South African Development Partnership Agency: briefing by Department on International Relations & Cooperation

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International Relations

13 September 2011
Chairperson: Mr T Magama (ANC)
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Meeting Summary

The establishment of The South African Development Partnership Agency (SADPA) represented a major development in the architecture of South Africa’s foreign policy. The Department was looking for the Committee’s views on how South Africa could better manage its entry into this area of foreign policy work. There were four broad themes to the briefing: 1) SADPA’s involvement in development cooperation work 2) the framework of African Renaissance Fund (ARF)- the precursor to SADPA 3) the context of the decision in which cabinet took to establish SADPA and 4) the issues that required attention going forward such as institutional arrangement, the SADPA fun bill, the project plan and the strategic framework.

One of the limitations or shortcomings that the Department of International Relations and Cooperation had noted was that all the spheres of government had been involved in outbound developmental assistance but the work had not been coordinated between the three tiers of government. Also, there was no overall development cooperation policy. The Department had identified the need to plug in these gaps and SADPA provides the appropriate opportunity to address these coordination and policy gaps. By entering into this sphere of interstate relations, it did not necessarily transform South Africa from being a ‘developing country’ to being a ‘donor country’ because South Africa has its own development challenges. South Africa remained a developing country “with a conscience that had an obligation to assist where possible so that countries who do not have the means that South Africa had could ameliorate their conditions.

The Department had also performed a review of similar development partnership agencies in other countries Such as France, The United Kingdom, New Zealand, The Nordic countries and the USA to get a sense as to how they organised and how they managed development cooperation. This resulted in useful lesson that have helped DIRCO conceptualise SADPA. The conceptual framework that the Department developed was approved by Cabinet in 2009. Essentially, Cabinet decided that SADPA needed to be an entity within DIRCO. It would be established in terms of the Public Service Act and would be staffed by a combination of diplomats and technical experts.

SADPA needed systems and processes to engage in complex funding and financial procurement arrangements. These would be the responsibility of SADPA itself, and not DIRCO, because SADPA would have its own administrative capacity to manage its programmes, projects and finances. Just like the ARF, SADPA would be governed in accordance with the existing schedule 3A of the Constitution. The Minister would delegate the oversight responsibility to one of the Deputy Ministers and policy direction and oversight would be provided by DIRCO. The head of SADPA itself would be its accounting officer; the Director General of DIRCO would not be the accounting officer. SADPA would have to issue its own annual report and present it to Parliament. SADPA would be audited as an independent entity by the Auditor General.

Committee members raised questions as to why the Department sought to dissolve the ARF brand and establish SADPA now. Members asked questions of clarification as to how SADPA would help South Africa pursue its national interests? How did the Department define development assistance and what was the distinction between a ‘donor country’ and a ‘development partner’?

Meeting report

Opening Remarks
The Chairperson noted the apologies from Committee Members Ms R Magau (ANC), Ms C September (ANC), Ms W Newoudt-Druchen (ANC), Mr E Sulliman (ANC) and Mr K Mubu (DA), all of whom could not attend for various reasons. He noted that there was a draft bill concerning the establishment of the South African Development Partnership Agency (SADPA)- it had not yet been formally introduced to the Committee. It was coincidental that the Committee would have a briefing while the process of the draft bill was underway. The briefing from the Department would be a preliminary briefing that had nothing to do with the formal processes of introducing the bill into Parliament.

The Chairperson invited Mr Mxolisi Nkosi, Deputy Director General: Africa Bilateral, Department of International Relations and Cooperation (DIRCO), to present the briefing.

