iSimangaliso Wetland Park & South African Weather Services Annual Reports 2008/09

Water and Sanitation

03 November 2009
Chairperson: Ms M Mabuza (ANC)
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Meeting Summary

iSimangaliso Wetland Park Authority presented its 2008/2009 Annual Report. It was to conserve the iSimangaliso Wetland Park and create jobs and benefits for surrounding communities, and therefore focused on conservation, local economic development and tourism. The key financial trends were outlined, which included job creation accounting for 60% of expenditure. The park revenue increased from 1.3% to 14.8% of total revenue while grants had decreased from 93% to 64% of total revenue. There was a strong balance sheet and an unqualified audit report. The achievements in the past year were outlined, and included introduction of malaria programmes, improvements to borders, establishment of the Lubombo route and transfrontier areas. Improved road access enhanced tourism, and led to longer stays in the park. Nine out of fourteen land claims were settled and six co-management agreements were signed. There had been capacity building through training and job creation, with a 70% placement rate, after leadership training, and mobile workshops for land claimants in various areas. R27.5 million was spent on infrastructure in 2008/9, of which 65% went to small enterprises and local labour, while land care contractors received R11.3 million, and employed over 5 000 people, of whom 60% were women. The natural resource use programme had grown, there were now mandatory equity partners in tourism facilities, and cultural heritage was being promoted. There had been improved and wider access to the park, and there would be a special focus on the youth. Future projects were outlined. iSimangaliso noted a call by lobbyists to allow beach driving again. Unauthorised developments, particularly at Kosi Bay, were posing environmental and legal challenges. Members’ questions related to rhino poaching, poaching for bush meat, unauthorised developments, Cape Vidal and the limitation of the footprint, efforts to control alien vegetation, the numbers of jobs created through iSimangaliso projects and the sustainability of community training, what measures were in place to cap the income losses, what involvement there was with land claimants, and waste management and pollution challenges.

South African Weather Services, presented its Annual Report, noting that the main business was to  disseminate reputable weather, climate and related environmental goods and services to clients. A new Board had been appointed in April 2008. It had received an unqualified audit report, although there was one instance of irregular expenditure noted and explained. It also reported 84% customer satisfaction with its goods and services. The total staff complement and gender and equity ratios were outlined. There were various human capital initiatives implemented, including retention strategies and succession planning. SAWS had awarded 40 bursaries, of which 75% went to members of previously disadvantaged communities. It had an internship programme and employed most interns following training. It was concentrating on financial sustainability, corporate governance and strategic leadership, including taking a leading role on the continent, continued learning and client satisfaction. It was strengthening supply chain management policies, and was attending to the challenges of deficit in revenue due to challenges faced by the aviation industry. Details were given of the achievements in the year, compared to the targets set out in the strategic plans. Details were given of SAWS’ efforts in  ensuring financial viability, ensuring corporate governance leadership and sustainability, making SAWS into a learning institution, and creating a client-centric organisation. The initiatives to ensure that it was a reputable provider of weather, climate and related environmental products and services were outlined. There was a need for more hydrometeorologists and agrometeorologists to deal with the issue of climate change. SAWS had requested additional funding for research and would approach other institutions such as the Department of Science and Technology. Members asked about the cutting down on radio soundings and the alternatives introduced, the early warning systems and links to disaster management centres, and details about the irregular expenditure.

Meeting report

iSimangaliso Wetland Park Authority (iSimangaliso) Annual Report 2008/09
Ms Terri Castis (CFO) and Mr Andrew Zaloumis (CEO) of the iSimangaliso Wetland Park Authority presented the 2008/2009 Annual Report.

