Media release

Transcript: Media briefing following Cabinet’s Economic Committee meeting

25 March 2009

25 March 2009

Presenter: Themba Maseko, Government Spokesperson
Date: 25 March 2009
Venue: Imbizo Media Centre, Cape Town (link-up to Union Buildings)

Statement read by Themba Maseko

Due to time constraints I have not been able to do draft a statement. I will speak from notes. We will do a recording and put it on the website for those who are interested. I’m going to start by indicating that there was indeed the discussion at the Cabinet meeting last week, so the Cabinet statement reflected correctly what was discussed and decided by Cabinet.

So the Cabinet decision was taken on the basis of information that was available. What happened this morning was that Cabinet’s Economic Committee met and a full report was provided to Cabinet.

On the settlement that was reached by the South African Airways (SAA) board and the chief executive officer (CEO) of SAA. This full report which was presented this morning included a legal opinion which was provided on the settlement as reached by SAA and the CEO, but also on the competence of the Board to reach such a settlement. And the legal opinion does confirm that the SAA Board was legally entitled to enter such a settlement and that in doing so there was consultation with the shareholder department and the Minister.

However at the Cabinet meeting the Minister did not have the complete report with her so she could not give the information.

Cabinet’s Economic Committee also considered the comments made by the chairperson of the SAA board which was given to Parliament yesterday (Tuesday). Cabinet acknowledges and concedes that its approach on the matter could have been different if all the information that was provided today, was been made available at its last meeting. Cabinet also acknowledges and accepts that the Board did exercise maximum caution and due consideration of the best interest of the airline, indeed consult with the shareholder department. Cabinet also fully accepts the SAA board’s bona fides and agreed this morning that there will be a communiqué in this regard to the SAA board to confirm that in fact their bona fides are not in question.

So there will be direct communication with the SAA board in this regard. What also became very clear from the legal opinion provided this morning was that while the shareholder, the state as a shareholder appoints the Board, all career incidents pertaining to the CEO, matters that need to be dealt with by the Board obviously in consultation with the shareholder as represented by the Minister and the department.

In conclusion, all matters about the state of affairs at the airline still remain issues of major concern to Cabinet. And it is Cabinet’s view that the Minister together with the Board are going to have to do everything that is necessary and possible to address all the difficulties and challenges that are experienced by the airline.

We will give details later on with the possibility of a statement also issued by the Minister to just explain, because what became very clear was that in the settlement reached with the CEO there were very tight conditions that were laid down which will make it possible for the Board to take further legal steps against the CEO if the investigation finds that there was wrongdoing on his part.

So Cabinet was satisfied that those conditions have been included in the settlement agreement. And those matters will be taken care of at that stage.

Questions and answers

Journalist: Themba, it’s still a bit unclear. If the Minister was at the Cabinet meeting and she at least knew that the SAA board had consulted her, how was it possible for a Cabinet statement to be issued saying that the shareholder was not consulted? Did she hide the fact or wasn’t she upfront about it, or how did that happen?

Themba Maseko: Well, as I said earlier on, what the statement indicated was an accurate reflection of the discussions and the decision that took place at the Cabinet meeting. Yes, you are correct, the Minister was present at the meeting and she had articulated a level of consultation with the Board but at the time she did not have all the information with her at the time so she was not able to demonstrate to Cabinet the exact details of the settlement that was reached. But you are correct. I mean there was indeed consultation with the Minister, so as I’m saying if all the information was made available to Cabinet it would not have taken the decision that it did at its last meeting.

Journalist: Can one surmise from that, that the Minister did not fully disclose the level of… she didn’t need to have any documents to say, look, I’ve met with the chairman, I have seen the settlement, I approved it. I mean that she doesn’t need to present anything. So one can only assume from what you’re saying that she didn’t disclose to Cabinet the fact that there had been full consultation.

Themba Maseko: Well, I’ll put it this way, when Cabinet took the decision that it took last week it did not have that information, the full information that was presented today and yes the Minister was present, but she did not have all the information and therefore did not give all the information to Cabinet. And that’s why Cabinet took the decision that it took.

