Department of Environmental Affairs & Entities Strategic Plans 2013/14, Update on Buyisa-e-Bag and Indalo Yethu

Water and Sanitation

18 March 2013
Chairperson: Mr J De Lange (ANC)
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Meeting Summary

The Department of Environmental Affairs (DEA) and the entities continued the presentation of the Strategic plans for 2013/14, and gave a report on the financial performance in 2012/13. Firstly, the Department set out the allocations for 2013 to 2016, noting that these were now divided between the approved structure of seven branches. The increases and trends were fully explained, and it was noted that in most cases these were due to the branches taking on additional functions – in particular, the DEA had taken over the Algoa Research Vessel from the Department of Agriculture, Forestry and Fisheries, there were new Oceans and Coastal risk management allocations from 2014/15, and additional allocations to SANPARKS for the rhino rangers. It was noted that provision was made for bonuses, but the Chairperson asked that none be allocated without first reporting back to this Committee. More funding was requested for expansion of the conservation estate, but none was given. The Members were worried about this, noting that this meant that South Africa would fail to reach its international commitments to have 17% of the total land estate under conservation by 2020, and said that it should have been treated as a priority. They wondered why National Treasury was consistently refusing some requests and suggested that further consultation be done with that body to clarify the reasoning.

The annual financial statements to 15 March 2013 were tabled, and it was noted that out of the total budget of  R5.175 billion, R4.756 billion had been spent by 15 March, and DEA was projecting that it would manage to spent around 92%. It was requesting rollovers of amounts committed, but not spent, on the Green Fund and putting it to funding the Department’s new IT infrastructure when it moved in June 2013. The largest cost drivers were noted as  consultants, contractors and agency/ outsourced services; travel and subsistence; operating leases and the inventory. The shortfall of R151.7 million in the Oceans and Coasts programme was noted, and attributed to the Agulhas vessel and the ALGOA Research Vessel, which involved taking over equipment already ordered. It was handled by making virements (within the permitted 8%) from other programmes. There was no irregular or unauthorised expenditure. A brief report on spending of the public entities, SANParks, SA Weather Service, South African National Biodiversity Institute and ISimangaliso was also given.

Members commended the DEA for not paying a contractor where performance was in dispute, and questioned how the DEA would intend to deal with amounts that could not be spent. It was suggested that perhaps Criminal Assets Recovery Amount might be approached to assist with transfer of assets to other departments.

An overview was given of the Biodiversity and Conservation Branch, noting that the nature conversation mandate in South Africa was a concurrent function, and that 21 institutions played a role in conservation. The DEA was responsible for coordinating national systems for development, implementation of legislation, compliance and enforcement, providing norms and standards, guidance, monitoring, evaluation and reporting within the entities and bodies involved in nature conservation. An ecosystems approach alone would not work and instead South Africa looked to species and was guided by a number of pieces of legislation. The DEA and entities’ strategic plans were aligned but it was recognised that sometimes mandates overlapped. A report was given on how the DEA intended to try to increase areas under conservation, but it was conceded that the international targets would not be reached. Some input was given, in response to answers, on how rhino poaching was being addressed, and the Chairperson commented that he thought that not enough planning was done into the transfrontier parks before they were implemented. Input was also made by iSimangaliso. Members asked about mining of sand dunes and marine mining, and called for brief written reports on all the areas and initiatives. The Chairperson said that in future all strategic plans should ideally be presented as a composite report, so that there was less disjuncture, and this would also make it clear how the entities linked with each other. They were not entirely happy with the answers given on offshore mining and needed clarity on this in writing. They also asked for more details on job creation and entrepreneurship.

Finally a brief report was given on the history, reasons for and status on the winding up of the Indalo Yethu Trust and Buyisa-e-Bag. It was noted that effectively the DEA was taking over the initiatives and had taken on staff from Buyisa-e-Bag.

Meeting report

 

Department of Environmental Affairs Strategic Plan 2013/14
Ms Nospihpho Ngcaba, Director General, Department of Environmental Affairs, and Ms Lize McCourt, Chief Operations Officer, Department of Environmental Affairs, presented the financial report structures and Estimates of National Expenditure (ENE), setting out the allocations for 2013, 2014, 2015 and 2016.

