SANBI, SAN Parks, iSimangaliso Wetland Park Authority, SA Weather Service 2011 Strategic Plans

Meeting report

The Chairperson noted the four entities that would present their strategic plans. The Committee had just dealt with some of the Water Boards. He had been shocked to hear that the financial statements of the Water Board were not being scrutinised by the Standing Committee on Public Accounts (SCOPA). The Chairperson asked if SANBI had appeared before SCOPA. The answer came back in the negative. The Chairperson expressed concern that the financial affairs of a broad section of the entities under the Department of Water and Environmental Affairs were not monitored by SCOPA. He would endeavour to follow it up with the relevant officials.

Committee Programme
The Chairperson set out the meeting schedule for the Committee for the current term. The current week would be used to deal with the entities under Environmental Affairs. Wednesday 1 June 2011 would be used to deal with the two corporate entities under the DEA, Buyisa eBag and Indalo Yethu. The week of 6 June would be dedicated to the entities that fell under the Water Boards. On 7June the Committee would deal with Trans-Caledon Tunnel Authority and Komati Basin Water Authority (KOBWA) and then with the two catchment management agencies, Bergwater and Nkomati. In the week of 13 June, the Committee would have a short meeting with the newly formed Ministerial Water Advisory Council. On 21 and 22 June, the Committee would deal with the Acid Mine Drainage Report. The Department would come with an expert to explain what was in the report, after which the Committee would engage the report. The Department then had to explain what it planned to do. On 28 June the Chamber of Mines and the mine owners would have the opportunity to explain why they were not doing what they were supposed to do. On 29 June, both Departments would come and report on what they were doing towards the Millennium Development Goals (MDGs). The recess would follow after which there would be a month available for Committee work. One of these weeks the Chairperson wanted to use to do oversight visits. Members should suggest relevant places to visit.

The Chairperson indicated that the presentations had to include the strategic plan, the annual report, and financial statements. This was his first engagement with these entities and he wanted to start a process where these entities would be vigorously engaged. The Committee would make sure that their programmes were appropriate, that these programmes were implemented correctly and that the funding these entities received was spent properly, and in some instances, the Committee would look at the advisability and the viability of the entity. This would be a process that would last the duration of the term of this Committee. The Chairperson would get SCOPA to play a much more prominent role in the financial oversight of both departments and their entities.

The Chairperson acknowledged representatives from National Treasury as well as the office of the Auditor-General and thanked them for being present.

South African National Biodiversity Institute (SANBI)
Dr Tanya Abrahamse, SANBI CEO, said that SANBI moved from a three year to a five year planning cycle in line with new National Treasury guidelines. The presentation outlined SANBI’s role, strategic plan, overview as well as its strategic goal and key programmes. It also outlined a summary of programmes and priority areas for 2011/12. It included SANBI headlines, challenges and opportunities as well as a financial report (see document for details).

SANBI’s Strategic Goal: SANBI was strategically positioned to harness South Africa’s biodiversity capacity and was recognized as the first port of call for knowledge, information and policy advice on biodiversity in South Africa and the region. This Goal was achieved through seven programmes with a number of Strategic Objectives. Within these programmes SANBI:

▪ Conducted research, monitored and assessed for understanding biodiversity and adaptation to climate change
▪ Coordinated biodiversity information management and access
▪ Coordinated programmes for protecting, restoring and reducing loss of natural habitat in threatened biomes and ecosystems
▪ Provided science-based policy advice
▪ Managed a network of conservation gardens (National Botanical Gardens NBGs)
▪ Drove human capital development, education & awareness in response to mandate
▪ Implemented effective systems & processes to support the achievement of the mandate.

Dr Abrahamse set out the strategic objectives for each programme. Some highlights were (see document for details):.
Under Programme 1, Conduct research, monitoring, and assessment for understanding biodiversity and adaptation to climate change, SANBI delivered the first work on the controversial Genetically Modified Organisms (GMOs) in 2010. It would work mainly with BT maize in order to assess the impact, positive and negative, of GMOs on biodiversity in the environment and report back to the Department.

Under Programme 2: Co-ordinate biodiversity information management and access, SANBI had created a product that was considered world best practice. It was a database, called the Biodiversity Adviser, which aimed to make biodiversity information accessible to whoever needed it free of charge. A considerable amount of information was available already, but it grew continuously. All environmental impact assessments (EIA) information would be fed into this database, in order to preserve information and save money by avoiding replication.

Under programme five, the Gardens Expansion Strategy, SANBI was about to proclaim a new botanical garden in the Eastern Cape.

Under program seven, SANBI planned to achieve a clean audit for the current financial year. It also had solved its bandwidth challenges by becoming part of the South African National Research Network (SANReN) group.

The 2^nd National Communications Report on Climate Change indicated that:
▪ Health impacts – eg. wetter, warmer climate would expand the malaria footprint
▪ Some effects due to climate change may already be occurring, such as due to rainfall (drought and floods) and temperature extremes
▪ Cholera outbreaks have been associated with extreme weather events, especially in poor, high density settlements.

SANBI engaged extensively with schools to create awareness of biodiversity and the need to protect it. It also strived to make the black population aware of its gardens as recreational facilities to visit. Its visitor numbers grew by 5% and its income through visitors by 7% annually.

It had its first ever winter concerts in the Pretoria and Walter Sisulu National Botanical Gardens with female vocal artist Lira during the last week of May 2011. It brought black people into the gardens who otherwise would not make use of the facility.

SANBI won a Gold Medal at the Chelsea Flower Show in England for the 31^st time in 2011.

SANBI was the first African (and second ‘South’ institution) invited to be a Convention on Biological Diversity (CBD) collaborating scientific institution. (The CBD was an international treaty to sustain the diversity of life on Earth).

SANBI’s main challenge was underfunding.

SANBI had been asked to be the national implementing entity for the Global Adaptation Fund.

Mr Moeketsi Khoahli, SANBI: CFO, delivered the financial report. He said that its revenue derived from a government grant of R150m, other grants, sponsorships and donations primarily from overseas. Own income was made up of investment income, sales and admission fees. Concerts contributed to that revenue stream. Revenue was R 378m. Rent came from restaurants operating in the gardens. SANBI collected a percentage of the turnover. There were other smaller amounts coming in from other concessions. This amounted to R350m.

On the expenditure side 70% plus of the income was spent on personnel. SANBI was talking to National Treasury via the Department for a bigger allocation. Almost 90% of the government grant was spent on personnel. The 10% that remained could not cover operational expenses. 86% of the operational costs were obligatory and could not be avoided.

The main categories of staff were scientists, admin and human resources, IT, and then the garden workers. Operating costs were R88.8m. This included audit fees, internal and external. There were grants and sponsorships but they were ring-fenced funds that were given for specific projects.

Discussion
The Chairperson asked if the Department and Treasury knew about the donations and if there were any obligations attached to them.

Mr Khoahli replied that the Department and Treasury were aware of the donations. SANBI submitted quarterly reports for projects as well as for the MTEF. The donations were unconditional. Each project had independent auditors who produced audit reports for the donors.

Dr Abrahamse said that the recently completed work that SANBI did on grasslands was funded by the World Bank. SANBI did a project on Cape fynbos that lasted for eight years, and was considered SANBI of the best implementers on the globe in terms of delivery, planning and financial management.
The Chairperson asked why the whole budget was spent on salaries.

Dr Abrahamse replied that an increase in the expertise of staff translated into an increase in the funding the institute attracted, but there were basic functions that the state had to fund. It was a people based entity.

The Chairperson said that the idea of having a budget was to share the money out equally amongst all the functions the entity had to perform. SANBI had overspent on staff. He wanted to ask the Department why it allowed this spending pattern. As long as this imbalance remained, the entity would not get more money from Treasury. SANBI was overspending R110m on staff, which was untenable.

