National Planning Commission Diagnostic Report & response by Department of Water & Environmental Affairs

Committee: Water and Sanitation

Chairperson: Mr J De Lange (ANC)

Date of Meeting: 12 Sep 2011

Summary

The National Planning Commission briefed the Committee on its Diagnostic Report on those matters relevant to the water and environmental sectors. The NPC told the Committee that the Commission’s purpose was to develop the country's long-term vision and national strategic plan, to draft a vision statement for 2030, and produce a development plan for how this vision could be achieved. The NPC identified some of the key challenges facing the country: too few South Africans were employed, the country had a high disease burden, communities were divided, there was poor public service performance, spatial patterns marginalised the poor, education outcomes were poor, corruption existed, it was a resource intensive country, and had crumbling infrastructure. The Diagnostic Report covered two broad water issues: water supply and sanitation services, and water resources. In terms of safe water and sanitation, good progress had been made since 1994. However, challenges included the question of where investment had to be focused, the funding for municipal mandates, problems of inadequate operation and maintenance, and inadequate personnel and poor governance. Water resource challenges consisted of limited water resources, the complex and costly response to growing demands and pressures, and trying to increase efficiency and quality of municipal and agricultural use. There were also water resource management challenges such as poor water management impacting on economic activities, knowledge not being translated into timely action, lack of coordination between all government spheres, placing importance on conservation and water loss reduction, and issuing compulsory licensing where needed. The environmental issues that the Diagnostic Report  covered included reducing fossil fuel dependency and the carbon intensity of the economy, managing the transition towards a low carbon and climate resilient economy and society, scaling up renewable energy, using water and other natural resources more sustainably. It highlighted that environmental sustainability was critical to meeting the needs of the economy and people.

The Committee noted that although the NPC Vision Statement and Development Plan would only be released on 11 November 2011, they still needed to understand what the NPC wanted to see in water and environmental affairs so the Departments of Water and Environmental Affairs knew what their roles would be. They were highly appreciative of what the NPC did and understood the NPC’s difficulties, being a structure outside of government and an advisory body only. However, if the NPC was not too careful, it was going to be just another “talk shop”. Someone had to ask the tough questions. This was the NPC’s job. If these issues continued to be neglected, the country was going “to end up stuck in a rut”. The presentation had to speak more clearly to what the plans were for the water sector such as the fragmentation of infrastructure plans in the water sector. National Treasury needed to change how it gave money to local government for water services. A conditional grant was a much better way of doing it, as it would ensure the money was spent on water. The Diagnostic Report did not ask the tough questions that needed to be raised, especially in the water sector. The Committee said it was clear that there were weaknesses in the current water policies. If everyone agreed that the policies were not working, then they had to be changed.

In terms of the environmental sector, the Committee asked where the home for the National Framework for Sustainable Development would be based - would the NPC be the home for the Framework? Would the NPC play a key role at COP17 this year? Sustainability was a big part of the environmental and water sector as well being an overall government issue. The problem was there was not one proper plan on the table that spoke to what sustainability actually was.

The Department of Water Affairs responded to the challenges raised in the NPC Diagnostic Report and noted the key water planning messages that had to be incorporated into future NPC Reports towards a 2030 Vision.

The Committee commended the DWA for a very good presentation that responded well to the NPC input. However, the DWA had to pinpoint the real problems. Members suggested that the DWA meet with the NPC to discuss these. The two entities had very similar inputs, but the Committee wanted to start the process of debating on important matters such as centralised infrastructure planning. What needed to change to bring about centralised infrastructure planning? Was it funding from the National Treasury? The Committee asked how new mechanisms could be created for inter-governmental cooperation and if government structures could sit together and agree on protocols to enhance cooperation on infrastructure planning. Funds were given to local government, but they did not have the capacity to spend the money. There was an urgent need to appoint people to local government that were competent. Officials in local government were supposed to see that plans were implemented but this was not happening. One of the biggest problems in the country was that the majority of the population consisted of working class and poor people. However, whenever the government wanted to address a problem, it raised prices. The DWA said it was trying to make water more available, but people had to accept that it would be costly. It was the same with electricity. South Africa had a high unemployment rate and people would not be able to afford the price increases. The DWA had to look at ways to address the water supply problem without increasing prices. There was also a need to address DWA organisational stability. Half of the DWA management team were in acting positions.

The Committee noted that if the DWA did not tackle the difficult issues then there was no point in going forward. It was important that the DWA, the DEA and the NPC “moves to the next level”. The Committee wanted the three entities to meet and come up with solutions to address the problems. They would also have to engage Treasury and local government, as these difficult issues affected them too.

The Department and Environmental Affairs presented its response to the NPC's Diagnostic Report. The Committee said the DEA had to meet with the NPC to identify and engage on issues affecting the sector. All the challenges had to be put on the table. Members said they were excited about DEA plans to scale up the Extended Public Works Programme. However, they were worried about the need for decent jobs, as many of them seemed to be temporary. They asked what role the DEA would play to ensure that at the completion of the project, skills that were acquired so the people did not become redundant. The Committee was disappointed with the DEA presentation because its focus was the State of the Nation Address. The presentation mostly focused on what the DEA was already doing. This was supposed to be an opportunity for the DEA to be forthright about the long-term problems they foresaw. The Committee needed the DEA to be more thoughtful about the constraints they faced, and do more specific work on policy coherence. Members knew there were problems in the provinces so they wanted to see the DEA being more thoughtful about this. Once the departments had met with the NPC, there could be a proper meeting with the Committee to discuss what came out of the discussions. The Committee also discussed briefly the carbon budget which was a very “hot” issue at the moment.