It was noted that the iSimangaliso  business was to conserve the iSimangaliso Wetland Park and to create jobs and benefits for communities living in and adjacent to the Park through optimal tourism-based development. iSimangaliso was therefore in the business of conservation, local economic development and tourism. According to the financial statement, accounting revenue for the year decreased by 25% from R67 million in 2008 to R50 million in 2009. This was the result of a decrease in project expenditure. Key trends in expenditure were delivery of services, including job creation, averaged at 60% of total expenditure, while personnel costs were brought down from a peak of 35% to 13% of total expenditure, and other costs averaged at around 20% of total expenditure. Key trends in revenue were that park revenue had increased from 1.3% to 14.8% of total revenue and grants had decreased from 93% to 64% of total revenue. Key trends of the balance sheet analysis showed a strong increase in asset base, a liability growth relative to increases in expenditure, an improvement in current ratio (ability to meet short term debt) and a debt equity ratio well below 1. The organisation received an unqualified audit. Employment equity figures showed 35 staff members, of whom 21 were black and 18 were women.

The presenters then highlighted some of the achievements during the past year.

Performance information centred on iSimangaliso Wetland Park, South Africa’s first World Heritage Site, and the historically linked Lubombo, one of the top 10 hotspots in the world in terms of biodiversity. The vision of the project was to end the paradox of poverty being found in the midst of plentiful resources, by removing the blockages to creating successful tourism, conservation and community development. Progress in this area included the malaria programme, which had been very successful, improvements to borders, the establishment of the Lubombo route and transfrontier areas. Improved road access had linked Swaziland, Mozambique and South Africa, making it possible for tourists to visit three countries in one day. Improved roads within the park had created further tourism opportunities, as one-night stays could increase to several nights. They also improved opportunities for trade and development. The project had focused its spend on blocks of the park. The issue of dune mining was debated, as there were losses of jobs, but it was decided that any development must look at conservation and tourism as a means of job creation. Land incorporations were seen as important for world heritage status and there was a potential for international funding. There had been an increase in tourism seen by number of beds occupied, and this was an indication that the project was beginning to work.

The People and Parks Programme focused on settlement of land claims and co-management agreements, providing support for land claimants. Nine out of fourteen claims were settled and six co-management agreements were signed. There had been capacity building through training and job creation, with a 70% placement rate, after leadership training and mobile workshops for land claimants in areas such as tour guiding, computer literacy, administration, craft (which resulted in 200 craft groups with links to high value markets), alien plant identification and herbicide application, project management, construction, environmental education, first aid and dangerous game education.

From the point of view of economic development, R27.5 million was spent on infrastructure in 2008/9 of which 65% went to SMMEs and local labour. Land care SMMEs received R11.3 million for land care contracts, with 5 250 local people employed, of whom 60% were women.

Natural resource use programmes grew from the need to find alternatives to swamp forest farming. Sustainable resource use was permitted, now providing for improved soil, access to water and seeds, fencing, training and enterprise skills development. Four hundred women completed the certified training course and 3 500 women collected incema in April/May.

There were now mandatory equity partners in tourism facilities. Rocktail Beach Camp had opened in December 2008. As far as tourism activities went, the Small, Medium and Micro Enterprises (SMME) development resulted in 48 entrepreneurs in all local economic sectors. Cultural heritage was promoted through improved information for tour guides and access to cultural sites for ceremonies and festivities.

Equitable access was moving forward, including 60 000 people visiting the Park free on New Year’s Day, environmental education for schools, which resulted in 120 schools’ and 3 000 learners’ visits per year, outings and trails were organised for land claimant youth to connect with the land and an inter-faith event was held.

The challenges and focus areas for the medium term were outlined. iSimangaliso hoped to maintain its track record of unqualified audits. The People and Parks programme would need to focus on capacity building of land claims trusts and implementation of the co-management agreements. There was a need to grow the equitable access programme, for instance, through access and support materials for schools. Training was another focus area, and would be including land care, infrastructure and tourism, especially at NQF4 levels, as this would allow people to become guides on their own. There would be a further programme focusing on hydrology, which would aim to find a solution for the problem of high silt levels in Lake St Lucia, due to canals from the Umfolozi catchment area. Economic development and education must continue.
Another challenge was to address the call by lobby groups to resume beach driving, as these groups were claiming that the tourism economy had declined since it was banned. Although work by Department of Environmental Affairs and Tourism (as it was then named) showed this was not necessarily the case, the Portfolio Committee needed to be aware of this lobby.