Allocations were according to the new approved programme structure of seven branches in the Department of Environmental Affairs (DEA or the Department), and the allocations had been continuously improving over the financial years from 2012/2012 to 2015/2016. The presentation went through all the trends in increases per the seven branches of Administration; Legal, Authorisations and Compliance; Oceans and Coasts; Climate Change and Air Quality; Biodiversity and Conservation; Environmental Programmes; Chemicals and Waste Management. For the most part the increases were due to the branches taking on additional functions. It was explained that this included taking over the Algoa Research Vessel from the Department of Agriculture, Forestry and Fisheries, the new Oceans and Coastal risk management allocation from 2014/15, and additional allocations to SANPARKS for the rhino rangers.

The biggest budget related to the Environmental Protection and Infrastructure Programme under the Expanded Public Works projects (EPWP). Although this was in need of more money, it was given any for the 2013/14 to 2015/16 financial years. The Infrastructure Investment budget to iSimangaliso, South African National Biodiversity Institute (SANBI), SA National Parks (SANPARKS) and South African Weather Service (SAWS) had also gone up over the financial years.

The ‘Compensation of Employees’ allocation included bonuses, which amounted to 1.5% of the budgeted amount, in line with Department of Public Service and Administration (DPSA) rulings.

The Chairperson asked the Department to report back to the Committee before bonuses were allocated.

It was noted that more funding for Expansion of the conservation estate was requested from National Treasury, but no funds were allocated, so the Department planned to re-submit the request, with additional motivation, in the next Medium Term Expenditure Framework (MTEF) cycle.

Discussion
The Chairperson said South Africa had committed itself internationally to reach its 17% target for land under conservation, by 2020, but if there was no funding that would be going back on the commitment. The matter should have been treated as a priority, especially since there were only seven years left to reach that target. Currently, conserved land was at 7%, so in the next seven years another 10% would have to have been acquired, but no budget was provided. He asked the Director General, Ms Nosipho Ngcaba, and the Chief Executive Officer of SANParks, Mr David Mabunda, to write a brief report on the matter for the Committee to include in its report. There may be valid reasons as to why Treasury was rejecting the requests and there was a need to discuss the matter and put the requests in an understandable format. Some requests had been rejected year after year.

Mr S Huang (ANC) questioned SANParks allocation for an 2012/13 additional R25 million to increase rhino rangers. He said more money had been allocated but there was also an increase in poaching.

Ms M Wenger (DA) was concerned about the non-responsiveness from National Treasury, and said this would end up being a battle between local authorities and the Department. Responsibilities were not clearly defined. The Department was responsible for certain functions, but when held accountable the expected function was shifted to the municipality. The Department would be handicapped in meeting its strategic targets due to the lack of funding, as the Department simply could not carry out some of its functions. The Committee should hear the views on the matters from National Treasury.

The Chairperson agreed that the Committee needed to hear from National Treasury on each of the items that were rejected. The Department needed to report on each of the items to which no funding was allocated, and link the requests for funding more specifically to the targets that needed to be met. If the rejections arose because it was felt that the functions resided with another entity or level of government, that should be clearly spelled out. The most worrying was the conservation allocation, due to the international commitments as already outlined. He could understand it if  a portion of the requested amount was not granted, but there was nothing granted at all, and there must be a good reason for that, and it must also be made very clear to the international community that the country would not meet its target.

Ms J Manganye (ANC) said the Department should also be clear when asked about the functions of municipalities, as she thought perhaps Treasury had regarded the functions as lying elsewhere.

Annual Financial Statements for 2012/13
Ms Ngcaba and Ms McCain noted that, for the 2012/13 financial year, the Department had a budget of R5.175 billion, and by 15 March 2013,  R4.756 billion had been spent. This meant that in order to achieve full spending, it would have to spend  R419 million by the end of the year.

The Green Fund was allocated R300 million but for this year only R88,7 million was spent, and the remaining R 211 million would be surrendered to National Treasury on 31 March 2013. R60 million for the building was not spent, and the Department would be asking for a rollover of the R271 million to fund the Department’s IT Infrastructure for the new Departmental building to be occupied in June 2014.