Minutes

Opening Statement
The Chairperson said that the meeting today was exploratory in nature. The National Planning Commission (NPC) had come out with its Diagnostic Review, but parliamentary committees had not been engaged on it. He wanted to hear from the NPC what their processes were, where they were planning to go and how they expected departments to fit into what they were doing. In this case, it was the two departments, the Department of Water Affairs (DWA) and the Department of Environmental Affairs (DEA). Once the NPC answered the questions, the Committee would be able to work out what its role would be in the process, and what was expected of the departments. The NPC had to tell Members where water and environmental affairs fitted into its twenty-year plan. He noted the apology from Minister Trevor Manuel, Minister in the Presidency for National Planning, for not attending the meeting, as he was overseas.

National Planning Commission briefing
Mr Mike Muller, Commissioner in the NPC, said that the presentation would highlight the elements of the Diagnostic Report that was particularly relevant to the water and environment sectors. They would also talk to what was going to happen after the Vision Statement and Development Plan for 2030 was published. This was due to be published on 11 November 2011 at 11 am.

Mr Kuben Naidoo, Head of the NPC Secretariat, said that at the inaugural meeting of the NPC on 11 May 2011, President Zuma said that the mandate of the Commission was to take a broad, independent view of South Africa to help define the South Africa we wanted to achieve in twenty years. The NPC would work with broader society to draw on the best expertise, consult the relevant stakeholders, and help to shape a consensus on what to do about the key challenges facing the country. The purpose of the NPC was to develop the country's long-term vision and national strategic plan, to draft a vision statement for 2030, and produce a development plan for how this vision can be achieved.

The NPC had published a document called the Diagnostic Report. Currently, consultations were underway with various sectors of society. Parliament was also consulted and various portfolio committees were engaging with the NPC. Government departments and provincial government structures were also being consulted. The NPC vision for the country consisted of having people united in diversity, with greater equality for women, high quality education and health care, comprehensive social security, the protection of the environment, access to jobs, and government, business and civil society working together to build a better Africa and a better world.

The NPC had identified some of the key challenges facing the country: too few South Africans were employed, the country had a high disease burden, communities were divided, there was poor public service performance, spatial patterns marginalised the poor, education outcomes were poor, there was corruption, South Africa was a resource intensive country, and there was crumbling infrastructure issues. The Commission showed that growth in the labour force outstripped employment creation. Many workers lacked skills in line with the needs of a modernising economy, and almost 60% of all unemployed had never worked. Poverty and inequality was largely driven by high unemployment, and even though the proportion of people below the poverty line had dropped from 53% in 1995 to 48% in 2008, it was still very high. The NPC research showed that education in the country had undergone several broad reforms and access to education and female participation were at or near universal levels. There was a steady increase in basic literacy rates, 80% of learners aged five were enrolled in Grade R, and most poor children received school meals. However, there were huge variations in South African education outcomes depending on school type. Only 1% of African schools were top performers on high school certificate results versus 31% for formerly privileged schools.]

According to the NPC, the government had under-invested in infrastructure in the country for over a generation. Development of the country was being held back by too little investment in new infrastructure, and a failure to maintain existing infrastructure. Poorly located and inadequate infrastructure limited social inclusion and faster economic growth. In terms of settlement patterns and lack of infrastructure, the poorest lived either in former homelands or were situated far from where jobs could be found in cities. There was a failure to coordinate the delivery of infrastructure between provinces, municipalities and national government.

The NPC stated that a resource-intensive development path for the country was unsustainable. South Africa was a highly resource intensive economy; however, resources were used inefficiently. As a result, the country had started to face some critical resource constraints such as water. The country had to become less resource-intensive, but this also had to be balanced against job creation, economic growth, energy, and food security. The South African society and economy needed a more sustainable growth path. According to a number of health indicators, South Africa's performance had actually deteriorated. The HIV/AIDS rate was significantly higher than most places in the world and worsening. Reported TB rates were increasing, and even though infant mortality rates were decreasing, they were still high. Life expectancy had deteriorated since 1995. Given severe public health challenges, the country's health system was in trouble. SA faced a growing burden of disease, but at the same time the country's health system was collapsing. The biggest concern was a massive shortage of skilled staff. If this was not addressed, structures such as the NHI would be ineffective. Longer-term health challenges were related to nutrition, lifestyle, traffic safety and violent crime.

The country's performance in terms of service delivery was uneven. This was due to policy instability, organisational instability and the capacity/skills deficit in the country. Corruption also undermined the state's legitimacy and services. Perceptions of corruption in government were high. State agencies were being tasked with fighting corruption and they were of the view that corruption was still at a very high level. Weak accountability and damaged societal ethics made corruption at lower levels in government almost pervasive, and corruption in infrastructure procurement had led to rising prices and poorer quality.

Despite significant changes since 1994, South Africa remained a divided society. This was mostly attributed to the race divide. Other significant fault lines included the rich / poor divide, men and women, the unemployed and workers, the language divide, the urban / rural divide, the skilled and unskilled workers, and importers and exporters. The country needed a development path that promoted growth and social equity.

The Diagnostic Report covered two broad water issues: water supply and sanitation services, and water resources. In terms of safe water and sanitation, good progress had been made since 1994. However, challenges included the question of where investment had to be focused, the issue of funding for municipal mandates, problems of inadequate operation and maintenance, and inadequate personnel and poor governance. Water resource challenges consisted of limited water resources, the complex and costly response to growing demands and pressures, and trying to increase efficiency and quality of municipal and agricultural use. There were also water resource management challenges such as poor water management impacting on economic activities, knowledge not being translated into timely action, lack of coordination between all government spheres, placing importance on conservation and water loss reduction, and issuing compulsory licensing where needed.

The environmental issues that the Diagnostic Report  covered included reducing fossil fuel dependency and the carbon intensity of the economy, managing the transition towards a low carbon and climate resilient economy and society, scaling up renewable energy, using water and other natural resources more sustainably. It highlighted that environmental sustainability was critical to meeting the needs of the economy and people.

