Department of Environmental Affairs & entities 2014/15 performance

Forestry, Fisheries and the Environment

14 August 2015
Chairperson: Mr J Mthembu (ANC)
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Meeting Summary

South African National Parks (SANParks) reported that most of their vacant posts, except for two core operative positions, had been filled. The terrestrial protected areas of SANParks exceeded 7.9 million hectares, while the coastal protected areas comprised of 426 000 hectares, and facilities were expected to be built on these areas.

Their operating tourism revenue baseline for 2014 was 7.0 percent with a target of 7.5 percent in the 2014/15 financial year. There was an improvement of 10.5 percent from R971.98 million in 2013/14 to R1.36 billion in 2014/15. The short-to-medium term fundraising strategies were currently being revised for the 2015/16 year. They implemented projects throughout the year, which included the Kudu Green School Initiative, Kids in Parks, Park Based Environment Education Programme and the Imbewu Youth Projects.

Through the Expanded Public Works Programme they had created temporary and “person-days on temporary” jobs, both increasing to an added total of 67.8 percent for 2014/15 financial year. Small, Medium and Micro Enterprise (SMME) businesses were also supported through the Expanded Public Works Programme (EPWP). SANParks targeted to support 407 SMMEs with funding, but the number grew to 701, which was an increase of 72.2 percent. They also offered learnerships which focused on accommodation services and skills development programmes to the value of R26.61 million in total.

Domestically, there were 506 273 tourists that visited the national parks and 5 578 532 visitors in total, including international tourists. The introduction of franchise restaurants in the national parks, as well as the operationalisation of the Skukuza Airport in the Kruger National Park, helped to increase their revenue.

Rhino poaching incidents had increased in the last year. The baseline for 2013/14 was 27.6 percent, and it was estimated that the rhino poaching incidents for 2014/15 would not exceed the growth rate.

The total revenue for 2014/15 was R1 444 623. Their total expenditure for the financial year was R2 507 495, with an operating surplus of R290 941. SANParks obtained an unqualified audit opinion. Two of their strategic objectives as presented in the 2014/15 Annual Performance Plan were qualified due to technical issues relating to recording and validation rather than anything of a fundamental nature.

The Committee asked about the low percentage of women working for SANParks, the depreciation value, whether they planned on moving towards national capital accounting, were there any plans of expanding the Kruger National Park and how they planned on making sure that rhinos were protected.

The South African Weather Service (SAWS) had not provided much detail on the financial part of the report as they have not yet looked at their annual financial statement, but they have included their targets and expenses. The Auditor-General’s (AG) Financial Year audit report showed the administration, financial management, information technology governance areas needed to be improved. The strategic objective for goal 1 was to maintain compliance with all statutory requirements and they had managed to achieve a favourable AG report in all four quarters.

The Committee was not satisfied with the SAWS quarterly report. They indicated that SAWS did not include any baselines for their targets, no comments were made for not achieving their goals and there was too much unnecessary detail. They asked that the entity re-do the report. It was suggested that the Department of Environmental Affairs should create a standard form of structuring reports. 

Meeting report

The Chairperson told the Committee Members that a document about Blood Lions, which was a call to stop the hunting of Canned Lions, had been circulated for the Members’ attention. There would be a screening of a documentary showing the number of lions which were killed every year, and what effect this had on South Africa. He also encouraged all the Members to attend the screening.

There were apologies from the Minister, Ms Edna Molewa, and the Deputy Minister, Ms Barbra Thomson.

Briefing by the South African National Parks (SANParks)

Mr Fundisile Mketeni, Chief Executive Office (CE0), SANParks, said in the past year they have managed to fill most of their vacant posts. However, there were two posts which were still vacant and these were the Managing Executives in both the Conservative Services and Tourism Development and Marketing. These posts also formed part of their core functions.

South Africa had approximately 550 and 48 terrestrial and coastal protected areas respectively, and 232 conservation areas. The terrestrial protected areas exceeded 7.9 million hectares, while the coastal protected areas comprised of 426 000 hectares. Nearly 4 million hectares of the protected areas were under SANParks’ management. Mr Mketeni spoke about SANParks’ plans to expand their tourism facilities by building Skukuza Conference Lodge and the Malelane Safari Lodge.

Growth Revenue

SANParks’ budget variance from exchange transactions was 6.4 percent (R87.028 million), which was better than the budget of R1.357 billion. This was an improvement of 7.5 percent. Their operating tourism revenue baseline for 2014 was 7.0 percent with a target of 7.5 percent in the 2014/15 financial year. There was an improvement of 10.5 percent from R971.98 million in 2013/14 to R1.36 billion in 2014/15. The improvement was due to the improvements which were made on some of their accommodations, which resulted in an increased number of visitors. The fundraising income for the 2014/15 financial year was R92.485 million, which was 7.5 percent less than the target of R100 million. He added that their short-to-medium term fundraising strategies were being revised for the 2015/16 year.