Briefing by the Department on the establishment of SADPA
Mr Nkosi stated that the establishment of SADPA represented a major development in the architecture of South Africa’s foreign policy. The establishment of SADPA represented a new frontier of engagement, which was a significant trajectory and a major leap in the country’s foreign policy. Until recently, the area of development assistance had been the monopoly of developed countries in the West. Recently, emerging powers of the South had ventured into this terrain. The Department was looking for the Committee’s views on how the country could better manage its entry into this area of foreign policy work. There were four broad themes to the briefing: 1) SADPA’s involvement in development cooperation work 2) the framework of the African Renaissance Fund (ARF)- the precursor to SADPA 3) the context of the decision in which cabinet took to establish SADPA and 4) the issues that required attention going forward such as institutional arrangement, the SADPA fun bill, the project plan and the strategic framework.

South Africa had been engaged in development cooperation for quite a while. The pre-1994 government had been involved in development assistance for reasons of trying to project itself on the African continent in the few countries which it still maintained diplomatic relations with, such as: Malawi, Côte d’Ivoire, Gabon Comoros and Equatorial Guinea. These countries benefited from a symbolic project, which the apartheid government used to divide African countries and ensure that it had a bit of recognition from some of the African countries. The ARF was established in 1994 - the sole purpose of which, was to promote development and peace on the African continent and help with institutional capacity building. The ARF had made a difference in a number of countries such as DR Congo, Burundi, Sudan, Lesotho and Guinea. Projects in these countries had a meaningful impact on the lives of African people, in helping them to set up strong institution of democracy, promote peace, security and stability in their countries.

One of the limitations or shortcomings that DIRCO had noted was that all the spheres of government had been involved in outbound developmental assistance but the work had not been coordinated between the three tiers of government. Also, there was no overall development cooperation policy. DIRCO had identified the need to plug in these gaps and SADPA provided the appropriate opportunity to address these coordination and policy gaps. Development cooperation was an important instrument in promoting South Africa’s objectives on the African continent. South Africa sought to promote peace, stability and democracy, good governance and create the conditions for these countries to develop and to prosper. In keeping with the motto and the vision of the Department, DIRCO sought to promote a peaceful prosperous Africa, which took its rightful place in the community of nations.

By entering into this sphere of interstate relations, it did not necessarily transform South Africa from being a ‘developing country’ to being a ‘donor country’ because South Africa has its own development challenges. South Africa remained a developing country “with a conscience that had an obligation to assist where possible so that countries that did not have the means that South Africa had could ameliorate their conditions”. For example, South Africa had recently deployed some of its divers to Tanzania to help recover some of the bodies following the disastrous sinking of the ship off the coast of Dar Es Salaam. This act was consistent with South Africa’s overall foreign policy orientation, which sought to assist where possible. South Africa’s Independent Election Commission had been asked to help with various aspects of the November 2011 elections in DR Congo, where a voting population of over 20 million people was expected. South Africa participated jointly in the India Brazil South Africa (IBSA) poverty alleviation fund with its two equal partners in this grouping. DIRCO also engaged multi lateral donors and lending institutions such as the African Development Bank and the World Bank. Other South African agencies that were involved in the area of development cooperation and assistance were funding institutions such as the Development Bank of Southern Africa and the Intelligence Transfer largely in major infrastructure projects.

Early assessment work had been done with the National Treasury to manage all inbound development assistance. Treasury had the experience and capacity to manage the official development assistance that flowed into South Africa. Treasury performed an extensive review of the ARF, and out of that came a number of recommendations, which helped DIRCO to model SADPA. DIRCO had also performed a review of similar bodies in other countries such as France, the United Kingdom, New Zealand, the Nordic countries and the USA to get a sense as to how they organised and how they managed development cooperation. This resulted in useful lessons that had helped DIRCO to “predicate the concept of SADPA”.

The conceptual framework that DIRCO developed was approved by Cabinet in 2009. Essentially, Cabinet decided that SADPA needed to be an entity within DIRCO. It would be established in terms of the Public Service Act and would be staffed by a combination of diplomats and technical experts. Some attention still needed to be given to the financial arrangements and the task of establishing SADPA resided with the Minister of International Relations and Cooperation. Having looked at a number of elements, the Department was currently developing a model for the operationalisation of SADPA. The guiding principles were on the focus of integration, rather than initiating a new process, given that SADPA was the successor to the ARF and would be established through a bill that would come before the National Assembly and would repeal the existing ARF Act.