The NPC was mandated to do detailed work on specific areas including the transition to a low carbon economy, implementation of capacity in the water and environment sectors, aligning national conservation priorities, water licensing, accelerating sanitation provision, recognising groundwater as an alternative source of water, and capacity building at municipal level. Eliminating poverty and reducing inequality would require bold actions; however, the government had shown before that it could solve complex national challenges.

Discussion
The Chairperson noted that the NPC’s Vision Statement and Development Plan would only be released on 11 November 2011. But he still needed to understand what the NPC wanted to see in terms of water and environmental affairs. This had to be highlighted so the DEA and DWA knew what their roles would be.

Mr Muller, NPC Commissioner,  replied that the NPC assumed the Committee wanted to discuss what had to be done going forward, but the point of the Diagnostic was to give the NPC a base at which to start. People had said that the diagnostic had not said anything new, but it had resonated with people. Many people had confirmed the information in the Diagnostic Report. This was important, as one could not move forward without understanding from where they were coming.

Dr Jennifer Molwantwa, NPC Commissioner, added that the Diagnostic Report spoke to issues that the NPC would be addressing, such as how to transition to a low carbon economy. Stakeholder workshops had been held and the inputs from these would be used to address the challenges contained in the Diagnostic. The Diagnostic would respond to the big issues such as supply, management and resources.

Mr G Morgan (DA) said that one of the ways the NPC could help the Committee was to talk Members through the steps the NPC planned to go through over the next few years. He took the point that the Diagnostic Report did not contain anything new, but he also took the point that something had to get started. He thought the Report was very good, and an accurate account of the status of the country. The relevant themes were well encapsulated in the Report. The NPC was aware that work had commenced on the National Water Resources Strategy that would look at the reconciliation of what was available and what needed to be found. It would also look at various ways to make water more available, whether it was in terms of re-using or recycling. He asked if the Vision Statement and Development Plan was going to be like a corporate statement, but for the country, or if it was a vision for the various sub-sectors highlighted by the NPC. The NPC said they were not really implementers, they pulled things together and the intention was to offer advice in the future. He was worried about the water sector due to some of the challenges and risks highlighted by the NPC. There were some great people in the DWA and a lot was being done with regards to planning, but one of the fundamental problems was that DWA was a department that followed more than it led when it came to the allocation of water in the country. There were a huge number of projects happening in the country, specifically in the energy and mining sectors. Often, in many of the augmentation programmes, there was a focus on giving water to those sectors. The true global look on the economy meant that the decisions made in one sector, such as energy or mining, had a substantial effect on other sectors. The push to mining and gathering coal meant that it had an effect on the water sector. How would the NPC as a planning commission, and not being the political decision-makers, balance this? There were still large areas that did not have access to water. It was managing this and not being trapped into particular futures by decisions that were being made now, which most concerned him. There was a timing problem here that had to be acknowledged as a risk. Certain decisions being made now were effectively going to tie the NPC’s future actions, even though the Vision Statement and Development Plan was not completed yet. He was not being judgmental. He asked them to comment on the risks of the programme. He was a great supporter of the NPC; the global look on the economy was the right way to go. However, there were certain decisions being made now that would trap the country, and there were certain political dynamics that made some departments more junior or senior to others. He asked them to comment on this, and what the Vision Statement was going to entail.

Mr Naidoo replied that the Vision Statement and Development Plan was a vision for the country. However, it would contain elements that would inform sub-sectors in terms of policy. The NPC had been quite deliberate about this approach. Some countries had a vision statement for achieving a certain GDP per capita, while the NPC wanted its vision statement to talk to the nature of the democratic state of the country, the services the public was going to get, and the rewards people were likely to get.

Mr Muller addressed the concern that the NPC could be at risk of “lock in” by the time they came to report to the Committee and all kinds of decisions would already have been made that could not be changed. This was a key concern that the NPC had in this process. The NPC did not have any mandate to interfere in the sectoral planning of individual government departments; they were “an advisory committee”. If the NPC saw actions that were being taken or proposals that were being made that would lock them into a particular direction, then that would become their role.

He said it was interesting to talk about the process for energy planning. The IRP2 looked at six issues in its decision on the future of electricity. One of the factors was water use at power stations. Another was the impact on the Southern African regional economy. This was a key concern raised by the NPC. The Commission asked if water availability to the rest of the country was going to be affected, if regional opportunities would be used to their full advantage, and if they were locking out particular opportunities by following this route. This was the value that the NPC could bring to the country. In terms of the National Water Resource Strategy, the NPC said it was worried, in the Diagnostic Report, because it had learnt from the electricity experience that departments that were not planning on a structured, regular basis usually ran into trouble. The whole point of having a statutory National Water Resource Strategy was so entities could do a plan every five years, review the situation, tell the public where they stood and plan ahead for the next five years. There was a concern that this planning process had not happened. It was the opposite of being “locked in”, as departments could be “locked out” this way as well. With no planning, departments were in danger of being locked out. Who was going to do the work once it was identified? This was seen as a systemic risk, not just to the water sector, but also to all the sectors that needed to use water. The NPC had to be very careful not to trespass on the territory of individual departments; the NPC had to have a clear conceptual view of what the sectors were doing and what the impact was on one another. There were also times when the NPC would have to blow the whistle where action was not being taken. There was an agreement between the NPC and the DWA to support the process of a National Water Resource Strategy when it got underway. The NPC was following the report’s progress and knew it was almost ready to be released for consultation. This meant the NPC could be part of the discussion with stakeholders such as farmers, power industries, municipalities and environmental interests to ask if what was proposed made sense and if it was feasible and likely to be implemented over the next few years. The NPC’s role was to support the DWA to help them bring in resistant stakeholders. There were interactions with the mining sector that was in part facilitated by NPC Commissioners that had knowledge in that area. However, the NPC was very concerned with the concepts of “lock in” as well as “lock out”.