Facilitating Socio-Economic Development

The number of people who received free access entrance was targeted at 18 100 for the 2014/15 year, but SANParks managed to achieve a total of 53 251. This achievement could be attributed to improved publicity of national parks and improved working relations with their neighbouring communities.

They also had environmental education programmes which targeted to have 180 600 participants in 2014/15 year. Their actual performance for the year was 213 744; this was an improvement of 18.4 percent.

Some of the projects which were implemented throughout the year were the Kudu Green School Initiative, Kids in Parks, Park Based Environment Education Programme and the Imbewu Youth Projects. SANParks, through the Expanded Public Works Programme (EPWP), had created temporary and “person-days on temporary” jobs. In 2014/15 they had a target of 1 307 742 “person-days on temporary” and 7379 temporary jobs, they managed to achieve a total of 1 355 207 “person-days on temporary” jobs and a total of 12 120 temporary jobs. Their actual performance for the “person-days on temporary” jobs was an improvement of 3.6 percent. On the other hand, the actual number of temporary jobs created was 64.2 percent more than what was targeted.

There were additional funds available for which they used for the Eco-Furniture Programme’s capital which enabled more employment to be made. Small, Medium and Micro Enterprise Businesses (SMME’s) were also supported through the Expanded Public Works Programme (EPWP) and SANParks targeted to help support 407 SMME’s with funding, but the number grew to 701 which was an increase of 72.2 percent from their 2014/15 target. The total number of funds used towards the support of SMME’s was R173.9 million.

Out of a target of 12, SANParks managed to implement 17 Community-based Socio Economic Initiatives in the 2014/15 year. The initiatives were funded through 1 percent of SANParks’ tourism revenue.

Integrating Strategy Implementation

The accommodation occupancy increased by 1.1 percent above the 71 percent which was targeted in 2014/15. In addition, there was an improvement of 3.6 percent in the number of accommodation units sold, and 5.8 percent improvement in tourism activities. The total number of visitors improved by 6.6 percent as compared to last year; local tourists that visited the national parks increased by 9.1 percent (from 1 795 406 to 1 958 816) year on year. The number of black visitors also increased by 8.4 percent in the 2014/15 year. Domestically, there were 506 273 tourists that visited the national parks and 5 578 532 visitors in total, including international tourists. 

The introduction of franchise restaurants in the national parks, as well as the operationalisation of the Skukuza Airport in the Kruger National Park (KNP), helped to increase revenue. The total number of guests for 2014/15 was as follows: the percentage of local visitors was 73.7 percent, the Southern African Development Community (SADC) had a total of 2 percent and the international visitors had a total of 24.3 percent. He added that the Auditor General asked for a source document which proved that they do indeed did have black South African visitors. In most cases, their customers were not comfortable in filling in surveys to indicate whether they were black or white.

Promoting Effective Management of National Parks

The total area which had been added to national parks was 6 125 hectares. This was an increase of 64.9 percent from the 3 715 hectare target in 2014/15. Some of the land was acquired through private donor funding and the land was added to the Tankwa Karoo, Agulhas, Table Mountain and Namaqua. The rehabilitated new areas was 44.9 percent below the target of 44 543 hectares due to the prioritisation of follow-up clearing. The percentage of monitoring the biodiversity was targeted to be 100 percent in 2014/15, but SANParks achieved only 89 percent of their monitoring plan. Limited resources such as aerial support made it impossible to complete their planned aerial censuses and there had been constraints on travelling in wider geographic locations of national parks.

Rhino poaching incidents had increased in the last year. The baseline for 2013/14 was 27.6 percent, and it was estimated that the rhino poaching incidents for 2014/15 should not exceed the growth rate. However, 878 rhinos were lost during the year due to poaching, there was a 42.8 percent increase in the poaching of rhinos and a total of 178 suspects were arrested for rhino poaching related crimes. He added that they would have to change their target because it was not measurable.

The Chairperson asked, in terms of the strategic objectives, what were they expected to measure. What targets were they expected to achieve. He added that this information was important because they need to be accountable for every target which they did not meet.

Mr Mketeni replied that it was not possible for SANParks to count the number of new born rhinos every month. The growth rate of rhinos could not be measured every month/every day; the growth rate can only be measured once a year or every two years.The average growth of rhino mortality in the Kruger National Park between 2010 and 2014 was 82.5 percent. There was also an increase of 36.5 percent in the death of rhinos between 2013 and 2014, and an average of 2.27 of rhinos was killed per day.

