Draft Committee Legacy Report for the Sixth Parliament

Meeting report

Opening

In her introductory remarks, the Chairperson stated the purpose of the meeting was to present the draft committee legacy report for the Sixth Parliament so that Members could go through it, page by page and discuss it. She indicated the terms of reference that were followed in drafting the document, and emphasised that the meeting was for maximum participation by Members, but not for making any decisions.

Dr Sibusiso Khuzwayo, Committee Content Advisor, took Members through the consolidated report about work done by the Committee from May 2019 to March 2024. In compiling the report, he said the Committee staff looked at the issues that came up during the tenure of the Committee and asked Members to make inputs. He noted it was a draft report to be discussed by Members and would later be considered for adoption in the next meeting. The draft report focused on five areas: highlights or achievements; the focus areas of the Committee during the 6th Parliament; key areas for future work; key emerging challenges; and recommendations.

Draft Committee Legacy Report for the Sixth Parliament

Key highlights/achievements

Amongst the other achievements presented, Dr Khuzwayo stated that the Portfolio Committee recommended that the Tourism Transformation Council be an independent body jointly funded by the private sector and ministry. In May 2020, the Council was registered. In August 2021, the Joint Funding Agreement was signed by the Tourism Business Council of South Africa (TOMSA), the Council and Department of Tourism to set up a joint private-public sector financial vehicle for the operationalisation of the Council. The tenure of the Council ended in May 2022. At the end of 2023, a new Council was yet to be appointed. The structure has existed, and a new council would be appointed later this year (2024) or in 2025.

Following proposals by government to reconfigure state entities to avoid duplication of mandates, the Committee raised the possibility of a merger between Brand SA and South African Tourism because these two entities were sharing similar mandates. The Committee approached the Minister of Tourism to engage the Minister in the Presidency on this possible merger and how it would affect tourism operations. The Minister later advised the Committee that the Presidency was no longer considering the merger.

Concerning e-visas for inbound source markets, the Committee emphasised the importance of ease of access. It advised the Department of Tourism to engage the Department of Home Affairs to ensure this was addressed rapidly. Recovery measures post-COVID further necessitated the need for the extension of the e-visa programme to more countries. In September 2021, the Department of Home Affairs announced its implementation of the electronic visa system (e-visa) in 15 countries.

Regarding the amendment of the Tourism Act, he pointed out the Act was not amended due to delays with the finalisation of the review of the White Paper on the Development and Promotion of Tourism. Because of changes in political heads of the Department, the decision to first review the White Paper happened during the 6th Parliament. As a result, the Green Paper was only finalised towards the end of 2023. The amendment of the Act would have to be considered during the term of the 7th Parliament. The Bill was not sent to the Committee and the matter would be raised sharply in the next Parliament.

During its tenure, the Committee also adopted a new approach to tourism development and marketing focusing on Villages, Townships and Small Dorpies (VTSDs). It raised its concern with the continued focus and concentration of tourism development and marketing in main centres such as Cape Town, Durban and Johannesburg. It encouraged the Department and South African Tourism to direct future funding to projects in these areas. As a result, the National Convention Bureau intentionally directed event bidding to VTSDs, resulting in events being hosted in smaller towns and this ensured geographic spread and economic development.

Further, tourist safety was another matter discussed throughout the term of the Committee. The issue of tourism police would be looked at in the new Parliament. The Department was encouraged to work closely with the SAPS, provinces and Tourism Business Council of SA, following the 2019 joint workshop between the Committee and Portfolio Committee on Police, towards the establishment of tourism safety forums, the training of tourism monitors and other lasting solutions to the challenge of crime.

Dr Khuzwayo noted many matters have not been included in the report like the Tottenham Hotspur saga, but advised Members suggest other items the Committee raised during its tenure so that they could be included in the legacy report.