SADPA needed systems and processes to engage in complex funding and financial procurement arrangements. These would be the responsibility of SADPA itself, and not DIRCO, because SADPA would have its own administrative capacity to manage its programmes, projects and finances. The proposal was for the SADPA fund to retain the Schedule 3A status, which referred to the public entity status. Just like the ARF, SADPA would be governed in accordance with the existing schedule 3A of the Constitution. The Department hoped that the Committee would agree to repeal the ARF, which was a critical step to establishing the SADPA fund bill and setting up the Board of Trustees. This would ensure that SADPA was managed in accordance with accepted principles and standards of good governance financial management and procurement principles. SADPA would be established as the Government component for purposes of administration of the fund and would be a separate component within the Ministerial portfolio. The Minister would delegate the oversight responsibility to one of the Deputy Ministers and policy direction and oversight would be provided by DIRCO. The head of SADPA itself would be its accounting officer; the Director General of DIRCO would not be the accounting officer. SADPA would have to issue its own annual report and present it to Parliament. SADPA would be audited as an independent entity by the Auditor General, who would issue a report of his findings based on an assessment of SADPA’s use of public and other funds that were placed at its disposal for discharging its mandate. The Board of Trustees were to be appointed by the Minister, and a minimum of seven and maximum of 15 members that could be appointed.

Mr Shoayb Casoo, Chief Director of Intergovernmental Affairs, DIRCO, stated that the SADPA bill had three basic elements. The bill dealt with the establishment of the agency as a component of government under the Minister’s portfolio. The bill discussed the objectives, which were to coordinate and implement South Africa’s outgoing development cooperation assistance programmes, as well as administer the SADPA fund. The remainder to the bill dealt with the establishment of the SADPA fund, the financial arrangements, the functions of the fund and the governance structures of the fund. DIRCO had created the possibility for the Minister to appoint an actuary to look at financial viability of SADPA if so required. That last parts of the bill dealt with the repeal of the ARF to create the SADPA fund. SADPA would be able to receive money into the SADPA fund directly from a foreign donor. One limitation of the ARF was that the money went directly to the National Treasury, so in instances of trilateral cooperation outside of South Africa, the money would be inaccurately reflected in a donor budget as the amount of aid that South Africa had received. International donors had approached South Africa on several occasions and requested that this arrangement be changed, in order to be accurately reflected in their accounting.

Discussion
The Chairperson opened the floor for questions.

Mr B Holomisa (UDM) asked whether the ARF would be “done away with” all together. The ARF was a strong brand and was still needed. What was the position of the African Renaissance Institution? Was DIRCO changing it “just for the sake” of changing it, and would it not be more expensive to do so? What national interest was South Africa targeting with the establishment of SADPA? Finally, he asked a question about the accountability of the recipients of development assistance. What mechanism would be put in place to ensure accountability?

Ms L Jacobus (ANC) asked what the current programmes were around the IBSA poverty alleviation fund.

Mr S Mokgalapa (DA) asked what would happen to the New Partnership for African Development (NEPAD) institutional arm of the ARF. Was the Department creating centres of soft power in Africa? What criteria would be used to choose recipients of development assistance? What model did DIRCO settle on and why? On the issue of monitoring and implementation, how would SADPA ensure checks and balances? How would SADPA coordinate efforts from different spheres of government? Would IBSA, ARF and all the programmes that were alluded to, all be consolidated under SADPA? What would be the appointment process of the Board members?

Mr M Booi (ANC) asked what DIRCO defined as development. What informed South Africa’s approach within the changing environment? For example, China had an increasingly bigger role in development cooperation on the African continent. What had put DIRCO under pressure to bring the establishment of SADPA up now? What was the role of the private sector?