SANParks had registered 374 research projects across the three research nodes. 27 scientific publications were co-authored by SANParks’ researchers, and all information was published in peer reviewed journals which resulted in a presence and credibility in the academic domain. A total number of 102 permanent staff members were hired during the course of the year.

The Chairperson asked for some clarity as to how there was 102 permanent staff members hired, but their actual performance indicated that only 19 permanent jobs were created.

Mr Raj Mahabeer, Chief Financial Officer (CFO), SANParks, replied that the number of vacant positions which were filled was 102 in total, including the vacancies which were filled. The 19 permanent jobs indicated an increase in the establishment figures of SANParks.

As of the 31st March 2015, SANParks had a permanent staff complement of 4065. Black people made up 92.2 percent of the permanent staff, women made up 35.5 percent and the Employment Equity plans were in place.They also offered learnerships which focused on Accommodation Services and spent R9.85 million towards skills development programmes. R3.1 million was spend towards skills development programmes, R4.16 million towards internships, R1.50 million towards employees’ bursaries, R500 000 was spend on the children of their employees and R310 000 on accreditation.

The Chairperson said they were supposed to indicate in which areas the jobs were created. The number of increased bursaries must be accompanied with comments indicating the correct number of bursaries which were given.

Mr Mketeni replied saying they do not have a baseline for their learnerships and bursaries. There was no baseline in their annual performance plan. He concluded that they achieved 74 percent of their targets.

Mr Raj Mahabeer said the revenue for the year was R2 79 million. This was a combination of their own revenue and government grants. The revenue comprised of tourism and retail, fauna and flora sales, interest and royalties received and their other operating income, which was a total of more than R1 billion. The government grants were R1.3 billion; this was mainly for special projects. Their total expenditure included employee related costs which were R8 71 million and the operating leases which were R112 million, amongst others. Their operating surplus was R287 million.

Mr Mahabeer added that all four quarters showed the same information but with different amounts, so it would be easy to understand the content. He concluded that SANParks obtained an unqualified audit opinion on its Available for Sale (AFS) financial year. Two of their strategic objectives as presented in the 2014/15 Annual Performance Plan were qualified due to technical issues relating to recording and validation rather than anything of a fundamental nature.

Discussion

Ms T Stander (DA) asked why Botswana and Swaziland were doing much better in terms of safeguarding their rhinos against poaching. What happened to the trans-located rhinos that were not sold, what was the average sale price when they were sold, and how much did SANParks make from fundraising with external partners?

A Member of the ANC asked if there were any plans of expanding the national parks to the North West. He complimented SANParks for achieving all their targets, but he was concerned about whether they had set their targets too low. What was the percentage of the depreciation value that was supposed to be worked out?

Ms H Kekane (ANC) asked what the right target baseline would have to be on the killing of rhinos.

Mr P Mabilo (ANC) said the entity should have added a realistic due dates of when they planned on filling the vacant positions. He asked for the total number of rangers that worked in the national parks, how far were they with the installation of drones, and had the entity developed any programmes which could help limit the number of rhinos being poached?

The Chairperson asked how many rhinos the park had, and what the impact of rhino poaching was.

Ms Stander asked if they would include the value of their national capital as part of their financial statement position, once when the aerial audit had been done.

A Member of the ANC said their method of recording the number of black people that visit the national parks was not workable. They should form a partnership with the Department of Home Affairs and find another way which could be used to record their visitors. He asked why women were not being empowered enough.

Mr Mketeni replied that their rhinos were scattered in the many large parts of the Kruger National Park. Botswana and Swaziland had small pieces of land and this had made it easier for them to protect their rhinos. The size of the KNP was an issue for them. In terms of expanding the KNP, each province had been given a target for expanding their parks. It was not easy to establish parks in provinces when the municipalities did not agree with the expansions.

In order to create jobs, SMMEs must be established and given to suitable people to manage. In the second year, the SMMEs should be able to indicate whether they could become possible contractors for the KNP. Hence there was a focus on the establishment of SMMEs. The number of employed women in the KNP was low because the jobs in the parks required their employees to carry firearms and fly helicopters and there were fewer women who were interested in these positions. However, they had increased the number of women in the corporate level. The ideal outcome was to have less rhinos that were killed; therefore they should measure the impact of interventions. They could not add their national capital as part of their financial statement. They had plans to work with Statistics South Africa and the Department of Home Affairs.

Mr Mahabeer replied that the sale of a rhino was R313 000 each. There was no complication in the depreciation of assets because government grants were recognised at a different period when an asset was capitalised. Depreciation would only kick in after the asset had been commissioned for use. Certain assets were depreciated by 20 percent per annum.

Ms Nosipho Ngcaba, Director-General, Department of Environmental Affairs, said the AG looked at the treatment of assets and whether they were working in the convention of the depreciation rules. There was no indication that SANParks was working outside of the depreciation rules.  