Mr P Mathebe (ANC) said he appreciated the work done by the NPC, but there were many people in rural areas that were not aware of what the NPC was doing. He asked how the NPC made itself known and if they consulted these vulnerable sectors of the society. As he understood it, the NPC’s research should not be based on reports from the various municipalities. The NPC needed first-hand information on the plight of the poor. He asked how they would undertake this process.

Mr Naidoo answered that the NPC was going out of its way to consult rural communities, communities in far-flung areas, and the youth in various languages. The Diagnostic Report was translated into all eleven languages and Braille. The NPC had been to all nine provinces and interacted with Community Based Organisations (CBOs). The NPC accepted that it was unable to do what was done with the drafting of the Constitution where the government was able to embark on a process that received two million submissions. The NPC did not have the capacity for this, but they were trying their best to reach far-flung areas in the country to talk about the Diagnostic Report. They accepted that the consultative process was more limited than they wanted it to be.

Mr J Skosana (ANC) said the input made at the meeting was very valuable. He asked what the NPC was doing about the issues identified. Was there a plan to mobilise resources to address delivery. The NPC had identified challenges with bulk water. Did the NPC have any recommendation or plan to show the DWA how to unlock this particular challenge? The shortage of water in the country was a big problem, specifically in rural areas. Was the NPC looking into addressing this matter? He was still waiting for more information on climate change matters and the 17
th United Nations Framework Convention on Climate Change (COP 17).

Ms Molwantwa explained that the NPC already alluded to the fact that they had an advisory role. She looked at the matter of resources to address delivery problems. The NPC had taken cognisance of the fact that there would be sufficient training for those that required it. There was also a requirement for financial resources for skills development. The NPC understood that focus had to be put on rural areas in order to unlock the potential in the country. Supplying water to the rural areas would require a lot of training and skilling of people to operate and maintain the use of ground water.

Mr Naidoo added that the NPC’s task in the Diagnostic Report was to get a broad, common consensus on what the key challenges were facing the country. The NPC’s aim now was to develop a high level plan to deal with the issues. So, the Vision Statement to be tabled on 11 November 2011 would be a fairly high-level plan, detailing in some areas how the NPC would deal with the challenges. In subsequent years, more detailed work would be done. For example, the NPC’s focus on the transition to a low carbon economy. He was not sure if the country would achieve all the commitments the President made in Copenhagen. The NPC’s job was to look at what instruments would be used, if the commitments were possible, who the winners would be, who the losers would be, how the plans would be phased in, how labour factors and the poor would be cushioned, how the carbon price would factor in, what the nature of the incentives would be, and if a broad consensus amongst key players could be reached. This work was not likely to be finished by 11 November, but the NPC would highlight the vision, the ambition, the targets, and the overall direction the project would take. But, the real work to figure out the transition to a low carbon economy was likely to take another year. This was consistent with the White Paper concerning the climate change response, which gave two years for sectoral services to transition.

Dr S Huang (ANC) asked how the DWA could get a guideline from the NPC on the water sector and how to build capacity for municipalities in terms of water infrastructure. The NPC’s presentation needed more information on how to address identified challenges.

Mr Naidoo answered that the NPC’s task was to provide high level, strategic guidelines and guidance to departments that would help inform plans. This meant for example, that if the NPC did a demographic model showing how many people there would be in 2030, and how many people there would be in rural and urban areas, they could forecast how much water would be needed as well as other things such as food and energy requirements. The NPC would then confront some of these choices and trade-offs. For example, in the water sector, there was clear tension between use of water in mining versus use of water in agriculture. The NPC would be able to provide policy frameworks and guidelines that would allow the departments to make informed decisions around the matter. The pricing of water was a critical issue as well. As a scarce resource, it had to be priced properly, but at the same time the government had a social responsibility to provide adequate water to the people. Most people would not be able to afford water if it was priced high, and it could impact on food processes, which was a concern too. The NPC’s task was to provide an over-arching, crosscutting framework to be able to enable those kinds of decisions to be made.  

Mr Naidoo addressed the concern of mobilising resources for delivery. The Diagnostic Report, in general, was of the view that the country’s biggest problem was not resources. In fact, the only place it said more resources were needed was in the health sector. There was not any other area where resources were the major constraint. He was not saying it was not a constraint; it just was not the biggest one.   

The Chairperson said he was very appreciative of what the NPC was doing and he was a very strong supporter of the entity. He understood the NPC’s difficulties, being a structure outside of government and being an advisory body. However, if the NPC was too careful, it was going to be just another “talk shop” that was going to regurgitate information. Somewhere, someone had to ask some tough questions. This was the NPC’s job. He was fine with starting the process through a diagnostic report. There were a lot of people that said the government’s problem was not policy, it was in the implementation of it. This was right to a certain extent. For example, in the water sector, there were many tough questions that had to be raised. The Committee had been engaging with these issues. If these issues continued to be neglected, the country was going to end up stuck in a rut. If the NPC was consulting with people, they had to know what issues they wanted information on. But, there were some things that had to be put on the table. For example, what was the NPC saying about the constitutional legal framework that dealt with water? Was it good enough? Did it have to be tweaked? It was a nationally driven process, but a lot of its functionalities were driven at the local level. The question was whether this framework was adequate for the country. The water sector had to start discussing this or else all the other issues would not be addressed. The fragmentation in the water sector was huge. To what extent did the fragmentation help the achievement of the objectives? What mechanisms could be put in place to coordinate and manage the fragmentation so there could be seamless achievements of projects? The Committee sat with the various water boards and it was scary to see the huge amounts of money that some of them had in reserves. These water boards prepared their budgets but when it came to the time they had to implement their projects, they found that the municipalities in charge of the infrastructure, did not have a budget for it. The government had huge amounts of money for infrastructure, but they had not looked at simple things like a centralised infrastructure plan. What protocols could be put in place to make this work? And, if it did not work, what interventions would be allowed? If these kinds of issues were not looked at, the government was not going to get anywhere.

