SAT Quarter 2 & 3 performance; Reputational risks to tourism industry posed by captive breeding: Expert briefing

Meeting report

The Chairperson stated that government had put certain measures in place for South Africans to adhere to due to the outbreak of the Corona Virus. He urged South Africans to remain calm but to be vigilant.

Opening remarks by Mr Siyabonga Dube SA Tourism Board Member

Mr Dube agreed that it was trying times for SA. There was huge impact on the tourism industry. SA Tourism and the National Department of Tourism had however put recovery processes in place. Some feedback provided to the Committee was that on 13 December 2019 the matter around the Chief Executive Officer (CEO) of SA Tourism had been finalised. The CEO had been cleared of all charges and was back at work. He on the performance of SA Tourism said that there were still challenges faced. There were targets that had not been achieved. The reasons would be covered in the briefing.

Briefing by SA Tourism on its Quarter 2 and Quarter 3 Performance Reports 2019/20

Ms Bashni Muthaya Chief Strategy Officer, SA Tourism at the outset spoke to tourism performance. She noted that international tourist arrivals to SA had declined by -2% in 2019 compared to the same period in 2018. There was a decline in most areas of the world. The Corona Virus outbreak had worsened things. Global travel bookings from January 2020 to February 2020 were down 19%. At present things were even worse. The upside however was that domestic tourism grew by 61.3% in 2019 compared to 2018. She continued with an overview of SA Tourism’s organisational performance by Programme for Quarters 2 and 3. She did however note that in the interests of time she would only focus on those targets that had not been achieved.

Programme 1: Corporate Support

There were no targets set for Quarters 2 and 3. Only annual targets were set. At the time annual targets were not due for reporting.

Programme 2: Business Enablement

For Quarters 2 and 3 the quarterly market insight report target had not been met. The Committee was given the assurance that the target would be met by the end of the financial year.

On the number of international tourist arrivals the targets for Quarters 2 and 3 fell short by -11% and -10% respectively. The targets were not achieved due to a 2.9% year on year decline in total international tourist arrivals.

Programme 3: Leisure Tourism Marketing

On Small and Medium Enterprises (SME) attendance at SA Tourism Tradeshow Platforms the Quarter 3 target fell short be -50%. The target was not achieved due to the shift in the date of IMEX America to Quarter 2.

Programme 4: Business Events

On the number of bids supported for international and regional business events the Quarter 3 target fell short by -50%. The explanation given was that bids submissions were still in progress.

Programme 5: Tourist Experience

On the number of graded rooms achieved the Quarter 3 target fell short by -12%. Corrective action taken included a renewed focus and process that was underway with some of the large hotel groups to ensure all the properties in the portfolio were graded which would add to the graded rooms performance. On the number of officials/frontline staff that had attended the Welcome Training the Quarter 3 target fell short by -39%. The explanation given was the unavailability of staff/officials during the busy festive period. 

Ms Nombulelo Guliwe Chief Financial Officer (CFO) SA Tourism provided the Committee with insight into the financial performance of SA Tourism. The total expenditure on the total budget for Quarter 2 and Quarter 3 sat at 57% and 90% respectively.

Ms Muthaya continued with detail on the human capital of SA Tourism. For Quarter 2 and Quarter 3 the vacancy rate sat at 8% and 6.3% respectively.

Presentation by Dr Louisa de Waal and Dr Ross Harvey on reputational risks to the tourism industry posed by the captive breeding of lions

Dr de Waal Campaign Manager: Blood Lions and Dr Harvey Consultant: EMS Foundation apologised for not having provided their presentation documents to the Committee but assured the Committee that it would be provided in due course.

