of the benefits for these MOUs signed were:
•Accelerated rollout for Smart ID Cards in a cost efficient manner
•Wider service access points for citizens
•Convenience for clients.

He said the project scope was for clients who were already banking with the respective banks. Agreements have also been signed with the South African Post Office (SAPO) customers, particularly those in rural areas due to the large footprint SAPO has in the country. Applicants would be able to apply online through eChannel and then collect their Smart ID Cards and passports at DHA. Applicants would be able to pay online and take their finger and photos on site. Nedbank and ABSA pilots would also be initiated. The project would kick off with four pilot sites in banking branches and this would increase as more banking institutions came on board. The objectives for this pilot were that of:
•Creating leverage through Public Private Partnerships (PPP) by utilizing available office space in banks and in SAPO
•Reducing queues in Home Affairs offices by diverting some of the clients to these new sites
•Reducing the timeline of replacement of green bar coded identity books
•Eliminating the dual means of identification in the shortest possible time.

He explained that the pilot sites at banks were ready and booths had already been installed. eChannel was at an advanced stage of development. The DHA has engaged the National Treasury on payment method options and the DHA was finalizing its preferred option. A risk analysis has been conducted and further expert advice was being sought. Site selection would be based on DHA’s required footprint and a revenue collection model was being finalised. The budget allocation for the 2015/16 financial year would determine the number of sites to be rolled out, which would determine human resources to be deployed at banks. Network connectivity also still needed to be secured.

Discussion
Chairperson Mashile asked whether the DHA has done a crash test on the process. What were the timeframes for the project and when would the pilot be concluded?

Mr M Hoosen (DA) said the offsite implementation of the DHA’s new Smart ID Card process posed great risks; what were some of the risks identified and what measures have been taken to deal with these issues? Why was the DHA approaching banks if DHA offices have not yet been completed? What were the banks getting from this deal? He asked about the staff at these DHA off site locations; would this be existing DHA staff and would they need to be newly trained?

Ms D Raphuti (ANC) said long queues at banks and at the DHA offices were already a problem. With the proposed new system, how would this inconvenience be improved? How would people be informed about the new initiative?

Mr D Gumede (ANC) said innovation which would move the DHA and the country forward are welcomed. The innovation would improve the work of the DHA. He raised a concern about the DHA partnering with SAPO. SAPO has not been able to perform its tasks these past couple of months because of a lack of proper governance within the institution. How would they be able to handle the new Smart ID Card rollout? SAPO was not a good brand. He asked whether the staff at SAPO and those at the banks have been vetted. What security measures have been applied seeing that these non DHA employees would be handling people’s sensitive information? He asked that the results of the DHAs risk analysis be made available to the Committee. What were some of the risks and challenges applicants should look out for during the application process?

Chairperson Mashile indicated that according to the presentation, booths had already been installed at various sites. Where were these sites, could they be made know to Members so they could visit?

Mr B Nesi (ANC) asked about the risk attached to online applications; how would the DHA get fingerprints? Has all of the DHA’s work regarding the issuing of Smart ID Cards been moved to banks and SAPO; what functions and responsibilities has the DHA been left with? Could the DHA indicate what risks were identified during the risk analysis? These were not clear from the presentation.

Ms Raphuti asked about the training of staff; what kind of capacity building would take place for personnel?

Chairperson Mashile raised a concern about the security of the infrastructure; how secure where the banks to house DHA infrastructure and to secure the flow of personal information between the networks?

Mr Moloi responded and said the verification of fingerprints was done by DHA and the banks used the Public Key Infrastructure system which has been made available for taking fingerprints, in that way banks also ensured that there was no breach of security either from their side or DHA. He reassured Members that risk assessment was an ongoing process. The reason why there was a need to expand DHA’s footprint was because DHA did not have a national centre for processing information and applications, however this would be developed. One of the risks identified was identity theft, however the Smart ID Card application process would prevent those risks. For example it would be impossible for anyone to remove and replace ID photographs as was the case with the green ID book.

