Departments of Environmental Affairs & Mineral Resources on their 2014 Strategic Plans

NCOP Land Reform, Environment, Mineral Resources and Energy

14 July 2014
Chairperson: Mr O Sefako (ANC; North West)
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Meeting Summary

The Departments of Environmental Affairs (DEA) and Mineral Resources (DMR) presented their budget plans to the Select Committee on Land and Mineral Resources, with specific reference to only certain programmes, as per the request of the Select Committee. The DEA presentation had specific reference to Programme 3: Oceans and Coasts; Programme 4: Climate Change and Air Quality; Programme 5: Biodiversity and Conservation; and Programme 6: Environmental Programmes.

Due to time constraints, Members did not have time to ask questions. Some Members felt that their written questions should receive responses from the DEA before the Budget Vote debate on 22 July, as there would be no point in going to the debate without feedback from the DEA. The Chairperson said that the date of the next meeting with the DEA would be announced.

The DMR then presented its budget plan with respect to: Programme 2: Mine Health and Safety; Programme 3: Mineral Regulation; and Programme 4: Mineral Policy and Promotion. Members asked how far the processes were for the establishment of a state-owned mining company; what informed the formula for determination of targets; why there was an increased budget for specialised skills; why the Bojanala mining township had been prioritised for township revitalisation; what the DMR relationship was with the local municipalities; and how infrastructure compliance fitted with social responsibility.  

Members also asked if the jewellery project was the only beneficiation project; for clarity on non-financial support for small and medium enterprises; for clarity on the status of the Flag Boshielo water supply scheme to Mogalakwena, in terms of mining performance, job creation, economic growth and readiness; and how the Nylsvley Mine received prospecting rights in an area where mining was not permitted at all. Finally Members asked what compliance regulation was in place to ensure that when miners engaged with tribal communities, the risk of bribery and leadership side-lining the community was minimized.

Additional questions and responses from the two Departments would be submitted in writing.

The Select Committee adopted the minutes of the 11 July 2014 meeting.
 

Meeting report

Adoption of Minutes
While awaiting the arrival of the Department of Environmental Affairs, the Chairperson opened the meeting with the adoption of minutes of the meeting held on 11 July 2014.  After reviewing the minutes page by page, Mr A Singh (ANC, KwaZulu Natal) moved their adoption and was seconded by Ms B Masango (DA, Gauteng).

Mr J Parkies (ANC, Free State) asked the Chairperson to request that Departmental officials submit the relevant documents to the Committee Members at least five working days before the date of the meeting.

The Chairperson agreed, and said he would highlight the issue to all the departments.

Briefing by the Department of Environmental Affairs:
Strategic Plan and Annual Performance Plan, with specific reference to the budget allocations to: Programme 3: Oceans and Coasts; Programme 4: Climate Change and Air Quality; Programme 5: Biodiversity and Conservation’ Programme 6:  Environmental Programmes

Ms Nosipho Ngcaba, Director-General: DEA, introduced the mandate and outlined the seven DEA programmes.

Ms Limpho Makotoko, Chief Director: Business Performance, DEA, then presented an overview of the DEA vision and strategy.

Ms Esther Makau, Chief Financial Officer: DEA said that the total allocation for the DEA ending in March 2014 was R5.2 billion, and the total allocation for 2014/15, starting on 1 April 2014, was R5.7 billion.

Programme 3: Oceans and Coasts
Ms Makau continued presenting on the programme, which focused on Oceans and Coasts. The total allocation for the financial year currently under audit (2013/14) was R326 million, and the allocation for 2014/15 was R357 million. Spending priorities of the programme were Oceans and Coastal Risk Management, the SA Agulhas, the use of helicopters for loading on ships, monitoring and global change tracking by the forecast system, and research.

Mr Monde Mayekiso, Deputy Director-General: Oceans and Coasts, DEA, said that the Oceans Management Policy was approved by Cabinet on 4 December 2014 and legislation was expected to be completed by 2019. Cabinet had also approved the Ocean Economic Perspectives policy and had requested that the DEA coordinate with key departments the strategic plan to improve the contribution of oceans to the country's GDP.  A team in Durban called “The Laboratory” was speedily developing a strategic plan. The priority areas would be shared with the Committee if time allowed. R53 million had been allocated for the current financial year to support this activity.

