Department of Arts and Culture UPDATE PRESENTATION ON

Department of Arts and Culture UPDATE PRESENTATION ON THE STATUS OF THE IMPLEMENTATION OF THE SETTLEMENT AGREEMENT BETWEEN THE DEPARTMENT OF ARTS AND CULTURE (DAC) AND THE SOUTH AFRICAN ROADIES ASSOCIATION (SARA) OF 01 ST APRIL 2014 PRESENTED TO: THE PORTFOLIO COMMITTEE BY DEPARTMENT OF ARTS AND CULTURE

6 INTRODUCTION a) Premise i. The update report is premised on activities undertaken post the meeting of the 12 th August 2015 held at the Deputy Public Protector on the implementation of the Settlement Agreement that was signed on the 01 st April 2014 between the Department of Arts and Culture (DAC) and the South African Roadies Association (SARA). ii. A copy of the Settlement Agreement is attached to the said report as (Annex A). iii. Further, the agreements reached in the dispute resolution meeting chaired by the Deputy Public Protector on 20 April 2016 are also included.

APPROACH a) Recognising that the implementation of the Settlement Agreement is the primary issue at hand, the report has focused on Clause 4 from page 10 of the Settlement Agreement with the heading “ 4. AGREEMENT BETWEEN THE PARTIES”. – – – – – Clause 4. 1. 1. Clause 4. 1. 2. Clause 4. 1. 3. Clause 4. 1. 4. Clause 4. 1. 5. Clause 4. 1. 6. Clause 4. 1. 7. Clause 4. 1. 8. Clause 4. 1. 9 Clause 4. 1. 10 • For details of the clauses please refer to Annex A. c) The presentation will table a summation of the progress made thus far in the implementation of the Settlement Agreement from the perspective of the DAC. 3

PROGRESS CLAUSE 4. 1. 1. a) Requests from SARA: i. On the 1 st April 2014 SARA submitted two proposals: – Building Renovation Proposal which requested R 39, 295, 545. 96 for the renovation of the SARA House – A funding proposal encompassing a three (3) year request for operational and administrative funding to the value of R 17, 206, 444. 63 and R 2, 838, 920. 80 for an international interactions programme. a) Response from DAC: i. The DAC considered the above mentioned proposals. A letter was sent to SARA communicating DAC’’s response, signed on 9 June 2014, a copy is attached as (Annex B). 4

PROGRESS CLAUSE 4. 1. 1. Cont Summary of responses SARA’s proposals received on 01 st April 2014 a) Renovations Proposal: i. The renovation proposal will be dealt within in sections 4. 1. 2 and 4. 1. 3 below. a) Funding Proposal: i. The funding proposal requested three (3) year operational and administration funding and funds for International Interactions the Department. ii. The Department has responded as follows: – The Department would not grant funding for the operational and administration funds request , given prevailing rules and statutes in the public service. a) The Department would be able to fund the international interactions programme and committed to fund the full amount of R 2, 838, 920. 80 over three years as requested by the beneficiary. i. An MOA ending March 2017 was signed and funds transferred in accordance with the contract. 5

PPROGRESS CLAUSE 4. 1. 2. a) DAC facilitate process to evaluate SARA House: i) On 4 April 2014 DAC instructed Independent Development Trust (IDT) to conduct an assessment of the facility. ii) The IDT assessment concluded that the building was beyond its functional life however recommendations were made with regard to remedying the security, health and safety issues as outlined in Section 4. 1. 3 below (Annex C). Iii) It is important to note the following – The DAC is aware that the building was purchased with R 3 million donated from the National Lottery Distribution Trust Fund (NLDTF). – The budget submitted by SARA for the Renovations is too high from the original purchase cost of the facility. – In DAC’s view the current state of the building is an indication of the lack of capacity of the organisation to maintain the infrastructure. – The enormous cost of the proposed refurbishment would over capitalise the structure and not constitute sound investment of government funds. 6

PROGRESS CLAUSE 4. 1. 3 a) DAC current offer and renovation cost implications i. iii. iv. b. i. The assessment conducted by the IDT estimated that the costs of ensuring compliance with occupational, health and safety legislation were approximately R 15 million (Annex C). As highlighted above, these costs were regarded as prohibitive given the overall assessment of the state of the facility and the current value of the structure. The Department initially indicated in its response in June 2014 to the proposals submitted that it would not support the proposal, however this decision was reviewed since IDT indicated that the building could nevertheless be refurbished to meet occupational health and safety standards and a grant of R 10 million was made to SARA to improve the conditions at SARA House (Annex D). As part of the Grant the DAC indicated to SARA that it (DAC) would , instead of appointing IDT , it (DAC) prefers to transfer the funds to SARA through an MOA and SARA contract a Professional Project Management for the implementation of the renovations. SARA’s response to DAC’s offer regarding the renovations. SARA is not satisfied with the terms of the grant offered, which require SARA to take responsibility for the renovation project, and not the Independent Development Trust (IDT) which is SARA’s preferred option 7