The Chairperson also wanted to know what the new sources of water were. He asked if it referred to re-used water or desalination. What were the plans for the water sector? These questions were not included in the presentation. A lot of fragmentation of infrastructure plans had to do with funding. There were simple decisions on the matter that could be taken. At the moment, National Treasury gave local government money on the basis of the equitable share, which gives a specific amount of money for water functions. However, the municipalities spent the money on everything else except water. He also had figures on how much money the municipalities owed the water boards. These arrears could not translate into infrastructure. It was a question of changing how Treasury gave money to local government for water services. A conditional grant was a much better way of doing it, as it would ensure the money was spent on water. Spending pattern was one of the basic changes that had to be made within government entities. The Chairperson had asked National Treasury why it could not do this. He was told that it was unconstitutional. He told them that if they made the decision for the money to be part of the equitable share, then they could change it and make it part of a conditional grant. Local government would not be happy if the allocation process for water was altered, but it had to change.

The NPC had to engage with certain sectors when conducting their work, so they can see what government was doing to get water licensing done and to translate it into new allocations. The legal framework on re-licensing was completely out of date. The DWA had to be challenged to change it. The Committee had a wonderful presentation from Mr Fred van Zyl from the DWA on the attainment of the Millennium Development Goals (MDGs) in the water sector. He suggested that the NPC take a look at it. It showed how the MDGs were attained for the last two or three years, and how it had “flattened off”. The DWA gave a few reasons for why this had happened. It had something to do with some of the functionality being given to other departments, so suddenly there was no budget or centralised planning for it. The difficult questions had to be asked. Was it the right decision to shift the function? How did one ensure it got onto the right path again? In summary, he respected all the things that the NPC was doing and that it wanted to be careful of what it was saying, but there was a way of doing things without tramping on people’s toes. It was by asking and putting the right issues forward that the challenges would be addressed. He did not think that the Diagnostic Report did this, as it did not ask the tough questions that needed to be raised, especially in the water sector. The issue of mining had to be tackled head-on or it would come to nothing. With every decision that was taken concerning mining, the environment was not considered. There was no one in the Department of Mineral Resources that could do this. The important issues had to be discussed, and the NPC had to it, without tramping on everyone’s toes.

Mr Morgan said that one of the things he was excited about was the NPC being the “canary in the coal mine” with regards to the so-called limits to growth. It was imperative for the economy to grow, for jobs to be created and for past injustices to be addressed. There were certain barriers to growth that were inescapable such as water, carbon, ozone depleting substances, amongst others. The Committee expected the DWA to continue with its plans for water and licensing etc. But, it could be useful, sometime in the future, to work out what the GDP was per unit of water. He understood there was a hierarchy of water. There was water for ecological reserves, human well-being, human consumption, maintenance of productive lives and health, and all the other ways we choose to use water. It was important to talk to the long-term potential growth of the economy from how and where water was being allocated, and what the trends were. This was important, as it would show what better ways there were to use water.

Mr Muller thanked the Committee for their comments. It was good to see that the Committee saw that one of the NPC’s functions should be to ask the tough questions. This was the NPC’s role and it was good to have the Committee’s support. He said the Committee should not under-estimate how much of this was done when the NPC put the Diagnostic together. If the DWA had planned properly three years ago, a lot of the issues that were raised would have been addressed. This matter was raised in the diagnostic. A lot of the local government failures that were raised in the meeting were also addressed. The Diagnostic said that unless local government improved, the NPC and Committee could talk all it wanted, but nothing would change. There were certain things that would happen at local government level. A discussion was starting today as to whether the NPC should recommend a change to the Constitution. So, people were very concerned about local government’s performance. The NPC also said there had to be a framework for regional utilities. The water sector was winning this race. It showed that some of the issues were being addressed. He warned that the Committee had to be very careful of policy change for the sake of policy change, as there had been inconsistencies and lack of continuity. Everybody all over the world had spoken about South Africa’s water policy as it was a model policy. The only problem was that the country had not been able to implement it. This happened in a lot of sectors in the country.

The Chairperson said that the NPC had to be careful when they said everybody said they had a wonderful policy. He suggested that the NPC sit with the Committee when they spoke with the DWA. It was clear that there were weaknesses in the policy. If everyone agreed that the policy was not working then it had to be changed. Instability on the policy would come from not responding to problems properly. The DWA had had problems with its leadership, but there were still problems with the policy. Clearly, it was not working for the public and it was the NPC’s duty to put these discussions on the table.

Mr Naidoo thanked the Chairperson for his comments; it was exactly what the NPC needed to hear. He reminded the Committee that the Diagnostic Report had approximately 150 pages on the water sector. In the water section, the NPC asked questions like whether the institutional arrangements worked, if there was sufficient planning capacity, what the capacity issues were in the sector, and what the actual plans were.

Dr Huang asked how the relationship was between the NPC and the DWA. He also wanted to know if the NPC would play a key role in COP17 this year.

Mr Muller replied that the NPC wanted to understand the implications of achieving the Copenhagen targets. The targets were set very clearly, subject to financial and technical support and could be achieved with this support. Minister Manuel had very specific interests in this.

Mr Naidoo responded that the NPC was not playing a leading role in COP 17, as the DEA was representing the country. However, the NPC and the DEA were working together and had a nice relationship.

Mr Morgan asked where the home for the National Framework for Sustainable Development would be. He asked if the NPC would be the home for the Framework. The NPC was well placed to have this Framework.

Mr Muller answered that the process of the Framework was a bit of a “club of Ministers of environments”. This was how it tended to operate. If the Committee saw who went to the Commission on Sustainable Development every year in New York, it tended to be the environmental sectors and their associate departments. Arguably, the government had to be looking at the roles of national planning agents in sustainable development. One of the roles of the NPC was to coordinate sustainability across government. The NPC was doing this quite successfully already.