Focus area of the Committee during the 6th Parliament

Throughout the 6th Parliament, the Committee was busy addressing governance challenges of South African Tourism. In line with the oversight work of the Committee, in 2023/24, the Auditor-General found that South African Tourism did not have a Board of Directors between June 2022 and August 2022 and this created a vacuum from an oversight perspective. There were multiple changes in the composition of the Board, starting with an Interim Board appointed in September 2022 followed by the Board appointed in October 2022. The multiple changes to the Board exacerbated the instability across oversight functionaries for the entity. The oversight over the entity was being exercised by the three-member Board appointed in April 2023. The Committee did not concur with the composition of the Board and recommended to the Minister that the number be increased from three to five. However, the Minister never acceded to this. In line with the consistent recommendation of the Committee, the Auditor-General recommended that the Executive Authority appoint a Board so that key vacant positions in the entity could be filled.

The Committee also tried to address the impact of Covid-19. The Covid-19 pandemic had a crippling impact which led to constrained tourism growth in South Africa. Covid-19 decimated the economy of South Africa, resulting in 3 million job losses in 2020. Of the 3 million jobs lost in South Africa, 470 000 of them were shed by the tourism sector. A total of about 76 percent of employees retained in the sector were not receiving full salaries, with only 37 percent of employees have received a 100 percent salary by February 2022. The impact of the global pandemic was indiscriminate as it heavily affected small, medium, and large tourism businesses alike. The informal tourism businesses were severely impacted given the size of operations and disposable funds. The Committee recommended that government should implement sector relief programmes to cushion tourism businesses from the devastating impact of Covid-19. To this end, the Department implemented the Tourism Relief Fund and Tourist Guides Relief Fund for registered freelance tourist guides.

The strategic focus on tourism oversight in the 6th Parliament was on Villages, Townships & Small Dorpies (VTSDs) in particular. The reason for this approach was that poverty, unemployment, and inequality were more expressed at the VTSDs. As a result of this, the Committee analysis and approach, together with the 2019 – 2024 strategic plans and annual performance plans of the Department and South African Tourism, intensified programmes aimed at addressing poverty through tourism in the Villages, Townships & Small Dorpies (VTSD). The focus on VTSDs was a deliberate approach, and the allocation of budget was shifted to these areas that were previously neglected.

Concerning intergovernmental relations, Dr Khuzwayo mentioned that the 6th Parliament realised that tourism was a multi-faceted sector that depended on a number of stakeholders to succeed. At a legislative level, the Committee facilitated the establishment of the Legislature Tourism Oversight Forum (LETOFO). The purpose of LETOFO was to align and strengthen oversight over tourism development and marketing by the Parliamentary Portfolio Committee on Tourism in partnership with the provincial portfolio committees responsible for tourism. The Committee conducted oversight on government programmes that created synergy in tourism development within South Africa as a destination. This was achieved through close coordination and collaboration amongst a wide range of stakeholders. However, a lot of work still needs to be done to achieve well-coordinated tourism development and marketing.

Regarding skills development and relevance of training programmes, it was pointed out that the private sector and government were providing a wide array of tourism skills development programmes. These remained greatly uncoordinated. The quality of tourism graduates and their readiness for the job market also remained a challenge.

Key areas for future work

The Committee has acknowledged that domestic tourism development has been neglected in Villages, Townships, Small Towns and Dorpies (VTSDs). The focus would be on developing domestic tourism with a special focus on the VTSDs. The focus would also be given to the National House of Traditional Leaders to facilitate the entrenchment of tourism in villages. The Department and SAT have not quantified the amount that has been needed. Hence, domestic tourism has not gone far.

The Committee has also identified legislative gaps in the tourism sector and would prioritise the amendment of the current Tourism Act (Act No. 3 of 2014). The Committee has sought to make amendments regarding the Sharing Economy; Tourism Grading Scheme; the Tourism Levy; and Tourist Guides. It has sought to maximise tourism funding, introduce compulsory grading, and determine the Regulations for the Sharing Economy within the tourism sector.

