Council for Scientific and Industrial Research Annual Report 2008/09

Science and Technology

03 November 2009
Chairperson: Mr N Ngcobo (ANC)
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Meeting Summary

The Council for Scientific and Industrial Research briefed the Committee on the Annual Report and Financial Statement 2008/09. The CSIR had received an unqualified audit report and presented a positive report of its activities in the past financial year. CSIR had developed programmes aimed at increasing the Science, Engineering and Technology base (SET). The SET base now had 33% women and 350 students in total.

Extensive research had been done in the areas of radar technology and lithium battery technology. The Council for Scientific and Industrial Research had developed an infrared camera that could be used in daylight. It had also investigated how to make plastic less permeable to oxygen and CO2 and developed a coating, and this technology had been approved by the Food and Drug Administration, and patented. Renewable energy sources had been researched and different types of materials for energy storage and energy generation had been developed. It was working with solar panels and was looking at technology to store energy and generate electricity. In the medical area, the issue of non-compliance with drug regimens by Tuberculosis patients had been investigated and a drug had been developed to counteract this challenge, by allowing patients to take only one tablet per week for their condition. CSIR was also investigating how to use water economically, and how to use other resources more effectively, and was also working with mines and communities to assist them with water issues.

The Committee expressed concern about the CSIR’s method of reporting, which did not always show a clear alignment to strategic plans. The Committee questioned the entities aligned to the CSIR and their asset components in terms of the Group and the organisation itself. Members asked if the organisation had enough of the right equipment. The marketing of the organisation to and with other entities was explained to the Committee. The Committee asked how the organisation was dealing with water shortages and if it had done any research in this area. Members also were concerned with the relationships with other departments, including those of Science and Technology, Transport, Human Settlements and Energy. They further questioned the arrangements in regard to Agrément SA other entities. Questions were asked about the remuneration increases and if staff at the organisation could acquire shares. The Committee expressed concern about the lack of information regarding climate change and renewable energy research. In answer to this, a long explanation was given of the efforts in which CSIR was involved, which included researching renewable energy sources, water purification, solar technology, alternative biofuel sources that did not interfere with food security, and Clean Coal technology.

Meeting report

Council for Scientific and Industrial Research (CSIR) Annual Report 2008/09
Mr Sibusiso Sibisi, Chief Executive Officer, Council for Scientific and Industrial Research, presented the Annual Report and asserted that it had been a very good year for the CSIR. The unqualified audit record was maintained and the total operating income was 1.49 billion. Performance Indicators was an area that had been consolidated. Work had been done on a lithium technology battery and this was coupled to electric car development in South Africa. Radar studies formed a very strong area of competence in the CSIR. The CSIR had invested in research in building infrastructures and had the support of the Department of Science and Technology in this regard. (See document for further details)

Ms Khungeka Njobe, Group Executive: Research and Development, Outcomes and Strategic Human Capital Development, CSIR, said that the CSIR had developed programmes aimed at increasing the Science, Engineering and Technology base (SET). The SET base now had 33% women and 350 students in total.

Mr Chris Sturdy, Chief Financial Officer, CSIR, said that the total operating governance issue was most important for the organisation and it had adopted a holistic view of governance. The CSIR had a research advisory panel, so that people could have a sense of ownership. The CSIR subscribed to a system of good governance and the Auditor General of South Africa (AGSA) had given the CSIR an unqualified audit.

Mr Hoffie Maree, Group Executive Operations, CSIR said that the organisation had developed an infrared camera that could work in daylight and had been accepted worldwide. The CSIR was bringing science into the maintenance of the electricity grid and was in the process of setting up a company to manufacture these cameras and sell them worldwide. The CSIR had investigated how to make plastic less permeable to oxygen and CO2 and developed a coating on the outside to effect this. In reality 20 000 to 30 000 of these bottles were made per hour so this had to be upscaled for production. The CSIR had an approved patent from the Food and Drug Administration (FDA) for this product and was ready for a much wider marketing strategy.

Mr Thulani Dlamini, Group Executive: Research and Development, CSIR said that the CSIR had made strides in renewable energy sources and in using the sun as an energy source. It had developed different types of material for solar panels to look at technology to store energy and generate electricity.

He noted that one of the main problems in South Africa with regard to Tuberculosis had to do with the issue of non-compliance of patients, because they needed to take a large number of drugs on a daily basis for very long periods of time. The CSIR was looking at how to address this issue of non-compliance, using its understanding of polymer science and nanotechnology to develop drugs and encapsulate them in a material that would allow materials to be released slowly into the body in a week. This would allow a patient to take the drug only once in the week. A good success rate had been reported with this study. (See document for details).