He thanked the Committee for raising the issue of mines. He believed it was a crosscutting issue that would be raised many times. It also represented a large market opportunity and job opportunity. The NPC was best placed to say what the trade-offs and balances would be. It was one of the items on the developmental agenda – to see that there was a real need for a cross-sectoral approach. Part of the NPC's role was policy coherence, but their role was not to take over the home of the Sustainable Development Framework. It had vexed the NPC that there was so much policy incoherence in the country in terms of sectoral policies that were contradictory and did not talk to one another. The mining sector was one example.

The Chairperson said that it would be useful to know where the Sustainable Development Framework was going to be based, as the issue of sustainability was a big part of the environmental and water sector. It was also an overall government issue. The problem was that there was not one proper plan on the table that spoke to what sustainability actually is. The government needed to have a clear position on the concepts of sustainability and monitoring. It was important to have regular monitoring in all sectors or departments could just feed Parliament any information. This was the value of the NPC; it gave the Presidency the capacity to see what was happening in the departments.

The Chairperson informed the NPC and the rest of the Committee that the DWA and the DEA prepared their own inputs to how they saw themselves responding to the NPC and its plans for the country.

Department of Water Affairs (DWA) response
Mr Helgard Muller, DWA Manager: Water Services, told the Committee that the purpose of the presentation was to present the DWA's response to the Diagnostic Overview as released by the NPC, and to share key water planning messages that had to be incorporated into future NPC reports towards the 2030 vision.

Mr Fred van Zyl, DWA Manager: Planning and Information, said the DWA acknowledged and supported the NPC in terms of its business and functions, and they took note of the Commission's planned actions and functions. He noted that aspects of water and water resources were covered in various sections of the Diagnostic. Sections of the Overview looked at access to water services and associated challenges, water infrastructure and planning, and water as a critical and essential resource.

The DWA appreciated the acknowledgement of the significant progress made in terms of access to water, and they supported the principle to identify and address weaknesses and challenges in delivery. The DWA acknowledged the need to address issues such as skills, maintenance of infrastructure, and poor economic management. They also supported the need for organisational stability, leadership, accountability, effectiveness and clarity on roles and responsibilities.

In terms of inadequate infrastructure, the DWA appreciated the acknowledgement that water management played a role in and impacts on social and economic activities. They also appreciated the acknowledgement of national water resource planning. The need to translate identified solutions into action was supported. To facilitate such delivery, the DWA initiated the development of a water investment framework and strategy. However, delays in its implementation could be ascribed to inadequate integrated planning and inadequate financing. The DWA understood the NPC's concern that the production of the National Water Resource Strategy 2. They assured the Committee that the issue was receiving the highest attention. The principle that infrastructure was not just about bricks and mortar but also about people, maintenance and operation of complicated systems was fully supported, it was also agreed that water management and associated infrastructure development required a regional perspective and approach, and appropriate institutional arrangements.

The NPC said “the national resource planning process had identified the supply needs and management alternatives...”. The DWA made presentations to the NPC about the planning work being done by the department. The statement made by the NPC acknowledged the DWA's work. The NPC also said that “while the national resource planning process had identified the supply needs and management alternatives, in an increasing number of cases this knowledge was not being translated into timely action”. The DWA had created Strategy Steering Committees for big systems to assist with implementation of recommendations. The Steering Committees were made up of members from all institutions. The committees did not have any executive powers; they could only make recommendations to “implementing” institutions.

The DWA was developing a Consolidated Water Investment Plan that would assist in difficult decisions on how to spend limited financial resources. The strengthening of local government was crucial to ensure proper management and maintenance of water infrastructure. The DWA had also initiated a special project called the Institutional Restructuring and Re-alignment process.

The DWA acknowledged the NPC's concern that SA's growth path was highly resource-intensive. The principle that the country's resources were challenged were confirmed and supported. The DWA appreciated the acknowledgement from the NPC of the importance of water and its scarcity, and the potential impact on growth and development. The need to improve water management included the effective use and resource protection, which was non-negotiable.

The NPC said “Moreover, many of South Africa’s challenges, such as managing water and ecosystems, reducing the effects of climate change, and developing infrastructure (road, rail, water, energy and broadband) require both a regional perspective and regional initiatives”. The DWA had already pointed out the relationship between food and water and the potential to grow food in neighbouring countries, while using scarce water in SA for high value use. The need to address water management in an integrated manner with social and economic sectors within a sustainable environmental framework was fully supported. This included spatial planning and alignment. The link between agriculture and the availability of water also had to be emphasised. The DWA thought that a clear national policy on where infrastructure should be provided was needed, which would greatly assist in focusing water supply. However, water resource limitations had to be acknowledged and incorporated into this planning.

The DWA supported the NPC's statement that a solution to problems experienced by the country lies in strengthening the planning responsibilities of municipal government. The DWA was working with provincial governments to mainstream water into provincial development planning. They also supported the NPC's plans to address skills development and capacity building, funding issues, accountability and authority structures, corruption, improved governance and performance, the need for effective leadership, and job creation. The DWA 's key interventions for 2011/12 included supporting municipalities to improve compliance with Water Quality Standards, supporting municipalities to improve compliance with Wastewater Quality Standards, supporting municipalities with their blue drop and green drop scores, and supporting municipalities to align their Water Services Development Plans to the Integrated Development Plans (IDPs).

The “All Town Studies” showed that there was a great need to focus on improved management. The largest portion of immediate problems was associated with poor management. The study showed that groundwater was a very important resource for towns; however, it was currently under-valued and under-used. The DWA said that water management was complex and solutions entailed much more than just the addition of dams. There was a huge potential for increasing the re-use of water at the coast but also inland. There was a limited opportunity for more dams, as they were very expensive. The DWA warned that it was possible to make water more available anywhere in the country in the future, but at steeply rising costs. Also, moving some unused allocated water from irrigation to other use had to be considered in certain areas. Catchment rehabilitation, the clearing of invasive alien plans and rainwater harvesting had to be undertaken to optimise rainfall.