The Chairperson asked if the staffing structure fell under the Public Finance Management Act (PFMA).

Dr Abrahamse replied that SANBI used the Department of Public Service and Administration (DPSA) structure of national government to determine staff salaries.

The Chairperson asked if SANBI had received a qualified or unqualified audit opinion.

Mr Khoahli replied that SANBI had received an unqualified audit opinion for the last two financial years, but there was concern about its status as a going concern.

Mr Khoahli said that on the page headed ‘Assets’ towards the bottom there was a subheading “Accumulated Surpluses”. These were the donor funds received. When compared to the previous year, there was a decrease almost equal to the deficit. This was attributed to funds committed for projects. It was not surplus funds.

The Chairperson asked where these funds were kept.

Dr Abrahamse replied that it was a commitment going forward. It was not money in a bank account.

The Chairperson said that last year SANBI had R129m, this year it was a R124m surplus. The previous year SANBI had said the same thing.

Ms Abrahamse said that an example was the Working for Wetlands project. SANBI would receive a commitment for money over three years. The plan and the budget would be detailed for the three years, so the funds would be reflected, but in reality there was no surplus. The funds were committed to that particular project.

The Chairperson asked why only R5m of the committed funds were spent.

Mr Khoahli said that the current year R80m and the previous year R90m were spent on projects. The previous year R62m remained and for the current year only R25m remained.

In response to the Chairperson asking if SANBI spent money on Soccer World Cup hospitality, Mr Khoahli said that SANBI only spent R97 million on Bafana-Bafana T-shirts for staff with the SANBI logo on.

The Chairperson asked the CEO for a breakdown of the budgets, separating donor funds from the government grant and showing how each budget was spent. He was worried when there was a R40m decrease in cash, and the reason given was that SANBI was getting less donor money.

The Chairperson said that the Members had received a document for each of the entities that presented, called ‘Compliance with Governance Framework.’ He asked why no board members were part of the delegation.

Ms Abrahamse said that there were no reasons why none of the board members were present.

The Chairperson said that he found it problematic, because the board had to come and account.

Dr S Kalyan (DA) asked who SANBI’s target market was and how the organisation reached them.

Ms Abrahamse replied that SANBI was concerned that the black market for its parks and gardens did not grow. SANPARKS tracked the demographics of the people using its facilities, but SANBI did not. SANBI had to attract the urban and peri-urban populations. The events held in the gardens had to attract low income and black people to the gardens. SANBI had not increased the fees for the last few years and did not want to, in order to give everybody access.

The Chairperson said that the crowds attending the Kirstenbosch summer concerts were all matured white people. Events like those had to target the black populations as well.

Mr Huang (ANC) said if SANBI wanted to engage the low income population, it could work with students and school children.

Dr Abrahamse replied that SANBI was working with schools constantly and there was a concessionary fee for school children. On Tuesdays, pensioners had free access. The access fees at the different gardens were not a flat rate. It was determined by the circumstances, taking into account other attractions in the vicinity. SANBI had the female vocal artist Lira perform at the Pretoria Botanical Gardens on a Sunday, which attracted a significant black crowd.

Dr Abrahamse added that SANBI’s key target market was scientists and researchers who used the information as support information for decision making. SANBI also wanted to provide information for citizen scientists. SANBI was part of a global biodiversity information facility. The aim of the global organisation was to market the information to scientists and intellectuals, but also to popularise science amongst the broader population. On the one hand the organisation provided relaxation and pleasure, education, windows into diversity and a tourism facility, and on the other hand it was about, policy development, and research information provision.

Dr Kalyan asked apart from universities, which other entities did SANBI work with? Did the collaborations generate income? She asked if SANBI was part of the Millennium Ecosystem Assessment. Did SANBI have a relationship with the Department of Communications?

Dr Abrahamse explained that the South African National Research Network (SANReN) was a national body set up by the South African government to ensure successful participation of South African researchers in global knowledge production. SANReN, the Centre for High Performance Computing (CHPC) and the Very Large Datebases (VLDB) project, formed a key component of the core scientific infrastructure for South Africa. SANREN was working with the Department and institutions to develop a national network. SANReN resolved the bandwidth challenge for SANBI, without it having to spend any funds. This was efficient use of state funds.

SANBI worked closely with the Council for Scientific and Industrial Research (CSIR) on the Millennium Development Goals in the ecosystems programme. Like there was an international organisation for climate change so there was one for biodiversity. South Africa was a key player in that organisation.

Regarding Working for Wetlands, SANBI had a meeting with the National Resources Management Facility Agency.

Dr Kalyan asked Ms Abrahamse not to use too many acronyms, with which some new Members of the Committee were unfamiliar. What was a red line for butterflies and who were targeted? She noted that there was no reference to health and biodiversity in the SANBI presentation.

Dr Abrahamse replied that there were areas in the northern parts of South Africa where malaria presented. It never came as far south as Pretoria. With climate change the footprint of the anopheles mosquito could expand or shift to include areas like Gauteng that were not affected now. SANBI had advised the health sector that its strategies would have to change. Cholera outbreaks were linked to unusual floods and unusual weather patterns. She had a whole presentation on the impact of climate change on health, the construction industry as well as agriculture, especially low income, low resourced subsistence farmers.

SANBI had produced the 2^nd National Communications Report on Climate Change, a scientific document which would be submitted to Cabinet within the next month, and would be part of SANBI’s presentation at the United Nations Framework Convention on Climate Change (UNFCCC) COP17 about the impact of climate change on the country.

Dr Kalyan commented that she had visited the botanical gardens in Durban and thought that the municipalities employed the staff that worked in botanical gardens. She asked what the relationship was between SANBI and municipalities in terms of funding for staff.

Mr Skosana asked why greening only happened in cities and at municipal and government buildings in rural areas.

Dr Abrahamse replied that the Durban Botanical Garden was not a SANBI garden. SANBI ran the Herbaria, but the garden belonged to the municipality. SANBI had a relationship with the network of non-SANBI gardens around the country and was encouraging them in the direction of becoming mini indigenous gardens, planting threatened plant species. Many municipalities did not have the ability or the money to run a garden, and did not prioritise it. SANBI worked with municipalities and assisted them with green spaces.

Dr Kalyan did not know what the Chelsea Flower Show was.

The Chairperson replied that SANBI won its 31^st Gold Medal at the Chelsea Flower Show.

The Chairperson asked where and by whom policy was made on biodiversity. Was it made by the Department, or by SANBI and its board?

Dr Abrahamse replied policies were made by the DEA, but SANBI was influential in their formulation. The policies were made within the framework of the National Biodiversity Strategy and Action Plan (NBSAP), which was the DEA’s comprehensive policy framework.

The Chairperson said that he did not have the policy with him. The research done by SANBI had to fit into this policy. When he started the hearings on entities, there were many problems in SANBI. He heard nothing from the Department. The Department had to empower the Committee to do its work.

Mr Ishaam Abader, DEA Deputy Director General, noted that the Department had provided the Committee with this policy.

Dr Huang made several comments about the audit, the increased audit cost, staff costs and other financial elements [not audible].

Ms Manganye asked SANBI to say something about the challenges of combating wild life crime.

Dr Abrahamse said that the database would provide the information for the monitoring and evaluation research required to combat wildlife crime.

Mr J Skosana (ANC) asked what the donor funds and investment income were used for, were they used for the payment of staff or projects?

Dr Kalyan said that the Working for Wetlands would be transferred to a unit in the DEA. What impact would that have on SANBI?

