South African National Parks (SANParks) on its 4th Quarterly Performance

Meeting report

SANParks fourth quarter report on its Annual Performance Plan 2015/16
The Chairperson noted the absence of SANParks Board Members.
 
Mr Fundisile Mketeni, Chief Executive Officer, SANParks, said it was his understanding that board members came only when the Annual Report and the Annual Performance Plan were presented.

Mr Riaan Aucamp, Chief Director: Administration and Strategic Support, DEA, confirmed that this had been the arrangement for the past two years.

Mr Mketeni said that SANParks was the biggest tourism entity in South Africa, managing 15 000 beds. 83% of its targets had been achieved. One of its strategic objectives was maximising its economic contribution through tourism and related activities, and a new performance indicator here was the development and implementation of a fund-raising policy. The fund-raising strategy had not been completed. Income had increased by 11%, while costs had declined by 15%. Around 3 700ha had been added to the parks. Another new indicator was that six species had been identified under a species intervention programme, and had been implemented.

He said the first week of September was National Parks Week and SANParks wanted to do an expo to showcase the job creation value chain through such awareness programmes. SANParks had under-achieved with regard to full time equivalent job creation. This was because of budget cuts and a lack of management capacity. The target had been to complete five planned community agreements, but only three had been completed. A new SANParks indicator was the risk response plan.

On the matter of blacks as a percentage of management, he said that the sector was not attractive to blacks and job hopping was a challenge. SANParks had amended its recruitment policy and had also instituted succession planning. The lack of women in the organisation was a challenge, as there were insufficient vacancies for SANParks to meet its target. The target of 50% parity had been set by Parliament. A women’s forum had been established at SANParks recently to motivate women to remain. SANParks was identifying posts that could be ring-fenced for people with disabilities, and managers were actively hunting for people with disabilities. A training committee had been established to implement a skills development plan.

Mr Rajesh Mahabeer, Chief Financial Officer, said that SANParks had received a clean audit from the AG, free of material misstatements. There had been an accounting surplus of R278m, which was not from trading cash flow, but had arisen from a recognition of assets according to Generally Recognised Accounting Practice (GRAP) rules. SANParks had consequently motivated that they be allowed by Treasury to retain this surplus. Revenue had increased from R1.4b to R1.6b, with the bulk of the increased revenue coming from tourism and tourism-related income. The balance sheet was stable, but there was one liability -- employee medical aid benefits post retirement -- which was a significant obligation that was not sustainable going into the future. Management was looking at ways to reduce this liability, as it could lead to SANParks becoming insolvent.

SANParks first quarter report on its Annual Performance Plan 2016/17
Mr Mketeni said SANParks had sought permission to review its strategic plan because it hadcontained no goals, and because all policies had to be based on science for effective decisions to be made. 57% of first quarter targets had been achieved. 1 500ha of land had been added. SANParks wanted to assess the implications of the addition of the Addo and Namaqua marine protected areas on mining, fishing and on the communities’ needs to access the sea. SANParks wanted to define the parameters and approaches to use first, before finalising the state of the biodiversity report. In addition, SANParks needed to up-skill its staff before completing the report.

A new indicator was the State of Area Integrity assessments. He gave Table Mountain Park, where there had been a lot of robberies, as an example of an assessment. The police's view was that SANParks was responsible, but SANParks felt that the security cluster should assist.

The issue of rhino and elephants still haunted SANParks, but it wanted to reduce the number of incidents by 2%. SANParks wanted to develop threshold levels to determine what number of animals was acceptable to lose. The methodologies to determine these threshold levels were being evaluated. Another issue was the question of whether to focus on animals or plants.

Tourism growth for the first quarter had been 10%, compared to the targeted 11%. SANParks wanted to aggressively market itself. Blacks constituted 22% of visitors to the parks.

On the Skukuza Spa development, he said agreement had not been reached because SANParks felt the quality of the agreements with small, medium and micro enterprises (SMMEs) were not up to standard. Regarding full time equivalent jobs, he said there was a need to catch up because the approval of business plans had been delayed. SANParks had announced plans for “green economy” projects, and the Khomanani San were doing well with its eco- tourism project.

