Department of Science and Technology, National Advisory Council of Innovation (NACI), South African National Space Agency Annual Reports 2013

Meeting report

The Chairperson informed the Department and its entities that the Committee’s Budgetary Review Recommendations Report (BRRR) would be written up after interrogating the annual reports. The BRRR was a tool the Committee could use to support DST and its entities, where possible, to increase the budge. This depended on evaluation of presentations, annual performance plans and strategic plans, discussions and sharing of ideas and plans.

Department Science and Technology Annual Report 2012/13
Dr Phil Mjwara (Director General) gave an overview of progress and achievements of the Department for the year under review.

The Department received a clean audit report from the Auditor-General for the 2012/13 financial year. However, in the performance audit of predetermined objectives a finidng was expressed on the reliability of information about the number of SMMEs supported and the number of masters and doctoral students supported, both from Programme 5: Socio-Economic Partnerships. Remedial action was implemented: DST requested its Internal Audit to conduct an audit on the SMMEs records kept by the Technology Innovation Agency (TIA); and verification information for number of students was obtained.

An additional matter with no impact on the audit findings was that about 29% of the total planned targets were not achieved. While DST increased its performance by 4% from the previous year, DST was still committed to achieve a minimum of 80% of its planned targets.

Overall DST performance for 2012/13, a total of 66 indicators were reported, 71% were achieved, 21% partly achieved, and 8% could not be achieved; which was an increase of 4% over the previous year’s achievements. While DST was happy with that, it fell short of the 80% expected by the Auditor General.

Highlights for 2012/13
- Astronomy and Space Science: South Africa, together with Australia, was awarded the bid for the Square Kilometre Array (SKA) telescope – the biggest radio astronomy project in the world.

- Biotechnology and Health: Funded by DST, CAPRISA announced the discovery of potent antibodies that could kill 88% of HIV found throughout the world. DST further supported the development of a candidate malaria drug that showed potential against multiple points in the malaria parasite’s life cycle.

- Human Capital Development: there was a significant increase in the number of postgraduate and researchers supported over the last three years. A total of 60 Research Chairs were appointed during the financial year, amounting to 117 out of 156 planned Research Chairs appointed in the last three years. The Department further launched the National Nanoscience Postgraduate Teaching and Training Platform in collaboration with the University of Johannesburg, Nelson Mandela Metropolitan University, the University of the Free State, and the University of the Western Cape.

- International Cooperation (1): Participation in the South Africa-European Union (EU) Summit in September 2012. In order to ensure that flying was safe in South Africa, DST agreed to the extension of the European Geostationary Navigation Overlay Service to South Africa, which deepened cooperation in the area of global navigation satellite systems with the EU. Germany and South Africa celebrated their long partnership on Science and Technology (S&T) during the German-South African Year of Science through a number of conferences and joint research programmes.

- International Cooperation (2): South Africa hosted the second BRICS Senior Officials’ meeting, and also hosted the first South African Development Community (SADC) Science Technology and Innovation (STI) policy training workshop in October 2012, with the aim of building Science and Technology (S&T) policy capacity in the SADC region. The DST also launched the first South African Young Scientists Summer Programme.

- International Cooperation (3): The second round of the European Development Countries Clinical Trials Programme (EDCTP2) was launched with increased investment, membership and broad disease coverage.

- A multi-million Rand Cofimvaba Rural Education Initiative was launched, which was to see whether the introduction of technology such as laptops and tablets would improve the quality of teaching and learning. The Technology Localisation Programme implementation was progressing well, 50 firms (accumulatively) received Technology Assistance Packages, which led to job retention and the creation of new jobs.

Performance per programme
Programme 1: Administration
The DST had a well functioning Internal Audit to enable it to identify early warnings. The Department paid attention to identifying risks, and in trying to ensure good relationships with its entities agreed on a Governance Framework to assist in streamlining the planning, budgeting and reporting and governance of entities. The Performance Information Management System (PIMS) was launched and would assist DST in ensuring that when the Auditor General looked for evidence on predetermined objectives that information could be obtained from PIMS.

Programme 2: Research, Development and Innovation
The purpose of the programme was to facilitate knowledge generation and exploitation through R&D in key priority areas of space science, the biosciences and energy.

- The target to increase the number of undergraduate and postgraduate students and technicians funded by 31 March 2013, and also to put unemployed graduates through an internship programme, was achieved. 50 interns were placed in private sector companies. It was understood that 60% or 70% of those companies agreed to offer those students employment.

- The South African National Space Agency (SANSA) honoured the data requested by the number of end users from the satellite imagery. The National Intellectual Property Management Office (NIPMO) trained candidates in the area of intellectual property and technology transfer training programme.

- One Meerkat antenna was designed and aligned to SKA design requirements.

- Of the target to have four Offices of Technology Transfer established and/or capitalised by 31 March 2013, 10 were achieved.

- The target to develop one prototype and one patent registered locally or internationally was also achieved.

- The target that NIPMO be established as a government component and staff permanently appointed was partly achieved as the Technical Assistance Unit recommended that NIPMO be established as an Special Service Delivery Unit (SSDU) instead of a government component.

- The target to develop five new technology based enterprises through funding support to TIA was partly achieved due to misalignment of targets between TIA and the DST.

Programme 3: International Cooperation and Resources
The programme strategically developed, promoted and managed international relationships, opportunities and S&T agreements that strengthened the NSI and enabled an exchange of knowledge, capacity and resources between South Africa and its regional and international partners. Four targets were all achieved.

- Financial targets were achieved.
- The target to have 800 foreign participants involved with South African participants in knowledge production, enhanced innovation and STI Human Capital Development (HCD) by 31 March 2013, was achieved and strengthened relationships with specific international role players and more South African researchers were funded.
- The target to have 450 South African postgraduate students participating in international STI development as agreed with foreign partners by 31 March 3013, 748 South African postgraduate students participated. The programame improved the collection and analysis of verifiable data.

Programme 4: Human Capital and Knowledge Systems
This programme provided leadership in the creation of an innovative and competitive society with highly skilled human capital, cutting-edge knowledge and research infrastructure. Of 32 targets 19 were achieved, 8 partly achieved, and 5 were not achieved.

- 8 379 postgraduate students (2951 honours, 3397 master’s and 2031 doctoral) were funded.

- 3976 researchers were awarded research grants.

- 711 graduates and students were placed in DST-funded work preparation programmes in SETIs.

- The target to have a consolidated Higher Education Management Information Systems (HEMIS) and Higher Education institutions (HEIs) data developed by 31 March 2013, a functional information management system for bursary outputs was in place and a report on graduate output (for students funded in the past) was received.

- An increased number (566 511 people) participated in DST-led science awareness and engagement programmes.

- A draft implementation plan for Palaeosciences and Archaeology strategy was completed.

- Terms of reference for the development of the Marine Biology Research Strategy were developed.

- A three-year diploma in industrial physics was established to train photonics technicians. The programme started in January 2013 and was run by the Tshwane University of Technology.

- Two prototypes, 109 journal articles and five patents resulted from research and innovation filed internationally.

- 30 postgraduate students graduated (17 master’s and 13 doctoral) through co-supervision at Nanotechnology innovation Centres (NICs) and other nanotechnology development programmes.

- Piloting and public consultations were done with stakeholders in KwaZulu-Natal and Limpopo. The draft accreditation and certification regulatory policy was developed after consultation and approved by EXCO for wider consultation.

- Five Moringa tree products were piloted and commercialised in Gauteng and Limpopo. In addition, two cooperatives were established as business models.

- 17 leads were identified for product development. Research led to multiple prototypes leads (three nutraceuticals, three cosmeceuticals and three traditional medicines).

- 25 master’s and doctoral students were financially supported – 15 master’s and 10 doctoral students.

- The target to have HCD for Research, Innovation and Scholarship (RIS) Strategy approved by the Minister by 31 March 2013 was not achieved. The HCD for RIS Strategy was not approved by the Minister during this period. During the year the approach taken to formulating the strategy changed in consultation with the Minister.

- The target to have a draft science, technology, engineering, mathematics and innovation (STEMI) promotion and engagement strategy for the NSI completed by 31 March 2013 was not achieved. A workshop of internal stakeholders was held in March 2013 to adopt a framework that would guide the development of the strategy in 2013/14. A new strategic approach to the conceptualisation of the strategy was developed during the year, in consultation with the Minister.

- The target to have 20 patents registered by NRF grant holders as reflected in NRF reports by 31 March 2013 was partly achieved. No registered patents were reported, but 14 patents were filed to be registered. The reason for variance was that it took too long to register a patent to be reported within a single year.