The Chairperson asked what would be the posture of SADPA. Would SADPA be a tool of foreign policy to advance South Africa’s national interest or would SADPA be a tool to advance what would otherwise be seen as South Africa’s “altruistic approach to matters”? South Africa had been known to invest all over Africa without clearly defined national interest objectives. It was a problematic concept for the objective of South African foreign policy to address challenges within Africa, because South Africa was not a country with the capacity to do so. Since 1994, the perspective had been that South Africa’s development was linked to the development of the Africa and the South. The emphasis was problematic in the sense that, it created an impression that the country went around addressing problems in Africa and the Global South when it did not have the resources, nor the capacity to do so. At a conceptual level, what was the difference between being a ‘donor country’ and being a ‘development partner’?  If the intention was to establish a Board of Trustees and create a separate entity that would account to Parliament on its own, this approach would not work. Parliament had seen those before, for example, the Independent Development Trust, and other similar entities were problematic. Why did DIRCO choose this path? These entities consume more resources for operational costs than they do on the actual work. It would make sense to rather create a division under one of the Deputy Director Generals.

Mr Nkosi responded that there was a strong relationship between SADPA and the ARF. SADPA would be the successor to the ARF. The establishment of SADPA represented the next phase of South Africa’s engagement on the African continent within the framework of the ARF. The concept of the ARF remained the philosophical foundation and remained the conceptual intellectual foundation of SADPA. There was no dichotomy, no contestation and no difference between what the ARF sough to achieve and what SADPA would achieve. The establishment of SADPA was more than just a change of name. SADPA envisaged establishing an administrative and institutional framework. SADPA would not just rely on appropriations from Parliament, but also rely on donor funding from bilateral and multilateral donors who would bring money into SADPA for purposes of implementing project on the African continent in the form of trilateral or multilateral cooperation. The ARF philosophy was predicated on the notion of contributing to Africa’s development and growth. There was no intention to depart from that original intent. DIRCO was taking this intent to next level and SADPA was the correct vehicle to do this.

Mr Holomisa interjected with the question of why DIRCO did not “beef up” the ARF and what were the circumstances that led to the change from the ARF to SADPA? The Committee wanted to understand the rationale.

Mr Booi added that South Africa had not handled the outgoing phase of former President Mbeki correctly and there were international perceptions that there were tensions within South Africa in the relationship between Mbeki and Zuma. Would the establishment of SADPA be able to deal with these perceptions?

Mr Nkosi replied that he was a “humble civil servant” so elements of Mr Booi’s question would better addressed at the appropriate level. He could only answer questions that were within his mandate as a civil servant.

Mr Nkosi reaffirmed that the concept of the ARF was rooted in South Africa’s foreign policy. DIRCO was looking at SADPA work as broader than simply Africa. SADPA would not be geographically limited to Africa. For example, DIRCO had to engage in Haiti, East Timor and Cuba. South Africa engaged in these countries within the context of South-South cooperation, which was a key plank of South Africa’s foreign policy. African cooperation was subsumed within the broad framework of development partnership. DIRCO’s definition of national interest transcended the classical philosophical definition, which looked purely at “what was in it for South Africa.” There was a modern doctrine of national interest, which incorporates elements that take place elsewhere which may also impact on ones own national interest. This was the new paradigm of national interest that South Africa had embraced. Kofi Annan, former UN Secretary-General, spoke about this in 2005 and Tony Blair and Bill Clinton had also articulated this idea that countries should take an active role in events that took place outside of their geographical spheres of interest because these events had an indirect collateral impact on their own development. For example, South Africa did not get involved in the DR Congo for egalitarian reasons, but rather because South Africa was pursuing its national interest. The DR Congo’s ongoing fratricidal war could result in the inflow of migrants and flow of small arms into South Africa and disturb South Africa’s newfound democracy and peace. This constituted a threat to South Africa’s own national interest. The classical dichotomy of what constituted a national interest and egalitarian or altruistic actions no longer existed in 21st Century international relations. National interests transcended geographical spheres of influence and could no longer only be defined in terms of pure economic interests, but should be broadly defined. South Africa needed SADPA as an instrument to articulate this interest. SADPA should help to contribute to development and create opportunities for South Africa to fully explore the potential that existed on the African continent. Countries that had aspirations like South Africa, had a role to play insofar as promoting the values of democracy, human rights, good governance, peace and development globally.
The IBSA poverty alleviation fund was a trilateral agreement between India, Brazil and South Africa that helped the Least Developed Countries address their challenges. IBSA helped Sierra Leone develop a rice and vegetable growing project. A similar project was planned in Burundi. IBSA had also planned a health systems delivery project, where Cuban doctors would be deployed to address maternal and child mortality in Sierra Leone. Sierra Leone’s ratio of gynaecologists to pregnant women was the lowest in the world, and IBSA projects contributed to meaningful change in these countries.