Dr Abrahamse said that SANBI did not accept donor funds for projects unless it suited the strategic plan. The grasslands project existed in the plan, and was mandated. SANBI then applied to the World Bank to do the project. The money from the foundations get used to work with the schools. Oppenheimer gave a donation that was used for a schools project. All of it was reflected in the financial reports. No performance bonuses were allocated to staff members on level 12 and above for two years. Although she was entitled to it according to her contract, she gave it up, in solidarity with her senior staff who could not get it.

Dr Abrahamse said that as a developing country South Africa had a limited budget for research. Universities received grants from the National Research Fund (NRF) to do research. Institutions also received grants. SANBI coordinated the research so that, instead of competing for resources, institutions used their grants to do complementary and supplementary research, working towards the same goal. SANBI had relationships with the Universities of the Free State, Pretoria, University of Cape Town, University of Western Cape, Fort Hare (on GMO work) and the University of Venda (on greening). Vhembe in Limpopo and Kalkeni were two very successful rural greening projects in the Eastern Cape. If SANBI did not get money for it, it would have to stop these projects.

SANBI had had to cut the education staff in half. They were moved to the emerging weeds programme funded by Water Affairs. One had to identify the priority of the priorities.

The Chairperson said that he had received anonymous, and sometimes not anonymous, accusations of corruption being perpetrated in SANBI. He asked that Dr Abrahamse took the responsibility to respond to this. People had been sacked.

Dr Abrahamse replied that an ex-employee, Mr Singh, was CFO when she became CEO, and she soon became aware of untoward activities in the organisation. He was taken through a disciplinary process, chaired by an independent person. He was found guilty and dismissed. He appealed and was found guilty again. He took SANBI to the CCMA where he was also found guilty. As it was not appropriate for public entities to sue people, she sued him in her personal capacity for defamation. He was found guilty and was instructed by the court to pay her legal fees. He had gone to the National Intelligence Agency and to the National Prosecuting Authority as well. Ms Zondo, another person who had been dismissed by SANBI, also had a disciplinary hearing chaired by an independent person and was found guilty. Her union represented her. She went to the CCMA afterwards, who threw out the case. There was a third person that was dismissed, a Ms Khoyo. Dr Abrahamse said that the issues around the ex-employees would have no effect on the audit outcomes of SANBI. She had had to write a report to the Auditor-General to close the matter.

The Chairperson asked Dr Abrahamse to provide the Committee with a short report, detailing the particulars of these cases.

The Chairperson asked about the database system, how big was the database and where was it situated?

Ms Abrahamse said that the database system was a node in the global biodiversity information system. It was accessed from a button on the SANBI website called Biodiversity Advisor. One would be able to download detailed information regarding land in South Africa. Such an information system had been tailored for use by Department of Mineral Resources for licensing purposes. Officials from the Department of Mineral Resources just returned from Canada where they had been informed that a system like that cost R20 million. The basis of the information was work that was done years ago on the vegetation of the RSA. It contained information on threatened species, threatened eco systems, water work and it was cutting the cost of doing business in South Africa. It was free information. Biodiversity Adviser was going to be displayed in Buenos Aires later in 2011 as a model of best practice in information management.

The Chairperson asked what other information was available on the system.

Dr Abrahamse replied that UCT did lots of work on bird movement. Bird movement was a big indicator of climate change. The old practice of researches in South Africa was that they clung to their data and refused to share it, until they felt they had exhausted the research. SANBI had to convince institutions and scientists to share their data and it was a slow process. Data had to be shared and made available to stimulate further research.

In response to the Chairperson asking if there were any major databases on biodiversity apart from this one, Dr Abrahamse said there were not. All databases in South Africa were either part of it, or were going to join.

Ms Bengu asked how many job opportunities were created last year.

Dr Abrahamse replied that SANBI employees were not public servants, but SANBI used the public service system. One of agreements with unions was that SANBI accepted most of the rules that applied to adjustments to salaries in the public service. The only difference was that SANBI had a different pension fund. SANBI increasingly had project funded staff. They got the same remuneration as public servants. The staff was shrinking because retired employees were not replaced.

The Chairperson asked if SANBI contributed more to the pension fund than the state.

Mr Khoali replied that it did not. He added that the reason the audit fee had increased was that there had to be an actuarial evaluation of the pension fund and medical aid which had resulted in the increased spending. The previous audits were unqualified. SANBI had had to submit statements for audit that day. He had not brought the audited financial statements.

The Chairperson said that his instructions were that he wanted an annual report, strategic plan and audited financial statements and the Auditor-General’s audit report. He asked the entities to submit the previous one and sent the new reports when they had them.

Ms J Manganye (ANC) asked how much of the budget was allocated for operations during the coming year.

Mr Skosana said that under investment income was listed an amount of R144m. Was it used together with the government grant or was it still in the bank?

Mr Khoali replied that investment income was the interest that SANBI had made. When it received its government grant, it invested the money to earn interest before salaries became payable. The same practice was followed with the project funds. Last year SANBI had a deficit of R11.7m. SANBI had to pay electricity etc. This had to do with underfunding. SANBI had tried to curtail expenses.

Ms P Bengu (ANC) asked why there had been a deficit the previous year.

Mr Khoali replied that staff costs were 76% of the budget in the MTEF, but on the projects the personnel cost made up 20%. There was a slow migration towards more project employed staff. Another reason for the increased cost of the audit process was the focus on performance information and that focus would remain for this year. There was a special audit for supply chain management. Most of the financial records were in Cape Town. The previous year SANBI also had to send two auditors to Cape Town for supply chain records and they audited for three years. It yielded three years of clean audits.

The issue of whistle blowing was another reason for the audit increase. Once there was whistle blowing, the auditors were duty-bound to investigate. Old Mutual managed the pension funds.

The Chairperson said that researchers had to work on the basis of excellence. He wanted to know when entities wanted to give performance bonuses. He was opposed to bonuses in the civil service, because he had never seen real excellence in the civil service, just people doing their jobs. He was happy with SANBI not giving bonuses. It would look bad for units with deficits to give performance bonuses.

Dr Kalyan asked why Dr Abrahamse would like to manage the Global Adaptation (for climate change) Fund. She asked what it meant and why Dr Abrahamse wanted to do it.

The Chairperson said that most SANBI staff collected information and did research. Were the botanical gardens the only project on which SANBI got its hands dirty? The presentation said under the third strategic goal, that SANBI coordinated programmes. Did SANBI run these itself or did the department do it, but SANBI provided the intellectual backup?

Dr Abrahamse replied that for the Global Adaptation Fund, there had to be national implementing entities in each country. At the moment there were only two national implementing agencies on the globe. Countries could access funds for projects dealing with adaptation. As SANBI had done the 2^nd National Communications Report on Climate Change, had worked with the climate change branch of DEA, and was an independent body overseen by the Auditor-General, it could implement the Global Adaptation Fund plan.

The Chairperson said that SANBI dealt with biodiversity, but adaptation was a much broader brief. SANBI could oversee adaptation in biodiversity, yes, but not beyond. He feared that SANBI would have to change in order to execute the Adaptation brief, instead of it consolidating. He asked if SANBI had the DEA’s blessing in taking on the Global Adaptation Fund responsibilities.

Ms Abrahamse replied that the DEA agreed, because this was a way of accessing the funds, but perhaps this decision had to be re-assessed.

Dr Kalyan said that the problem in Parliament was that the response to COP17 was fragmented. The money was there, but no entity to access it and implement it. She asked if Dr Abrahamse thought her organisation was the correct one to access the funds and implement the program.

Dr Abrahamse replied that her colleague from the DEA was there to explain the deeper issues and institutional arrangements around climate change.