Dr de Waal at the outset provided some context over the issue of lions. Lion populations had over the past 20 years decreased by 40%. This was partly due to habitat degradation and other factors. There was around 3 000 lions in fenced reserves and about 8 000 in captive breeding facilities. The 8000 figure in reality could be as high as 12 000. SA had the largest lion breeding industry. The captive lion breeding industry had started in the 1990s. In 2009 there were 3 000 lions but by 2015 this number had doubled to 6 000. By 2019 the number had increased to 7 979 in 366 facilities. She believed that over the next few years the numbers could increase to between 15 000 and 20 000 lions. She said that lions were exploited for the sake of tourism. Cubs were taken away from their mothers at birth. Lionesses in the wild would have one litter every two years. In captive breeding lionesses were having five litters every two years. The problem was that captive lions did not fear humans. Nor had they learnt to hunt. Lions at these facilities were often in-bred. On trophy hunting of captive bred lions from 1999 to 2018 a total of 12 000 trophies had been exported, mostly to the USA. She stressed that there was no conservation benefits to lions being bred in captivity. The concern was that captive breeding might increase the demand for wild lion bones as well. On the lion bone trade since 2008 over 6 000 lion skeletons had been exported to South East Asia for traditional medicine purposes. Since 2017 the export quota had been set to 800 skeletons. There was no scientific basis for the use of lion bones for medicine. No evidence for efficacy. This trade in bones legitimises the product ie lions for trade. It even incentivised poaches to target wild lions. 98% of the skeletons were destined for Laos and Vietnam. The International Union on the Conservation of Nature (IUCN) World Conservation Congress had passed a motion to urge the government of SA to stop captive lion breeding. To date nothing had happened. No norms and standards for the industry had been set. In 2019 a court decision was that the 800 lion skeleton quota was unlawful and that the welfare of lions was not taken into consideration. There were also health risks to humans attached to the captive breeding of lions. Zoonosis and other parasitic diseases could be transmitted to humans. She pointed out that global awareness against captive breeding of lions was increasing with airlines in France, USA, and Australia banning the transport of trophies. There were even disputes amongst hunting association in SA regarding the issue. On damage to the SA brand she pointed out that there was a possible loss of R54bn over the next few decades to tourism in SA. SA could not afford further setbacks in tourism as the Corona Virus had already negatively impacted the industry.

Dr Harvey spoke to the state of the captive breeding industry in SA. He urged the Minister of Tourism and cabinet to terminate and shut down the lion captive breeding industry. He suggested that the Committee watch the movie “Blood Lions”.  He noted that there were various layers of exploitation. The industry was totally unregulated. The USA had in 2016 banned the hunting of captive lions and the transport of trophies to it. Now the industry had shifted gear to supply lion bones to Asia. He estimated that in 2018 revenue from the sale of lion bones could be as high as $180m annually. The benefits were mostly to white owners of facilities. Perhaps there was a 1.8% contribution to tourism revenue. Direct employment sat at a lowly 613. The argument put forth by the industry was that it created jobs in rural areas. The industry only benefitted a few wealthy people. No tourism jobs were created. He said that in 2018 parliament had passed a resolution over the matter of captive lion breeding. However he observed that the emphasis to eliminate the industry seems to have been lost. He reiterated that in 2019 Justice Jody Kollapen had ruled that the 2017 and 2018 quotas had been illegal. On 4 October 2019 lion bones weighing 342 kilograms had been seized at OR Tambo International Airport. He felt that captive breeding industry was a blight on SA’s tourism industry. He urged the Committee to hold cabinet to account.

Discussion

The Chairperson urged members to direct questions to both SA Tourism and to the experts on canned lion hunting in the interests of time. He said that it was important to consider what damage the canned lion hunting industry had done to the image of SA.

Mr Dube said that all questions, comments and recommendations of the Committee were noted. He undertook to deal with key issues.

Mr H Gumbi (DA) given the Corona Virus outbreak said that there were responses by SA and the rest of the world around travel restrictions. This would inevitably affect the numbers of tourists visiting SA.  How did SA Tourism perceive the Corona Virus to affect domestic tourism and more specifically the visiting of friends and relatives (VFR)? He asked how one would rebuild after the Corona Virus. How would one rebuild international confidence in coming to visit SA? There needed to be a massive campaign that SA Tourism, National Department of Tourism (NDT) and other organised tourism agencies needed to be involved in.

He pointed out that canned lion hunting was an issue which popped up regularly. The experts had in the presentation stated that due to canned lion hunting there was a possible loss of R54bn to the tourism sector. He observed that there was a huge culture of hunting in the USA notwithstanding the ban on bringing back trophies to the USA. He asked how many tourists came to SA purely for canned lion hunting. How would one go about closing down the canned lion hunting industry? Perhaps there could be legislation to ban the industry?