- The target for a draft Antarctic research strategy to be completed by 31 March 2013 was partly achieved. A draft Antarctic research strategy was not developed, but a framework for the draft strategy was developed. A decision was taken to develop a broader framework for the holistic development of research in the Southern Oceans and Antarctica.

- The target to have 42 academic and research sites connected to the South African National Research Network (SANReN) by 31 March 2013 was partly achieved. 40 academic and research sites connected to SANReN network. The additional sites estimated were to be connected through the Rural Campus Connectivity Programme, which faced some problems in the year under review.

- The target for a Cabinet memorandum on draft legislation on the protection, promotion, development and management of IKS approved by the Minister by 31 March 2013 was not achieved. A draft bill was approved by senior management for wider stakeholder consultation. The Department of Trade and Industry (DTI) developed an IP Laws Amendment Bill, the content of which was relevant to the DST’s proposed Bill. The delay in finalising the DTI Bill had an impact on progress with the DST Bill.

- The target to have a national bioprospecting platform framework approved by the Director General by 31 March 2013 was not achieved. Finalisation of the platform concept was dependant on progress with the Bioeconomy Strategy, which was finalised late in the year.

Programme 5: Socio-Economic Partnerships
This programme enhanced the growth and development priorities of government through targeted S&T interventions and the development of strategic partnerships with other government departments, industry, research institutions and communities. Of 15 targets 12 were achieved and 3 partly achieved.

- The Department was able to achieve 502 livelihood opportunities, whereby 52 were self-employed entrepreneurs (10%) and the remainder were employees (90%).

- The Department was able to achieve two additions to the IP portfolio (patents, patent applications, prototypes, technology demonstrators and TT packages) by 31 March 2013.

- The Department was able to achieve 294 master’s and doctoral students co-funded in designated niche areas. The demand for bursaries was high and the DST allocation was therefore distributed in such a way that most of the recipients were co-funded from other sources.

- 132 scientific and technical papers were accepted for publication by 31 March 2013.

- Five policy briefings on reports such as R&D tax incentive performance report, R&D survey and report of scientific capacity of SAWS were completed.

- 16 patents, prototypes, technology demonstrators or TT packages were added to the IP portfolio by 31 March 2013.

- 50 companies on a register of companied were provided with a Technology Assistance Package (TAP).

- 17 peer reviewed scientific publications

- 23 policy interventions, seminars, briefs, and policy papers were achieved, working with the HSRC in the formulation of policy. The HSRC invited government departments in seminars and policy briefs in order to indicate the impact of their research work for the departments to use that work to inform policies.

- 50 funded or co-funded internships in the social sciences and humanities were doing well.

- A total of 1 769 SMEs received technology support through technology stations. The target was partly achieved due to the misalignment of targets between TIA and the DST targets.

- The target to have one knowledge product (policy brief) published on the DST website by 31 March 2013 was partially achieved. The study was published five days late owing to a delay in incorporating comments into the document to finalise it.

- The target to have one knowledge product (policy brief) on government planning and service delivery improvement through innovation in housing published by 31 March 2013, was partly achieved as the study was published three days late owing to a delay in incorporating comments into the document to finalise it.

Human Resources Report
Recently in the results of the Management Performance Assessment Tool, where Department of Performance Monitoring and Evaluation (DPME) assessed certain competencies of government; DST was identified as the best department as to how it managed HR. The case study was written and published for other government departments to use some of the systems used in DST on how to manage HR.

Highlights of HR achievements were:
- An electronic recruitment system was introduced; CVs and applications were received on line.
- A vacancy rate of 8% was achieved
- Employment equity: DST achieved its target with 47% of women in the Senior Management Services (SMS) and 3% of people with disabilities.

Financial Report
The bulk of the money (41.1%) was spent on Programme 4 (Human capital). Approximately 92% of the budget went to DST’s public entities, leaving 8% for DST’s activities.

Of a budget of approximately R5 billion 99.5% was spent.

Dr Mjwara concluded that the DST was committed to excellence in both the way DST and its entities were governed to ensure it achieved the high number of objectives set out. It had not reached the target of 80% but achieved an improvement of 4%. The Department would continue to strive towards clean audits of its financials and predetermined objectives.

Discussion
Ms M Dunjwa (ANC) thanked DST for a more reader friendly report. She noted that the First Science Summit was not mentioned.

Mr Thulani Mavuso (Chief Operations Officer) explained that the reporting period was up to end March 2013, the summit took place in July so would be reported in the next financial year.

Ms Dunjwa asked for clarification of the term ‘partly achieved’, either it was achieved or not.

Mr Mavuso responded DST tried to separate areas where work had already been started. In most instances of partly achieved the work overlapped into the new financial year and would be achieved but was partly achieved in the year under review. At the end of the financial year DST continued to track those that had not been achieved to ensure that they were achieved.

Ms Dunjwa was interested to know, if DST planned to ask for more money, what would that be for?

Mr Mavuso responded that DST’s funding was not adequate. The interventions it did were based on limited funding so the targets were not the level of targets the DSD would like to have, but they had to fit the current funding. The fact that DST was able to demonstrate to government that it was able to manage its current funds, should put it in a good position for the allocation of additional funding.

Dr Mjwara added that the DST had asked for R2.7 billion but had been told no, R1.5 billion on infrastructure from the Infrastructure Fund and R1.2 billion for non-infrastructure. The DST was of the opinion that it was important that the parliamentary grants of the entities that reported to DST be increased. Looking at the ratio of the parliamentary grant vis-à-vis external income, the scales were tipping into a situation where the government contribution to those entities was below the critical number of about 55%. It was very difficult to direct an entity that one was not funding, which was a concern for DST. He asked the Committee to assist DST in communicating that message. Entities had to develop long term competencies that were not about the projects of today but competencies that they needed and the skills they needed for them to be sustained over a long period of time.

In order to increase research capacity, unless established researchers were given the appropriate skills and infrastructure and funding DST would not be able to train. If the target were to increase research capacity and have more Masters and PhD students to be trained, as well as increase the research output, only 35% with Masters and PhD would not get anywhere. The DST was asking for money to build capacity and for expanding the activities of the offices of technology transfer. To convert research into commercialisable products, unless there were people in the offices of technology transfer who understood how to work with researchers to translate it against this vision, then that ambition would not be realised.

The Chairperson asked what had happened to the PhD project?

Dr Mjwara responded that the NRF was running it, the DST continued to provide the funding to ensure it was achieved, but it came down to funding. Only a small percentage of students applied for funding.

Dr Thomas Auf der Heyde (DDG: Human Capital Knowledge Systems) submitted that the percentage of students the DST funded out of all the students enrolled was less than about 9%. It was about 4.5% at honours level, 8% Masters and 18% at doctoral level, which was all the funds DST had. The Department had a challenge in trying to increase simultaneously the per capita level of support, individual bursary value, and the number of bursars because the individual values were too low to be able to replace an after tax salary, which was the big challenge. To consider a person who recently obtained a first degree, they could get a job with an after tax salary of R100 000 per year, but the bursary the DST could afford to give for an honours degree was R45 000; if they had family commitments that could not service them as full time students. The Department maximised the individual grants as much as it could while also trying to drive up the number of students it could support. It came back essentially to the question of finance.

Ms Dunjwa was concerned that transformation was not mentioned in reports from the DST or its entities. What were the plans for transformation and what were the stumbling blocks?

The Chairperson said that was a very important point, he had also not come across any mention of transformation in the reports. That made it difficult for the Committee when applying its BRRR tool to support DST, not knowing what it was for in terms of ultimate goals.

Mr Mavuso responded that the entities did report on transformation in their key performance indicator reports DST received on an annual basis and DST analysed that information. That information was not in the DSD’s reporting to the Committee but was available.

Dr Auf der Heyde added on about transformation in the research community and in particular amongst the student population that the DST supported through research grants and bursaries. Last year Mr Auf der Heyde was asked to brief the Committee on DST’s Human Capital Development activities. In the course of that he presented several statistics drawn from the DHET database. There was a drop-off in the demographics of the student population going from undergraduate to honours to masters and to PhDs. The number of black researchers, and in particular black African researchers, dropped significantly along the way, which was an area of extreme concern to DST. As one of the tools to address that, DST formulated for the Minister a series of directives that set targets for the National Research Foundation’s bursary programmes that were specifically designed to ensure that DST did what it could to change those demographics. The Department set targets for the NRF to transform the demographics of the postgraduate student component of the students funded by DST. If the Committee would like DST to come back and brief it again on Human Capital Development, DST would be very happy to do so.