The Chairperson said, other than the botanical gardens, were there any other hand-dirtying projects that SANBI was involved in.

Dr Abrahamse mentioned the Working for Wetlands program that was funded with donor funding but executed by SANBI staff. The money came via the Extended Public Works Program (EPWP) for the renovation and upgrading of wetlands. Furthermore SANBI did greening programs and worked with the Education Department, did schools greening projects and research. She did not know what “hand-dirtying” meant – planting and monitoring? SANBI also did impact studies of GMOs on the environment, working with farmers and universities and that involved a lot of fieldwork.

The Chairperson said that there existed a unit in the Department that was created to do dirty-hands projects. He could not understand why this unit existed, if SANBI replicated its work. He said that the Committee would engage that unit in order to get clarity on where the brief of the unit ended and the brief of SANBI started, and whether there was an overlap. The DDG had to start thinking about the roles of SANBI and that unit. The Department of Water Affairs was a disaster from a structure-functional perspective. He did not want the same thing to happen in a well-run department like the DEA. It was dangerous to create structures outside of departments. When things went wrong, it became an administrative nightmare.

The Chairperson asked Dr Abrahamse to give short reports on each project SANBI was running so that that the Committee had it on record. The Committee would pay an oversight visit to the database centre. He reiterated his discontent that the board was not represented at the meeting. It showed that board members were not engaged and it would be impossible to hold them responsible for overseeing SANBI implementing its brief.

The Chairperson also expressed his disappointment that there were also no SAN Parks board members present at the meeting.

SANPARKS briefing
Mr David Mabunda, SAN Parks CEO, said that collectively, terrestrial protected areas exceed 7, 9 million hectares (7.5% of the country), while the costal/marine protected areas comprised over 426,000 hectares. Nearly 4 million hectares of these protected areas were under SANParks management. SAN Parks mandate was to conserve, protect, control and manage the National Park system and the associated cultural heritage. There were 22 parks of which five were trans-frontier parks. There were no national parks in KZN and the North West Province.

The Chaiperson asked Mr Mabunda to explain how trans-frontier parks were managed. Was there a fully functioning body like SAN Parks on the other side of the border? How did people manage to come through to poach? What was the nature and the structure of the agreement?

Mr Mabunda replied that it flowed from a country-to-country treaty, signed by the presidents from the two countries. One expected that there had to be a management structure similar to SAN Parks on the other side of the border. The principle was that each country looked after its own assets, but collaborated on areas of common interest, such as law enforcement, tourist flow, disease control. SAN Parks was responsible for managing the South African part of the bargain.

The Chairperson asked what was happening on the Mozambican side.

Mr Mabunda replied that there was a structure on the Mozambican side, but it was not well resourced and as able to fulfil its mandate.

The Chairperson asked what the treaty said about one side not fulfilling its part of the bargain, whether the other party could withdraw from the agreement.

Dr Mabida replied that the treaty was quiet about how the situation had to be managed if one party did not fulfil its duties.

The Chairperson asked if one had to go through a border post in the park.

Dr Mabunda said that there was a border post, but people moved illegally over the border without going through the border post. It was an old problem that existed before 1994. There used to be an electric fence, which had since been taken down.
 
The business architecture of SAN Parks was that of a conservation organisation. SAN Parks’ tourism section had 6 000 beds throughout the country. Through its conservation strategy, it generated 80% of its operational budget.

Part of its business was constituency building. The population had become alienated from conservation. The relationship had to be built again. Each conservation area had a forum where the community was represented.

Dr Nomvuselelo Songelwa – Senior General Manager: SAN Parks, explained that, five years before, SAN Parks had adopted a balance scorecard. Using the graphic on the slide, she explained that Learning and Growth as well as Internal Processes were the drivers of the process, Stakeholder, customer and financial manifestations were the outcomes of the process. Over the years the strategic objectives had been crystallised and simplified. There were measures in place to monitor and manage the strategy through quarterly and annual reviews. There were three strategic objectives:
▪ Promoting customer focussed responsible tourism
▪ Growing Community Support and providing access and benefit sharing
▪ Enhancing the organisation’s reputation.

Dr Mabunda said that he could give over 500 measures for resource protection. He explained further how people and heritage protection were essential to viable and sound conservation practices.

The Chairperson asked him to send a report on rhino poaching.

Dr Mabunda said since the South African National Defence Force (SANDF) had started patrolling the border, there had been a drastic decline in incidents. Many trespassers and poachers had been killed. 170 poachers had been caught since the beginning of the year and they were in custody, but this development could not be publicised as the National Prosecuting Authority (NPA) had advised against it.
 
The Chairperson said that it could be done in a level-headed way.

Dr Mabunda said that given current events like the recession, the hotel industry suffered from low occupancy rates. The national average was around 65%, but the SAN Parks had an average occupancy rate of 69.2 %. There was a 0.5% increase in the number of visitors and the black component of the visitor figures went from 397 to 497.

Job creation ran through the system. 10 350 people were employed by SAN Parks itself, through public-private partnerships with the lodges operating in the parks, as well as funded projects.

Financial Report
Mr T Mabelane, the CFO reported that SAN Parks over-collected its target by R5m in revenue. Tourism growth increased by 15%. The statements showed a surplus of R59m, but this was not cash in the bank. The reflected R6m was cash in the bank.

The Chairperson asked what percentage of the expenses was spent on staff and which salary structure was used to determine salaries.

Dr Mabunda replied 56% of expenses were spent on staff. In the 1970s, the then board developed its own salary system. It was not DPSA – but its levels corresponded. SAN Parks had achieved its budget target.

The Chairperson asked what SAN Parks did when it wanted to acquire land to create a new park.

Dr Mabunda said that SAN Parks had a land acquisition plan. There was a special fund for park development.

The Chairperson asked where this fund was accounted for.

Mr Mabelane replied that it was the R11m that was collected by the sale of fauna and flora. The five year budget plan set out where the organisation wanted to go financially in the short term future.

In response to the Chairperson asking who made policy, Dr Mabunda answered that the board made policy using guidelines from the DEA.

Mr Abader from DEA added that policy stemmed from the Biodiversity Act.

The Chairperson said that that was not a policy it was a law. He said that he needed the policy document. He asked where the Committee would stay on an oversight visit.

Dr Mabunda said that he wanted to clear misconceptions. He gave an historic overview of the development of hospitality facilities at the Kruger National Park.

Dr Kalyan asked what the nationalities of the 170 poachers in custody were. There was speculation that they were part of a syndicate and that the horns were poached for medicinal purposes and destined for an Asian market.

Dr Mabunda replied that the nationality of most of the people in custody was Mozambiqan, but he was aware that there were Chinese and Vietnamese nationals involved at higher levels of the criminal syndicate and they were assisted by South Africans.

Dr Huang referred to the 170 poachers in custody and asked if they were foreign or local. This implied 170 law suits. What was the cost per case to SAN Parks?

Dr Mabunda replied that the cost of the court cases did not impact on SAN Parks as the people in custody became the responsibility of the Department of Justice and Constitutional Development as soon as they were arrested and handed over.

Ms Bhengu asked what SAN Parks was doing about challenges around fragile conservation areas.
 
The Chairperson asked if there was a mechanism through which to engage the Mozambicans about the rhino poaching.

Dr Kalyan asked what the nature was of the agreement amongst the three countries involved in the Transfrontier Park. Was it a treaty, a memorandum of understanding or a protocol?

Dr Mabunda said that it was a treaty. He was part of the team drafting it.

Mr Abader said it was more of a protocol.

Dr Kalyan said that at the Pan African Parliament, people thought it was an MOU.

The Chairperson instructed them to provide a copy so that he could inform himself regarding its nature. The idea was wonderful but it could not be allowed to become a haven for criminality.