The Benguela Current Convention (BCC) was a coordinated approach to rehabilitation of the ecosystem to provide an economically viable area of ocean coverage between the Republics of Angola, Namibia and South Africa. The BCC had been negotiated between 2010 and 2012, and the convention had been approved in 2012. The Departments of Transport; Minerals; Energy; and Agriculture, Forestry, and Fishery were also involved.

Programme 4: Climate Change and Air Quality
Ms Makotoko said that the total allocated budget for this programme had been increased from R230 million in the audited year 2013/14, to almost R240 million in the 2014/15, and to R274 million in 2016/17. The budget for Climate Change Management was R5 million in the baseline years, and moved to R7million for the outer Medium Term Expenditure Framework (MTEF) years; the budget for Climate Change Mitigation was R7 million in 2013/14, going to R7.7 million in 2014/15, and then to R8.6 million in the outer years; Climate Change Adaptation was R3.6 million in 2013/14, and moved to R4.7 million in the outer years. The Air Quality Management budget was R32.5 million in 2013/14, and moved to R42.5 million in the outer years; the International Climate Change relations and negotiations budget was R9.2 million, increasing to R11 million; and Monitoring and Evaluation of Climate Change was R8 million, and increased to R10 million. Most of the budget was allocated to South African Weather Services -- R162 million -- and this would be R189 million in the outer years.

Priorities were climate change mitigation, long term climate change projection research, adaptation responses, sector developmental plans, donor funding for response mechanisms, evaluation systems for air quality monitoring and systems (mainly residing in SA Weather Services), greenhouse gas emissions and carbon tax initiatives.

Ms Judy Beaumont, Deputy Director-General: Climate Change and Air Quality, DEA, said that the presentation would focus on the priority areas - the Vaal Triangle and Highveld, where air pollution was a serious problem - and also the DEA’s Vehicle Emissions Strategy.

Ms Elizabeth Masekoameng, Director: DEA’s Vehicle Emissions Strategy, said that the strategy had been initiated due to the increase in pollutants in the air because of the number of vehicles on the roads – the number had doubled since 1995 – as well as the increase in the distance travelled due to urbanisation.  In 2011, DEA studied possible interventions for improvement in ambient air quality. Key findings were that vehicles annually contributed to 250 000 tons of nitrogen oxide and 3 000 tons of particulate matter, 1 million tons of carbon monoxide and 25 million tons of carbon dioxide. The studies also investigated the impact of these emissions on the ambient air, and figures indeed revealed that in some areas, such as in Durban, ambient air was not healthy.

Many interventions had been proposed and a core strategy for maximum benefit had been proposed by the Interdepartmental Task Team, which consisted of the Departments of Energy, Transport, Trade & Industry, and the SABS. Some of the projects, such as Clean Fuels, were already in place and other interventions to reduce emissions were: use of controlled natural gas; public transport; and emissions guidelines to encourage people to maintain their cars to reduce emissions. Studies examined the reduction in nitrogen oxide and particulate matter and found that if no intervention was implemented, emissions would double in the next 20 years. A cost benefit analysis showed that intervention costs totalling R100 million would cause benefits in terms of a reduced cost of healthcare worth R300 million.

Dr Thuli Mdluli, Chief Director: Air Quality Management, DEA, said that in terms of the Air Quality Act, the Minister could declare a priority area if the air quality standards had been exceeded. The three priority areas, the Highveld, Vaal Triangle, and Waterberg Bojanala, were tested for ambient air quality and emissions of concern were particulate matter, nitrogen, ozone, mercury, lead, carbon monoxide and benzene. Interventions include: building government capacity; infrastructure for monitoring of the significance of pollution problems; addressing domestic fuel-use and transport guidelines; pollution awareness programmes; social upliftment; and major investment from large industrial emitters which contribute significant emission loads. The operational budget for DEA implementation of some of the interventions was R2 million per year, and some interventions were covered by the large industrial emitters.

Ms Beaumont added that South Africa was required to report to the United Nations Framework Convention on Climate Change on its greenhouse gas emissions every two years. South Africa had produced three official national Greenhouse Gas Inventories. The current inventory, for 2000-2010, was out for public comment until 6 August 2014. Total greenhouse gas (excluding the land sector) had steadily increased by 24.9% between 2000 and 2010.