The DWA concluded that if the country used water more efficiently, water resources could go a long way. More water could also be made available as needed; however, it had to be accepted that it was going to cost more and more as we go into the future. Therefore, it was critical that plans to reconcile water supply and demand were developed and implemented timeously. Action was needed by all parties involved.

Discussion
The Chairperson commended the DWA for a very good presentation that responded well to the NPC's input. However, the DWA had to pinpoint the real problems. He suggested that the DWA meet with the NPC to discuss all the relevant issues. He noted that the two entities had very similar inputs, but he wanted to start the process of debating on important matters such as centralised infrastructure planning. He wondered what they needed to change to bring about the process of centralised infrastructure planning. Was it funding from the National Treasury? He thought that in order to achieve centralised infrastructure planning, the Treasury had to agree to funding only if an entire, complete plan was in place. Then the type of funding also had to be discussed. He asked how new mechanisms could be created for inter-governmental cooperation. He wondered if government structures could sit together and agree on protocols to enhance cooperation regarding certain things like infrastructure planning. The DWA could not solve this problem on their own, but with the NPC, they would be able to start engaging with local government to form an agreement on infrastructure planning. They had to show local government that their powers would not be taken away and all that was needed were certain institutional arrangements. The DWA's presentation showed that they had a good understanding of the direction they wanted to go, but solutions had to be found now.

Ms Tsotetsi noted that funds were given to local government, but they did not have the capacity to spend the money. There was an urgent need to appoint people to local government that were competent. Officials in local government were supposed to see that plans were being implemented but this was not happening.

Mr van Zyl answered that the appointment of competent people was a critical issue. The DWA was in discussions to address the matter. This included talking about skills and prescribing skills standards. He was concerned that skills needed for the water sector was not being addressed.

Ms H Ndude (COPE) said that one of the biggest problems in the country was that the majority of the population consisted of working class and poor people. However, whenever the government wanted to address a problem, it raised prices. The DWA said that they were trying to make water more available, but people had to accept that it would be costly. It was the same with electricity. A few years ago, South Africa had the cheapest electricity, now it was one of the most expensive because we were supplying to big companies at the expense of ordinary citizens. If the same was going to be done with water supply, then the government had to take a look at the rest of the world. South Africa had a high unemployment rate. Where would people find the money to afford water? The DWA had to look at ways to address the water supply problem without resorting to increasing prices. This was the same for food prices, which had increased exponentially in the past three years. The NPC had to look at this and address the challenges before the masses start to revolt. Nobody was speaking for the poor, who were the most downtrodden and vulnerable.

Mr van Zyl answered that the DWA's objectives also involved economic growth and social security. In terms of costs and agriculture, people argued that agriculture accounted for 62% of water use for the country, and it was 36% of the GDP. In terms of agriculture, the food chain industry was 18% of the GDP, it accounted for 54% of all jobs, and in rural areas, it was 70% of all jobs. This sector had to be looked at regarding the role it plays in the stability of the economy, its economic value and the social component. The government had to look at how the poor could receive the benefits from the agricultural sector.

Mr Mathebe noted that the document did not come up solutions to the challenges that were raised; it only said they supported the NPC. There was a need to address the DWA's organisational stability issues. However, half of the DWA's management team were in acting positions. He wondered what they were doing to ensure the department was stable, accountable and effective. The Committee needed practical examples of what the DWA was going to do to address challenges in the sector.

Mr van Zyl replied that today's presentation was about the response to the NPC's Diagnostic Report, and was not an analysis of the DWA's performance. The presentation was prepared in response to the NPA's objectives. He thought DWA and the Committee were going to have a proper discussion on the solutions to the challenges in the sector.

An official from the DWA explained that the Minister had told the public at a media briefing earlier that morning, that the process of applications and screening had been concluded for the position of Director General. If she had been able to convene a panel, the interviews for the position would have taken place today. There were 26 positions advertised in the past month and a half. The process had been set in motion in terms of short listing and preparing for interviews. There were four disciplinary hearings in progress. These positions would be filled once the disciplinary cases were resolved.

Ms P Bhengu (ANC) noted that most municipalities prioritised water services and supply in their IDPs, but most of them did not have water service plans. She asked if the DWA had looked into this matter.

Mr Muller replied that training would be given to councillors in all nine provinces. Focus would be given to councillors involved with water and sanitation programmes. The focus would also be on municipalities that were under-performing.

The Chairperson noted that it was all good and well to ask very general questions, but if they did not tackle the difficult issues then there was no point in going forward. It was important that the DWA, the DEA and the NPC “moved to the next level”. The Committee wanted the three entities to meet and discuss the relevant issues and come up with solutions to address the problems. They would also have to engage other relevant institutions such as Treasury and local government, as the issues would affect them a lot. He wanted the NPC, DWA and DEA to identify what the blockages were, together, so the problems could be addressed instead of just debated. One area that was a big problem had to do with databases. He wanted databases to be central in the water and environment sectors. This went further than IT. He wanted to know what steps could be put in place to put a proper database in place that decisions could be based on. It would create an analytical ability to assess reliable information. The only way proper decisions could be made was if there was a database in place to collate all the information from the water and environment sectors. This was something the NPC had to sort out. This did not have to be resolved now; he just wanted to flag the matter.

Department of Environmental Affairs (DEA) response
Mr Mark Gordon, Climate and Energy Special Adviser (DEA), agreed with the Chairperson that there was a need for more accurate data for the water and environment sectors. This was made explicit in the new climate change policy. In terms of the nexus between climate change and development, there had been a lot of interaction with the NPC about it. The DEA wanted to introduce a number of “firsts” in the country. They introduced a new climate change policy that spoke to a carbon budgeting process. This was two years away from completion. A climate constraint was imposed on the electricity sector. The Integrated Resource Plan on Electricity, the sector was capped on a 50% carbon budget up to 2030. So, the carbon budgeting process had already been started. There also had to be a debate on defining the emissions trajectory. To a large extent, sectors started to become “locked in” once numbers were discussed. There were a few problems around this matter. In terms of COP 17, the DEA was trying to get the White Paper on climate change into Parliament by the end of this month. It was a signal to the world that South Africa was serious about climate change.