Mr Abader said on the matter of wildlife trafficking, that the Minister was meeting with the Vietnamese and Mozambican governments to address the environmental protocol and law enforcement.

Dr Kalyan pointed out that the SANBI board term of office ended today, but the Minister extended it by another year. She wondered why. What was the term of office for the SAN Parks board and were they paid?

Dr Mabunda replied that the term of office for the board was three years and it could be re-appointed for a second term. The current term would end in 2012.

The Chairperson said that “Mpumalanga parks go broke” was a news paper heading he saw recently. Was it SAN Parks in Mpumalanga?

Mr Skosana wanted clarity about whether SAN Parks had a program to assist small parks trying to establish themselves in the industry.
 
Dr Mabunga replied that no parks managed by SAN Parks were going bankrupt. The national parks systems re-invested its profits back into the parks. The parks that Mr Skosana referred to and the parks in Mpumalanga were regional/provincial parks. The national agency, SAN Parks, could not get involved in the provincial parks.

Mr Abader said that parks were governed by National Environmental Management Act (NEMA) which was the legislative framework. The National Biodiversity Strategy and Action Plan ( NBSAP) was the practical plan to implement the principles of the international Convention on Biological Diversity in South Africa. Based on these frameworks, policies were developed along which the different categories of parks were managed: national parks (SAN Parks), provincial parks, local parks, private parks.

There was a question about the impact of the Radisson Hotel development (inside the Kruger National Park) on the environment in terms of the natural life and noise pollution for example.

Ms Manganye wanted to know more about the hotel development.

The Chairperson asked how high the proposed structures of the Radisson Hotel were.

Professor Willem van Riet replied he had been on the board for 15 years. He had been acting as the coordinator of developmental projects. Ecologically and aesthetically, the best way to deal with new developments in a national park was to put it on the edge of the park, because it was the most impacted part. This development would be situated at the extreme south of the park close to the Malelane entrance gate. People left cars at the entrance gate and were fetched by shuttle. Because it was a high density development, there was a picture of a high-rise hotel in people’s minds, but this was not the case. Studies done proved that the biodiversity was higher inside that outside the camp. The façade of the main building was two stories high, but all the buildings were single storey and had a flat roofed structure. In the case of Bergendal, the environmental impact was dealt with properly in terms of site selection. He advised the board on how to communicate and implement the project. An independent EIA would assess whether the project would go ahead and the DEA would have to approve it.

The Chairperson said that there was an accusation of a clash of interests.

Dr Mabunga said that the chairperson of the board of SAN Parks, was also a board member of the Mvelapanda Group. The Mvelapanda Group was an entirely separate entity from Mvelapanda Holdings. They were not linked. Mvelapanda Holdings were BEE partners in the Radisson Hotel development in the Kruger National Park. The fact that there was no link between the Mvelapanda Group and Mvelapanda Holdings meant that there was no conflict of interest.

The Chairperson confirmed that Dr Mabunda stated that there was no conflict of interest.

Dr Huang said that under the first strategic objective in the table: ‘ Improving the state of the Conservation Estate’, for progress against implementation, it said 95% in 2010/11 and it still said 95% in 2015/16.

Mr Mabelane replied that the 95% was linked to specific projects. Some KPIs could not be quantified

Mr Skosana asked about fishing rights in the Tsitsikamma. How was the project progressing to return fishing rights to the local community?

Dr Songelwa said that there had been an extensive engagement with the local communities on the issue of fishing rights. A proposal had been submitted to Department. The Minister decided that the Tsitsikamma would be a no-take zone and that no fishing rights would be granted there.

Ms Manganye asked if the Minister had spoken to the community that was waiting for fishing concessions in the Tsitsikamma. The community still thought that it was awaiting the EIA.

Dr Mabunga said that the board had made its recommendations and the Minister had to communicate the decision back to the community. Fishing was stopped many years ago and the fish stocks had recovered along the coast.

The Chairperson said that the Minister had to communicate with the community as a matter of urgency.

Dr Kalyan asked what progress there was in controlling the baboons at the Table Mountain National Park.

Dr Mabunda replied that the management of wildlife in an urban area was a municipal issue. Inside the park it was SAN Park’s issue. Outside the parks it was a case for the municipality. SAN Parks had had meetings with the city. It could not go into municipal areas to manage wildlife.

The Chairperson asked where was the Auditor-General’s audit report in the DEA Annual Report.

Dr Mabunda referred to the irregular procurement practices at Addo and Golden Gate Parks. Officials were supposed to use the open tender system but had used the three quotes system and entered into the contracts with suppliers. The audit on this had to be finalised by the end of June and the report would be issued end of July. He was unsure about the impact it would have on the audit opinion.

The Chairperson said that he wanted the report immediately. The CEO had to act quickly. He wanted to see action taken urgently.

The Chairperson said that the CEO had to act quickly about the tender irregularities at the two parks. Treasury would in future oversee all state tenders in the amount of R500 000 and over.

IsiMangaliso Wetland Park
Mr Andrew Zaloumis, CEO, said iSimangaliso Wetland Park was South Africa’s first World Heritage Site as a result of its biodiversity. It had a unique ecological and biological system and was also a place of great natural beauty. These were universal values and the site was valuable for all people of the world. 136 countries affiliated to UNESCO agreed that it had universal importance. Yet, there was poverty amongst the plenty. In 1990 there had been a bid to start dune mining. The new government of South Africa decided not to dune-mine it in 1996. The area was suffering from socio-economic neglect and was in decline. The key challenge was to shift the development trajectory.

The park included Southern Mozambique, Eastern Swaziland and Northern KZN - the idea was to visit three counties in one day. There was a tri-lateral Minister’s Committee amongst the three countries. iSimangaliso, or the Great Trans-Frontier Park, was the key driver of the economic recovery of the area on the South African side, because the tourism development happened along the eastern seaboard.

The project had other positive spin-offs. When the program started 40 000 people contracted malaria in KZN. Since the Project started the prevalence of malaria had decreased by 98% in the area, including Mozambique and Swaziland.

There had been a tremendously positive impact on the service at the border posts. The Project was working on a tourism route now with the National Department of Tourism, Boundless Africa and the province of KZN.

There were five trans-frontier conservation areas. The ecosystems were continuous, the borders were artificial.

The vision and mission of the park was to balance the world heritage site values with the need to develop the area economically as well as the necessity for conservation. A network of roads was in the process of being constructed in order to facilitate movement through the park as well as between the different countries.

An old apartheid missile base had been removed. A Mondi blue-gum plantation had been included in the park. This was a collaborative partnership between iSimangaliso and Mondi, because Mondi maintained their own stretch of fence and the animals had more land at their disposal.

The park helped to manage foot-and-mouth disease. To manage it, one needed physical barriers. iSimangaliso’s buffaloes were foot-and-mouth disease free.

From 2000 to 2010 there had been an 89% increase in the number of boat and tourism related businesses around the park. Occupancy rate of B&Bs went from below the national average to above. There had been a dip in visitor numbers due to the recession. Access fees had stayed the same for five years.

The presentation detailed the achievement of the park and the developments around it that it stimulated. Amongst others, 24 permanent and 3 268 temporary jobs had been created. Fifteen NQF4 guides had been trained of whom 80% (12) were employed. There were 20 craft groups and agricultural food gardens. Local people took part in natural resource harvesting.

The park availed 27 bursaries for young people to study for hospitality and conservation related qualifications at university, so that they could return and work at the park. They were doing well.

Growth was 5% to 7.6%. The park had 40 000 visitors on New Year’s Day, when entry into the park was free and 22 000 throughout the course of the year. These were people from the local communities.