Dr Auf der Heyde said it was suspected that the key reason for the drop off in demographics from first degree to honours to masters to PhD had to do with the fact that at the undergraduate level the State supported 25% to 30% of students but at the honours level, the DST programme supported only 4% or 5% of students. The affordability of continued studies was problematic. The demographic drop-off reflected to a large extent that it was the middle classes that could afford to stay in universities for postgraduate studies. The Department had published a tender recently for a service provider to undertake a detailed study of this, including interviews with a lot of postgraduate students that were in the system and students that had dropped out so that DST could get an understanding of why, in particular black African students, could not continue to study. It was suggested that it boiled down to money. The Committee’s support in this regard would be welcomed.

The Chairperson suggested a workshop on this very important area, and the Committee could intervene in terms of the BRRR report. The PhD project was taken up very seriously but Africans could not afford to do so. He was pleased that DST had commissioned a survey as to what the real reasons were. A workshop had to be scientific with no guesswork.

Dr Auf der Heyde said not much had been heard of the PhD programme for a while and suggested that the Chairperson ask the NRF, when it presented, about that.

Ms P Mocumi (ANC) asked, although it did not have an impact on the Auditor General’s opinion, the reason for the 29% of total planned targets that were not achieved.

Mr Mavuso responded that the 29% was ‘partly achieved’ plus ‘not achieved’. Reasons were given for variances on each of the targets. The Auditor General considered 80% to be satisfactory.

Ms Ditsietsi Morabe (Acting CFO) responded that the main reason for the variance between planning and actual expenditure in July and October was because before follow-up payments could be made to projects, performance reports had to be submitted to the DST and the programmes would evaluate the performance. If not up to scratch according to the targets set, then the funds would be withheld until the target agreed upon was met. Another reason was that there were still discussions between DST and TIA on where the transfer funds should be expended, and it was decided to withhold the funds until discussions were concluded. The funds unspent in June were absorbed in July.

In reply to the Chair asking why the CFO was not present, Dr Mjwara replied that she was on special leave.

Ms Mocumi said much as the Committee commended DST for having received an unqualified audit report without matters, Mr Mavuso was also commended as the person responsible for HR for having achieved acknowledgement of the DST being the best run in terms of HR.

Ms Mocumi referred to compensation of employees in the Annual Report. The Auditor General indicated that employees had been appointed without following proper processes to verify claims made by applicants. Why did that pass through the system, and what were the implications of that?

Mr Mavuso said that was a matter that DST argued with the Auditor General when conducting their audit. It was only a few cases and not a systemic problem in DST. It had to do with the expiry of a contract with a company DST utilised to do verification. DST had planned to renew that contract when it expired but questions were raised by Department of Public Service and Administration around the foreign ownership of the company. The process of getting the service provider to help DST with that, was therefore delayed. When people were employed, DST was required to check their criminal record, verification of qualifications and a number of other things. DST used the South African Police Service (SAPS) to check their criminal record, and the South African Qualifications Authority (SAQA) to verify the qualifications of individuals. That could take four to six weeks in certain instances. The utilisation of this particular company was more of a one-stop point to do those labour verifications instead of going to SAPS and SAQA. However, in all appointments, it was indicated that the appointment was subject to verification and security clearance. It was indicated to the Auditor General that in instances where people either misrepresented what they claimed, there was a clause in their appointment letter that protected DST against that. Subsequent to that, those verifications were conducted.

Ms Mocumi referred to the statement on HR “providing consistent and best employment practices”. There was an issue of financial and performance management. Why did the Auditor General indicate that DST did not always adhere to human resource policies and procedures for verification on new appointments?

Dr J Kloppers-Lourens (DA) asked for more information as to why targets were not reached, specifically 21% partly achieved and 8% not achieved. He asked how the four universities for the Nanoscience Postgraduate Teaching and Training Platform were identified?

Dr Thomas Auf der Heyde responded that when the decision was made to establish such a teaching and training platform, DST investigated the extent of expertise, the research infrastructure, the level of nanotechnology research activities, the availability of nanotechnology existing teaching programmes, and the extent of nanotechnology research capacity at various institutions and identified those four as being in the best position to establish the teaching and training platform.

Dr Kloppers-Lourens noted reference to a significant increase in the number of postgraduate and researchers supported over the last three years. She did not think there was a significant increase in the number of researchers.

Dr Auf der Heyde understood that on the graph the scale looked almost a horizontal line, but looking at the numbers it was almost a 20% increase over a two-year period over a population that was fairly stagnant because the number of researchers in the system did not increase largely from one year to the next. The fact that DST increased the number of researchers it was supporting was quite significant because it meant DST was able to persuade more researchers to get involved in research to justify the DSD giving them grants.

Dr Kloppers-Lourens asked how DST planned for Research Chairs; there were 117 Research Chairs out of a target of 156.

Dr Auf der Heyde explained that 156 Chairs had been awarded to institutions. The programme did not provide Research Chairs to individuals; it provided Research Chairs to institutions that were then given the opportunity to recruit the appropriate individuals to occupy those Research Chairs. All the Research Chairs that the DSD established had been awarded to institutions. The institutions, after receiving the award, had a period of time to identify the individuals for those posts. The National Research Foundation oversaw that process and was involved in approving the selection. If, after that period, they had been unable to secure somebody then the question of that post was reviewed and could be taken away from that institution and given to another, or it might be redefined for a different purpose. That was why they were not all filled at the same time.

Dr Kloppers-Lourens asked for more information on the facilitated partnerships with the private sector especially for the SKA.

Ms Nombuyiselo Mokoena (DDG: Corporate Services) responded that part of DST’s engagement in seeking partnership for the SKA, was looking at was how to encourage the private sector to invest in R&D in the country. Global projects such as the SKA created that opportunity. The Department was able to identify possible partners in the form of multinational companies with whom at the beginning of the financial year signed agreements on the role they would be playing in the SKA.

Dr Kloppers-Lourens asked for more information on the draft Antarctic research strategy and whether it had anything to do with the problems relating to the SA Agulhas 2.

Dr Auf der Heyde replied that when he was appointed to his current post at the beginning of the last financial year, shortly thereafter he discovered that his programme had planned to produce two or three research strategies for closely related areas – a marine research strategy, a Southern Oceans research strategy, and an Antarctic Research strategy. The DSD national research strategy identified the complex of research areas as an area of geographic advantage. He suggested one overarching framework, even if there were detailed plans for Marine, Southern Ocean, and Antarctic research. He also argued that such a framework be developed in conjunction with Department of Environment Affairs that had interests there. Those interventions by Dr Auf der Heyde slowed down the plans for the smaller research strategies, so the delay in finalising the overarching research strategy was a result of that and had nothing to do with issues around the Agulhas boat.

Dr Kloppers-Lourens asked for more information on the Management Performance Assessment Tool and that huge achievement of DST.

Mr Mavuso responded that she was actually referring to PIMS, which was a Performance Information Management System developed by DST and it was a requirement that National Treasury asked all departments to have a system of that nature. On a quarterly basis, programmes were collated in relation to the targets for each quarter, and that information was submitted to National Treasury in the quarterly report. The Department was trying, from a knowledge management point of view, to ensure that the agencies that executed work on behalf of DST and submitted to DST. DST was able to lock that information under one information management system, so that when the audit time came DST could say it was reported to National Treasury in a particular quarter and that was where the information could be found. When the auditors wanted evidence, the evidence was in that particular system.

The Management Performance Assessment Tool (MPAT) looked at whether government departments had good management practices. Four areas were focused on – strategic planning, governance and accountability, and HR and finance. Specific questions were asked such as issues of delegation of authority, whether from the HOD or from the Minister, to ensure that the department executed functions as properly delegated. Given the opportunity, DST could give a report in relation to that.

The Chairperson said the chairpersons had already been trained; committee members would also need to be empowered in that regard.

Dr Kloppers-Lourens asked how the vacancy rate of 8% affected the coordination of the NSI?

Mr Mavuso said DST ensured that it developed a retention strategy, but could not control the turnover rate of individuals. The DSD trained a lot of people internally and they would be posted to other departments or the private sector would poach them. Incentives were very limited because DST worked in a controlled environment. 8% was an international norm but the Director General had given instructions to try to reduce that to around 5%.

Dr Kloppers-Lourens referred to the words “reasonable good correlation” on two positions on the graph of expenditure, where there was not a good correlation.

The Chairperson asked for clarity where DST’s target was one prototype and it had achieved two, and the target was 10 peer reviewed publications and one patent resulting from research and innovation filed internationally; achievement was two prototypes and 109 journal articles and five patents. Were the 109 peer reviewed or were they just articles?

Dr Auf der Heyde confirmed that the journals were peer reviewed; DST only reported on publications in accredited and peer reviewed journals.

The Chairperson said then it must be put on paper that they were the peer review targets otherwise there could be an element of doubt in that respect.