Dr Khuzwayo emphasised the overarching oversight focus of the Committee was on the transformation of the tourism sector. The Committee has realised that transformation in the tourism sector has remained stubbornly and dreadfully slow since the dawn of democracy in 1994, and more work still needs to be done to entrench transformation in the sector. The Committee would deliberately engage all relevant stakeholders inside and outside government to facilitate projects, programmes, and collaborations that would expedite transformation and change the growth trajectory of the tourism sector. The Committee might ensure that the Department and SAT implement programmes to fast-track transformation, including disbursing funds to the Tourism Equity Fund halted by court interdicts.

Pertaining to infrastructure projects, he reported serious monitoring of the projects was needed. The Committee might need to monitor how the Department was building internal capacity to implement future projects, including the Memorandum of Agreement (MoA) with the Development Bank of SA (DBSA) that would be coming to an end. The Department must advise how it would ensure the sustainable development of future infrastructure projects and their effective monitoring.

Further, he pointed out that South Africa has suffered serious brand reputation damage in the recent past. The Committee would focus on rallying together all stakeholders to protect the South Africa country brand as a viable destination for investment and as a preferred tourism destination. This needs the whole government approach, media, and society. The brand disablers that need immediate attention include crime which has created a negative perception of the country as an unsafe destination; canned animal lion hunting and human-animal interaction which have caused reputational damage on the environmental acumen of the country; xenophobia/ Afrophobia which has branded the country as unwelcoming for fellow Africans; negative media reporting; and communication around government policy of land expropriation without compensation.

Key challenges emerging

Dr Khuzwayo, first, said the constant changes in the Executive Authority (ministers) of the Department led to delays in the review of the White Paper on Development and Promotion of Tourism in Sout Africa (1996) and the amendment of the Tourism Act (Act No.3 of 2014). The 6th Parliament was, therefore, hamstrung by these delays to address the identified legislative and policy gaps in the sector.

Second, the work of the Committee in the 6th Parliament was mainly focused on addressing the collapse of governance in South African Tourism. In line with the oversight work of the Committee, the Auditor-General found in 2023 that South African Tourism did not have a board of directors between June 2022 and August 2022, something which created a vacuum from an oversight perspective. There were multiple changes in terms of the composition of the Board, starting with an interim board appointed in September 2022, followed by the three-member Board being appointed in October 2022. The multiple changes to the Board exacerbated the instability in governance and operations of the entity. The Committee did not concur with the composition of the three-member Board and recommended to the Minister that the number be increased from three to five. However, this was never acceded to by the Minister.

Third, the Committee was concerned that South African Tourism received an unqualified audit opinion with findings on compliance with key legislation in the 2022/23 financial year. This meant the audit outcomes remained unchanged from the 2021/22 financial year, with serious recurring findings. The entity failed to address the findings made by the Auditor-General and the Committee in the previous audit period. This points to failure in governance and incapacity to deliver effective operations at the entity.

The Committee was satisfied with the Department obtaining an unqualified audit opinion with findings on non-compliance with legislation in the 2022/23 financial year, but it noted there was no improvement in the audit findings given that the Department had received a financially unqualified opinion with findings on compliance with key legislation in the previous financial year. However, the Department was commended for submitting annual financial statements free from material misstatements This was an improvement from the prior year as the Department had made material adjustments to achieve an unqualified audit opinion.

Then, he stated there was a need to demystify tourism as a concurrent function. The Constitution categorises tourism as a concurrent function. The local government represents the third sphere of government and plays a major role in the tourism sector. In addition to the responsibility of the national and provincial government to pass, design, and implement tourism legislation, policies and strategies, the local government is at the coal face of promoting and supporting tourism at a local level. The local government, however, does not fulfil its constitutional mandate.

Recommendations

The 7th Parliament Portfolio Committee on Tourism should ensure that the Tourism Act (Act No. 3 of 2014) is amended. As identified by the 6th Parliament, the Committee may make amendments regarding the Sharing Economy; Tourism Grading Scheme; the Tourism Levy; Tourist Guides, composition of South African Board in case the Board is dissolved. The committee might pursue maximisation of tourism funding, introduce compulsory grading, and determine the Regulations for the Sharing Economy within the tourism sector (e.g. AirBnB; Uber; etc.)