Programme 5: Biodiversity and Conservation
Ms Makotoko outlined the budget allocation for the programme: Biodiversity Management.  The budget was R11 million for the 2013/14, moving to R17 million in the outer years. Biodiversity Planning and Management received R19 million, moving to R27 million in the outer years.  Most of the budget had been allocated to the three public entities: Isimangaliso Wetlands Parks received R28 million and in the outer years R33.8 million, SANParks’ current year allocation was R274 million, and went up to R287 million in the outer years. The remainder of the budget went to the South African National Biodiversity Institute (SANBI) -- R208 million in the base year, moving to R226 million and then to R249 million in the outer years.  Therefore, total budget for Programme 5 was R565 million in the base year, moving to R691 million in the outer years. The priority of the programme was to implement legislation to fulfil its sustainable development agenda.

Mr Fundisile Mketeni, Deputy Director-General, DEA added that the National Environment Management Biodiversity Act (NEMBA) amendments dealt with conservation of species and ecosystems and issues of sustainable use. Since 1994, DEA had focused on law reform to deal with issues that related to environmental injustices, particular with reference to utilisation of species. The regulations under review were: CITES (The Convention on International Trade of Endangered Species) of flora and fauna; TOPS (Threatened Or Protected Species); Norms and Standards for Elephant Management; and Bio-prospecting, Access and Benefit Sharing (BABS), which included international dialogue on the use of indigenous plants by pharmaceutical companies.

Mr Ishaam Abader, Deputy Director-General: Environmental Law, DEA, added that there had been a steady increase in wildlife crime. Rhino poaching was a serious threat to South Africa’s biodiversity. There had also been a steady decline in adult plants from the wild, such as cycad populations, and some were becoming extinct. Illegal exploitation of abalone had also led to a decline in this species.  The National and Provincial Joint Priority Committees on Wildlife Crime had responded to organised wildlife crime in all nine provinces, and the DEA collaborated with all the wildlife trafficking organisations. To strengthen enforcement against rhino poaching, among other types of poaching, the DEA collaborated with SARS and Customs, Ports, Interpol, the Rhino DNA programme, Hawks, and the SA National Prosecutions Authority. Details of the budget for the provincial allocations for this programme can be found in the attached document. 

Programme 6: Environmental Programmes
Dr Guy Preston, Deputy Director-General: Environmental Programmes, DEA, described the work opportunities in the provinces created by the programmes.  A total of 64 482 people worked in the programmes in the past financial year, which translated to 30 000 full time employees. The current year target was 72 000 people and 37 000 full time employees. More detailed information can be found in the attached document.

Mr Zaheer Fakir, Acting Deputy Director-General: Environmental Advisory Services; Department of Environmental Affairs, presented a summary on the Green Fund.  R594 million had been allocated to 20 investment projects, of which R188 million had been disbursed. These projects were expected to create 12 712 jobs. There were 15 research and policy development projects, of which R36 million had been allocated and fully disbursed. Five capacity-building initiative projects totalled R51.7 million.  Fund allocations per project and province were displayed in the attached document. The DEA was a key player in the 12 commitments of the Green Accord: the rollout of solar water heaters; investment in the Green Economy; rollout of renewable energy; energy efficiency; waste recycling, reuse and recovery, and youth and community involvement; reducing carbon emissions on roads; electrification of poor communities and reducing fossil fuel use - the iShack project in the Western Cape; and research and economic development. The targets, number of jobs and budgetary amount per project can be found in the attached document. Financial and technical resources came from government, the Development Bank of Southern Africa (DBSA) Green Fund, the KFW Development Bank, and GIZ, the German Federal Enterprise for International Cooperation.

Discussion
The Chairperson asked if there was any justification for the Members receiving the relevant information only during the presentation.  Documents were required at least four days prior to the presentations to enable Members to engage efficiently.

Ms Ngcaba replied that the documents had been sent to the Committee on Thursday. The copies being circulated were copies of those that had been consolidated for the presentation for the sake of saving time.

The Chairperson suggested that since the Committee had to engage with another department, Members should submit questions in writing, for response in writing.