Ms Mocumi again referred to partly achieved targets and the statement ‘misalignment of targets between TIA and the DST’. How could DST achieve anything when there was misalignment, could that be unpacked?

Mr Mjwara responded that DST had not paid particular attention. DST had targets in DST and TIA had theirs and they were not aligned. It had now been agreed that targets had to be done in consultation with TIA. It was part of a learning exercise.

The Chairperson asked the DG for his input on transformation.

Dr Mjwara suggested that DST bring the staff information received from entities in terms of what was happening within the institutions, and also the number of students that they were training. The directive from the Minister was in terms of the allocation of bursaries and how that could be used for women as well as black students. The Department could come back with that information. In terms of the training of black students and women students the DST was not doing badly, the challenge was retaining them in the system.

Ms Dunjwa said the challenge for transformation was not only about human capital but its impact on the programme and to the broader society.

National Advisory Council on Innovation (NACI) Annual Report 2012/13
Dr Steve Lennon (Board Chairman) briefed the Committee. He was accompanied by Mr Thulani Mavuso (Acting CEO), Mr Geoff Rothschild (Councillor), Mr Mozipho Buthelezi (Chief Policy specialist), and Dr Ntsane Moleleke (Senior Specialist).

The Chairperson said the Committee expected the Chair, the CEO and the CFO.

Dr Lennon explained that NACI finances were managed through the DST so Mr Mavuso, who was also Chief Operating Officer for the DST, would talk to the finances.

Some of the key objectives as set out in NACI Annual Performance Plan were:

- Engagement with the Minister on the implications of the Science and Technology Laws Amendment Act 2011 and recommendations of NACI Review Panels for NACI.
- Engagement with the Minister on key issues to be addressed during 2012/13.
- Establishment of project teams – in terms of section 8(4) of the NACI Act, with defined objectives and outcomes around identified key issues.
- Initiation of partnerships with policy researchers at universities and science councils.
- Co-funding the establishment of a research chair or centre of excellence in innovation policy development. NACI engaged with the NRF in terms of the establishment of the research chair.
- Establishment of a central database of innovation knowledge (the national repository for data).

The Council was appointed by Cabinet to advise the Minister of Science and Technology and was supported by an Executive Committee and a Secretariat. Previously NACI had a small grouping of sub committees that was changed to Expert Panels/Project Teams and the areas focused on were:
• Gender Mainstreaming in STI
• Skills in Mathematics, Science and Technology
• Infrastructure for Research and Innovation
• Innovation for Economic Development and Social Upliftment
• Monitoring
• Evaluation and Indicators
• Development of a National Innovation Framework
The teams were headed by a Councillor and supported by a secretariat made up of experts from the Higher Education Sector and the private sector.

The Council complemented the activities of those project teams with strategic engagements throughout the economy, and found that those strategic engagements were invaluable in getting information and during the last year had numerous workshops, seminars and conferences. Engagements varied from engagements on the National Development Plan (NDP), through to a workshop with the Minister on Gender Policy Framework, several sessions with the previous Minister as well as with the current Minister, and various interventions on the Women Empowerment and Gender Equality Bill; and biotechnology workshops.

Key Outputs
Monitoring, Evaluation and Indicators: the Council worked very closely with the DST as well as the South African Academy of Science in assessing the indicator system, the basis for measuring performance in science, technology and innovation (STI), with a view to the establishment of a national Innovation Portal. The work was expected to be concluded in the next few months in partnership with the Academy of Science and one of the outputs anticipated was recommendations between NACI, the Academy of Science of South Africa (ASSAF) and the DST on what indicators should be used to measure the system, and who should be responsible for those indicators.

The Chairperson asked when that project would be completed?

Dr Lennon responded within the next two to three months. The final report had been received from the Academy of Science; the Council was translating that into specific recommendations.

NACI produced an annual South African S&T Indicators’ publication, the latest version would only be finalised by the end of the current financial year.

Development of a National lnnovation Framework: A Draft National Innovation Framework was developed. This work was presented at Minister’s Research and Innovation Summit. The Innovation Framework was an analysis of the South African National System of Innovation and what was required to support the aspirations of the NDP and what needed to be done differently to achieve that. The work would soon be published.

Areas unpacked as part of the National lnnovation Framework dealt with skills, creation of an enabling investment environment, creation of an inclusive innovation platform because innovation and science and technology were often seen as very exclusive and exclusionary. There was a need to be able to demonstrate to all South Africans that they were capable of innovations and could pursue careers and entrepreneurial development opportunities in the sciences as well.

The innovation infrastructure that supported the national science system and flagship projects such as the SKA, the need for champions and role models and, in particular, transformation in the national innovation system, the need for appropriate advisory structures, measures and indicators, and the institutional structure, which ensured alignment across government and society as a whole.

Infrastructure for Research Development and Innovation: Some time ago NACI did work on infrastructure for Research, Development and Innovation and came out with recommendations relating to the support of the innovation infrastructure that was now in practice in the DST with the support of major infrastructure, major equipment, and major maintenance of existing infrastructure. This was an update of that work and would be concluded within the next few months, with an update on recommendations on progress on the support infrastructure and what needed to be done differently, especially in the context of the Innovation Framework.

Strengthening Skills for Mathematics, Science and Technology: NACI had been very active in this area and in the last year continued with a lot more focus, and focusing on identifying a few key interventions in terms of skills. Advice was informed by NACI interactions with the private sector in coming up with recommendations. Areas looked at were:
- The need for an integrated information system to provide data for skills in the country;
- The demand for skills and the matching of demand and supply, in particular the feedback from industry was that the system was not generating the skills that industry was looking for and there was a greater requirement for more effective FET Colleges.
- A requirement to revisit the SETA model to ensure optimal functioning of those institutions, especially meeting the supply and demand with a focus on artisan level and technician type skills.
- The scaling up of PhD production; and
- Coordination between DHET and DST in funding higher education.

NACI believed that this was an area that required constant attention and better coordination across government and alignment with national priorities.

Bioeconomy Policies and Strategies: The team worked on:
- Bio-prospecting South Africa’s biodiversity.
- Genomic sovereignty in South Africa. South Africa did not have legislation to protect our DNA, our plant species and human DNA. This was brought to the attention of the Minister of Science and Technology and would soon be addressed.
- Intellectual property n the context of biotechnology.
- Basic research and biotechnology incentives.
- The implications of the GMO Act and, in particular, the process followed in the approval of exercises, research, and so dealt with Genetically Modified Organisms.
- Biotechnology and food security.
- Bioethics in research.
- Inputs into the DST Bioeconomy Strategy, which in this year was in the form of an analysis of all legislation in South Africa relating to biotechnology and whether that was an enabler or a disabler of the Bioeconomy strategy, and there NACI suggested that the Minister of Science and Technology met with the Ministers of Health, Trade and Industry, and Agriculture, to ensure that the legislative environment was alignment with the Bioeconomy strategy because NACI believed that the Bioeconomy was an area of great competitive advantage for South Africa.

Gender mainstreaming: Gender mainstreaming was a priority in NACI. The intention was to ensure that in everything that NACI did it considered the role of gender and the role of transformation in the recommendations that it made. The Council produced a document that summarised best practice for technical women in the workplace, and NACI had policy input in the strive for gender equality policy.

The same applied to innovation. In the last year NACI looked at models on social innovation and how those could be amplified, replicated and scaled. That work was still in the process of being finalised.

International Benchmarking South Africa’s National System of Innovation
In considering South Africa’s position in the BRICS nations in terms of the Global Innovation Index, or the Knowledge Economy Index, or the Global Competitiveness Index, in all three of them in recent times South Africa sat in the middle of the BRICS nations. According to the indices, it seemed South Africa was on the right track, but the question was whether they were made up correctly. NACI found that increasingly the indices were not a true reflection. When working on indicators, the question was what were the indicators that would truly position South Africa competitively. It may be an indicator as to how many flagships it had, its reputation as a technology investment destination. That was still work in progress. NACI believed that South Africa needed to develop capacity to have input as to how the indices were put together and need to be shapers of the indices instead of just accepting them. The Secretariat had been doing a lot of work on that.

- South Africa was doing well on the input indicators but not sure what it meant for the output indicators. The South African innovation model appeared to be non-linear.

- The country made good progress on the current R&D capacity. The capacity to support investment for research was looking very promising. NACI saw considerable progress being made in the private sector although the Council was still concerned about the technology balance of payments.

- South African technological progress was improving the quality of life and wealth creation.

- Significant progress needed to be made on human capital development, particularly the development of innovation and entrepreneurial skills right through the education system.

- Information and communication system infrastructure was very important in supporting projects such as the SKA and large data intensive projects that NACI believed were going to become more important to South Africa in the future.