The Chairperson asked what the problem was with the Green Fund.

The Department said it was a late allocation and the Department had to set up mechanism. Though only R88, 7 million was physically spent, all the money allocated was actually committed and the Department was engaging with National Treasury whether to give the money back and ask for a rollover, or allow payments based on the commitments.

The biggest cost drivers for the Department were consultants, contractors and agency/ outsourced services; travel and subsistence; operating leases and Inventory. In previous years the Department had spent between 96% and 99% of its budget. In this  year expenditure was estimated to be between 92% and 93%.

For 2012/13, the Oceans and Coasts Programme had a shortfall of R151, 7 million and that was due to the insurance and administrative costs for  SA Agulhas 11, as also the fact that the Department took over the ALGOA Research Vessel, for  which the Department had no budget and paying for research and laboratory equipment that was already ordered. To fund Oceans and Coasts, the Department had to reprioritise and take funds from other programmes. However, these virements were within the 8% range permitted by the Public Finance Management Act (PFMA).

The financial statement for 2012/13 would be submitted on 31 May 2013. There had been no irregular or unauthorised expenditure.

Public Entities’ spending
The Department’s representatives noted that SANParks’ actual revenue was above the budgeted revenue by 5%. This entity received most revenue through money they raised themselves. The Gross Operating Revenue consisted of mainly retail gross profit generated from restaurants; other income, including sales of game and by-products, and conservation fees, due to increased visitors to the parks. Its actual expenditure, however, was above the budgeted expenditure by 7%, This was due to increased operating costs of 11%, ESKOM electricity hikes, increased security costs as well as vehicle rentals, and increased (8%) personnel costs, due to additional establishment  of rangers and other critical posts.

SAWS showed actual revenue of 7% below the budgeted revenue. This was because its aviation income decreased by 7%, due to lower aircraft volume numbers, whilst other income and non-regulated commercial revenue decreased by 37%. Its actual expenditure was below the budgeted expenditure by 4%, and this was attributed to a decrease in operating expenditure by 16%.

SANBI’s actual revenue was 9% below the budgeted revenue and this was attributed to the decrease in grants, sponsorships and donations. Its actual expenditure was below its budgeted expenditure by 15%, and this was owed to a decrease in operating expenses by 29%, as a result of austerity measures implemented to curb expenditure. Personnel costs also went down by 7%, and administrative expenditure had decreased by 5% due to decreased audit costs.

iSimangaliso’s actual revenue was 43% below the budgeted revenue, because other income decreased by 81%. The representatives pointed out an error on the graph, since  “other income” should have been under “capital grants”. The entity had trouble with a non-performing contractor and therefore withheld certain payments, so the money was not reflected in revenue yet. Its actual expenditure was below its budgeted expenditure by 10%, and this was attributed to strict cost reduction measures implemented. Operating expenses were reduced by 38% and personnel costs decreased by 19%.

The Chairperson commended the entity for not paying the non-performing contractor. So often, government paid first and then tried to deal with the matter and rectify the problems later.

Ms Ngcaba said that none of the public entities were projecting large deficits for the financial year.

Discussion
Mr Haung asked how the Department would find it possible to spend R420 million by the end of the month.

The Department’s representative answered that out of the R420 million, it was hoped that R211 million from the Green Fund and the R60 million (which was allocated for the Department’s building), would be re-allocated or rolled over by National Treasury to the Department for its IT infrastructure. Overall, it was projected that the Department would spend 92% of its budget.

Ms Wenger asked the transfer of the money underspent from Green Fund would not result in fiscal dumping.

The Department said it would be fiscal dumping if the Department was to transfer all that money now to Development Bank of Southern Africa (DBSA). Currently, there were engagements with National Treasury and the DBSA regarding how the money should be handled.

Ms Wenger asked under the identified shortfalls for Oceans and Coasts, who provided a concession to take over ALGOA, considering the tender programmes.

The Department said the issue was with DAFF and not the Department, the tender issue was a procurement problem in DAFF.