The presentation looked at the areas highlighted by the NPC and what action plans the DEA wanted to put in place to address the challenges. The first point of the Diagnostic was that the country had a high unemployment rate and low earnings. The DEA was involved in the facilitation of the Green Economy Strategy, which showed potential for “green” jobs. They wanted to scale up the Extended Public Works Programme (EPWP) and the creation of decent work. The DEA was also involved in labour intensive programmes aimed at providing employment. There was also a focus on skills and experience to enable beneficiaries to participate in mainstream economy.

The Diagnostic recognised that quality education for poor black South Africans was substandard. The DEA was in cooperation with the education departments, the South African Qualifications Authority (SAQA) and Sector Education and Training Authorities (SETAs) in supporting the continuous review of environmental curriculum linked to sector demands. The NPC said that poorly located and inadequate infrastructure limited social inclusion and faster economic growth, the DEA wanted to address this matter through improved Environmental Impact Assessments (EIAs) processes, and through the contribution of environmental assets towards rural development.

The NPC noted that spatial challenges continued to marginalise the poor. The DEA wanted to address this through sustainable land use management and integrated spatial planning, as well as infrastructure development in rural areas. The NPC said that SA's growth path was highly resource intensive and unstable due to the energy-intensive coal-based nature of the economy, climate change, natural resource exploitation and threatened biodiversity. The DEA was in the process of fostering a global sustainable development agenda taking into account the natural environment as a material condition for development. The DEA was also involved in renewable energy deployment, mitigating and adapting to the impacts of climate change, restoration and rehabilitation of degraded ecosystems, the expansion of the conservation estate, and integrated and innovative approaches to natural resource management.

The DEA wanted to ease the burden on the health system by giving effect to the right of citizens to an environment that was not harmful to their health and well being through the reduction of atmospheric pollutants, and the effective waste management. The DEA was also involved in other initiatives such as supporting local government in environmental functions to improve service delivery, taking an integrated approach to the prevention of poaching activities, improving compliance with environmental laws, and contributing towards building cohesive and sustainable communities through implementation of the EPWP projects for the sector.

Discussion
The Chairperson said he wanted to tell the DEA the same thing he told the DWA; that they had to meet with the NPC to identify and engage on issues affecting the sector. All the challenges had to be put on the table.

Ms Tsotetsi said she was excited about the DEA's plans to scale up the EPWP. However, she was worried about the creation of decent jobs, as many of them seemed to be temporary. She asked what role the DEA would play to ensure that at the completion of the project, skills that were required did not become redundant.

Mr Morgan noted that the DEA was an entity that was generally run very well, and he did not have any particular problem with how it conducted its business. However, he was disappointed with the presentation because it showed more of how the DEA would respond to something like the State of the National Address. The presentation mostly focused on what the DEA was already doing and fit it into the Diagnostic Report. This was an opportunity for the DEA to be forthright about the long-term problems that they foresaw. The Committee needed the DEA to be more thoughtful about what constraints they faced, and more specific work on policy coherence. For example, the Committee needed more information on how the DEA envisioned its relationship with the provinces given their shared competencies in terms of the Constitution. Members knew there were problems in the provinces so he wanted to see the DEA being more thoughtful about it. There was nothing specifically wrong with the presentation; it just did not talk to the vision of long term planning.

Dr Huang said he was concerned about the DEA's presentation. He did not see any comment or real reaction to issues raised by the NPC. The Committee needed more detail on what they were going to do to address the challenges. He wondered how many jobs the DEA would create with the EPWP and warned that temporary jobs were not considered decent jobs. The DEA had to highlight problems that the country was experiencing, such as rhino poaching.

The Chairperson said that the Committee already identified that the DEA and DWA had to sit down with the NPC and ask them all the hard questions. Once the departments had met with the NPC, they had to inform the Committee about it so there could be a proper meeting to discuss what came out of the discussions.

Mr Gordan replied that the DEA accepted the Committee's comments and they would meet with the NPC again.

Mr Muller asked if Mr Naidoo could comment further on the carbon budget. This was a very “hot” issue at the moment.

Mr Naidoo thanked the DWA and DEA for their inputs and welcomed the suggestion that the NPC and the departments should meet. They also welcomed the White Paper and white paper process on climate change. The NPC wanted to give the Committee a sense of the “prism” the NPC was going to use to view environmental and carbon issues. In view of the Diagnostic Report, the fact that too few people in the country were employed was the uppermost problem. In the transition to a low carbon economy, the NPC had to separate issues into two or three categories. One category looked at the “complementarities” between low carbon growth and job creation. There were obvious complementarities such as solar water heating, which was a highly labour intensive activity. A lot of the environmental programmes in the EPWP were very good from a climate and environment point of view. If conservation could be expanded, there would be complementarities with the transition to the low carbon economy and job creation. However, there were areas that were potentially contradictory. A slightly different approach was needed for industries that were both energy intensive and labour intensive. The transition of the industries had to be supported in ways that did not impact on jobs. This applied particularly to energy intensive industries that employed low skilled people. This was the prism in which the NPC would view climate change
issues. According to the Draft White Paper, this was exactly what the DEA wanted to do.

The Chairperson thanked the NPC, the DEA and the DWA for their inputs. He acknowledged that the Committee would probably have to engage with the NPC at the beginning of the new year. He hoped that the DEA and DWA would be working closely with the NPC. It was important that they started engaging with other role players as well.

The meeting was adjourned.