Ms Stander said there was a move towards national capital accounting and she wanted to know if the Department planned on moving in that direction. What happened to the trans-located rhinos that were not sold?

Ms Ngcaba replied saying they were planning on moving in that direction but they would consult with the AG before making any changes. She added that the CEO and CFO of SANParks were both new to the entity and most of the issues which were directed to them were handled by the previous CEO and CFO. 

Mr Mketeni replied that they were able to get the rhinos back from neighbouring countries such as Botswana. There were policies which allowed the KNP to take their rhinos back, whether they have multiplied or not.

Briefing by the South African Weather Service (SAWS)

Dr Linda Makuleni, CEO, SAWS, said she would cover the introduction part of the report, as well as the performances of each quarter. She added that their report was very detailed, as all the activities from all four quarters had been outlined. The entity had not provided much detail on the financial part of the report as they had not looked at their annual financial statement, but they have included their targets and expenses.

Their first goal was to meet all the regulatory requirements and have a clean administration audit. The Auditor-General’s (AG) Financial Year audit report showed the administration, financial management, information technology governance areas needed to be improved. Governance structure was one of their strong areas and they had received a clean audit from the AG in terms of their governance structure.The strategic objective for goal one was to maintain compliance with all statutory requirements and they managed to achieve a favourable AG report in all four quarters. The audit report was made available in the second quarter and they received an unqualified audit report for 2013/14 financial year.

Another strategic objective was to provide programmes and applications for weather and climate variability, climate change adaptation and mitigation. The entity had a number of applications which they have developed, for example, they were providing different products to industries, one of them being the hybrid weather station with cameras.

Discussion

The Chairperson interrupted Ms Makuleni and said the report should have also indicated why the entity was not able to meet their target in providing programmes and applications for weather and climate variability, climate change adaptation and mitigation. Although the report shows that only 70 percent of the work was done, it did not indicate why there was a short-fall of 30 percent. The report would be submitted to Parliament and the Committee would be asked why there was a short-fall of 30 percent. If the information was not in the report then they would not be able to answer to Parliament. The report was not helpful – they were supposed to include their weaknesses and strengths.

A Member of the African National Congress (ANC) said the report should have been compiled with their main challenges in each quarter. Making a list of all their achievements did not help the Committee because they had to identify the areas which needed to be improved.

The Chairperson said the structure of the report was not helpful to the Committee. They should have followed the same report structure which was done by SANParks, and done a summary of their activities, what their weaknesses were and why some targets were not achieved.

Ms Ngcaba suggested that the entity should skip the first three quarters and report on the fourth quarter; indicating which targets were met and which were not.

The Chairperson replied saying they should have structured they report in that manner in the first place. The report must include which targets were met, which targets did they not meet and which hindered them from not achieving those targets. He suggested that they should go back and restructure their report and report back to the Committee once their report was satisfactory. He told Ms Ngcaba that the Department must assist SAWS with the report.

Dr Makuleni said they have the final copy of the fourth quarter. They also have a summarised version of quarter four, which they could present to the Committee.

The SAWS did not add the fourth quarter to the report which was submitted to the Committee. A new document was handed out to the Members which did, however, include a summarised version of the fourth quarter.

The Chairperson replied that that the Committee could allow them to present the fourth quarter report. He asked for the Members’ opinion on the matter.

Dr Makuleni said they had five slides which could help the Committee understand the report better.

The Chairperson replied that the government created a report structure for entities which should always be followed. This structure was created so that it would make it easier to hold entity executives accountable.

A Member of the ANC said the fourth quarter did not have the details which the Committee wanted to see. It did not indicate why their targets were not met and there was no baseline; they have only further explained the areas which they have succeeded.

The Chairperson said the entity must re-do the report. There were no baselines, they have not indicated how they managed to achieve their targets and there were no explanations of any corrective measures they intend on taking. He asked the Members if they were all in agreement that the SAWS should re-do the report.

Ms Judy Beaumont, Board Member, SAWS, said in the normal format used by the Department they were required to indicate all four quarters, including the baseline. The information on their report was correct except that a baseline had not been included. The inclusion of all four quarters had made it even more difficult to understand because there was simply too much detail.

The Chairperson added that some of the targets which they were not able to achieve have not been commented on.

Ms Stander said she had noticed that each entity of the Department had structured their report differently. She suggested that the Department should set a standard for the correct way of drafting a report, especially when it came to the financial report.

Ms Ngcaba said she did not look at the report before the meeting and apologised on behalf of the entity.

The Chairperson said the Committee’s programme for the year was full, but they would try and set up a meeting with the entity again.

The meeting was adjourned.

Present

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