The Chairperson suggested that the Department approach the Criminal Assets Recovery Account (CARA), a body that was able to remove assets from those involved in criminal activity. Perhaps it would be possible for it, for instance, to redistribute boats to this Department, which might be a way of assisting with its needs.

Overview of Programme 5 - Biodiversity and Conservation Branch & Public Entities Strategic/Annual Performance Plan
The presentation highlighted the biodiversity and conservation strategy map. The nature conversation mandate in South Africa was a concurrent function, entrenched in the Constitution. Presently there were approximately 21 institutions at national and provincial level playing a role in biodiversity conservation and there needed to be work and coordination with these institutions by the Department. The Department was responsible for coordinating national systems for development, implementation of legislation, compliance and enforcement, providing norms and standards, guidance, monitoring, evaluation and reporting within the entities and bodies involved in nature conservation.

An Ecosystems approach was always recommended at a global level; however as a mega-biodiverse country, this approach alone would not suffice for South Africa. Instead, the country had to look at species, and mechanisms had to be in place for managing species of special concern. The Department had four guiding pieces of legislation and conventions with which it must comply. with regard to biodiversity conservation, as well as regulatory tools that had been in place for the last 17 years.

The national DEA delivered its mandate with the support of three public entities: South African National Biodiversity Institute, South African National Parks and iSimangaliso Wetland Park Authority. The Department aligned its strategic plans with the public entities, and the entities submitted their plans to the Department for approval. The entities also had shared areas of work such as species management, protected areas management, effectiveness for systems or interventions to curb wildlife crime, knowledge management, and assessing the biodiversity sector contribution to economic development. The roles in these areas could be similar and also interrelate.

Noting the remarks made by the Chairperson, the Department’s representatives noted that the DEA hoped to increase the amount of land under conservation. Currently, land under conservation was at 7.7% and the long term target was to reach  12% by 2028. However the Department still hoped to reach the 17% target that the country had pledged to reach. Management effectiveness for South Africa’s estate management of protected areas was currently at a dismal 49%, and only 21% of protected areas scored above 67%. The DEA hoped to see improvements of this, reaching at least an improvement to 60% of state-managed protected areas with a score of  68%. With the People and Parks Programme, the Department hoped to implement the resolutions from conferences. In the past there had been hostility, but there had been openness by  the Department in developing plans and implementing in communities. By 2020 the value of biodiversity to the economy, and to people’s lives, would be quantified and would be monitored to inform policy, strategy and action.

Input on rhino poaching
Dr David Mabunda, Chief Executive Officer, SANParks, gave an input on rhino poaching. There had been encouraging feedback from countries like Bangkok, acknowledging the contribution by the government to curb rhino poaching, despite escalating numbers. Though the Kruger National Park was the epicentre of rhino poaching, due to its proximity to, and sharing of the border with Mozambique, there were other success stories on the work done to protect rhinos in parks. There had been no poaching in the black rhino population in many national parks, and that was owed partly to good neighbour policies, law enforcement and resources. On the other hand, the Kruger National Park situation was very complex, part of the problem was due to the non-performance of the Mozambique government in terms of meeting its bargain of the Great Limpopo Transfrontier Park (GLTP) treaty. The number of prosecutions had increased, and investigations were still taking longer. There was a lack of modern technology for early detection, for instance in the form of sensor cameras that were put under ground to detect movement of poachers. Currently, rangers were monitoring with no specific information in terms of where the poachers were cutting through fences, and there needed to be fences that could act as early detectors. Another problem was responding at night, as none of the current available helicopters could fly at night. That, however, would change soon as honorary rangers had managed to acquire, through a donation, a twin engine helicopter which was being assembled at Lanseria Airport. On the Transfrontier park initiative, what the Board had requested was that SANParks must be more careful in planning. At first, the problem with the GLTP was that a lot of things happened in haste, and the plans were not thought through well enough and there was no plan for law enforcement. The next step was to work on joint operations, sharing of intelligence, radio communication, and generally working together on both sides of the borders.