PROGRESS CLAUSE 4. 1. 3 Cont. a) DAC’s Interpretation : i. Clause 4. 1. 9 of the agreement stipulates that the “The DAC shall submit to PPSA a detailed project/implementation plan in regard to the intervention of the IDT and other bodies and its proposal regarding assisting with the removal of the health, safety and security risks uncovered at SARA House by the close of business on Tuesday 15 April 2014. ” ii. The DAC’s view is that this condition was met, and empowers the DAC to utilise other bodies in remedying the situation; a contractor or contractors to be appointed by SARA are the identified “body” in this regard. iii. A meeting was held with SARA on the 15 th January 2016 and no agreement could be reached. iv. At the request of SARA the substance of DAC’s position in this regard was confirmed in writing on 1 February 2016 (Annex E). v. In recognition of the urgent need for the renovation, the impact of cost escalations o the budget since the assessment in 2014 and the need for the project to be supported by the necessary professional expertise, the DAC has increased the offered grant amount for the refurbishment to R 15 million. This was communicated to SARA in correspondence signed on 4 March 2016 (Annex F). The grant conditions however remain the same; SARA will be expected to utilise a maximum of 10% of the total value of the grant to appoint the necessary professionals and administer the work effectively. vi. SARA has accepted the grant conditions based on the meeting with the Deputy Public Protector on 20 April 2016. 8

PROGRESS CLAUSE 4. 1. 4 Cont. a) DAC deployment of sufficient personnel: i) A Deputy Director in the DAC responsible for the development of the Technical Support Services sector in the Cultural Development Chief Directorate has been mandated to engage with SARA on the implementation of the Agreement. ii) It was also agreed with SARA at the meeting held on the 15 th January 2016 that the said Officer will be the link and line of communication in order to harmonise the flow of information. 9

PROGRESS CLAUSE 4. 1. 5. a) SARA’s funding from other funding agencies: i) The DAC has not been informed of any application made by SARA to other funding agencies, with the exception of the issues raised by SARA about the NAC and CATHSSETA. ii) The DAC requested an indication of progress in this regard, and information on current training programmes underway in correspondence signed on 4 March 2016 (Annex F). 10

PROGRESS CLAUSE 4. 1. 5. cont b) Regarding the NAC matter: i. SARA has requested DAC to investigate a matter pertaining to an application by the organisation to the NAC. DAC’s internal auditors have concluded the process and provided the report to the DAC. ii. Currently the DAC’s Internal Audit unit is reviewing the report; the process will be completed by the end of April 2016. SARA was informed of the process in correspondence signed on 7 September 2015 and 23 September 2015 (Annex G). 11

PROGRESS CLAUSE 4. 1. 6. cont a) Harmonious relationship: i) The DAC has continued to engage with SARA at a number of levels, both directly in terms of the support offered to SARA and advocating its importance in the sector. Platforms such as: -Technical Services sector, including the Events Technical Production Transformation Forum, and Interim Committee of the Creative and Cultural Industries Federation of South Africa (CCIFSA). ii) Further, provision has been made for SARA learners to be part of major DAC projects such as MOSHITO. iii) At the Ministers request the Department provides support to the Live Events Technical Production Conference (LETPC) launched in 2015. Currently the Department has committed R 2, 5 million over a period of 3 years. 12

PROGRESS CLAUSE 4. 1. 6. cont Harmonious relationship continued: iv. written e-mail and text correspondence has denigrated officials directly including Chairperson of the Portfolio Committee, however the DAC has been notably more responsive to SARA’s voluminous communications. v. The DAC formally requested SARA to desist from denigrating officials (Annex I); however further denigrating email and text message correspondence were received, see attached (Annex J). vi. At the meeting of the 20 th April 2016 the Deputy Public Protector advised firmly both parties to maintain professional and cordial relations and cautioned SARA leadership to improve it decorum. 13

6 PROGRESS CLAUSE 4. 1. 7 a) DAC follow on facilitation of SARA application i) Endorsement letters were sent to all funding bodies identified by SARA in September 2015 (Annex K). ii) As outlined above, the DAC has set aside funds in its budget support SARA’s activities and the full cost renovations of SARA House.

PROGRESS CLAUSE 4. 1. 8. a) Taking matters arising to other forums i. While there has been email correspondence, there has been no formal communication in terms of the settlement agreement with regard to breaches to date and/or the remedy thereof. ii. Any further correspondence with SARA on matters pertaining to the implementation of the settlement agreement shall be suspended until such time as the matter of the dispute has been resolved. iii. The Office of the Deputy Public Protector convened a meeting on 30 April to resolve matters pertaining to the renovation of SARA House. 15

PROGRESS CLAUSE 4. 1. 9. a) Project Implementation Plan i. The assessment was provided to the PPSA and SARA, and was discussed at the meeting with SARA in August 2015 and again in the meeting on 15 January 2016. ii. As agreed on 20 April 2016, once the MOA is concluded and a new project plan has been devised, updated documentation will be provided to the PPSA. 16

PROGRESS CLAUSE 4. 1. 10. a) A dispute resolution meeting was held on 20 April 2016. A number of items were identified for DAC to follow up on: i. iii. b) To develop a draft of Terms of Reference for appointment of Project Management for the Renovations to assist SARA in the implementation of the renovation project To further outline the reasons for not providing support for SARA’s operational funding. DAC to confirm in writing support for the renovation project It was agreed that SARA would contract suitably qualified companies to complete the renovation with support from relevant DAC officials where necessary 17

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