Mr Pat Manders, Executive Director: Natural Resources and Environment, CSIR said that the baseline showed a fairly intact ecosystem which looked effectively at how to use water economically, and how to use other resources more effectively. The CSIR was investigating ecologies on the management and maintenance of systems. Most of South Africa had below average rainfall and would have to be very careful with water usage in the country. With its strong mining history, the country had to be careful of the acidic environment created by mines, and had to investigate ways to deal with this. Research about water had to reach a point where water could be re-used.

The Chairperson recommended that the CSIR should be more systematic in its approach to reporting and include information about what it would be doing in the strategic plan. All government entities should be presenting reports that were based upon the strategic plans. The Committee would assist the CSIR to structure its reporting, and would forward the model structure for this process.

The Chairperson asked what ‘Airbus’ was as this was mentioned in the closing slide with a selection of quotes from organisations in various relationships with CSIR.

Mr Sibisi replied that the CSIR had done mathematical modelling in structural design for a company called Airbus. 

Ms M Shinn (DA) asked for clarification regarding references made to finances belonging to the CSIR, and finances belonging to the Group, in the Annual Report. This was difficult to understand because it was unknown whether two organisations existed within the CSIR.

Mr Sturdy clarified that the CSIR was an entity created by an Act of Parliament. It was able to hold shares in other companies. When the results of all the entities were brought in, all the results were added together to get the ‘Group’ results. Any entity under the control of the CSIR was represented as part of the Group results. The operating income was only R20 million, so the bulk of the activities were housed within the CSIR as the main entity.

Ms Shinn said that she was confused about a statement in the Annual Report that stated that ‘during the current financial year, assets to value of R74.7 million were purchased with parliamentary grants’ and, ‘at the year end assets at the cost of R133 million were purchased with parliamentary grants’.

Mr Sturdy said that in terms of Generally Accepted Accounting Practice, there were two statements dealing with these matters. The one dealing with grant funded assets was different from the general accounting treatment. This note was therefore saying that in the current financial year, the CSIR had spent R74.7 million on equipment, using Parliamentary grant funds. The total spent over the life of the CSIR on grant funded assets was the R133 million that was shown on the balance sheet of grant funded assets. The CSIR would look again at the wording of this statement to try to avoid confusion.

Ms Shinn asked what the difference was between the two. She asked if CSIR had enough of the right equipment, so that people would not leave for this reason. She asked further if the CSIR really had enough money to spend.

Mr Sturdy said that the CSIR did invest significantly, but unfortunately only had finite funds available. The CSIR had to ensure that the organisation continued as a going concern. There were challenges in this area that would continue to be addressed.

Mr Maree said that in regard to equipment, the organisation did ask its units to present a list of requirements and asked them what they could do if they had more funds. Many requests were forwarded that could be funded, but the CSIR also sometimes had to refuse requests for good causes.

Ms N Ngcengwane (ANC) asked how the CSIR marketed itself to other departments, and asked whether, and how closely it worked with the Department of Transport, and with the Departments of Human Settlements and Energy in relation to low cost housing and solar systems respectively. She also asked if the CSIR marketed itself to schools in rural areas.

Ms Njobe replied that the CSIR did approach stakeholders who were key to being able to identify problems in various sectors in the country. Relationships existed with the Department of Transport, as well as the Department of Human Settlements, and these were particularly good relationships. The quality of those relationships varied because people moved around. Because of the recent changes of political heads, the CSIR had to reinvest in forming new relationships, so that it could get buy-in to its projects. These relationships could be improved, as was the case with the colleagues at the Department of Water Affairs, whom the CSIR had briefed on the problem regarding the water at the Olifants River.

Mr Maree added that CSIR tried to sign a kind of Memorandum of Understanding with these departments, and with the Department of Science and Technology. The CSIR operated in the hope that other departments had their own research budgets, which they could use to address their own research questions. The CSIR had had some success. However, it would like to get some help from the Committee, as it could do better if it was assisted by better departmental budgets for research questions with which it could engage. In this way the CSIR could become more aligned with the priorities in those departments.

The other area where the CSIR was building relationships was with the State-owned enterprises, and CSIR was asking particularly what it could do better, if it worked more closely with Transnet. The CSIR had worked with Coricam and Eskom. It could not work on its own, so the question was how these relationships would help it to do better.