Financial Report
Ms Terry Castis, the CFO, noted the park had achieved unqualified audits since its inception eight years before. He provided a summary of its financial performance. . The presentation showed the projected revenue, then the non-capital and capital expenditure for 2012, 2013 and 2014. From 2010 to 2011 the percentage of budget paid to employees fell from 16% to 9%. Cash paid to suppliers fell from 53% to 28%. Cash expended on capital assets went from 31% to 36%. Consultant fees went up by R3m. At the end of financial year 2010/11, there was an amount of R 51.2 m cash on the books

Mr Zaloumis said the Global Environmental Facility (GEF) had given iSimangaliso R90m to do hydrology research on Lake St Lucia. Management was recapitalising the park.

The challenges of using biodiversity to generate economic opportunity were firstly, that the area was very poor, secondly, the pressure of high expectations of delivery in a recession, the creation of large scale regional economic opportunities adjacent to the park, optimising versus maximising revenue.

A major challenge was the hydrology of Lake St Lucia. He wanted to do a special presentation on the river mouth and the ecological result of the mouth being closed as well as when it was open. It was a complex situation with the lake sometimes being a salt lake and at other times being a fresh lake. This had dire consequences on the animal and plant life

On the matter of silt management, he said that long ago the Natal province had dredged the mouth but this was now seen as poor practice. Lake St Lucia with the estuary was 70 km long and South Africa’s biggest estuary. It contained more than 60% of South Africa’s estuary landscape and contained a rare swamp forest. 76% of the swamp forest of the country was located here as well as 80% of the mangroves in the country. The challenge was to balance the ecological issues with economical and other issues, in order to manage it in a sustainable way. There was a national ban on driving on the beach with 4x4 vehicles but at Lake St Lucia and Mtunzini people were still driving on the beach. There was a strong lobby group who wanted to be able to drive on the beach with 4x4s and they want the mouth to be dredged open so that they could fish. The lobby group claimed that tourism was being destroyed by the ban on driving on the beach. It was a very emotional issue.

The drought was a challenge. Normally there was 8-10 years of wet cycle and three years dry cycle. Now there was eight years of dry cycle.

In terms of profits, iSimangaliso could not be compared to dune mining. However, Isimangaliso had a right to exist in terms of its world heritage site status. Mining would be a constant threat on the horizon, to conservation at St Lucia, and had to be dealt with. Dune mining was taking place in the vicinity, and there would be attempts at expansion.

He described how the area was being rehabilitated. iSimangaliso had an agreement with Mondi who owned a neighbouring piece of land on which it managed a plantation. Mondi had incorporated its land into the park, and managed 70km of the fence, costing R2 000 per km to maintain annually.

Finally, Mr Zaloumis explained how a network of roads drew visitors off the N2.

Discussion
The Chairperson said that it was unacceptable that no board members of iSimangaliso Wetlands Park were present in the meeting.

The Chairperson asked if the Park’s salary structure was the same as the DPSA.

Ms Castis replied that iSimangaliso did not use the DPSA salary structure. It was benchmarked against national private sector salaries and was a lot lower than salaries in the public sector.

 
The Chairperson asked why iSimangaliso was not part of SAN Parks.

Mr Zaloumis replied that it was a not a national park, but a provincial function. It was declared a Section 9 Authority under the World Heritage Act.

The Chairperson asked if it came about via a different legal route.

Mr Zaloumis confirmed this.

The Chair asked if iSimangaliso also had a rhino poaching problem.

Mr Zaloumis replied that this year there had been no losses, but the previous year there had been three and the year before that, two. (iSimangaliso had more than 100 rhinos).

Dr S Huang (ANC) said that the presentation stated that more than 3 000 temporary jobs had been created. How long did these last?

Ms Bhengu said that job creation could not be done by the park alone. She asked what role did the province and the local authority play in job creation for the poor communities living around the park.

Ms Castis said that a lot of the funds for job creation came from the Extended Public Works Programme (EPWP).

Dr Huang questioned the correctness of the figures and calculations on the table showing the Summary of Financial Performance.

Ms Castis explained that the shifts in percentages were not between 2010 and 2011. They reflected the percentage of the total for that year. The cash figure reflected cash at the end of 2010.

Mr G Morgan (DA) asked about the shifting of tourism and the judgment that one type was better than the other. What has been the effect on the town of St Lucia after the park having been there for a decade, in terms of actual tourism, for example B&Bs? Stakeholders said that the B&Bs and restaurants were struggling and they blamed it on management choices made by the Isimangaliso management. What was Isimangaliso doing to see that the St Lucia town thrived?

Mr Zaloumis replied that St Lucia had 3 to 4 restaurants 10 years ago, there were 8 to 10 now. There were 500 tourism beds then, now there 3000. The occupancy rate had been below the national average, and since four years ago it went above the national average. Tourism was down currently, but the dips had decreased, and were less prolonged. Last year places like iSimangaliso had not really benefited from the World Cup. This year the upmarket lodges took strain as well as the cheaper B&Bs which used to cater for the fishing market. The middle range B&Bs did better. The park used to issue 800 fishing licences, but the fisherfolk were absent, because the river mouth was closed.

Mr Morgan said that much of Isimangaliso’s presentation was the same every year (he had been in the committee for seven years) except for a few dots regarding future developments. He wanted more detailed stuff for example the park’s relationship with the licensees operating businesses in the park and the process of issuing those licences. Dive and fishing charters, were never talked about. He wanted an update. He wanted to know who drafted licence agreements. He thought the licence agreements were appalling and anti-competitive. There was no concept of what a material breach was in the licence agreement. The park could terminate licences and appropriate the equipment of the licensee for 90 days with no sharing of liability. Why did iSimangaliso management prevent licensees from talking to Members of Parliament about their contracts? He found it shocking.

Mr Zaloumis replied that 8 to 10 years ago, there was very little opportunity in the park. Sodwana existed but there was no regulation. During the last two years, there had been unauthorized development outside the park. iSimangaliso followed Treasury processes and advertised for 50 licences for night drives, open vehicles, boats, horses. Management reserved tenders to make sure that black entrepreneurs could participate. Management still looked at financing, sustainability etc. One critical criterion was active management. iSimangaliso had been growing the tourism market and training people in entrepreneurship and assisting them to get in contact with funding organisations etc. The GEF process also provided training for 50 entrepreneurs. The licensing advertisements were all available. Regarding the gagging of bidders, bidders were asked not to discuss the process in order to ensure the integrity of the process. There was a technical committee which did the evaluation and only then did it go to the bid committee.

Ms Castis added that licences were guided strongly by public-private partnership agreements. Management used the template documents that were used for all licence agreements. Appropriation happened with liability and not without liability. It was fixed in a later draft. She invited Mr Morgan to suggest improvements to the licence agreements. Looking at the agreement as a pure commercial transaction, was frightening and felt very one-sided, but it did conform to the risk of the requirement and came through the PFMA.

The Chairperson asked for detail on the quality of the contracts.

Mr Zaloumis said that businesses were granted two to three licences in order to enable them to run viable businesses doing for example, whale watching, ocean excursions and concession charter fishing. Management was trying to regulate all operators and operators who had been doing business for free, or in ways not entirely aligned with what management wanted, clashed with management.

Mr Morgan said that there was potential for development and empowerment along the coast in dolphin and whale watching. Ninety pods of dolphins lived along the KZN coast. They stayed in one area. Licences were issued by the authority. It happened anyway and illegally all along the KZN coast. Why was it not developed more aggressively from inside the park?

Mr Morgan asked what was different about the Global Environment Facility (GEF) study, because the lake had been studied extensively.