Mr Dube on the Corona Virus said that SA as a country and the tourism sector had to appreciate that winter was approaching. SA needed to come out of this predicament called the Corona Virus much quicker. He pointed out that countries in the North were starting to stabilise. The measures that were put in place were appreciated. SA had to deal with the Corona Virus quickly so that tourists could be attracted back to SA. He noted that SA Tourism had had a plan to focus on domestic travel rather than focussing on international travel. Once the Corona Virus situation had subsided then the focus would once again be on international marketing. 

Dr de Waal said that work was being done on an exit plan to phase out the canned lion hunting industry. The breeding of such lions should be stopped. On the number of trophies or the income to the tourism industry she said that 600 trophies were exported to the USA. Most of these trophies had been captive bred lions. She noted that only 12 wild lion hunting permits were issued per year. Captive lion hunts were easy and short. The hunters stayed in SA for only a week. Hence the economic benefit was minimal. The tourism industry made much more off other tourism activities. 

Dr Ross responded that it was difficult to ascertain the revenue from canned lion hunting. It usually cost $8000 for a captive hunt. The practise was frowned upon by ethical hunters. Real hunts were in the range of $35 000 in Tanzania. He said that the revenue generated was limited as there were only eight accredited canned lion hunting facilities. The rest of the hunts were illegal and the proceeds were never seen. The revenue was thus small when compared to other hunting and tourism activities. Tourists wishing to come to SA frowned upon the canned lion hunting industry. One had to balance the revenue gained from the industry against the revenue lost because of the existence of the industry.

Mr M De Freitas (DA) suggested that the Committee watch the documentary “Blood Lions” which he was fortunate enough to had watched. A viewing could be arranged for the Committee. SA had the legal framework persons involved in the industry should be punished. A fine of R3000 was not good enough. He said that gun loving Americans were coming to SA to kill lions. He referred to SA Tourism’s briefing document (Slide 30) and asked whether the training that had not happened could still be done virtually given the Corona Virus outbreak. There was no doubt that the sector was suffering due to the Corona Virus outbreak. SA Tourism was asked whether they had plans to mitigate the economic change in the sector over the next two to three quarters. He said that possible suggestions could be to rather postpone conferences and events instead of cancelling them. He also felt that foreign tourists who were already in SA should be encouraged to stay on as it was safer than to travel back to Europe to countries like Italy. It was about how SA could maximise benefit from the situation without sounding unsympathetic.

Ms M Gomba (ANC) asked SA Tourism whether they had a functional internal audit committee.

Ms Guliwe confirmed that SA Tourism did in fact have an internal audit function. Reporting was done to the Chief Executive Officer (CEO) of SA Tourism and not to her as CFO.

Mr P Moteka (EFF) felt that on SA Tourisms performance where targets were not met because the annual key performance indicator was not yet due for reporting or where insufficient data was available that those targets should be considered not to have been achieved.

Mr K Sithole (IFP) was concerned about the underachievement by SA Tourism on its targets. Why were targets not achieved? SA Tourism was asked what action plans it had in place to address audit outcomes. How many events/conferences in SA had thus far been cancelled? What impact did it have? He asked why the target on training had not been achieved due to staff not being available (Slide 30). On the criminalities of canned lion hunting he asked whether there were remedies.

Mr Dube said he did not have a figure on the number of events that had been cancelled. Events were still being cancelled. The Two Oceans Marathon in Cape Town had been cancelled. Formula 1 Racing had been cancelled and the Super Rugby Tournament had been postponed

Ms Muthaya on officials not being available for training explained that it related to Department of Home Affairs’ officials that were not available for training because they were working. 

Dr de Waal on criminal activity said that there was enough evidence of illegal trade. There was a massive captive lion population. There were 8000-12000 legal captive lions but there were an equivalent number of illegal captive lions. She said that huge consignments of lion bones destined for overseas markets had been intercepted.

Mr N Galo (AIC) asked SA Tourism to speak to the statement made by President Cyril Ramaphosa around the Corona Virus. Due to the measures put in place by government around gatherings all conferences and events would come to a standstill. What was to happen now?