- Non-Science and Technology based innovation, social innovation, and entrepreneurial innovation. South Africa was making progress, innovation was pervasive in the NDP.

- The transition to an innovation driven economy would be effected by cooperation among science councils, universities, SMMEs, state owned enterprises, large firms, venture capitalists and the government.

- NACI’s existence confirmed the continued existence of the innovation-chasm. One of the big gaps was that South Africa was not generally seen as an investment destination for technology intensive businesses and that should be changed. NACI had made recommendations around the establishment of a technology index on the Johannesburg Stock Exchange, and made recommendations around venture capital, risk capital, in South Africa, and NACI would continue working in that space.

The NACI Secretariat was a major resource of senior specialists with great skills that had been built up over the years and increasingly as the Council moved towards technical teams, the Secretariat was doing a lot of the technical work as opposed to that work being outsourced to consultants. It worked under an Acting Chief Executive and because of uncertainty around NACI’s future, it had not been able to replace that CEO.

Financial Report
Almost R3 million was underspent. A portion of that was due to the fact that NACI was not paying the Acting CEO, who was Acting by courtesy of the DST.

R3 million was also underspent on goods and services. NACI was able to do a lot more of the technical work in-house in the Secretariat as opposed to using external consultants, and the project teams did a lot of work at rates much lower than consultants. NACI was able to achieve its objectives at considerable lower cost.

The Chairperson suggested that such savings be directed to the PhD project.

Dr Lennon replied that that did happen to a certain extent.

Way forward
The term of the current NACI Council was extended by just over a year and would end about the middle of next year, or sooner should the Minister choose to appoint an alternative council before then. The focus for the final stages of the current Council was to finish off the work presented to the Committee. The focus for the next six months was on giving advice to the Minister and then following up with the DST around implementation.

On the appointment of the new council, Dr Lennon referred to the recommendations of the Ministerial Review Council that spoke about a different advisory structure. NACI had given advice as its potential role in the proposed Ministerial Council or the Office for Research and Innovation Policy, saying that neither of those was a perfect fit for NACI. NACI felt that there was a need for optimisation in the advisory space regarding innovation.

Looking at the advice NACI had been working on in the last couple of years, it was not only advice given to the Minister of Science and Technology but a lot of that advice was far broader than the Minister of Science and Technology. The Council had been engaging as to how NACI’s advice could be more effective, how it could partner with entities such as the South African Academy of Science, was there a possibility for NACI to optimise the incredible skills and experience it had, and the reach of a body such as the Academy of Science becoming a lot more effective. A small working group had been put together to look at that and would be advising the Minister on that within the next few weeks.

When NACI presented to the Committee next year it would be a different NACI and hopefully a lot more effective and influential.

Dr Lennon thanked Mr Mavuso and the Secretariat, all of whom were busy people, for the support given and time dedicated to NACI, it was much appreciated and a resource that had to be looked after.

The Chairperson suggested that NACI and ASSAF should be working together. It had always been a concern of the Committee that the two entities were duplicating work.

Dr Lennon assured the Committee that in all the work NACI did over the last two years, it had worked closely with ASSAF and DST and had started a process of joint planning. ASSAF was involved in the work done on the National Innovation Framework and the work done on indicators, and was doing some of that work. ASSAF was also represented on all NACI committees.

Discussion
Ms Dunjwa said it was a good presentation but she had expected more. She asked whether Mr Mavuso’s assistance to NACI was on a voluntary basis?

The Chairperson explained that Mr Mavuso was acting because NACI did not currently have a CEO.

Dr Lennon added that Mr Mavuso and himself had managed the situation very carefully to maintain the independence of NACI and he recognised Mr Mavuso was put in a very difficult situation. Attempts were made to appoint an outside person on contract but it was very difficult at that level of contract to find someone for a short period.

Ms Dunjwa noted Dr Lennon saying that the next board would advise and do what it was supposed to do, did that imply some weakness in the current NACI?

Dr Lennon responded that the reach of NACI beyond science and technology and as recommended in the Ministerial Review was as an innovation advisory function of Cabinet as a whole. He anticipated that if the resources of NACI and the Academy of Science were combined it would be a much more scientific base than NACI currently had, and would have a lot more independence, which came from the Academy, the Academy being a completely independent body in terms of processes and appointment of members. In discussions with the Minister of Science and Technology, the Ministry would be creating a vehicle that other ministers would be comfortable to approach for advice.

Dr Kloppers-Lourens commented on reference to coordination between DHET and DST in funding higher education. Basic Education should be included in that.

Dr Lennon agreed. There was a need to look at how to promote entrepreneurial capability right from day one in the education system and right through the education system. Science and Technology and Innovation were often seen as an exclusive domain. It needed to be shown that all South Africans could innovate and NACI would like to see a body like TIA creating an open innovation platform to provide an opportunity for all South Africans to put their ideas forward to be developed into commercial ventures or to social improvement.

Dr Kloppers-Lourens referred to benchmarking and asked for clarification of China compared to South Africa.

Dr Lennon said it was very interesting, one could see in the Global Competitiveness Index and the Global Innovation Index that China rated high. However, in the Knowledge Economy Index relatively it was low and India in most recent years was right at the back, which almost seemed to be counter intuitive. The high rating of China in the Global Innovation Index and the Global Competitive Index, if looking in terms of quantum investment in R&D, had huge numbers but when divided by population numbers, it became a small number. China and India were relatively low in the Knowledge Economy Index if looked at on a per capita basis versdus the absolute numbers reflected in the other two. There was an entire science behind analysing such indices and it did inform investors and did not inform the views of our country.

Dr Kloppers-Lourens asked Dr Lennon to elaborate on the statement ‘sometimes the advice was far broader’.

Dr Lennon gave an example of the work NACI did in terms of gender mainstreaming. Over the years NACI looked at constraints to the development of women careers in science and engineering technology and mathematics, and one could argue that those constraints were common across the board, but there were certain elements particular to that industry, such as re-entry strategies when working in a highly technical space and a woman took off a year or two. To try and re-enter that technical space could be very difficult. NACI did a survey of industry and asked what worked, and ASSAF had developed a best practice guideline. That best practice guideline needed to be tabled into the Departments of Trade and Industry and Labour about what should apply across the nation and all systems of government.

Dr Kloppers-Lourens asked if NACI had a database comprising of full records of policy advice given to the Minister that also stated what advice was implemented or adopted, and what advice was rejected and why.

Dr Lennon responded that NACI had a database of all advice given; it failed in terms of feedback, particularly from the DST. Some years, feedback from DST was that all advice had been accepted and advice implemented, and other years no feedback was given at all, which NACI interpreted as none of the advice being implemented. Part of that was there was no formal process in place to move the advice from the Minister’s Office to DST. NACI was focusing on much higher levels of achievement and implementation of advice.

Ms Mocumi appealed for the report to be clear and specific. The reports were public documents and information should be clearly specified.

Dr Lennon responded that NACI had an Annual Performance Plan with specific indicators and very specific deadlines. NACI would achieve all goals in that Annual Performance Plan this year so it was not covered in the report. In future reports would be similar to the format that DST had used.

The Chairperson asked what advice NACI gave the Minister on what the Ministry should adopt on the controversial issue of Genetically Modified Organisms (GMO) policies for the country?

Dr Lennon responded that a big focus on that had been on the approval process for proposals on pilots. NACI looked at the proposed Soya bean trial in South Africa. Our processes were exceptionally slow and as a result the project moved out of South Africa and went to Kenya. NACI’s view was that Genetically Modified Organisms had a very important role to play in the future of all nations. In the work done on biotechnology and food security there were enormous opportunities there. South Africa had a good technical base and a good research base and great businesses in the biotechnology area and NACI believed that a lot more could be done with it. NACI also believed that the GMO Act could be revised to be more friendly to exploiting this opportunity for the country. The GMO Act related to Department of Health and Department of Agriculture, and at this stage such things as where the genomic sovereignty should be, were uncertain. NACI could go through the details of that advice should the Committee be interested.

The Chairperson said he was very interested in that because there was a joint sitting with Department of Health and Department of Agriculture on those issues.

Dr Lennon said there was a lot of detail around that which he was prepared to share. The Minister of Science and Technology had indicated that she would like to set up a meeting with the Ministers of Health and of Agriculture to discuss those issues further and NACI would be presenting at that meeting.

The Chairperson asked what was the advice of NACI in terms of Bioeconomy strategy and Indigenous Knowledge System (IKS) strategy, because they seemed to be interrelated.