Journalist: [Off mic]

Themba Maseko: Well, she did indicate that there was some consultation between her and the Board, and what she understood in my discussion with her was that Cabinet had required the exact details of the package which she did not have at her disposal at the meeting last week. She says that she had approved, she was consulted and had approved the broad framework of the settlement but had not seen the details in terms of the rands and cents of the total package. So that’s the information that she was then able to provide to Cabinet today to say although the broad outline of the settlement was consulted upon the exact details in terms of the final rands and cents were not available to her at the Cabinet meeting which was called.

Journalist: I mean the rands and cents are surely, you know, one of the most important details of the settlement. Are you saying that when the Minister gave the Board the go-ahead to axe Mr. Ngqula that she didn’t know anything about the money then? That she was only told in this last week about the money?

Themba Maseko: Well, when the discussion was taking place at Cabinet meeting she had approved, she had been consulted on the broad outline of the settlement. To say the package would for instance include his salary for the remainder of the term, it will include X, Y, Z. But what she did not have with her at the meeting was the details of the settlement in terms of rands and cents. How much it would actually amount to.

Journalist: And when you say that she didn’t have it at the meeting do you mean they never told her how much it would actually amount, or do you mean you know she wrote it down somewhere and she just didn’t bring it with her?

Themba Maseko: She was not aware of the details at the meeting. She did not have the information.

Journalist: [Off mic]

Themba Maseko: She was consulted on the broad outline of the package.

Journalist: But there’s a contradiction then. If she was aware of the broad outline then there’s a contradiction between the statement, your statement now and the statement which you’re reading to us where she admits that she was consulted. So I don’t know. We are just going around and around now.

Themba Maseko: No, no, we’re not. I’m saying that she was consulted on the broad outline of the settlement but not the details in terms of rands and cents.

Journalist: But now you’re fully exculpating the Board about the whole process, the bona fides of the Board, that they were fully consulted, etcetera and etcetera. I mean, the rands and cents are very important.

Themba Maseko: They’re important. Let’s say the Minister has a meeting with the Board and the Board says to her we think the best interests of the airline will be served by us reaching a settlement and the settlement will include the various components, I mean, those outlined to her. And she says, look, I’m okay with that settlement and its fine. But then the Board goes and works out the details of the settlement to say this broad outline will translate to the following. Leave X amount. This X amount. And that’s the information that she says she was not [unclear]. Okay, let’s take another question.

Journalist: So in effect you are actually saying that the statement that was issued last week that the shareholder was not consulted is incorrect.

Themba Maseko: Well, on the basis of the information that was given at this meeting it is becoming very clear that in fact if Cabinet did have this information at its meeting last week it would not have taken the position that it did take. Now this information has been brought to its attention, including the fact that there was consultation between the shareholder Minister and SAA, and therefore would not have issued that statement. Or Cabinet would not have taken that decision at its meeting last week. Yes.

Journalist: Sorry to belabour the point, so the Minister did have the broad framework but she was unable to present it in Cabinet and to confirm to Cabinet that I’ve been consulted.

Themba Maseko: Well, at the meeting, yes, that information did not become clear that she was consulted. And that she had approved the broad outline of the settlement.

Journalist: Wasn’t she able to say to Cabinet, yes, I was consulted. Yes, I’m sorry I don’t have the rands and cents, but I have been consulted and I have approved the broad outline. How does she not say that? In the terms of everything else that is going on, they’re all condemning SAA right, left and centre and demanding the head of the Board and all that kind of stuff, and saying we must go into it deeply and also go into every other state owned industry under your charge, to see what’s going wrong there. Why doesn’t… why… if she says this, they can’t have that discussion. If she doesn’t say it why didn’t she say it?

Themba Maseko: Well, I think it’s something that we can deal with at a later stage, but the fact of the matter is that that was not made very clear at the Cabinet meeting and that is why Cabinet took the decision that it took.

Journalist: It sounds like seriously sloppy work from the Minister who has greatly embarrassed Cabinet. Has this been made clear to her and you know what she has done and what has been her response to all these things?

Themba Maseko: Well, I mean there was an extensive discussion at the meeting and I think it’s becoming increasingly very clear, based on the legal opinion as well, that in future the role of the Minister as a shareholder and the role of Cabinet are things that are going to have to be clarified in much greater detail. She fully understands that her role as shareholder Minister is to make sure that major decisions of the Board are discussed with her and in this case that did indeed take place, and that in future if she informs Cabinet about developments at a state owned enterprise we’re going to have to make sure that all the information is made available so that when Cabinet takes a decision it’s based on full information.