Mr Z Peter (ANC) was pleased that the matter around the Chief Executive Officer (CEO) of SA Tourism had been settled. He was concerned that targets around the number of graded rooms seemed to always be a challenge to achieve. How could villages, townships and small towns be brought on board? On canned lion hunting and the export of lion’s bones for traditional medicinal purposes in Asia he said that one needed scientific proof whether the bones had medicinal value or not. The Committee needed to respond to the issue from an informed perspective.

Dr de Waal on the medicinal value of lion bones said that scientific studies had been done and had shown that the only active ingredients in the bones were calcium and collagen. These were very simple basic ingredients that could be manufactured. She said that there were existing studies that had been done. No new studies were needed.

Ms S Xego (ANC) agreed that scientific proof was needed on the medicinal benefits of lions’ bones. She was concerned about SA Tourism at time of reporting on performance not having required information at hand. She hoped that by the fourth and final quarter information should be available. She urged SA Tourism to do proper planning. SA Tourism had also not done proper planning when targets on training could not be met due to unavailability of staff (Slide 30). SA Tourism on the impact of the Corona Virus was asked whether they had a mitigating strategy in place.

Ms Muthaya on SA Tourism having incomplete information on its key performance indicators said that the observation was noted. SA Tourism would in the future amend how it did its reporting. On the underachievement of targets and how planning was done she explained that SA Tourism had done a review of lessons learnt. Often targets were set relevant to what goal had been set. SA Tourism considered things in their control as well as things that were not in their control.

Ms L Makhubela-Mashele (ANC) stated that she had expected SA Tourism to provide the Committee with updates on happenings like the postponement of the Tourism Indaba. Pros and cons of revenue lost should be elaborated upon. There should be a strategy so that ground was not lost. She also felt that the new date for the Tourism Indaba might not suit all exhibitors. The National Conventions Bureau being responsible for conferences and events and now with them being cancelled she asked what strategy was being put in place? The Committee was interested to see SA Tourism’s recovery plan. She was especially concerned about how small businesses would recover due to the impact of Corona. She suggested that SA Tourism put together a recovery plan that the Committee could look at. She agreed that it was concerning when targets were not met. When targets were set there were usually budgets that went along with it. How much was spent in relation to meeting targets. The Committee after all did oversight on how money was spent. On the canned lion issue the Committee had heard one side of the story. In order for the Committee to have a balanced view the Committee had to hear the industry’s point of view. The Committee could get insight into how much revenue was generated for the sector or how much it contributed towards the Gross Domestic Product (GDP) of SA. The Committee needed to make an objective decision. She said that she had attended the colloquium over the captive lion breeding issue that the Portfolio Committee on Environmental Affairs had organised under the Fifth Parliament. Perhaps the Committee could also organise a colloquium of sorts.  

Mr Dube on the Tourism Indaba noted that the buying season was in May. The question was whether buyers would still be willing to buy if the Tourism Indaba was postponed to a later date. Some industry players felt it better to cancel the Tourism Indaba rather than to postpone it. The decision was taken to rather postpone the Tourism Indaba so that one could monitor how things played out globally. He said that one had to minimise job losses. SA Tourism had engaged with the Banking Association of SA (BASA) over extending the working capital requirements of Small, Medium and Micro Enterprises (SMMEs). He said that engagements were still ongoing.

Ms Kate Rivett-Carnac SA Tourism Board Member said that the Corona Virus issue was a fast moving thing. SA Tourism supported government’s stance. It was however a hard time for tourism. On how SA Tourism ought to respond she said that it was quite complicated. SA Tourism was concerned about SMMEs.

Dr de Waal stated that a study done had shown that on jobs created by the canned lion industry the benefits were minimal. Workers were paid minimum wage, there were no contracts in place, workers worked long hours and there were no health and safety guidelines. Some of those employed by the industry were even illegal immigrants.

Dr Harvey felt the canned lion hunting industry to be an atrocious industry. Tourism revenue and future tourists could be lost because of the existence of the industry. He noted that empirical evidence showed that only 613 jobs were supported by the industry. He felt that better sustainable jobs could be created in other parts of the tourism industry. The colloquium that parliament had hosted had heard evidence from both sides. There were a small handful of people supporting the industry. This was the very reason for parliament deciding to shut down the industry.