Dr Lennon responded that there was a whole suite of advice on the Bioeconomy strategy that looked at GMO issues, intellectual property, and the enabling environment for small businesses. It was an enormous body of work and that body of work would be taken to the Ministers of Health, Environmental Affairs and Trade and Industry, with a view to creating the right enabling environment for the Bioeconomy. He could provide the Committee with a summary of that and the main areas requiring attention, after the meeting.

The Chairperson was interested in advice in terms of interacting with the Bioeconomy strategy and with the Indigenous Knowledge strategy.

Dr Lennon said NACI would have to come back on that. One of the areas looked at was medicines and related substances. He suggested coming back to the Committee on that.

The Chairperson said he had attended an international Bioeconomy convention and found that a lot of the issues were taken for granted. He dedicated his budget speech on the Bioeconomy and IKS, which must be centrally driven by the Minister of Science and Technology.

The Chairperson asked what was the advice of NACI on the PhD project?

Dr Lennon responded that the views of NACI were very similar to those of the DST; it was a great initiative. NACI looked very carefully at the report ASSAF put together on PhDs and looked at what the limitations were to black South Africans pursuing PhDs. It largely boiled down to the incentives and finance available, and the pressure on graduates to go out and start working straight away and how to change that. NACI had looked at the possibility of PhDs in the workplace, which all universities should cater for but were generally not very supportive; they preferred having the PhD students in the academic space. It was important to have a pipeline of PhDs throughout the Higher Education system. If the input could be changed, the output could be changed. NACI also emphasised the importance not only of PhD students but the supervisory system in Higher Education. A lot of the capacity in Higher Education was being done with very high-level teaching, there was the aging face of academics and the ability to continue the mentoring and supervising of PhD students, alongside the need to encourage more post doctoral students.

The Chairperson commented on the Local Competitive Index vs the International Competitive Index. While he recommended developing local standards, they should be of international acceptance or merit. The output indicators may be different because South Africa was a developing economy and at that level would have different indicators but the local ones should be of international orientation. How did NACI think it would be able to develop local indicators?

Dr Lennon agreed. The question was how to do that. One of the NACI Councillors who was a highly reputable economist and was very good at indicators, headed the project team and should be able to come up with something that was both locally and internationally relevant.

The reason South Africa needed indicators to be used in South Africa was that it needed to be better at the cause and effect.

The Chairperson referred to the Innovation Council and asked how NACI advised the Minister in terms of the TIA.

Dr Lennon responded that NACI did have input to the TIA Review, and he had recently been appointed to the TIA Board. When work was done on the innovation chasm it became very clear that there was a lot of venture capital available in South Africa. Private institutions had it, the IDC had it, the Development Bank of South Africa had it, and many other institutions, but they were very conservative and did not have a very high-risk appetite, which was where the Technology Innovation Agency should be playing a role. The weakness in the system was the ability to develop proposals and business plans, which was a role that TIA could play. TIA had huge funds that provided opportunity for young entrepreneurs to develop business plans and then take those to the venture capitalists for funding. NACI believed it needed to change the investment mindset of South Africans to accept a portion of every portfolio as true risk capital.

Ms Mocumi referred to the section in the Annual Report under Policy Thrust No 7: Gender mainstreaming. The Council attracted women in science, engineering and technology, as well as the challenges women faced. She asked what efforts the Council made in progress regarding disabled people in science, engineering and technology as well as the challenges the sector faced. During the period under review NACI completed research into the Women’s Empowerment Gender Equality Bill, what research had the Council conducted for disabled people? They also had capacity to contribute to the economy of the country.

Dr Lennon responded that that was a very good point; NACI had not addressed the issue of the disabled in the innovation space. That was an area that needed to be addressed.

The Chairperson suggested another area in terms of funding, especially in the development of TIA related projects, saying the Committee visited the European Union that had a lot of funding for absolutely anything in terms of innovation. International collaboration was another that was virtually untapped. That was the advice he would have expected NACI to provde the Minister where money was dormant and not being utilised.

Dr Lennon responded that had been identified as an opportunity for DST to take forward. There were great opportunities for South Africa to tap into international funding, particularly as it related to the development of projects such as SKA that highlighted such opportunities.

Dr Kloppers-Lourens asked Dr Lennon to keep the Committee posted on Eskom’s competition for young entrepreneurs. She was interested in feedback io what they were doing.

Dr Lennon agreed to that. It was something that happened throughout the country from June to August in 30 different regions every year, with the national finals in Johannesburg in October. He undertook to pass the information on.

The Chairperson thanked NACI for the presentation and responses and for advising the Committee where NACI was in terms of advising the Minister and Cabinet. Members had raised issues on what NACI could do in future to address some of the concerns of the Committee as public representatives, and asked NACI to take into consideration what had been shared in the meeting.

South African National Space Agency (SANSA) Annual Report 2012/13
Mr Maurice Magugumela (Board Chairman) led the delegation from SANSA. Dr Sandile Malinga, SANSA CEO, briefed the Committee, saying the establishment of SANSA was a three-year phase process that started in 2010 with the establishment phase, moving to the second phase: foundational operating phase, and Phase 3: the full operating phase of SANSA, which was the year under review.

SANSA’s mission was to deliver space-related services and products to South Africa and the region; guide and conduct research and development in space science and engineering and the practical application of the innovations they generated; stimulate interest in science and develop human capacity in space science and technologies in South Africa; create an environment that promoted industrial development; and nurture space related partnerships to enhance South Africa’s standing in the community of nation.

The DST had approved the appointment of an additional five members to the SANSA Board, and those had been appointed.

Performance focus
What SANSA did was informed by the fact that the global population was growing; it was currently standing at 7.2 billion and was forecast to grow to 9.6 billion by 2050, which posed a number of challenges. Currently the demands on our earth system would require one and a half earths and by 2050 would require three earths. For the earth to replenish itself required one and a half years. That required us to change the way we did things. We needed a different path and in order to do that SANSA contributed through its Natural Resource Management and Monitoring, through improved learning, through sustainable development, through disaster management and many other applications and decision making resources and tools that could be provided through a true Space system.

National challenges:
- Too few people were employed
- Poor quality of school education for black people
- Infrastructure was poorly located, inadequate and under-maintained
- Spatial divides hobbled inclusive development
- The economy was unsustainably resource intensive
- The public health system could not meet demand or sustain quality
- Corruption levels were high
- South Africa remained a divided society.

SANSA could contribute to four of those:
• Infrastructure poorly located and inadequate and under-maintained: Through space our roads and bridges could be maintained, our dams, our high polluting infrastructure such as the power stations being developed, could be monitored through space. The President had tasked the DST to explore that possibility.
• Spatial divides hobbled inclusive development: Through improved spatial planning, urban development, and rural development.
• Economy unstable and resource intensive: Through space that could be improved through knowledge creation as well as more efficient and sustainable national natural resource management.
• Public service uneven and often of poor quality: SANSA provided services to municipalities.

SANSA received an unqualified audit opinion with matters of emphasis on performance information: predetermined objectives

Organisational priorities and implementation:
Five organisational priorities identified were: addressing societal needs; creating new knowledge, technologies and innovation; creating capacity and transforming society; growing the South African industry; and making South Africa a global player. Implementation vehicles were the Earth Observation Programme, the Space Science Programme, Space Operations Programme, Space Engineering Programme, and Corporate Support Programme.

Priority 1: Addressing Societal Needs
Key projects were data acquisition, archiving and distribution, both in terms of science data acquired as well as satellite imagery acquired, distributed and archived; flood monitoring assistance; human settlement monitoring; and space weather services.

- About 17 000 satellite images acquired and about 165 000 distributed to government, R&D institutions and Higher Education Institutions, to assist in decision making, policy, as well as for natural resource management, for agriculture, human settlements monitoring and service delivery processes,

- SANSA had developed a flood monitoring tool that was used in Limpopo and Mozambique.

- Human settlement database tool to address Cabinet’s 45 priority municipalities, 35 municipalities were captured in seven of the nine provinces.

- A number of space weather products were developed, used for navigation, for communication, by Eskom for monitoring geomagnetically induced current that may cause damage to transformers and impede the continued supply of electricity, including an SMS warning service.

Priority 2: Creating new knowledge, technologies and innovation
Key projects were creating a comprehensive research infrastructure, looking at developing instrumentation and a wide network, extending over our mainland, the neighbouring islands, and as far south as Antarctica. Conducting cutting-edge research in soil physics, Geophysics and Geomagnetic physics; and SANSA continued to develop software tools and algorithms for us to benefit on the resources the nation had.

Priority 3: Creating human capacity and transforming society
Key projects included student training; staff training initiatives; and school outreach programmes:
- 48 students/interns were supported
- 10 SANSA supported students graduated from the University of KwaZulu-Natal, University of Fort Hare and Rhodes University
- 18 universities received Fundisa discs, which were discs that contained satellite imagery, SANSA processing tools, and were used for research at universities in our country
- 27 university campuses visited and over 1360 students reach during road shows (led to a 44% increase in bursary allocations)
- Through science centres and facilities engaged with 6500 learners and 205 educators
- About 33 staff members trained through formal programmes (22% of staff).