Journalist: So she has not been punished, she’s not been required to resign because of having misled Cabinet, which she plainly did.

Themba Maseko: No, nobody has been asked to resign at this stage.

Journalist: Will any action be taken against her?

Themba Maseko: Well, it’s not for Cabinet to decide if there’s any action that needs to be taken against a member of Cabinet. So there was no such discussion at the meeting.

Journalist: Just to clarify, who made this full report to Cabinet this morning which clarified everything?

Themba Maseko: Well, she delivered a report to Cabinet which outlined the process and the procedures that were followed, and that is why I’m saying earlier on if this information was made available to Cabinet at its last meeting, Cabinet would not have decided the way it did at the meeting. Let’s take the last hand.

Journalist: Themba, was that report ready for the last meeting when Cabinet made that announcement? Was there actually a legal opinion? And secondly, has the Minister apologise to Cabinet?

Themba Maseko: The report was not available at the last meeting. If you look at the statement that we issued it does make it very clear that the Minister needs to interact with SAA and get all the facts. So that report was prepared after the Cabinet meeting and it was actually presented at today’s meeting.

Journalist: Sorry, Themba, does Cabinet still not know exactly how much the former CEO was paid out, or you do know by now?

Themba Maseko: No, that information was provided to Cabinet, and SAA will in due course reveal the details of the package.

Journalist: [Off mic]

Themba Maseko: It’s Cabinet’s Economic Committee.

Journalist: Can I just ask, please, the statement that’s issued after Cabinet, the one that you bring to us, is that something which Cabinet members get to read and approve or is it something that you draw out from the meeting.

Themba Maseko: The statements are prepared after the Cabinet meeting, so I prepare them and issue them. They don’t go back to Cabinet. What Cabinet does is to simply adopt its minutes at its subsequent meetings. And there is no way I can actually wait for minutes to be drafted, so I report on the decisions and the outcome of the Cabinet meeting as it was decided at the meeting. So I make reflect those decisions as accurately as possible and which was the case with the last statement.

Journalist: How do you agree to a settlement without knowing the greater final detail? That’s a bit clumsy and incompetent. Wouldn’t you concede?

Themba Maseko: No, I wouldn’t concede that. As I was saying earlier, let’s just go back to what I said. The legal opinion has clarified the roles, it is saying that whilst the shareholder appoints the Board all career incidents pertaining to the CEO are the responsibility of the Board and it does so in consultation with the shareholder. So in this particular case the broad framework, the outline of the settlement was discussed with the shareholder Minister and the department and was accented to. The only thing that never went back to the Minister is actually the rands and cents. So she did not know the translation of the settlement into rands and cents. So, to give you an example, it would be for instance the package will include the leave that’s due to… leave payments that’s due to the person. It will include payment of his settlement, of his salary for the remainder of the term, all those kinds of things. But it will not say the leave due to the CEO is X amount of money.

Journalist: A package that she didn’t know how much it will cost the public purse?

Themba Maseko: There was agreement on the broad outlines of the settlement with the CEO.

Journalist: That’s the problem. You’re saying the broad outline and you are not talking to the greater finer detail, which to me would be the total package of this settlement to the public purse.

Themba Maseko: Well, the legal opinion confirms that it’s the responsibility of the Board to do the final settlement, so the consultation did happen, and the broad principles of the settlement were agreed to. But the Minister did not have sight of the rands and cents translation of the settlement.

Journalist: Themba, sorry, did the Minister apologise for this mess?

Themba Maseko: At (Cabinet’s Economic Committee) meeting today the Minister did explain what happened and the turn of events and regretted the fact that there seems to have been a misunderstanding.

Journalist: The statements mentioned the investigation that’s ongoing, and suggested that the Board should have waited for the outcome of that investigation. Has that position changed given this information?

Themba Maseko: Well, the legal opinion was very clear. As we said, we’ll seek legal opinion on this matter. The legal opinion was very clear that it’s not illegal for the Board to enter into a settlement with the CEO before the investigation is concluded, so yes you are correct, the investigation is still proceeding, so there’s not been finalisation of that. However, it is very clear, even based on the legal opinion that we received in the report that the fact that a settlement has been reached does not necessarily mean that if the Board decides to take action against the CEO at a later stage, that could actually still take place, so yes it was the view of Cabinet at the time that they should not have reached a settlement whilst the investigation was ongoing but the legal opinion says the reaching of a settlement while the investigation is proceeding does not pose any problem. You can still act if wrongdoing is found on the part of the CEO.