Mr Parkies proposed that Members engage the DEA on a suitable date, for a full day. He would like to ask more about contentious issues.

Mr C Smit (DA, Limpopo) started to ask a question about rhino poaching, but was interrupted by the Chairperson, owing to the proposal by the previous Member.

Mr A Nyambi (ANC, Mpumalanga) seconded the proposal to have questions clarified in writing before the day of the Budget Vote.

Ms E Prins (ANC, Western Cape) commented that she would save her questions, in light of the proposal being seconded.

Ms C Labuschagne (DA, Western Cape) said that there would be no point in going to the Budget Vote debate without feedback from the DEA.  She asked if questions could be put in writing and responses received in time to prepare for the NCOP budget debate on 22 July.

The Chairperson asked for a date that the DEA could meet with the Committee.

Mr Nyambi commented that since the content would not be changed before the Budget Vote, it was just clarification that was needed to enable the Committee to do effective oversight over the next five years.

The Chairperson said that the date of the next meeting would be announced and the session was adjourned.


Briefing by the Department of Mineral Resources
Strategic Plan and Annual Performance Plan, with respect to: Programme 2: Mine Health and Safety; Programme 3: Mineral Regulation; and Programme 4: Mineral Policy and Promotion.

Mr Godfrey Oliphant, Deputy Minister: Department of Mineral Resources (DMR), said that the regulations of minerals and upstream petroleum industries were at the heart of DMR’s work. The DMR had to ensure that the country’s resources, as per the Mineral and Petroleum Resources Development Act (MPRDA), benefited the people of the country and helped advance DMR's broader developmental goals -- those of tackling inequality, unemployment and poverty. DMR also ensured that companies operated in an environment that was conducive while complying within the framework of the laws governing the resources. The DMR would not hesitate to take action against non-compliance by companies.

Key to the MPRDA were the Mine and Health Safety Act and the Mining Charter. The Mining Charter, in its tenth year, offered an opportune time to assess companies’ compliance and areas where the Mining Charter had to be augmented. Preliminary findings were that while some companies were delivering according to the requirements of the Mining Charter, others were not.  Implementation of the Framework Agreement for Sustainable Mining provided a compass for guiding interventions to stabilise this important sector of the economy.

The discovery of shale gas in the Karoo and in Limpopo provided exciting possibilities for development of upstream petroleum and socio-economic development in these areas, some of which were amongst the poorest in the country. It was encouraging to note that development of this resource would make a difference to people’s lives. A set of technical regulations had been developed, to regulate hydraulic fracturing activities in a manner which was sensitive to the environment. Once consultation had been undertaken in the affected areas, DMR would commence with the processing of applications. South Africa’s minerals and petroleum resources were found across the country and as a result, DMR’s work spanned across the provinces - the areas over which the Select Committee had oversight.

The Deputy Minister then said that he would have to leave the meeting to prepare for a budget vote in the afternoon.

Mr Thibedi Ramontje, Director General: DMR said that the DMR would give an overview of the DMR financials by programme, as per the request of the Committee.

Ms Irene Singo, Chief Financial Officer: DMR, presented an overview of the DMR’s budget over the MTEF period. The details were outlined in pages 25 and 27 of the strategic plan.  For the 2013/14 financial year, the DMR budget was R1.3 billion, and this was expected to increase to R1.6 billion in the 2016/17 financial year, mainly due to funding secured for derelict and ownerless mines and for technical skills for the implementation of the National Environmental Management Act (NEMA) of 1988. The largest portion of the budget went to Mineral Policy Promotion, an amount of R787.78 million in 2014/15. This is where most of the entities resided. This was followed by the Mineral Regulations budget which was R231.3 million. The budget for Promotion of Mine Safety and Health was R167.9 million.

The Programme 2, Mine Safety and Health Promotion, budget was R153.9 million in 2013/14, and was expected to increase to R188.9 million in 2016/17, mainly to ensure compliance with the Mine Health and Safety Act (1996) standards and to enhance inspection capacity in the provinces.

The Programme 3, Mineral Regulation, budget was R154 million in 2013/14 and was expected to increase to R260 million by 2016/17, as the spending focus would be on improving the processing and issuing mining rights and payments, compensation of employees, and NEMA implementation and related goods and services.