Mr Morgan asked why was the choice for opening or closing the river mouth, was in one direction while both had negative consequences, and the decision was taken in the face of an incomplete study.

Mr Zaloumis replied that management of the mouth was not based on the GEF study. It was based on the best current scientific information available. The GEF study was reviewing that. What the GEF study first did was to scan all available information. It was now looking at the best option to improve the hydrology situation at St Lucia. The next phase would be an Environmental Impact Assessment (EIA) type study. GEF processes and public meetings were advertised. Background information documents were available in order to keep the public informed. There were pros and cons either way. iSimangaliso would use the scientists to advise them. Outside the GEF process, iSimangaliso had open workshops to review the work done by consultants. Isimangaliso commissioned work on the silt. The Department of Environmental Affairs (DEA) EIA people were invited to come and look what iSimangaliso was doing.

Ms J Manganye (ANC) asked what the relationship was between SiyaQhubeka forest and iSimangaliso. She asked how effective was their concept of sustainable forestry in relation to its impact on the environment. She asked how iSimangaliso was addressing the hydrological and land use imbalances brought about by human activity such as sugarcane and forest plantations, particularly along the Mfolozi River.

Mr Zaloumis replied that the GEF study would deal with the hydrology of the sugarcane plantations especially with regards to the Mfolozi River.

Ms P Bhengu (ANC) said that there was a disconnect between the park’s strategic objectives and the villages, especially Nakuna village. What were the challenges and how would they be addressed?

Mr Zaloumis replied that the philosophy with iSimangaliso was that it developed to conserve not vice versa. Villagers conserved in order to develop. iSimangaliso had a recent negative conservation history. Stakeholder issues were many. There were regional land claims.

Mr Zaloumi regularly attended the HOD meetings of province. On the Dukuduku project, iSimangaliso worked as a very junior partner with the Department of Cooperative Governance and Traditional Affairs (CoGTA). There was an MEC oversight committee, which was part of the economic cluster. There was direct oversight from Province. iSimangaliso was hopeful about the new municipalities.

Mr Skosana wanted more information about donor funds from the World Bank.

The Chairperson asked if the donor funding received was reflected anywhere in the statements.

Ms Castis said that the financial statements appeared on pages 53, 63 (node 9) and 66 (node 13) of the 2009/10 Annual Report.

The Chairperson insisted that donor money had to be accounted for in the financial statements and raised in the Committee meetings, because it created space for corruption if it did not happen. Everything had to be done under contract.

Mr Zaloumis replied that the GEF grant was approved by National Treasury and administered by the World Bank. Management took a long time before accepting the money from the GEF, because it did not only want the money to go into the hydrology study; it also had to facilitate education, enterprise development and empowerment. It was not a standard grant with the GEF project.

The board of iSimangaliso was probably the only board which had landclaims, a former mayor of the district, national and provincial government as well as traditional chiefs.
Mondi was operating on private land. SQF iSimangaliso was land that had been tendered by government, and awarded to SQF. He did not agree with the principle of plantations, being a conservationist, but he could appreciate Mondi’s technique and technology that SQF used. They have a technique called valley-bottom where they removed the trees from the catchment area at the bottom of the valley, freeing the river. Elephants sometimes damaged trees there, but the relationship between iSimangaliso and Mondi was of such a nature that such issues could be resolved.

The big challenge lay north of the Mfolozi. There were many plantations, and they were expanding, which would cause the lowering of the water tables for the parks.

Mr Skosana asked if iSimangaliso had a procurement management action plan and was it strict enough to mitigate procurement risk.

Ms Castis replied that procurement plan was dealt with in risk assessment. Internal control mechanisms and a system of multiple approval was in place. Nothing was procured randomly. Everything was centrally procured. There were internal and external auditing procedures in place.

Dr Huang did not understand what the 40% and 76% achieved meant.
The CFO said that 40% was t the target that the Department set and 76% was the percentage achieved.

Mr Morgan asked how the relationship was with KZN wildlife. He asked Mr Zaloumis to explain that a large amount of the management inside the park was done by a different entity. What was the relationship with this company like? Who did the infrastructure of the camps that they run belong to.

Mr Zaloumis replied that Izivela was a company that did day to day conservation in the park. iSimangaliso performed the oversight function and where necessary stepped in for example in the case of unauthorised developments. Izivela had its own internal and transformation issues that had been widely reported and its internal issues had impacted on service delivery at times, in which case iSimangaliso stepped in, because it was ultimately responsible. The relationship had a chequered patch. There was a new CEO and each party understood its role and function. Izivela was currently struggling financially and iSimangaliso was assisting them with upgrading the Public Access Facilities. Once they were on their feet again the relationship would become strictly business again.

Mr Morgan recommended an oversight visit to this iSimangaliso.

The Chairperson liked the clean audit. He congratulated iSimangaliso and commented on the commercial potential of the park.

SA Weather Service (SAWS) presentation
Dr Linda Makuleni, SAWS CEO, stated the Vision, Mission, Quality Policy Statement and the Enterprise view of SAWS. Its five strategic goals were:
▪ To ensure continued relevance of its services in compliance with all applicable regulatory frameworks
▪ To ensure the effective management of stakeholder, partner and key client relations
▪ To address sustainability of SAWS revenue and other resourcing requirements
▪ To ensure optimized business integration and the organizational effectiveness of SAWS.
▪ To create strategy-driven human capital capacity for SAWS’ performance.

The strategic drivers included balancing the grant and revenue generation imperative, enhancing Southern African Development Community (SADC) and African (African Union & New Partnership for Africa’s Development - NEPAD) positioning, adaptation to technological advancement and skills development and retention.
 
SAWS contributed to all but number seven of the top 10 National Priorities. The document detailed the ways in which the SAWS contributed. Priority Four was: Strengthening the skills and human resource base and towards this end, SAWS provided training for meteorologists and climatologists. It offered a Teacher Development Program and had a bursary scheme for students studying towards qualifications in its field.

SAWS had five Strategic Programmes:
▪ The Climate Change and Variability Programme entailed research and development of forecasting tools in order to forecast severe weather more accurately and prevent loss of life and damage to infrastructure. It also monitored air quality for its impact on health.
▪ The Commercialisation Programme was aimed at SAWS using its services to generate revenue.
▪ The Human Capital Programme was aimed at keeping employees satisfied and healthy, complying to Human Resource policy and labour law stipulations.
▪ The Infrastructure Modernisation Programme dealt with investment in infrastructure. Over a three year period the government had spent R240m on 12 new radars and it would have a total of 18 radar systems.
▪ The Total Quality Management (ISO Certification) programme was instituted, because as a member of the International Civil Aviation Organisation, there was a requirement that all weather services in Africa achieved International Standards Organisation accreditation by 2012.

The SAWS was working collaboratively with government departments, public entities and universities within South Africa, as well as international weather and research organisations like the UK Met office and the Australian Met Office.

Financially the organisation was on track. She presented the interim audit report, which indicated that all was well except for a few aspects which would be addressed before the final audit.

Mr Slingsby Mda, the CFO reported that SAWS had a surplus of R10m because of revenue it generated itself. Part of this was due to business done during the Soccer World Cup Tournament in 2010. Employee costs amounted to 57% of its expenses for FY 2010/11 (see document for analysis of finances).

Discussion
Mr G Morgan (DA) asked if all Members had received the report from the first year.

The Chairperson replied that the entity provided its reports timeously and the committee secretary would send them to the Members.

Mr Morgan asked where SAWS was with the legislation initiated in September 2010. The Auditor-General’s comment that the board was the accounting authority, was not reflected in the SAWS Act with the result that the SAWS Act contradicted the Public Finance Management Act. It had been raised in the 2006/07 audit.