Journalist: I’d like to know, the communiqué that you say Cabinet will send to the SAA board – would it be offered by the President or by the Minister?

Themba Maseko: Well, I think it will be sent on behalf of Cabinet so the logistics of that, I think chances are that it will the President who signs it or somebody else, but we didn’t finalise those details at this meeting but my expectation is that it might have to be acceded to by the President but its something that was not finalised at the meeting.

Journalist: Did Cabinet have any discussion today about the fact that there have been wide-ranging calls for the settlement figure to be disclosed now, since it’s going to be disclosed in six months time? What’s the difference? Was there any discussion about how to respond to those calls?

Themba Maseko: Well, the settlement has now been communicated to Cabinet. I just don’t at this stage have a mandate to disclose it so there has to be an interaction between the department and the minister and the Board of SAA to then agree that the settlement is to be disclosed, but I mean from our point of view, because of the immense public interest on the matter, there might have to be a disclosure of this settlement at some point.

Journalist: Following on what you just said about the immense public interest, just two points – would Cabinet experience the misunderstanding as embarrassing, I mean you do concede that it is a bit of an embarrassment, and given the immense public interest wouldn’t it be incumbent on the minister to present a full report of last week’s Cabinet, because there’d been an outcry for about a week. I don’t know in what circumstances one has to make a report but one would think that she would have brought a full report last week.

Themba Maseko: The Cabinet committee did not take a decision to say this is an embarrassment. But as a government spokesperson I would find it embarrassing that we issue such a statement and new facts emerge at a later stage which indicated that the decision taken was actually taken with very limited information which has subsequently been provided. The minister did indicate at the last Cabinet meeting that she did not have all the information with her at the time and that she had made a commitment to provide the full information at the earliest opportunity. At today’s Cabinet committee became that opportunity why she could provide this full information.

Journalist: The statement last week said that there will be an investigation into all the other state-owned enterprises. That we presume still holds. There is going to be that investigation or has the whole thing fallen down?

Themba Maseko: Not everything has fallen down. The issues of governance and management issues in a number of state-owned enterprises and their economic performance is still something of major interest to the public and also to government so that whole matter needs to be looked at and in looking at that matter the issue of the role of the shareholder department, the issue of the role where does Cabinet fit in, in that whole context because what the legal opinion is clearly indicating, is that there is no requirement for Cabinet as a body, as a collective to be consulted on this matter. The legal opinion says the responsibility of government is to appoint a Board. And then it is up to the Board to manage the SOE and make sure that all the important issues are actually dealt with. Now the question is, if Cabinet has major issues with a particular state-owned enterprise, what channels, what routes should Cabinet follow? And that’s what this matter is actually indicating, that in fact, the role clarification was essential and I think the legal opinion was quite instrumental in this regard to just clarify the roles of the Board, of the shareholder and of Cabinet.

Journalist: I wanted to ask you about statements by the Health Minister (Barbara Hogan) regarding the Dalai Lama. Does Cabinet hold a view on what she has said? She has said government owes the people of this country an apology. Would Cabinet like to express a view on this one?

Themba Maseko: The comments of the Minister of Health were rather unfortunate in the sense that this position on the Dalai Lama is an official position of this government and it is unfortunate that the minister chose to go to a public platform to attack a decision of government when she in fact is a member of that collective, so I think that its something that will have to be addressed in the near future by this government. How do ministers conduct themselves in instances where they do not agree with the position of government? Certainly the way government functions is that its not for a Minister to go to a public platform and openly attack and disagree with a government position. So its something that’s going to have to be dealt with at some stage but at this meeting no particular decisions were taken in that regard.

Journalist: ‘Should a Minister’ – the way you put it, it sounds like she’s gone out of line. Will she be towed into line?

Themba Maseko: Well, the matter of what happens to the minister was not on the agenda so unfortunately I can’t say much on that. Unfortunately I’m not aware of a decision taken by the President in that regard so if he chooses to take any further steps I’m sure he’ll make that announcement at some stage. It was not discussed at this meeting.

Journalist: Surely, I mean her opinion on something like this, I mean she’s got her freedom of expression right. Surely that’s much less serious than what Minister Mabandla has done and you haven’t said that she’s going to be hauled into line.