The Programme 4, Mineral Policy and Promotion, budget increased from R724.2 million in 2013/14, to R900 million in 2016/17. Spending would be to promote the mineral sector, strengthen the regulatory framework for both the mining and petroleum sectors, and promote small and medium enterprises.

The budget allocation per economic classification can be found in the attached document.

Programme 2: Mine Health and Safety
Mr David Msiza, Chief Inspector of Mines: DMR, presented an overview of the occupational risks, diseases and accidents (pages 50-57). There were still asbestosis cases, despite asbestos mining being stopped 20 years ago. The safety impact was immediate, but the health impact was delayed.  The focus was on zero deaths and zero harm. Figures on fatalities per commodity and by region were presented.  Studies revealed that overall there was a significant reduction in the number of fatalities due to mining accidents and respiratory failure between 2002 and 2012.

The Chief Directorate on Occupational Health had been established, which had a strategy to enhance health matters such as HIV/AIDS, silicosis, TB, and lifestyle diseases. The DMR would also implement regulations to prevent mining accidents, such as proximity technology to reduce transport-related accidents.

The Mine Health and Safety Inspectorate was drafting enforcement guidelines to ensure a transparent and consistent approach to compliance by inspectors, and offered support for training and mentoring in this regard. Other focus areas were improvement on turn-around times for medical appeals and input on the MPRDA.

Programme 3: Mineral Regulation
Mr Joel Raphela, Deputy Director-General: Mineral Regulation; DMR, said that he would present the Annual Performance Plan of the branch, as outlined in Strategic Plan, and an update on the Framework Agreement for a Sustainable Mining Industry.

The Chairperson asked the DDG to limit his presentation so that there would be time for questions.

The strategic objectives of the branch were: job creation; sustainable resource use and management; to reduce state environmental liability and financial risk; implementing transformation policies and legislation; monitor and enforce compliance to achieve 100% compliance with regulatory requirements; and improve turnaround time for adjudication. (See pages 58-66 of the strategic plan).

The updated Framework Agreement for a Sustainable Mining Industry (July 2013) commitments were: ensuring the rule of law, peace and stability; strengthening labour relations; implementation of human settlements interventions and improving workplace relations; identification of short to medium-term measures, and implementation of long term measures; and to support growth and stability of the mining industry.

With regard to progress achieved on the key elements of the framework, a number of mine crime-combating forums had since being established in localities that had been identified as being affected by a paucity in rule of law, peace and stability. Linked to the target to improve living conditions for miners, as per the Mining Charter, the conversion of hostel dwellings was currently being completed.   Also, the migrant labour system was being studied, and projects were under way to improve housing and services to revitalise mining towns, with priority on Bojanala Platinum District Municipality. Other priority areas had been identified, and are listed in the attached document.

Ongoing issues were: guidelines, templates and checklists, which were critical for applications (deadline in July 2014); accredited training for environmental management inspectors; awareness workshops, which were ongoing; and capacity building of regional officials.

Programme 4: Mineral Policy and Promotion
Mr Mosa Mabuza, Deputy Director-General: Mineral Policy and Promotion, DMR, presented on pages 68-78 of the tabled strategic plan.  Some of the key activities to promote investment in the mining sector were: publication of technical and promotional documents; establishment of technical and strategic partnerships to nurture growth; engagement with stakeholder and social partners, including organised business labour and civil society; promotion of sustainable resource management; constant review of guidelines and regulations and facilitating transformation through amendments to policies, the MPRDA, Mine and Health Safety Act, and develop legislation for establishment of state-owned mining; and rehabilitation of the 600 derelict and ownerless mines.

In respect of shale gas, the development of hydraulic fracturing policies had been prioritised.
In terms of progress, the Minerals Beneficiation Strategy had been identified as policy. The DMR had identified the need to strengthen the legal basis, particularly for security of supply of minerals (Section 26 of the MPRDA Bill), which proposed mechanisms to ensure security of the cost competitive supply of input minerals. The bulk of the plan had been developed and was the subject of implementation between the DMR and the Department of Trade & Industry.

A detailed technical report on the socio-economic impact of shale gas had been published for public comment. It would enable the co-existence of the development of shale gas mining and SKA astronomy developments (administered by the DST), to ensure optimal and environmentally responsible development. 120 inputs had been received from stakeholders. The DMR had engaged with other departments, and public hearings on the draft regulations would take place during July 2014.