The Chairperson said if there were no commitments in writing from other countries, and planning was not up to scratch, there should be no transfrontier parks at all. There needed to be a separate input on the matter. The Chairperson said in his experience the parks were formed with good intentions, but the implementation was rushed.

iSimangaliso input
Mr Andrew Zaloumis, Chief Executive Officer, iSimangaliso Wetland Park Authority, said that he wanted to focus on the work done on implementation of government programmes, such as Working for Water and Working for Fire. Other areas where problems were encountered included the fact that parks were often surrounded by areas of poverty and lack of delivery by local government. On the upside, he cited the iSimangaliso entrepreneurship programme, which was in its third phase. He explained that this  programme took on entrepreneurs and placed them in a mentorship programme and then assisted them in setting up businesses around parks, continuing thereafter also to provide on-going support through mentors.

In regard to species management, there was a  focus on rhinos.  iSimangaliso was working also to establish conservation of the coastal population. It was also working on research on parks, and there were over 20 registered research programmes with research in hydrology being paramount.

The Chairperson asked for an update on what was happening with “the mouth”.

Mr Zaloumis explained to Members that “the mouth” was the natural linking between uMfolozi River and the sea, and this was open. It was intended to assist with a functional marine system.

Discussion
The Chairperson said there was a bit of a disjuncture between conservation and biodiversity, since much of the work was done with entities that were closely related to the Department, but still had separate structures. This Committee had been trying to have the reporting done differently, and wanted the reports to encompass all entities of conservation, and show that SANParks and iSimangaliso were integrated in their work, listing that work in a unified report so that different reports did not appear as if they were dealing with unrelated fields.

Ms Manganye asked about the mining of sand dunes, noting that the mineral contents in sand dunes was becoming more profitable to mining companies. She asked also, if the mining was happening, what its extent was, and how the challenges were addressed. She also pointed out that, globally, marine mining was expanding as it was now realised that the sea held two thirds of the world’s mineral resources. More mining companies were looking at the potential of commercial marine mining ventures for commercial seabed deposits of metals. She wondered how this was managed, and what challenges faced the protected marine environment in South Africa.

The Department’s representatives noted that their understanding of the Department of Mineral Resources’ (DMR) future mining strategy, was that there had been huge titanium deposits identified outside the  coastal areas which DMR wanted to mine. What was needed perhaps was continuous engagement with the DMR to understand its plans in terms of licences in the coastal areas.

Ms Razeena Omar, Chief Director: Integrated Coastal Management, Department of Environmental Affairs, said that indeed the DEA was working closely with DMR in this regard and there was continuous engagement with delegated task teams, with members from both sides. Currently there was a vulnerability study being conducted, to isolate areas where no mining would be permitted. It was a real threat, but it was being addressed and the DEA was being proactive, as well as addressing past issues in a reactive way.

The Chairperson asked if there were any applications that had been approved.

Ms Omar said there were applications received, and there may be some that had been approved, but she could not say this with certainty. As yet, DEA was not aware of any huge impact or mining permit granted along the 3 500 kilometre coast, although there were plans.

The Chairperson said he was concerned about the lack of certainty regarding the progress and approval of applications. He asked for a full report on the matter, setting out details of the research, work done and deadlines. Also, he asked if, legally speaking, the DEA was not responsible for the Environmental Impact Assessments (EIAs).

The Department’s representatives noted that off shore mining was still an unknown area, with limited information. The Department was, however, responsible for off shore and on shore EIAs. The problem often was that there was vast sand dune mining, close to the ocean, but not within the protected area. The most recent project of sand dune mining was at the Wild Coast, where there was a permit issued, which was later withdrawn but which may likely be reinstated. There was also commercial sand dune mining closer to Richard’s Bay, which had been going on for quite some time, and then there was mining of actual sand for building purposes, which seemed small but, when accumulated could be a big problem.

Mr Zaloumis said that in iSimangaliso there was an attempt to extend mining, but that had been pulled back. In regard to the seabed, it was important to note that the whole coast was divided up into prospecting licences. Prospecting was not to be taken lightly, as it had the potential to be harmful and it also used explosives. There had been strong objections to one application, as the applicants wanted to do prospecting on a proclaimed park and protected marine area.

The Chairperson was puzzled how anyone could get a right to prospect without an EIA.

Mr Zaloumis said that in that instance an EMTR was issued.