He agreed that there had been some chaos at SAPO and the DHA has looked at issues around SAPO and its reputation. The DHA would deploy vetted people to work on the system. He argued that there were benefits to modernization. DHA staff would be re-trained on the use of the new Smart ID Card and eChannel. It would however still take about 5-7 years for the country to change completely from the green ID book to the Smart ID Card.  A full rollout however would result in a lot of uncertainty which was why the pilot was ideal. The MOU with the banks has been signed for six months from February to July 2015. He assured Members that there would be a comprehensive way forward after July. He indicated that the photo booths were in Johannesburg at the FNB and Standard Bank headquarters. With regards to the question on what benefits the banks would be receiving, he said banks agreed to give DHA the space to deliver its services, and as the relationship strengthened the information sharing element would be more defined. The only financial gain for the banks he knew about was that of the bank charges for various transactions.

Chairperson Mashile said according to the presentation, fees would be collected through the bank system; how would this happen without networks between the banks and DHA been interconnected?

Mr Moloi responded to the question on training, saying DHA staff would be retrained on how to deal with the new process. The workforce would be taken from the DHA.

Chairperson Mashile reiterated the concerns on why DHA was engaging banks when the DHA has not finished the rollout of the projects within the DHA and how would the initiative be communicated to the general public?

Mr Hoosen said clearly the sharing of information between the DHA and banks was a trade off; however it was not clear what the banks would be getting from the deal. Banks would ordinarily charge a rate for the utilization of their working space and for taking full responsibility of the DHA infrastructure. What were the banks getting from the deal?

Chairperson Mashile asked whether there would still be a need for an applicant to go to the DHA when they have applied through the banks. How was the DHA going to keep the information from the banks safe and separate during this pilot phase so that it could be assessed differently from the mainstream work of the banks?

Mr Moloi agreed with Mr Hoosen’s concerns and said the banks were approaching the collaboration with the DHA with caution. Citizens have been informed through various platforms and the Minister of Home Affairs has also informed the public that in the next 5-7 years the DHA would get rid of all green ID booklets as people would have to migrate to the Smart ID Card. However during the pilot phase the process was only intended for the banks’ current clients as well as the bank staff. Broad communication would be done after the pilot has been completed successfully. He agreed with the concerns around SAPO and said collaboration with SAPO was being done with caution. He did not have the exact details regarding the contracts between banks and the DHA.

The Chairperson said the DHA would need to go back and check what the costs would be for the DHA to have the banks providing security and office space to the DHA. This was an important aspect of the deal and Members wanted to know everything about it.

Mr Nesi said the DHA would have to rent space from banks; why was DHA not focusing on expanding its offices instead of paying rent to banks? How much would this rent be and why was the DHA using two systems in parallel? Have unions been engaged seeing that the current DHA staff would be moved to banks and SAPO?

Mr Hoosen said the DHA needed to bring answers to Members about the pilot process and the involvement of banks and SAPO. Members wanted to understand the long term vision of the DHA and what the benefits would be for the banks and for SAPO.

Department of Home Affairs – Visa Facilitation Services (VFS) Challenges and Recommendations
Mr Jack Monedi, Chief Director: Permits, DHA, explained the three-fold rationale for partnering with VFS:
• Swift intervention in managing applications, which included paperless environments, improved security through taking biometric information of clients, deploying necessary infrastructure at no cost to the state, addressing capacity challenges through innovative business partnering and putting South Africa in a better position to compete for skilled migrants
• New Immigration Amended Act of 2011 which advocated for personal appearances by applicants in lodging applications and collecting outcomes, tighter security measures at the DHA, DHA offices were not ready for clients to personally present themselves, VIP facilities for clients and private companies and business applications
• Cost benefit analysis; all set up costs were borne by the service provider therefore no financial implications for the DHA, service provider collected revenue due to the state and provided a daily reconciliation, less administration burden on DHA, DHA and the service provider agreed on a handling fee of R1350 charged to clients.

He said the VFS had a standard floor plan across all branches and this increased efficiency and productivity, and reduced turnaround times. The VFS business solution was a web-based application solution. Some of the challenges experienced however included:
- Designing of DHA Visa Adjudication System (VAS)
- Data interface between VAS and VFS
- Switching from manual to electronic adjudication
- Clients were still not used to the electronic lodging of applications
- VFS system adaptability and resilience to high volumes of applications
- Overcrowding in centres like Brooklyn in Pretoria and Rivonia in Johannesburg
- Restricted access to VFS services in East Asia
- Abuse of the VFS appointment system by individuals.

Some of the proposed recommendations to these challenges were; designing an end-to-end application and adjudication system, continuing to monitor the agreed data transfer protocol between DHA and VFS, consolidating the positive impact of change management programme, establishing VFS accredited business kiosks, conducting weekly visits between DHA and VFS steering committee to monitor performance and to intervene decisively, opening a new VFS centre in Gauteng, rolling out additional VFS centres in China and India and reforming the VFS appointment system to combat abuse.