Transformation remains a huge challenge in the tourism sector. Tourism is mostly developed in big cities and towns and largely monopolised by international conglomerates. The 7th Parliament should continue fighting for the plight of emerging Black-owned tourism establishments.

The 7th Parliament Committee is urged to conduct a focused oversight on the governance and institutional stability of South African Tourism in terms of a full constitution of the Board, separation of powers between the Board and staff of the entity, following up on the findings of the Auditor-General and ensuring the entity is fully and appropriately staffed to enable it to execute its legislated mandate.

The 6th Parliament realised the tourism budget was inadequate, whilst an average of 53 percent of the budget vote was transferred to South African Tourism. The TOMSA Levy collections have grown at a staggering rate over the recent years. The 7th Parliament should closely conduct oversight on how South African Tourism and the TOMSA Levy maximise cooperation in marketing the country.

The 7th Parliament is urged to conduct oversight on the degree to which technology is used to modernise tourism offerings and experiences so that South Africa is on par with other mature tourist destinations. This includes developing booking platforms that advance transformation in the sector.

Discussion

The Chairperson remarked that the document needed more meat as the Committee did many things but were not included in the report.

On governance matters, the document focused on SAT to the exclusion of the Department’s activities.

There was recurring irregular expenditure, funding for the youth, and other matters.

On SAT, issues about Mr Rantente (sp) have been omitted, including summons issued for an Executive Authority, who also refused to appear before the Committee.

She said vacancies were an issue within SAT and that contributed to poor governance matters.

Also, the Department did not have action plans until the Committee forced it.

The Committee further asked the Department to engage with the higher education department to train young people in TVET colleges.

The Committee was still in the dark about whether the Tourism Policy Review Panel would still exist, and that transformation has remained a thorny matter in tourism.

She then gave Members a chance to give their inputs.

Ms M Gomba (ANC) suggested the following items should be included in the report:

• Master Plans that were discussed by the Committee;
• absence of stakeholder participation by the DBSA when implementing projects;
• more emphasis should be on the objectives of LETOFO;
• the report should touch on free and compulsory grading and no policy review was received by the Committee concerning the Grading Council Policy Review;
• the issue of foreign nationals in tourism getting more work than the locals was never followed;
• the matter of tourism forums at local level to enhance tourism growth at local government level should be followed as it has been a good initiative;
• the Tourism Bill should be strengthened and it has not been established; 
• the provincial women tourism forum should be mentioned in the report.

Ms S Maneli (ANC) suggested these inclusions: there should be a recommendation on the merger between SAT and Brand SA as these two needed to come together; and the estranged work relations between the Minister and Director-General in the Department limited some of the things the Committee wanted to deal with.

Ms H Ismail (DA) made the following suggestions: the matter of internal audits that have not been sent to the Committee should be brought up. No one in the Department was taking responsibility for projects carried out by the DBSA. There should be more intergovernmental meetings with the Department of Sport, Arts and Culture. There have been not enough engagements with other departments and communities on white elephant projects; the Women In Tourism programme should be included in the report.

Ms P Mpushe (ANC) suggested the report touch on the Committee’s concerns about the former Minister; the Committee not recognising the three-member board structure of the SAT; the Department doing away with employment of foreign nationals as tour guides; mentioning the positives that came out of the Covid Recovery Plan; improvements due to virtual meetings; and inclusion of findings and lessons learnt from the China trip.

The Chairperson commented that matters not in the Annual Performance Plans (APPs) and never discussed in the Committee should not be in the report. She noted the Green Paper has not been sent to Cabinet because that was never reported to the Committee. She suggested oversight visits by the Committee should be highlighted/green-flagged and details be provided, and red flag matters should be included such as the Committee’s strong views on Destination Development. The contribution of the Committee in the BRICS Summit should be highlighted in the report.

The meeting was adjourned.