SANSA skills profile included 76% previously disadvantaged individuals, 39% females and 2.3% disabled persons.

Employment equity stood at 51%, 39% white, 6% Coloured and 4% Indians.

SANSA was a high skills entity in terms of people with diplomas, Bachelors, Bachelors (Hons), Masters or Doctorate. The challenge was the job market was very competitive and SANSA needed to be on top in terms of how to compensate them and how to keep them, taking into account reduced budgets.

Priority 4: Growing the South African Space Industry
Key projects were the development of new technologies, the provision of technical services, consolidation of the Space industry, and the development of the EO-Sat1 as announced by the Minister in Parliament earlier this year.

- Developed, together with Witwatersrand University, a unique type of satellite propulsion system called Vacuum Arc Thruster, which could be used in future satellites that South Africa developed.

- Provision of compass swing services for the South African Air Force for navigation purposes

- Demagnetisation of SA Navy ships, including submarines

- Installation of Superconducting Quantum Interference Device (SQUID) that could be used for seismic operations

- Three trials for the Satellite Based Augmentation System (SBAS) that looked at, for example, improving Tracker for more refined tracking of road stock (trucks) and other assets of that nature; and another trial looking at possible precision, and monitoring natural resources in the Kruger Park.

- Continued working on resolving SunSpace issues. That had been concluded, the individuals employed on SunSpace were redeployed to Denel Space Tech

- The process of developing the next satellite announced by the Minister was progressing well and was currently in the definition phase of the satellite with key decisions that had to be taken in the next few weeks and months to make some choices that would allow SANSA to move forward.

Priority 5: Making South Africa a Global Player
Key projects included the provision of international commercial services, and contribution to global partnerships.

- 10 In-orbit-tests were done and 22 satellite launch activities generating R45 million in revenue (22% of SANSA’s total revenue)

- Participated in about ten multinational projects

- Participated in multinational forums

- Presented at 14 international conferences

Performance against set targets
The Agency had 43 targets referred to it by the Board, of which 39 were achieved (91% success rate).
- Goals 1, 2 and 5 were fully achieved.
- Goal 3 (Human Capital) 86% achieved due to recruitment challenges faced within the operation technicians environment and engagement with educators resulted in 86% achievement of this goal.
- Goal 4 (globally competitive national space industry): Achieved at 67% due to the fact that external (commercial) contract income remained unchanged while other income stream(s) increased year-on-year.

Financial performance
Total assets for 2013: R214 million, liabilities: R56 million.
Unspent conditional grants of R24 million involved commitments made and money either spent since 31 March or would soon be spent.
Net assets R157.6 million

Total revenue: R207.2 million
Expenditure: R176.7 million

Surplus for 2012/13 R30.4 million, which should be understood in terms of Capital Expenditure as well as committed to contracts that at the time were still work in progress.

The parliamentary allocation and government allocation year-on-year increased by .3%, contract revenue year-on-year increased 28%. The parliamentary allocation was 62% of SANSA’s income, a decrease from the previous year’s 68%. Contract income increased from 30% to 35% year-on-year.

Sources of income:
Parliamentary Grant 51%
Contracts: International entities 22%
Contracts: Public entities 13%
Ring fenced transfers 9%
Interest and other income 3%
Research grants 2%

Expenditure:
Employee related costs: R52.7 million (32%)
Operating expenditure: R114 million (57%)
Capital Expenditure: R32 million (12%)
Total Expenditure R209 million (100%)

Programme Expenditure:
Earth Observation Services: R57 million (27%)
Space Operations: R57.7 million (28%)
Space Science: R37.8 million (18%)
Satellite Capability: R17.8 million (9%)
Corporate Office: R38 million (18%)

Audit and compliance matters
SANSA had received an unqualified audit opinion with matters of emphasis on performance information: predetermined objectives as measurability of some objectives not clear and some of the performance outputs could not be independently verified.

Remedial steps were taken, findings received this year could not be resolved this year but would be rectified in the Annaul Performance Plan for 2014/15. SANSA was working very closely with the DST on the Performance Information Management System (PIMS) and were adopting that system for reporting going forward. SANSA ensured tolerable levels of risk and compliance to all legislation.

Challenges
- Delayed resolution of SunSpace matters, but that issue had been resolved
- Erosion of space engineering capability, people moved to other entities
- Fragmented space industry
- Skills shortages in scarce skills areas
- SANSA was sub-critically staffed, there were problems when people left. Currently the vacancy rate was 19% due to constrained resources.
- Competitive employee market
- Limited base funding.

Future view:
- The recent fund allocation (total of R372 million over the MTEF) for satellite development was welcomed and offered great opportunity
- Full rollout of EO-Sat1 development now that the SunSpace issue was resolved
- Facilitating the development of a competitive national satellite industry cluster with the DTI and TIA
- Final approval of the National Space Programme (NSP) plan and its phased implementation
- More focused stakeholder engagement and mandated coordination role and better role clarity
- Expanding Human Capital Development (HCD) by increasing collaborative networks with R&D institutions and universities.

Discussion
The Chairperson said in terms of the appeal for funding, the Committee was shortly formulating its Budget Review and Recommendations Report (BRRR), which allowed Parliament to influence money bills. He would like a workshop early next year to discuss the needs of the various entities of DST so that those needs could be incorporated into the BRRR recommendations and see how it could influence Treasury. SANSA would need to come with a concrete reasonable motivation that would appeal to Treasury. Clean financial reports were also needed for such an appeal. SANSA must try to improve on its audit report that had findings; there must be no findings in order to qualify for budgetary adjustments.

Dr Malinga responded that SANSA was delighted and encouraged by that. Looking at the focus for the next three years, the allocations received projected an increase in terms of SANSA’s base funding of 2% going forward, which had a number of implications. Salary increases nationally were around 6% so taking that conservative increase in terms of staff salaries, the shortfall going forward for the next three years was about 4%. Something would have to be cut, either Capex or operational expenses, and that put a strain on the system and therefore the need to increase the base funding was important.

Government had set a target to increase SANSA’s expenditure on R&D to at least 1%, SANSA came very close to that but had regressed since then. Therefore a decision had to be taken to invest in R&D so any efforts to increase SANSA’s funding would be welcomed. That would be supported by proper control of resources and receiving a clean audit.

Ms Dunjwa would have liked to hear more on community involvement and the impact in day-to-day life. Communities were fighting with government; they wanted to occupy every piece of land. How could SANSA assist in getting communities to understand not to build on wetlands and other unsuitable areas? How could SANSA get communities to understand that every ill was not because government was corrupt. How could SANSA assist people to understand that, among other things, government had an ailing infrastructure because of the increase in population?

Dr Malinga responded that SANSA ran open days where, in addition to educators and learners coming to its facilities, SANSA also engaged with the general public. SANSA ran a number of public lectures aimed at informing the general public on science matters such as global warming, sustaining the environment, the effects of space work and how it affected communications, and many other things. SANSA tried to increase the scientific literacy of our population, to make the general population aware of scientific things and to take government and Parliament to task about some of the decisions taken for our country.

Ms Dunjwa referred to the Auditor General’s report on page 79 of the Annual Report on programme performance. A total of 22% of indicators were not well defined and verified because unambiguous data definitions were not available to allow for data to be collected consistently. On the same page it said management did not exercise oversight responsibility regarding performance reporting and compliance and related internal controls. How confident could the Committee be when there was that shortcoming in leadership? That responsibility was twofold, governance of the institution and governance of the Board.

Dr Malinga responded that SANSA was not trying to hide anything, or to belittle anything. The Auditor General looked at two key matters: how SANSA handled the resources and finances it had been tasked with, and to look at whether SANSA performed against the predetermined objectives. Government took a decision to ensure that there was service delivery and compliance with what an entity planned to deliver. The Auditor General did not use the issue of reporting on predetermined objectives to express an opinion. That did not mean that SANSA was not paying attention to those, however it was still a challenge to define the goals to be SMART. It was not that SANSA had total disregard, it was doing all it could, and SANSA was doing all it could going forward to ensure performance on predetermined objectives was reported using SMART indicators.

Ms Dunjwa noted the report mentioned seven of the nine provinces but did not say which provinces. Which municipalities used SANSA and were able to show results?

Dr Malinga apologised saying he did not know the names of the two provinces that SANSA did not see. The biggest project embarked on was in the North West municipalities. Dr Malinga saw a letter from the province indicating that they had improved their audit opinion based on the use of satellites.