Ms Lize McCourt, Chief Operating Officer (COO), said that to increase the employment equity of women in management from 33% to 50% in one year was a tall order. She was not optimistic that the 50% target would be reached in one year, and that it would rather take three to five years because the change depended on retirements and the number of vacancies available, or otherwise on an expansion of the SANParks structure. Not only had the target been increased, but SANParks had lost some females in management. SANParks was verifying all management level qualifications. There was a low staff turnover and a low vacancy rate, but there was a high sick leave percentage and SANParks was undertaking an audit to determine why this percentage was so high. There was no quarterly target for information technology (IT) strategy, because it was assessed over a one year period.

Mr Mahabeer said there had been a 16% increase in income, and that expenses were four percent below budget. Following the seven percent salary increases after wage negotiations, direct HR costs would come through only in the following quarter. There was also a statutory requirement to adjust salaries for those earning less than R205 000 a year to be the same as those of others in their cohort. This was because of amendments to the Labour Relations Act, which ensured that those with the same experience should get the same pay.

Mr Mahabeer said income included own revenue, grant income and Expanded Public Works Programme (EPWP) income. Average debtor days were 20, but creditor repayments took place within 42 days because of administration issues caused by the delay in invoices from suppliers reaching SANParks, and not because of cash flow issues. SANParks had developed plans to reduce the payment turnaround times. He said the fund-raising strategy was being implemented and had already raised R30m of an annual target of R50m.

Discussion
Mr E Shelembe (NFP) requested more information regarding firearms stolen from a SANParks office. He asked how SANParks was making the broader community aware of nature conservation.

Mr Mketeni responded that in December 2014 there had been a robbery at Golden Gate Park, where 15 firearms had been stolen from a safe at a SANParks office. Management could give no answers, and had been either relieved of their duties or had resigned.

He said SANParks had a national park week coming up in September, where entrance to parks would be free. It had school education programmes, and a portion of income was used for social responsibility programmes like the funding of four science laboratories at schools close to parks. Students were also brought to the parks, and some parks had dedicated centres to house school students. These programmes were run in the holidays so as not to interfere with the schools’ syllabus.

The Chairperson said the Committee was planning to have a colloquium on rhino poaching on 6 September, and he wanted to engage with SANParks on its strategies. He wanted further elaboration on the post retirement medical aid benefits.

Mr Mketeni said the retirement benefits issue had a long history, and SANParks was doing a risk assessment. It needed to be dealt with before it made SANParks insolvent. He said SANParks would prepare for the colloquium.

Mr Z Makhubele (ANC) asked whether SANParks had relationships with the private sector concerning its management of 67% of the protected areas of the country. Would the new draft strategy be finalised by the end of the financial year? He noted that some parks had not given targets for its marine protected areas, so the Committee would not be able to evaluate these parks. He noted that business plans had been delayed and wanted clarification on why this was so. Had the Department explained to SANParks the difference between the full-time and part time work equivalents? On community contractual agreements, he questioned whether the challenge lay with the communities or the SANParks team. He was not satisfied with the employment equity plans, and said that management had to work harder. What new products were SANParks creating? What was the profile of the 5m day and overnight visitors? Who was involved in the strategy renewal plan? Were parts of the land that SANParks wanted to claim already under claim? Had SANParks been given an unqualified audit opinion? Was benchmarking done in terms of the statutory requirements of the Labour Relations Act?

Mr Mketeni said SANParks did have partnerships with the private sector and with communities. SANParks did not have a blanket approach, but altered its approach to develop a customised solution.

He said that targets were set using trends of the past five years and that, year on year, there had been an increase in the targets set.

The fund-raising strategy needed to be finalised and then aggressively pushed.

There was a target of 2 200 square kilometers of land to be declared as marine protected areas in the following year, and SANParks was using the current year to prepare for the following year.

SANParks' own scientists collaborated with universities, and the scientific product produced by SANParks was being recognised.

SANParks was doing a consolidation of all community projects and, there was a need to look at the land use capability of the land. Kruger National Park (KNP), for example, contained lions yet there was livestock farming taking place in community lands. It would be better if these lands adjacent to the KNP were developed to extract their tourism potential. SANParks’ own staff were also not fully skilled in big business practices. Notwithstanding this, it was developing community beneficiation schemes.