A further challenge was posed by unauthorised developments, where activities were continuing with developers in Kosi Bay, using locals to front for them. This was a major challenge as, among other negative consequences, the lights interfered with turtle laying, which was threatening the species with extinction. In Dukuduku there was a historical deal with government to settle away from the forest and Umfolozi flood plain, but illegal activities were still taking place. Some developers had been taken to court.

The infrastructure programme for 2010 would be focusing on picnic sites and roads. There would be a continuation of efforts to introduce game to the park. One indication of success had been the return of elephant after an absence of 80 years. There would also be a continuation of the removal of alien vegetation, the redevelopment and upgrade of tourism accommodation facilities in the Park, and new investment, with the anchor project of Cape Vidal, which had an approximate investment value of R500 million.

Mr G Morgan (DA) thanked the team for their presentation and asked whether iSimangaliso had been affected by the upsurge in rhino poaching. If so, he asked what was being done about this. He also asked whether there was a problem with poaching for bush meat.

Mr Zaloumis responded that iSimangaliso had a unique model as it did not undertake the day-to-day conservation. There had been a problem with rhino poaching in previous years but not this year as controls had been increased. There also had been poaching for bush meat when its value increased. In this respect ground coverage was a very important tool which technology did not replace.

Mr Morgan referred to the court case around unauthorised developments, and enquired why the issue had become so big before the Department of Environmental Affairs had dealt with it, and whether there were any other unauthorised developments that the iSimangaliso Wetland Park Authority was dealing with.

Mr Zaloumis replied that there was a long history with old legislation in place until 2005, when iSimangaliso became the authority. Because of this there had been a need to move slowly and follow a process to raise awareness. There were instances with critical ecological impact, and it was generally following the civil case route as criminal cases took too long. There had been one landmark case in which the developer had been found guilty.

Mr Morgan wanted more information about Cape Vidal, in particular how, since it was such a large development, the organisation was planning to keep a smaller footprint.

Mr Zaloumis explained that the existing site had 600 accommodation opportunities. In the development proposal, iSimangaliso stayed within current capacity in that the developer must work within strictures. Technology was to be restricted, water and waste was to be dealt with and staff numbers capped at 70.

Mr Morgan asked how many pines had been cut down, what follow up action was being taken to ensure alien plants did not re-establish themselves, and what happened to unsightly stumps.

Mr Zaloumis said that on the eastern side of the Park the removal was more or less complete. The western side was more difficult as it had pine and gum trees, the latter posing more of a problem as the stumps stayed and started regrowing the same day, so these had to be removed every five years, whereas pine stumps rotted away. Fire management helped with the removal of alien vegetation and there were public works projects with the Department. Mr Zaloumis acknowledged that the western shores were a problem, saying that the organisation needed funding for rehabilitation. 
Mr Morgan enquired about the number of Expanded Public Work Programme (EPWP) jobs created as a result of iSimangaliso projects, and how iSimangaliso could expand opportunities for permanent jobs under their control.

Mr Zaloumis acknowledged that iSimangaliso would like to improve its numbers. For example, in the area of land claims settlements, the organisation needed more staff but it was not within the current budget.

Mr J Skosana (ANC) asked about measures the organisation had put in place to cap the income drop and whether there were any other challenges to iSimangaliso in the area of finance.

Mr Zaloumis explained that iSimangaliso had a three-part strategy: the first being private sector funding, which had had limited success, the second addressed the improvement of controls such as taking better control of the gates, to increase the revenue, and the third being tourism. However, as the third was somewhat fickle, iSimangaliso would prefer to work on fixed rentals and Public Private initiatives, as it did not want to overwhelm smaller companies or those just starting out.

Mr Skosana also questioned the sustainability of community training and asked for clarity on income for the people.

Mr Zaloumis said that the sustainability of community projects would come from the budget being repeated. iSimangaliso also tried to upskill existing SMMEs and manage them for longer.

Mr Skosana enquired about iSimangaliso’s involvement with land claimants, other than youth, and whether it was assisting people with how to claim.