Mr Holomisa interrupted and said that there were some areas where the Committee needed to engage the political head of the Department so that before it moved on to substantive issues, the issues of national interest could be clarified with the Minister. The establishment of SADPA would fit well if there was a white paper that articulated how South Africa’s foreign policy would be driven. The Committee needed time to review these documents.

Mr Nkosi replied that there would be a symbiotic relationship between SADPA and NEPAD. SADPA would also strike strategic partnerships with institutions such as the African Development Bank, and the regional economic communities on the African continent. The relationship was complementary and it sought to reinforce the development agenda of the African continent.

The criteria to assess the countries that qualified for developmental assistance would be determined by the Board as well as the SADPA administration. Broadly speaking, SADPA would pursue projects that sought to promote democracy, good governance, capacity and institution building. About the modality, DIRCO had explored structures that were independent of the Department such as the Canadian, American, French and Swiss models. SADPA decided to go for a hybrid model that sought to retain SADPA within government and at the same time ensure that SADPA was unencumbered by the bureaucracy. DIRCO looked at a model that sought to balance between the two extremes.

SADPA would coordinate efforts of provincial and local authorities by establishing a forum that coordinated outbound development assistance and ensured that there was information sharing and that duplication of efforts was eliminated. In response to question of project consolidation, IBSA would continue to exist on its own, as it was an independent fund. But the hope was that the two institutions would complement each other.

The appointed members of the board would not receive any additional remuneration. The SADPA board was not a “typical corporate board”.

Regarding the role of the private sector, the Minister underscored the roles of non-state actors in the speech that she had delivered. These actors were free to make contributions in kind, so that SADPA could implement its programmes. Also the private sector was free to deploy experts from various fields.

The conceptual difference between a ‘donor country’ and a ‘development partner’ was that donor countries were traditionally developed, Organisation for Economic Cooperation and Development (OECD) countries. For example, Mexico was now an OECD member and they had made the decision to be described a donor country South Africa did not want that distinction because there are still huge development challenges within South Africa, where a lot of people still live in conditions of abject poverty. Only the WTO had erroneously recognised South Africa as a developed country, however all other multilateral bodies regarded South Africa as a developing body?

The Chairperson thanked DIRCO for their presentation. The Committee would engage with the bill when it was formally tabled. Hopefully the Minister would be present to engage on the political issues surrounding the SADPA bill. The Committee had engaged with the establishment of SADPA in the past. He stated that the white paper on foreign policy was inextricably intertwined with the establishment of SADPA and they should be looked at in conjunction to one another an not as separate issues.

Mr Mogakapla asked whether it was a formal Committee resolution to see the Minister before the bill was tabled in Parliament.

The Chairperson stated that the technical difficulty with taking a formal resolution was that the Committee did not constitute a quorum. However the Committee would leave it with the Department to engage the Minister and the Chairperson would also extend an invitation to the Minister to attend a Committee meeting and find an appropriate time to engage on the issues surrounding the SADP bill.

The Chairperson closed the meeting.

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