Discussion
Mr Hoosen asked about the unintended consequences of the VSF system in places such as China. Has the DHA conducted a feasibility study before the rollout on how the system will impact tourism? People were complaining that they were having to travel long distances to visit VFS offices, could fingerprints not be taken at the tail end of the process? How would legislation be changed to accommodate these new changes? Had the number of applications being processed increased or decreased with the implementation of the system? Has it improved turnaround times? There had been complaints from applicants who said that they were forced to pay more than R1350 because there were problems with the application process; was the DHA aware of this?

Ms T Kenye (ANC) asked what the causes were for the challenges of overcrowding in Gauteng. She asked about the abuse of the system; what disciplinary measures which were in place to deal with this? What measures were in place to detect criminal records of applicants?

Ms Raphuti asked whether the allegations that the system has caused a drop in the number of tourists coming into the country, were true. With regard to work permits given to foreigners with non-critical skills, if a person was found to be a criminal what was the recourse?

Mr Nesi asked about the disciplinary measures for fraudulent and corrupt officials.

Mr Gumede said people needed to see the bigger picture which the DHA and VFS was working towards, and that was to have a safer and more stable South Africa. South Africa needs to be kept safe from organized crime and from terrorists. He said there was no unfair competition between unskilled labour.

Chairperson Mashile asked whether the DHA was coping with the rising numbers of people trying to get into the country. What steps had been taken to deal with people who fraudulently took part in block bookings? The VFS was providing a system at no cost to the state; why was the DHA continuing to say this when there was a R1350 handling fee? Who would be paying for the services at the kiosks outside the country?

Mr Monedi responded and said a feasibility study has been done and it started by looking at smaller countries. He said to place a DHA official abroad to do administrative work was expensive and was not sustainable. For example, adjudication was not done at the country of origin, South Africa has tested the system and was pleased with it. Countries which were security conscious were also using the system. The biometrics would be done at the port of entry as a measure to ensure that security was tight and that criminal record checks would be done upon arrival. He said the rationale to opt for 43 offices instead of 11 offices has assisted a lot; systems were now streamlined and there were no DHA officials at these offices. All 11 offices have been standardized. He said the number of applications has not increased or decreased but efficiency has improved. The DHA was now able to adjudicate applications on time. In the past it was difficult for headquarters to receive applications because the system was inefficient. 

He responded to the question about applicants paying more than the initial fee, saying incomplete applications should not be submitted. The DHA has insisted that incomplete applications not be considered; these applications were rejected. An applicant could apply for an appeal upon rejection and then be liable to pay an appeal fee. He clarified and said the people abusing the system were not officials but were rather private applicants. VFS has started a legal process to deal with the issue. VFS has been instructed to do mystery shopping to infiltrate fraudulent activities. Not all tourists who came to South Africa could be assumed to be safe and were not terrorists. It was therefore important that the DHA check whether there was a risk the tourist was posing to the country before entry was given. South Africa was not immune from attacks. VFS collects the handling fees on behalf of DHA. He explained that the kiosks were an optional service.

Mr Hoosen reiterated that there was an alarming decline in tourism; this was based on a statement made by the Minister of Tourism. The problem was not around tourism, the real problem was that South Africa was frustrated with the DHA not being able to deal with illegal immigrants. That was the problem, not that of tourists. What was the number of applicants which were not being processed, either at VFS or at DHA. He said there were many countries who use VFS, but the system needed to be more simplified for tourists. South Africa needed to be smarter.

The Chairperson asked about the companies which were taking VFS to court and wondered why were these court cases secret?

Chairperson Mashile said the DHA needed to come back and clarify the risk analysis on the Smart ID pilot and the benefits enjoyed by banks and SAPO.

Consideration of the Budget Vote Report for the 2015/16 financial year
Ms Kenye moved for the adoption of the report with minor spelling amendments.

Ms Raphuti seconded the adoption of the report.

Chairperson Mashile indicated that the DHA’s budget vote would take place on 6 May 2015 and Members should do their best to prepare for the engagement.

Adoption of Committee Minutes: 24 March 2015
Mr Nesi moved for the adoption of the minutes without amendments. Ms Kenye supported the adoption.

The meeting was adjourned.