Themba Maseko: I’m not sure if we’re comparing apples with apples here. You’re describing a situation on the one hand of not enough information being provided to Cabinet and Cabinet taking decisions. On the other hand you have a situation where a minister stands on a public platform and attacks a government position. And those are two incomparable instances.

Journalist: The Dalai Lama discussed in Cabinet to have [Unclear] allow the minister to have a position consistent with that of Cabinet or maybe the situation [Unclear] that she’s supposed to have known somehow.

Themba Maseko: Well yes, the matter was discussed very briefly at the meeting and the Minister of Foreign Affairs will be communicating to clarify the government position on this matter but in short, the government position is that we do not want the sporting events in this country, particularly 2010 to be used as a platform to advance the various different causes around the world, because that diverts attention from the sporting events themselves. Now international events, different groups tend to want to use international events as platforms for particular causes and our view is that 2010 should not be used for that purpose because today it will be this and tomorrow it could be something else. So that is why this decision was taken and we are of the view that the interests of the country would not have been served if 2010 is being used as a platform to advance certain causes, political causes. But as I said the Minister of Foreign Affairs will give a policy statement in this regard.

Journalist: But then does Cabinet realise that it’s actually contradicting its own history? I mean, during the anti-apartheid struggle there were always protests at sporting events and they were always used to promote the cause of anti-apartheid. So I mean that reason really doesn’t hold any water unless Cabinet is completely contradicting its own history. Is it aware of that?

Themba Maseko: Well, I can tell you that Cabinet’s position is that we do not want the 2010 World Cup to be used as a platform to advance the political causes of various groups. So that’s a particular decision in the country. Whether you interpret that to be contradicting a previous decision you can reach that conclusion, but this is the Cabinet position, and we believe that if you have to compare the interests of a peace conference as opposed to the national interest including economic interests, bilateral relations with a particular country, a choice was made in this particular case that our interests will be better served if we give priority to making sure that we don’t jeopardise our bilateral relations with China in this particular case. But one thing that is very clear, and I’ve seen this in a lot of media reports, this decision was a South African government decision. We were not instructed in any way by any government, including the Chinese government. Okay, because this is a side issue we should not take the rest of the afternoon dealing with it.

Journalist: [Off mic]… comments that she’s made in any Cabinet meeting before, until last night, I just wanted to be clear on that.

Themba Maseko: No.

Journalist: She’s never raised the issue with Cabinet before until she made her public remarks?

Themba Maseko: Government heard about her views for the first time when she made them last night.

Journalist: [Off mic]

Themba Maseko: You can quote me as the government spokesperson. Okay.

Journalist: When you say that government felt that by inviting the Dalai Lama that they’d be opening themselves up for protests that would distract… detract from the sporting… or that you didn’t want to have these protests that would detract from the sporting events, don’t you think not allowing the Dalai Lama could do the exact same thing? I mean, you’ve got all this uproar over it and there will… I mean, what do you do? Do you have some kind of database where all known protestors are going to be blocked from coming into the country, how do you actually do that?

Themba Maseko: I did not use the word protest in my statements. I’m saying that we do not want these sporting events, especially 2010, to be used as a platform to advance other causes and in looking at this matter government had to look at the issue you’re raising now, vis-à-vis the other national interests including our bilateral relations with a powerful state such as China, our trade relations with China, and all of those. So balancing the two it was our view as government that inviting the Dalai Lama and allowing him to use this platform at this particular point in time could have actually diverted the world’s attention from the sport event itself and the peace conference. Diverted attention from the important event of hosting a very successful sport event in this country, and our view is that these sports events should not be used as a platform to advance these equally important causes.

Journalist: But don’t you think that’s already happened? I mean, you’ve got all this controversy over government’s decision and not the event itself.

Themba Maseko: Well, I think that there was going to be controversy either way. Whether we said yes or no, there would have been controversy. So it’s a choice that has been made by this government and I think that our responsibility is to explain this much better to South Africans. And when I say that the Minister of Foreign Affairs will articulate this position I think that’s precisely what we need to do to just explain why we took this decision, and there may be people who disagree with the decision but the fact of the matter is that it’s a choice that this government has made and we believe that it’s a choice that is in the best interests of South Africa at the moment. Okay, thank you.

Themba Maseko   
Cell: 083 645 0810

Issued by: Government Communications (GCIS)


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