Dr Makhuleni replied that she would request the Department to give a report on the Act.

Mr Abader reported that in terms of the DEA legislative program (presented in January), the legislation had to be in Cabinet by June 2011. It was in Cabinet currently, which meant that it was on schedule.

Mr Morgan asked, regarding the Commercialisation Programme, what the Weather Service charged for and what it provided free of charge. There were many different types of farmers in South Africa. How did the Weather Service differentiate between an established commercial farmer and a struggling emerging farmer, who had to have free access to the information, and how were they billed?

Mr Morgan said that SAWS had been created by the SAWS Act 10 years ago. On what basis could SAWS charge for data which had been collected over 90 years ago and paid for by taxpayer money? Should there not be a difference in the way the information was treated if collected before 2001 and after 2001 when SAWS was created. There were tough decisions to make. There were people who could afford to buy data and there were people who could not. Did the SAWS not hinder development since people did not have the money to buy the data?

Mr J Skosana (ANC) asked, if the SAWS had been permitted to generate income from commercial activities, how the company had been capitalizing on it.

Dr Makhuleni replied about commercialisation and the public good, that the Act itself stated some of the public good SAWS had to provide. SAWS had to provide severe weather warnings through Disaster Management Centres. While SAWS had to provide information, it did not want to create panic.

Academic and research institutions such as universities had free access to SAWS data. There had been a Data Management Committee that applied a policy that determined how data was provided. SAWS had been providing daily temperatures and rainfall information for free. On the website there were predictions spanning over seven days.

SAWS had an activity based costing system in place. The question was: What was in the public interest? To collect the information, to analyse it, to predict and to act and send the warning, had been for the public good. Accuracy had been important. For the private sector, specialised services/ info were available, for example for the insurance industry. It wanted to reduce the money it had to pay out to clients due to accidents in severe weather. It had to pay because it was a commercial transaction.

Subsistence farmers received seasonal forecasts, free of charge. However, commercial farmers that needed weather information spanning over 30 years for a specific area, because they wanted to farm there, had to pay, because scientists had to extract the information and analyse it. Aviation also required specialised information that was why it had to pay for the service.

The same debate was going on at international level. Weather services throughout the world did not operate in the same manner. The Americans used a non-commercial model. The model used in Europe corresponded with the one used in South Africa. Different countries had different policies.

Mr Mda said SAWS employed people to process the data into products and knowledge. SAWS looked at how many man-hours were spent doing the work. Although publicly funded, the equipment and devices needed maintenance and they needed to be replaced from time to time. The replacement was not publicly funded. New radars had just been bought with public funds. The same question could be asked. SAWS charged for the service offered by the radars in order to be able to maintain them. Maintenance cost could be as high as the purchase price.

Dr Huang (ANC) said that SAWS received 85% of its income from the government. The rest of its income came mainly from the aviation industry. How did the CFO calculate R87m for the past two years? Why was it not more? The employee cost for 2011/12 was R130m. The government grant was only R126m.

Mr Mda addressed the employee cost issue. SAWS received less money from government than it would have wanted, but it understood that it could not expect to be funded at that level. It was no longer reliant on government grant for operations and employee costs. The salaries did not depend on a government grant.

Ms J Manganye (ANC) asked how effective the process of skills transfer was, especially with scientists.

Dr Makhuleni replied that skills transfer was going very well. It was linked with the succession plan. Young scientists were working with experienced scientists in order to acquire their skills. Skills transfer was working well.
 
Mr Mda said that SAWS engaged with the aviation industry in September 2010, based on the past system and the future operational budget. In 2008/09 and 2009/10 it under-recovered by R10 million. This situation had been corrected. For 2010 it over-recovered during the Soccer Wold Cup and set a slightly lower tariff for 2012/13, it set lower revenue to R79.5m and then returned to R87m. There was a three-year cycle, but it was reviewed and adjusted each year.

In reply to the Chairperson asking if SAWS was locked into a tariff for a period of time, Mr Mda said it was locked into a tariff for one year.

Mr Skosana thanked SAWS for the presentation. He said the Weather Service was the organisation which should warn people of dangerous weather patterns like strong winds, floods and lightning in KZN and the Eastern Cape. Did the company have the mechanisms to warn people before disasters happened?

Dr Huang asked if an early warning system could not be set up using cell phone technology (SMSs) in the rural areas.

Ms P Bhengu (ANC) said regarding an early warning system that other departments like the Department of Energy had to be involved in the rural areas where often there was no TV or SABC coverage.

Dr Makhuleni said that SAWS needed to work closely with the Department of Energy. It already worked with ESKOM on lightning information, but it needed to work more closely with them. They had a MOU with the South African National Energy Research Institute (SANERI) which was working on alternative energy sources like wind. SAWS provided information in terms of the wind conditions. Currently SAWS provided severe weather warnings to the Disaster Management Centres. These centres were supposed to communicate the information to the communities. However SAWS felt that government had to assist the centres with the communication function to disseminate the information. The SABC could assist, but the SABC wanted to be paid for the slots. The Minister needed to be involved.

The Early Warning System did not function, because the information was provided, but it did not reach the relevant people early enough, and people were still being struck by lightning. This needed close scrutiny. Within six months she would demonstrate to the Committee some of the application tools that SAWS was in the process of developing. SAWS was looking for funding for the project. One example was a lightning alarm that used solar energy, for rural communities. It was trying to sell it to the golfing community but rural communities needed it more.

The Chairperson said that he was 53 years old and he had never received any early warnings about severe weather or disaster from a disaster risk management centre. The system in place currently was not working. The approach needed to be more proactive and creative. He would prefer a stampede, rather than people being swept away by a flood.

Dr Makhuleni said that for SAWS it was a challenge and it was working on it. SAWS had entered into a MOU with the Department of Rural Development and Land Reform regarding this issue. SAWS also requested assistance from the Department of Communications to disseminate information.

The Chairperson said that he felt that SAWS had to be more proactive with early warning systems. There were many ways in which this could be done. He instructed SAWS to create an early warning system that gave free information in collaboration with the cell phone industry. Another entity could do it for money but the danger with commercialisation was that people that should not pay had to pay for information. Creating a system that gave free information would be part of giving back to the taxpayer/community.

Mr Skosana said on information dissemination that all entities involved in this had to get together to resolve the challenge of an early warning system.

Dr Huang asked SAWS to come to the next meeting with information on Early Warning Systems from Japan, the USA and Europe.

The Chairperson said that he was not easily “pleasantly surprised” but all entities had unqualified audited reports. It indicated a healthy situation. The financial systems were in place. As a first time engagement it was important to understand where the mandate of one organisation ended and the next one began. The danger was that the situation in the Department of Water Affairs could be replicated in the DEA, where there was no orderly organisational structure that corresponded with functions.

SANBI was by definition a research structure that paid 70% of its budget to staff salaries, because it employed scientists, researchers and professors. It was actually a policy driving structure. Its brief was not to implement policy. In order to balance out its budget, it had to start doing projects that actually fell outside of its brief. This was an inefficient use of skills and person-power. There was another unit within the DEA that was supposed to run the projects SANBI was running. He did not say it was wrong; he said that it gradually became messy, incoherent and inefficient. It was a small warning, but the Committee had to be alert.

He had a problem where government departments created structures outside of it to deal with responsibilities that actually belonged to government. It was problematic. It was also problematic when government departments created structures that had a totally different salary structure to government. If these structures were doing it, it meant that the Department was letting them do it, either through grants, or letting them run the project. He made another example with SAWS and the air quality function: whether it had to be part of SAWS or a separate function. He warned the Department to be careful with creep. On the whole, he was happy with the wonderful work done. The Committee had some oversight work to do.

The meeting was adjourned.