The Chairperson agreed that the Committee on the canned lion issue had to listen to both sides of the story. He said that the Committee had in a previous meeting with Brand SA suggested to them to have a more formalised relationship with SA Tourism. The Committee had observed that there was overlap and duplication in the work of Brand SA and SA Tourism. He said that in the context of rationalisation it was a matter that had to be addressed. SA Tourism was asked to provide the Committee with detail on Broad-Based Black Economic Empowerment (B-BBEE). He observed that domestic tourism seemed to be doing well.SA Tourism was asked whether the growth in domestic tourism had an element of canned lion hunting to it. He also asked whether major hunting associations’ disproval of canned lion hunting had affected international tourism numbers to SA. SA Tourism was asked to demonstrate how dynamics would be managed from a Quarter 1 2020/21 planning perspective given that it was nearing the end of Quarter 4 2019/20. On canned lion hunting there needed to be a greater focus on empirical research as the matter had to be dealt with quickly. SA Tourism on domestic tourism was asked on a disaggregation of numbers whether figures for youth and women were available.

Mr Khumalo on how SA Tourism managed the South African brand due to the Corona Virus outbreak said that life as one knew it would never be the same. Perhaps it was time to embrace a new reality. New solutions were needed going forward. He stated that marketing plans had been taken to the SA Tourism Board for approval on 28 February 2020. The marketing plans were approved. He did say that when the Corona Virus hit everything changed. The work was ready to be done but it was under review. It would be brought before the Committee at the right time. He confirmed that SA Tourism had a recovery plan but there was a need to deal with what needed to be done immediately. When President Ramaphosa announced that gatherings should not exceed 100 in number, events were cancelled. The adverse effect still had to be quantified. It was a serious matter. Weddings and funerals required rethinking. He said that SA Tourism had set up a Communications Command Centre and it would be up and running by the end of the week. Information was coming in from various sources. What SA Tourism did was to put all information in one repository. In this way there could be a central point where information could be disseminated. Information would be disseminated periodically. 

Nearing the end of the meeting the Chairperson asked to be excused and asked Ms Xego to take over as Acting Chairperson. Given time constraints members asked if SA Tourism could provide written responses to outstanding questions but the Committee subsequently decided that it was best to continue and deal with issues.

Mr Khumalo continued that there were three messages to get across. The first was that information from the Department of Health was not written in a manner in which the tourism sector could deal with it. The information was rewritten for the tourism sector. The second was information on the economic impact of the Corona Virus and the third was issues that were to be dealt with in the tourism value chain when the Corona Virus struck. SA Tourism now had the time to focus on its fundamentals whilst everything was more or less in limbo across the world. SA Tourism had to consider building new relationships and partnerships. He said that if there were any issues not dealt with, responses could be provided to the Committee in writing.

Mr Dube on whether canned lion hunting affected local tourism stated that SA Tourism did not have data available on whether people who came for ecotourism also came for hunting.

Mr Moteka said that the numbers spoke for themselves. Even before the Corona Virus hit, SA Tourism was not performing. It was simply not meeting all its targets. As one went from Quarters 1 to 3 on various key performance indicators there were targets that had not been met. It begged the question whether targets for Quarter 4 and annual targets would be met. SA Tourism was asked what miracle was to happen in Quarter 4 that would enable all outstanding targets to be met.

Mr Dube conceded that in all likelihood outstanding targets and the annual targets would not be met. He said that things had been complicated with the outbreak of the Corona Virus. SA Tourism had nevertheless done significant work on targets even though they had not been met. He said that SA Tourism would provide written responses to questions that had remained unanswered.

Ms Xego noted that it was not the first time that members of the Committee had asked about the underperformance of SA Tourism. She said that the targets of SA Tourism needed to be Specific, Measurable, Accurate, Relevant and Timely (SMART). She urged SA Tourism to do better planning.    

Dr de Waal said that given the current Corona Virus outbreak one did not know how many other Zoonosis diseases there could be out there.

Ms Xego thanked the experts on canned lion hunting for their presentation and asked that copies of their presentations be provided to the Committee. She too thanked SA Tourism for their briefing.

Committee Minutes

Minutes dated 10 March 2020 was adopted as amended.

The meeting was adjourned.