Mr Zaloumis said that iSimangaliso encouraged the inclusion of women and youth so that all constituencies were represented. Although it was not concerned with settling the claim, it would attend the meetings as support for the claimants. It tried to build good relationships with claimants and committees to facilitate the process.

Mr Skosana expressed the view that if all the objectives in the document were delivered, the organisation would go far.

The Acting Chairperson asked about the progress in the area of solid waste and also enquired why MTN funding was mentioned in last year’s and again in this year’s report.

Mr Zaloumis replied that iSimangaliso was not making much progress in terms of solid waste. It was doing a review across the Park, largely dependent on the municipality. The MTN project was running over three years, which was the reason why it was mentioned in both annual reports.

Ms C Mabuza (ANC) asked whether pollution was a problem. Mr Zaloumis said that it was, particularly off the coast. It was a particular worry in the turtle season. He mentioned that coast cleaning did help to create jobs. Inside the Park iSimangaliso had concessioned out road clearance and cleaning.

South African Weather Service (SAWS) 2008/09 Annual Report
Dr Linda Makuleni, Chief Executive Officer, South African Weather Services, presented the report. She noted that the business of South African Weather Services (SAWS) was to disseminate reputable weather, climate and related environmental goods and services to clients.

She noted that the reporting period coincided with the first year of a new Board appointed in April 2008, and the change in administration from Department of Environmental Affairs and Tourism to the Department of Water and Environmental Affairs (DWEA). The support from shareholder and other stakeholders was appreciated. The organisation received an unqualified audit report and also reported 84% customer satisfaction with its goods and services, as found in a perception survey conducted by an independent service provider. The total staff complement of the organisation was 386, of which 79% came from historically disadvantaged backgrounds, 35% were female, and 2% disabled, fairly spread at different human resource categories. Human capital initiatives being implemented were the Skills Development Plan, the attraction and retention strategy and succession planning. These initiatives were important because more climatologists were needed and, although equity numbers looked good, SAWS needed a succession plan in order to have experienced staff to take over high level duties. SAWS had awarded 40 bursaries, of which 75% went to members of previously disadvantaged communities. In the area of job creation, the organisation had an internship programme and most interns were employed within the organisation following training. One intern who failed the exam was given another opportunity to write, and had then passed the exam.

Strategic goals and objectives concentrated on the areas of financial sustainability, corporate governance and strategic leadership, including SAWS intention to take a meteorological leadership role in Africa, continued learning and client satisfaction.

Although the audit report was unqualified, the Auditor-General (AG) had drawn attention to the incurring of R1.1 million in irregular expenditure. The person responsible had been dismissed. The AG noted management’s disclosure of the irregular expenditure. The organisation was in the process of strengthening its supply chain management policy. The deficit in revenue from aviation was partly due to the challenges faced by the aviation industry with the liquidation of some airlines.

Dr Makuleni then described performance against the targets set in the Strategic Plan. Under the goal of ensuring financial viability and sustainability, there was growth of commercial revenue, Research and Development funding of R3.6 million was received, and there had been effective utilisation of the grant, with 97% of budget spent. This was in line with the acceptable variance of 10%. There was an increase in operating expenses, but this had been kept at 5.5% and there was a decrease of 9% in other operating expenses. There had been non-financial revenue growth of 49.3%.

In line with ensuring corporate governance leadership and sustainability, SAWS had received an unqualified audit and took a leadership role in the implementation of the Severe Weather Forecast Demonstration Project (SWFDP), was appointed both Chair and Secretariat of the Meteorological Association of Southern Africa (MASA), and continued its role as the World Meteorological Association’s (WMO) Regional Specialised Meteorological Centre. Effective stakeholder management included the implementation of 3 CSI programmes, a drive to recruit bursary holders and an international relations framework. Internal controls were reviewed and enhanced.

In meeting the goal to ensure that SAWS becomes a learning organisation, Dr Malukeni noted that SAWS was now accredited as a training institution by the relevant Sector Education and Training Authority TETA, which would aid the growth of critical and scarce skills, and had established strategic partnerships with universities in rural areas. Internally, eight people were appointed to the learning programme.