Ms Njobe said that the CSIR had done a lot of work in the rural areas regarding marketing, Many CSIR bursaries were advertised in public newspapers and did not reach rural schools, but the CSIR was committed to improvement in this area of its mandate. There were colleagues in the Human Capital Development unit at the CSIR who were quite passionate about this, and literally went into schools in rural areas to identify and interview individuals for programmes. With additional resources, the CSIR intended to increase its reach. With regard to stakeholder relations CSIR had a major focus on youth, and partnered actively with the Department of Science and Technology (DST) in this regard.

Mr Sibisi added that the South African National Research Network should not just be a network that reached high level research institutions, but that it should be a ubiquitous network reaching everyone, including all school children.

Mr S Mkhize (ANC) said that the Minister of Water Affairs had recently said that certain cities would experience problems with fresh water. He asked if the CSIR could deal with this situation; Issues were also raised about the Olifants River and whether this water was suitable for drinking, and he asked whether CSIR could do anything to address these issues.

Mr Manders said that water was in limited supply and there were serious constraints in terms of large Metro areas. A lot of research had been done, but rainfall was limited and ground water was not an infinite resource. Climate change also had to be considered here, because the implications for using water efficiently were serious, especially for emerging farmers. South Africa was recognised as a world leader in the debate around sharing of water. The challenge was that water changes over time could not be measured. Potentially, South Africa could use and re-use a lot of water, but this called into question the quality of water. It was very expensive to treat water, and South Africa did not have any established companies dealing with water treatment. The CSIR did partner with some other companies in this regard. The implications of water treatment were serious for dry land farmers, because water needed to be shared with neighbours who also had a claim.

Mr Mkhize asked for clarity about the capacity at the CSIR, and the scientific interventions developed

Mr Sibisi said that the CSIR built capacity to conduct research to develop technology. It was essential to work in partnerships. Titanium beneficiation was one area where the CSIR had partnered with other organisations.

Mr Mkhize asked what could be done to address the challenge of poverty in South Africa

Mr Sibisi said that more could always be done to address poverty, like finding a well-priced and medium term solution to low cost housing, better than that existing in South Africa at present.  The CSIR was currently working on sorghum and drought resistant maize issues. Mr Sibisi said that it should be remembered that other institutions were also fighting poverty.

Ms S Molao (COPE) asked if the CSIR had any plans to bring the mines on board to assist in re-purifying water.

Mr Manders replied that work was being done to purify water on the mines. It was hoped that more CSIR technologies could be used, so that the CSIR could work with the mines to solve their problems. The CSIR was licensed to other companies like Anglo Coal and Harmony, and was dealing with neutralisation at the upper Olifants River. The Upper Olifants River Forum was providing the funds for that research.

Ms Shinn said that the Annual Report had declared that lost and stolen vehicles had trebled from last year to this year, with the figures at nearly R1.5 million. She asked what the CSIR was going to do about this loss.

Mr Sturdy replied that unfortunately this had happened. To put this in context, the CSIR did spend a significant amount of money on security, and R1.4 million amounted to 0.02% of the total cost of the assets at the CSIR. The CSIR had comprehensive security and had managed to recover funds.

Ms Shinn asked why employee remuneration increases were so high, and if performance bonuses were attached to wage increases.

Mr Sturdy said that employee remuneration had increased by 23%. The reason for this was that there had been a small increase in the headcount at the CSIR, there had been an annual increase process at the organisation, and it had also introduced a scarcity allowance to maintain the core research base. Certain individuals were therefore identified, and they received an additional allowance. Included in the 23% was also a provision for performance bonuses. Last year was the first time in the history of the CSIR that a 13th cheque was paid to all staff. The total provision for performance bonuses was 1.2 times the average 13th cheque for staff members.

Ms Njobe said that a scarcity allowance had also been allocated to CSIR staff for the first time ever this year, as a response to the market. The CSIR was currently in the process of developing a comprehensive strategy on remuneration, to try to retain the skills that it had. It had adopted a uni-dimensional approach to retain and attract people. The CSIR did have a very comprehensive performance assessment process.

Ms Shinn asked if there was policy amongst staff on whether individuals could own shares or be Directors of any of the Joint Venture Companies, and, if so, what were the rules.

Mr Sturdy said that staff could own shares in the organisation. Coricam was an entity that the CSIR was looking at, to create, spin out and commercialise cameras. There were certain people who were critical to making this venture work. In order to incentivise these people, CSIR was currently investigating the possible offering of shares for sale to them.

Ms Njobe added that the CSIR was also looking at amending the benefit sharing exercise in this regard. Intellectual property had a realised value, and the creators of that property could of course share in the financial proceeds.

Ms M Dunjwa (ANC) asked what was the CSIR’s relationship with the entity Agrément South Africa.