Mr Mketeni said viable parks, such as Tsitsikamma, Kgalagadi and Kruger, made a profit because of the years of development that had taken place there. SANParks was now trying to identify new products for the newer parks.

The park management plan followed a particular format. The land valuation was as per the Department valuation, and was for land that had been targeted for acquisition.

The issue of land claims was a difficult one, because one was working with land on which there might be pockets that had already been claimed, but where there were disputes that were still unresolved.

Indications were that the Department had received an unqualified audit report.

The provinces with no national parks were KwaZulu-Natal and North West province. KwaZulu-Natal had provincial parks, and there was a lot of fragmentation.

Late payment to suppliers was because invoices were not going to the right places. SANParks was a large national organisation.

He said farms bordering the KNP were being used to poach animals inside Kruger. The Department's Director General was leading a process at Isimangaliso, but there was a need to rationalise areas for the effective management of the park and adjacent areas.

The Chairperson said the Committee was thinking of scheduling a briefing on the biodiversity of the country. Why was SANParks not managing parks in two of the country's provinces?

Ms McCourt said that SANParks was doing what it could within the constraints it found itself, to make the employment equity targets. SANParks would not be able to achieve the employment equity target, but she was confident that they would achieve the other targets.

There had been 2.1m paying day visitors and 706 000 paying overnight visitors, while there had been an overall total of 5.9m entrants to the park, inclusive of all free entries and educational programme entrants. Three parks were not counting day visitors.

New SANParks products were Russel House, Pafuri guest house, three cottages at Kalahari-Gemsbok and up-scaled sites at Kruger.

She said there had been two comprehensive benchmarking processes at SANParks. One had been done by the Department, and then SANParks’ own process had been instituted, which included salary allowances and used the Patterson grading method.

Mr Makhubele asked if labour was satisfied with the processes.

Ms McCourt said the benchmarking processes had not yet reached the stage where trade unions had signed off on them, and SANParks would sign off only if the trade unions signed off.

The Chairperson wanted an explanation for the R1.7m of irregular expenditure.

Mr Mahabeer said that the AG had reported that SANParks would get a clean audit report. The R1.7m related to contracts with two service providers whose contact period had expired, and new service providers had not yet been contracted. It was standard to then extend the term of the existing service providers if there was a gap in the contract periods. SANParks had informed all necessary bodies, and the transaction had been regularised. This incident had also led to the institution of a contract management system, so that similar problems would be eliminated in future.

He said the medical aid benefits had been for certain employees in the fund pre-1996, where 100% of medical aid premiums would be paid by SANParks upon the member's retirement. 629 members had initially been eligible. In 2014 SANParks, had introduced a low-cost medical aid scheme for employees present pre-1996, so the numbers of eligible members had increased from 629 to 1 400, and SANParks’ liability for which it had to provide, had increased to R486m. Management had consulted a specialist advocate and his view was that there was nothing SANParks could do, save to take a unilateral decision to stop the benefit. Management felt this would cause labour relation problems at SANParks. The benefit was a legacy issue, and once a benefit had been awarded, it could not be taken back. It had also consulted with the Department, who had suggested that they consult with the SA National Biodiversity Institute (SANBI), which had encountered a similar situation. SANParks were looking at various possible solutions.

Mr Mketeni said that initially it had been only for members in the higher salary brackets, but that later SANParks boards had brought parity to the benefits by including the lower salaried staff.

The Chairperson asked if the board members were part-time or full-time.

Mr Aucamp said the members were part-time.

Regarding the wetlands and the rehabilitation thereof, there had been an EPWP program to fund this via the Department. The Department had suffered a R30m cut from these funds. This had been the cause of the delay to the business plan approvals of SANParks, through which the Department did the EPWP work. There had since been a further R29m cut to the budget. Business plans had, however, been finalised, but it did mean that no work had taken pace in April. In addition, Treasury had added extra requirements in that service providers had to register with Treasury's central supplier database. The Department would most likely request from the Committee that the targets be reduced.

Regarding full-time and part-time job equivalents, he said the EPWP had indicated that 230 days per year was the equivalent of a full-time job, but there was a further level of complexity, because the 230 days could be made up by adding the work of two or three people.

The meeting was adjourned.