In relation to creating a client-centric organisation, Dr Malukeni noted that in regard to severe weather warnings, Memoranda of Understanding were concluded with the then-named Departments of Provincial and Local Government (DPLG), Environmental Affairs and Tourism (DEAT) and Water Affairs and Forestry (DWAF). Mr Lance Williams, a Board member, was commended for his contribution in this regard.

In line with ensuring that SAWS became a reputable provider of weather, climate and related environmental products and services, Dr Makuleni noted that, among other achievements, the organisation had installed the South African Air Quality Information System and participated in research to improve the Nowcasting and Flash-flood Guidance System, which was important for weather-related disaster risk reduction as it guided people’s responses. It was using Numerical Weather Prediction documentation of weather-related indigenous knowledge, which aimed to link indigenous knowledge with science. Customer-specific products developed included automatic weather stations for small airports, an aviation website, web portals for specific users such as utilities, mining and manufacturing industries, giving information such as tracking storms. The Road Hazard Warning System was a pilot project rolled out with insurance companies, to provide clients with warnings about severe weather in an effort to reduce claims.

She noted that the reduced number of aircraft in the aviation industry resulted in income loss,  as the service costs to the organisation were the same. The Medium Term Expenditure Framework (MTEF) submission reflected that the country needed more hydrometeorologists and agrometeorologists to deal with the issue of climate change. SAWS had requested additional funding for research and would approach other institutions such as the Department of Science and Technology.

She concluded that continuing support for SAWS would enable the organisation to enhance aviation income recovery through the regulatory process, and focus more on commercialisation of activities, modernisation of infrastructure, human capital development, regional cooperation and climate change and variability.

Mr Morgan commented that while SAWS’ austerity measures were good, one of these was to cut down on radio soundings to save costs. This compromised the quality of the service. He questioned whether this was an indication that SAWS had more financial problems. He also requested details about the irregular expenditure as mentioned on page 71 of the report.

Dr Makuleni replied that in 2008 management had discussed the issue of how to spend the grant prudently. Radio soundings were considered expensive as they were sourced internationally. An alternative source was found locally. This year, management faced the same challenge regarding spending and also identified the need to generate money from commercial enterprises. An agreement was concluded with South African Airways (SAA), in which aircraft in the upper air collected information. SAWS was also using numerical predictions to get information. These initiatives were put in place to compensate for cut radio soundings.

In regard to the irregular expenditure, she noted that the problem was identified by management and not by the auditors. The individual responsible went through the disciplinary process. Management informed the Audit Committee, the Board and the Auditor General and discussed controls. The individual was found guilty and dismissed. The issue had to be noted as irregular, but it had been dealt with.

Ms A Lovemore (DA) asked about the early warning system and links with the disaster management centre. Citing the fact that not all provinces had disaster management plans in place, she expressed concern that things were not necessarily happening on the ground. She also asked for details on the issue of air quality modelling (as set out on page 49 of the report).

Dr Makuleni answered that SAWS was working very closely with the disaster management centre and had identified a need for capacity building. SAWS’ role was to provide training. There was also a team looking at the Department of Communication to help improve the centre’s communication, and a pilot project involving the media to find ways to communicate information to communities. The issue of air quality modelling needed to be addressed by finding strategies to help the country make decisions, and the expertise of SAWS was currently not enough to be custodian of the information.

Mr Mnikeli Ndabambi, Senior Manager: Forecasting, SAWS,  added that new technology regarding early warning was being developed and that he could provide Ms Lovemore with an updated list of provinces that now had disaster management plans.

Mr J Skosana (ANC) thanked Dr Makuleni and the SAWS team for their excellent report. He expressed his worry about the mismanagement of funds. If that was not repeated the organisation could go far.

Mr Morgan asked for details of what had happened.

Dr Makuleni explained that the situation arose when a SAWS aeroplane’s engine failed while in Australia. The engine was not insured. The employee in charge did not inform management of the situation, but chose the most expensive option to rectify the problem. The costs were not approved. Mismanagement of funds was ruled, as the organisation lost money that was not budgeted for when there were less expensive options.

The meeting was adjourned.


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