Ms Mocumi referred to the Annual Report. She was aware that a workshop was attended around December last year but the Agency indicated that it had not fully developed an Employee Assistance Programme. She believed that such a programme was imperative in the workplace. Why did the Agency not develop that programme, and when did it intend having it in place and fully functional?

Dr Malinga responded that the report said that SANSA had not developed an Employee Assistance Plan, but was pursuing a number of initiatives. The Agency ran Employee Wellness on issues that related to high blood pressure, diabetes, AIDS testing, and wellness in general. SANSA had plans on how to counsel and assist people, which was something it did not have and needed to prioritise. SANSA was performing in a very competitive marketplace and it was not just about pay, it was about whether people were happy. There was a need to improve the environment, things such as a cafeteria made a lot of difference to employees. That required resources.

Ms Mocumi referred to employment equity profiles by occupational category, which had a total of 155. She assumed that employment equity differed from the skills profile in the presentation. How many of those 155 individuals were disabled people?

Dr Malinga said that there were about four disabled people.

Ms Mocumi referred to the skills profile with disabled at 2.3%. At what level were those disabled people?

Dr Malinga undertook to come back with that information.

Ms Mocumi went back to the issue of leadership, that management did not exercise responsibility regarding performance and reporting and compliance with regard to internal controls. Why did management abdicate their responsibility, and what would be done to remedy that situation?

Dr Malinga said they were doing the best they could.

Dr Kloppers-Lourens referred to the school outreach programme. Reference was made to festivals and running programmes in order to reach more educators. What programmes did SANSA have for educators? Were these educators at a Higher Education or Basic Education level?

Dr Malinga responded that the educators that SANSA engaged with at science programmes, Sasol Space and such would be Basic Education from the lower grades up to matric. A number of festivals were run around the country, the largest being at Grahamstown, which ran for almost a week with a number of presentations by both local scientists as well as international speakers who addressed topics, including space and global change and environmental monitoring, with a display of exhibits. That was largely at Basic Education level. Teachers were largely at basic education level. SANSA ran Educator Workshops on how to incorporate space into the curriculum.

Dr Kloppers-Lourens noted that Dr Malinga had said about its skills profile that its 39% females representation was a bit low. Why was it so low and what was the Agency going to do about that?

Dr Malinga said there was no justification for that. A number of programmes were run, together with DST – Women in Science initiatives, and role model initiatives where SANSA’s female scientists went to a number of centres, but SANSA could do more.

Dr Kloppers-Lourens asked what was SANSA’s role in SunSpace that was now Denel Space Tech?

Dr Malinga explained that Space Tech was a Denel entity that reported to the Denel Board. The link between SANSA and Space Tech was through memorandums of agreement that SANSA signed about partnership for contracting for specific projects embarked on. SANSA was the custodian of the Space programmes so could influence the direction in which the space programme was directed and implemented.

Dr Kloppers-Lourens noted that R12 million was spent on the SunSpace transition, and another amount of R55 million was also involved. The whole evaluation of the project was worth ten times more, why then did it receive only one tenth of the worth of that entity?

Dr Malinga said that the R12 million was to keep them going before the process was concluded. During that period they did a number of projects, including the design of the satellite, and including learning from the satellite launch. As for one tenth of the worth of the entity, that was a very subjective matter. One opinion was R1 and another half a billion Rand. Intellectual property specialists had looked at different ways of evaluating it and ended up with a range between R50 million and R100 million. DST settled on R55 million, which excluded an incentive of R25 million to keep their employees locked in for two years going forward.

Dr Kloppers-Lourens noted that very little was mentioned about the ARNC Project, what progress was made with that project. Had Algeria already ordered its satellite from us now that SunSpace was with Denel Space Tech?

Dr Malinga responded that in SANSA’s discussion with DST the Agency referred to the satellite ZAR&C1. The Department felt that the allocation that was coming from Global Competitiveness funding was not guaranteed over the full spectrum of the development cycle so for SANSA to go public in such an odd manner might create challenges. The name was now EO-SaT 1, which was SANSA’s contribution to the ARNC project. On Algeria, in discussions with them around March this year there was still the intention to do so. A meeting was planned for May to take that forward but that meeting was to have taken place in Egypt but was cancelled before the uprisings in Egypt.

Dr Kloppers-Lourens asked what was meant by ‘delayed resolution’ of SunSpace matters under Challenges?

Dr Malinga clarified that raising the amount of funding required to carry it through was a challenge, and still was a challenge. Demands from SunSpace delayed matters, as well as other issues that meant that SANSA could have done things faster in some instances.

Dr Kloppers-Lourens noted the 19% vacancy rate due to constrained resources, how would SANSA solve that problem?

Dr Malinga said there were two issues, both resources and in some instances not getting the requisite skills. SANSA was sub-critically resourced and once someone left there was no pipeline of individuals that could be appointed in their place immediately.

The Chairperson added that entities used to say that the new Labour Relations Act bound the entity so had to be very careful who they employed, because once a person was employed it was difficult to get them out. It had been found that most of the vacancies were not due to lack of resources but because employers in the form of entities were being careful about whom they employed. That was a concern when one of government’s focuses was on employment creation.

Dr Malinga said SANSA fully understood government’s drive to move towards increasing employability of our people, SANSA currently stood at 155, including temporary staff. The space industry was not labour intensive. The current benchmark was for every engineer or high tech skill, there was a multiplier factor of 4. The engineer or high skilled person required the support of four.

The Chairperson said the satellite capability was with SunSpace. Now that SunSpace was no longer functioning properly, what was the position?

Dr Malinga indicated that partly the skills had eroded, some had moved to the SKA or another private company in Stellenbosch, the Space Advisory Company. The capacity was still in the country.

The Chairperson asked about the satellite capability.

Dr Malinga said currently a number of entities had the capability: Denel Space Tech, Space Advisory Company, the CSIR, and a number of private companies such as Telemet and Reutech. SANSA, together with the DTI, was looking at consolidation of who was driving the aerospace industry and were looking at partnering with those, together with TIA, to look at how to stimulate the space industry.

The Chairperson asked how SunSpace featured in Denel, because 80% of Denel was owned by Sweden?

Dr Malinga did not know who owned Denel.

Ms Mocumi asked where the vacancies existed and the impact of those on the functioning of the Agency?

Dr Malinga responded that the bulk of vacancies were in rare skills, professionals, whether scientists or managers, and where there would be a scientist who specialised in something, or an engineer who specialised in, for instance, monitoring data or hardware that SANSA operated. A better way of doing it, if there were resources, would be to have an understudy, but SANSA operated on what was absolutely required. The impact was huge. When someone resigned, it created a setback of a couple of months.

Ms Dunjwa asked that SANSA give a breakdown of the municipalities and Dr Malinga undertook to do so.

Ms Dunjwa asked from which schools those learners were. The Agency should concentrate on learners across the country.

Dr Malinga responded that the main focus was on the previously disadvantaged schools in the townships but there was no policy. SANSA did not focus on Grahamstown only, last weekend it was in Kimberley, Sasol Space Tech was in the north, and there was the Rand Easter Show. There was a wide range of festivals SANSA attended. It also had a mobile laboratory that went to the rural areas with screens or televisions. The reach was vast but SANSA tried to target the rural areas in the main.

Dr Kloppers-Lourens was told that SunSpace had 18 staff members. Was that sufficient for Denel to continue. More information was requested about the company in Stellenbosch.

Dr Malinga responded that 85% of employees were retained in the move. The company was Space Advisory Company, which was owned by one of the former directors of SunSpace and its composition was largely ex SunSpace employees.

Dr Kloppers-Lourens noted that during the Committee’s visit to Hermanus last year, she had referred to the two decisions and Dr Malinga’s comment was that taxpayers could not be expected to fund that whole SunSpace issue; but in fact the taxpayer did fund the whole SunSpace issue. She asked for comment.

Dr Malinga recalled what had been said then was that government should pay SunSpace, and SunSpace should remain a private company with government settling Sunspace’s liabilities. That was untenable. It could not be that government paid to settle debts that SunSpace had accumulated and SunSpace have continue to exist as if nothing had happened. That was not what happened. An amount of money was paid to settle whatever debts there were and to procure the R&D and the company was moved to a state company and was no longer in private hands.

The Chairperson thanked SANSA and said if it wished to be assisted through the BRRR recommendations it would need to work hard to convince the Auditor General that the Agency was ready to be supported. SANSA was moving in a positive direction. He reminded the Agency that the Public Protector had decided that by 2015 it could not be business as usual. When the Auditor General found that entities of government or provinces or municipalities had not performed there would have to be consequences.

Meeting adjourned.