Mr Maree sad that international standards were driven very strongly from Paris in France, and this included the system of measurement and the International Standards Institute. The certification of buildings and the like were an offspring of this arrangement. This was where Agrément entered the picture. It was supported by the Department of Public Works, and may migrate separately from the CSIR.

The Chairperson said that he had not heard any significant coverage about climate change in the CSIR’s presentation. The country was faced with a very difficult negotiation process, to have all countries on board to sign the 2012 United Nations (UN) agreement together. The Conference in Copenhagen was going to be the cornerstone that would determine whether South Africa and other countries would be able to move together towards the 2012 UN agreement. The effort of many countries rested with institutions like the CSIR. He pointed out that at the ANC conference in Polokwane, an agreement was reached that renewable energy should be at the centre of any future development. As result the Energy Bill was passed, which sought to move South Africa’s policy in this direction. The CSIR had not reported on how it was developing renewable energy programmes for the government.

Mr Manders said that the DST had a 10 year Innovation Plan, and the CSIR was working very closely with the DST and the rest of the South African community in developing a plan in support of the global change challenges, with one, but not the sole, emphasis being on climate change. CSIR was hoping to work closely with Access, which was a South African consortium of researchers co-ordinating earth systems science research in support of climate change and other global change. CSIR was also hosting, piloting and setting up the South African Risk and Vulnerability Atlas. Specifically in relation to Copenhagen, the CSIR was working with the South African Biodiversity Institute, which was one of the research partners of the CSIR, and they had recently put together a very substantial component of the Second National Communication on climate change.

Mr Sibisi said that the challenge with renewable energy was that although there was a real understanding, conceptually, of what needed to be done, there were still concerns as to how to translate this into efficient action. The CSIR had decided that it would set up a substantial demonstration facility on CSIR grounds related to renewable energy, such as solar energy, that would allow for the development of better technologies. It would be concentrating on solar energy and making use of technologies that already existed. The major challenge lay in tracking the sun to get optimal reception of sun rays. The CSIR was looking at designing Heliostats and making them lighter, to reduce costs

Mr Dlamini said that the CSIR had a number of programmes looking at renewable energy technologies. These programmes had three objectives, being access, energy security and minimising the environmental impact of energy generation, and utilisation of these sources. CSIR also had programmes looking at bio-fuel technologies, but the focus in this regard was to develop technology that would not impact adversely on food security. This approach was focused on two areas. The first was on some novel enzymes that the CSIR had developed, which could be used to digest and convert grass to sugars. The second investigated algae, which was also non-food raw material, and then converting algae into liquids which could then be converted further into ethanol. This research was still in the early stages, but was showing alternative ways to generate bio-fuel from these materials. Another area of CSIR investigation was Clean Coal Technology, to capture, convert and store CO2, which was generated, for instance, during the gassification of coal. The CSIR was co-operating with Eskom and Sasol as future partners to develop these technologies further.

Mr Manders said that the CSIR did not want to make the same mistakes with regard to the sustainable use of bio-fuels, and was looking to pilot mixed-energy solutions with Invest North West as part of its local planning strategy. The other part of sustainability was concerned with the deployment. It was necessary to ensure that the energy mixes and their availability were socially acceptable and affordable. There was a lot of work to be done in sustainability and renewable energy.

The Chairperson said that it was estimated that, by the year 2050, all countries would have reduced their gas emissions by almost 80%. One of most important areas in which this could be addressed locally was through using nuclear power. The CSIR should start to liaise with other projects on nuclear-based generation.

The Chairperson asked how much had been done in the Hydrology Division at the CSIR regarding water development for rural areas.

Mr Manders said that the CSIR did have a water research focus, which included investigating making ground water available and fit for use for rural communities. The CSIR was definitely looking at the health aspects and how rural communities could manage this resource. It was a challenge to sustain such communities on continuous basis. The built environment initiatives of the CSIR also involved the distribution of water to rural communities.

The Chairperson asked about new strategies at the CSIR for people who had been skilled.

Ms Njobe said that the CSIR Board had adopted the Human Resource Development Strategy in November 2006. A key aspect of this strategy was that CSIR must focus on having security of supply of the kind of skills it required for its research. This meant that there was not so much a broad focus on having people with Master’s and PhD degrees, but a focus on CSIR priorities. The CSIR had programmes in the pipeline for people closely aligned to the organisation, which were related to the areas in which they were working and the extent to which they could be placed on the CSIR campus. The intention was that those people should come out of the programme with skills aligned already to the workplace. There was active interaction with all who were on the CSIR bursary programme, and they were encouraged to work at the organisation during vacations.

The meeting was adjourned.


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