The Director General said the Department would come back to give a presentation on research into the extent of sand mining in the country and controls.

The Chairperson was worried that what iSimangaliso was saying was contradictory to what the Oceans Division was saying. Ms Omar gave the impression that not much was going on yet Mr Zaloumis had just noted that the coast was divided into prospecting areas and people were applying in the areas for licences. He asked for a report on all three areas, asking that the question of sand mining be separated out clearly as it could happen both inland and at the coast.

Mr Haung said that in relation to iSimangaliso, there would be an increase in the number of Black Economic Empowered (BEE) Small, Medium and Micro Enterprises (SMMEs), and that the creation of temporary jobs (direct and indirect) was 1 200 whilst there were about 10 permanent jobs. He asked, in relation to the SMMEs, what the strategy was to ensure an increase with the businesses, and asked also if iSimangaliso was in tune with the EPWPs on temporary work.

Mr Zaloumis said that creation of permanent jobs was limited by funding and size of the project. iSimangaliso had tried to grow permanent jobs through the entrepreneurship programme, and currently there were 150 entrepreneurs compared to none about three years ago. In addition, he noted that all the tenders were BEE-compliant.

The Director General added that funding for job creation was dependent on extended public works requirements. This was one way in which the entities could take on temporary employees and expose them to skills development.

The Chairperson asked Mr Zaloumis to give a short written report on the entrepreneurship programme, its successes and the numbers.

The Chairperson hoped in future that when the Department was reporting on conservation in a more integrated way, the reports would encompass all the entities, so that those entities would not each have to report separately, but would merely supplement whatever had not been dealt with fully in the integrated report. The  strategic plans should not be heard from the entities as different presentations. Instead, they should all be encompassed under conservation. The achievements should be pulled together, so that it was not possible to find one entity lagging behind whilst another was flourishing. There needed to be a holistic approach when it came to the budget as well, and requests for funding ought to be looked at in combination, with a composite motivation for funding. This would also have an impact on the way targets were reached.  This would not mean that the entities were being disregarded, but a more integrated approach would ensure that,  years down the line, closer relationships between the entities would ensure greater efficiency in meeting the mandates of the DEA and each one of the entities.

Indalo Yethu and Buyisa-e-Bag
Ms Lize McCourt reported on the status of Indalo Yethu and Buyisa-e-Bag. The Indalo Yethu was being dissolved by the Board and the process was already in place. She explained that Indalo Yethu was established in terms of a Memorandum of Understanding (MoU) between DEA and Wildlife and Environment Society of South Africa (WESSA) in 2005. The primary goal of the Indalo Yethu Trust was to design and implement an environmental awareness campaign. The Department undertook a review of the operations of Indalo Yethu to investigate the possibilities for amending the corporate form of the Trust and to consider its financial viability. The reasons for dissolving the Indalo Yethu Trust included the fact that operations of Indalo Yethu could not be supported from the R4 million per year received from the Department, it was not the intention of the DEA to fund the operations of Indalo Yethu in perpetuity, and the Trust was supposed to generate sufficient income to support its operations.

A service provider was appointed by the Department to assist the Trustees with the dissolution of the Trust. Operations of Indalo Yethu were wound up on 31 December 2012. All staff members’ contracts had terminated and they accepted a gratuity amount that was offered by the Trustees. It was estimated that the necessary documents for formal dissolution of the Trust would be submitted to the Master of the High Court by May 2013.

The reasons for winding-up Buyisa-e-Bag were that the Department had found that this company had failed to meet the objectives as set out in the founding Memorandum of Agreement, and there were concerns with governance, expenditure and performance. All staff accepted offers of employment from the Department and assumed duty with it on 1 February 2012.

The Department remained committed to achieving the intended objectives of Buyisa-e-Bag, which included expansion of waste collection networks, the establishment of rural waste collection SMMEs, creating additional capacity in NGOs, job creation, improving skills and re-skilling workers in the plastics field.

Discussion
The Chairperson said the presentation was straightforward. He had always been of the opinion that environmental awareness should be done by those that were responsible for it, and not by the two bodies now being wound up.

The meeting was adjourned.


 

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