Discussion
Mr Parkies asked how far the processes were with establishing a state-owned mining company.
           
Mr Ramontje replied that the African Exploration and Mining Finance Corporation, a subsidiary of the Central Energy Fund, had been identified as the nucleus to create this company. One of their mines had already started operations, and two others were in the pipeline. The DMR would bring a Bill to Parliament to create a framework for this company to stand alone. National Treasury had approved the document.

Mr Parkies asked what informed the formula for determination of targets. Ms Prins also asked about what informed the DMR to decide on bursary targets over the MTEF. The figures were not logically measureable for the Select Committee.

Mr Ramontje replied that targets were predominantly informed by resources available within the DMR. With more resources and capacity to increase the number of inspections, targets would be adjusted. They would be reviewed on an annual basis and discussed with the Committee.

Mr Parkies asked why the budget would increase due to specialised skills.

Mr Ramontje replied that the inspectorate was always a challenge, especially with the Mine Health & Safety inspectors, who had to inspect mining, mechanical and electrical engineers. Capacity had to be able to compete salary-wise. The DMR had started a programme whereby 50 university graduates could be trained as inspectors by DMR and the mining companies, work alongside inspectors over a four to six year programme and become competent inspectors.

Mr Parkies asked why the Bojanala mining township had been prioritised for township revitalisation.  The Chairperson asked what the DMR relationship was with the local municipalities to counteract the mushrooming of informal settlements in the mine surroundings.  Mr Smit asked if infrastructure compliance fitted with social responsibility, where mines brought additional burdens of infrastructure. For example, in Mogalakwena, water was assisted but roads were not.

Mr Ramontje replied that Bojanala was identified and prioritised due to the challenges it was experiencing.
There would be other mining towns identified. The MPRDA Bill amendments and Integrated Development Planning at municipal level recognised the important of a holistic social development and labour plan. If municipalities, the DMR and mine owners met at district level and planned for the area, there would be much improvement in social development – logical planning for schools, clinics and infrastructure partnerships.

Mr Parkies asked if the jewellery project was the only beneficiation project; and for clarity on non-financial support for SMME.

Mr Ramontje replied that jewellery was not the only beneficiation project. The strategy had identified platinum, titanium, coal, jewellery and energy value chains. These five value chains were being worked on.  A full action plan had already been implemented for jewellery. The DMR had to focus on providing technical support to small, medium and micro enterprises (SMMEs).  If a small scale miner needed assistance, DMR would identify the Council for Geoscience, Mintek and others.  DMR held technical expertise workshops, but not on finances.

The Chairperson asked if the inter-collaboration with other departments created a pool of inspectors to ensure compliance.

Mr Smit asked for clarity on the status of the Flag Boshielo water scheme and Mogalakwena in terms of mining performance, job creation, economic growth and readiness. He also asked how the Nylsvley Mine received prospecting rights in a vleiland, area where mining was not permitted at all.

Mr Raphela replied that responses with regard to the information on the two issues would be submitted in writing.

Mr Smit asked what process was in place to ensure that miners could not manipulate compliance on applications through, for example, bribery of traditional leaders.

Mr Ramontje replied that bribery of tribal leaders was not tolerated by the DMR. Crime was not tolerated. Officials would be reported to authorities if found to be involved in bribes. If the mines bribed third parties, the DMR could not be blamed.

Mr Smit clarified his question by asking what compliance regulation was in place to ensure that when miners engaged with tribal communities, the risk of bribery and leadership side-lining the community, was minimized.

Mr Raphela replied that there was documentation of interested and affected parties, some of whom more or less impacted on the communal land application. They would consult with DMR, but if they consulted when the DMR was not present, DMR could not intervene easily. The onus of application was with the applicant. Where traditional leaders were involved, the applicant would need proof that there was consultation with them, who was there, what took place, whether there was roll call, that minutes were taken, and where the consultation took place.  Matters of dispute were taken up with the department responsible for traditional leaders. Members of the community could appeal before the REMDEC (Regional Mining Development and Environment Committee) with objections, and deal with the issue legally. All consultations were handled within the framework of the law.

The meeting was adjourned.
 

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