Marine Spatial Planning Bill; DEA Annual Report late tabling; DEA, Isimangaliso, SANParks on Quarter 1 & 2 performance

Environment, Forestry and Fisheries

21 November 2017
Chairperson: Mr P Mapulane (ANC)
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Meeting Summary

The Committee had held extensive discussions on the Marine Spatial Planning Bill at its previous meeting, and was following up on the concerns that had been raised. These were related to the Bill’s consistency with other legislation, and the editorial improvements in some of the clauses in the Bill. Of particular concern was the prescribed timeframes for the implementation of the transition clauses, in order to avoid a potential endless transition period or abuse of the provision.

The Committee had also requested the Auditor General of South Africa (AGSA) to prepare a special report on the late tabling of the DEA’s annual report and the financial statements for 2016/17, in terms of the Public Finance Management Act (PFMA). A disagreement had resulted from AGSA’s audit following the DEA’s decision, based on its interpretation, to account for all payments made under principle agent arrangements, as transfer payments. The AGSA had disagreed with this adopted accounting treatment and had therefore given an adverse audit opinion. The payments made were in respect of the Expanded Public Works Programme (EPWP) and the Green Fund, which had subsequently been considered as non-exchange transactions. After extensive discussion, the Committee was told that the Office of the Accountant General (OAG) had been asked to provide a formal position for consideration by the AGSA. This position had been received on 21 November by the AGSA, and would be assessed to determine the areas where there may be agreements or disagreements, the impact thereof and the way forward.

SANParks and the Isimangaliso Wetlands Park reported on their performances for the first two quarters of the current financial year.

SANParks said it had recorded an overall performance of 78% of targets that had been achieved, 19% remained work in progress and 3% were off target. There had been a reduction in recorded fatalities of rhinos and elephants poached compared to the same period last year, and this was attributed to the improved capacity to react and improved technology. However, there were non-governmental organizations (NGOs) whose campaigns inadvertently associated the rhino horns with money, which in turn had a negative impact on the awareness campaigns. There was a need to synchronize the awareness campaigns so as not to adversely perpetuate adversely the situation by creating more syndicates and poachers. There were also plans in place to entice a younger market to visit the national parks, since the current market was aging quickly.

Isimangaliso Wetland Park said that in the second quarter, 27 targets had been achieved and four remained works in progress. These targets assessed the Park’s programmes for conservation and operations, transformation, tourism/commercial activities and corporate governance. The Park’s income had exceeded the budget by R33.3 million during the period April to September. Despite the Park being a small organization, with a R344 million budget and 33 members of staff, they had absorbed some of the interns into the ‘Working for Wetlands’ programme. The Committee advised the Park to maintain its engagements with the local communities in order to sensitise them to its capacity constraints, and thereby foster understanding.

Meeting report

Chairperson’s Opening Remarks

The Chairperson said the Committee had attended the climate change conference in Germany, but they had not been satisfied with the outcomes of the negotiations there, despite the slow progress. The Committee was expecting a more comprehensive feedback from the Department of Environmental Affairs (DEA) after they had consolidated their notes. A break-through was reached on the negotiations surrounding agriculture. The Committee had enquired about the United States of America’s withdrawal from the Paris Agreement. There was still uncertainty on whether they would like to renegotiate their participation in the Agreement, and on the other hand they were still waiting for clarity from their executive as to whether they would be proceeding with their intended withdrawal from it.

Marine Spatial Planning Bill [B9-2017]

Ms Radia Razack, Director: Law Reform and Appeals, Cape Town Office, DEA, said that the much of the Bill had been dealt with at the previous meeting, especially the issues relating to suggested editorial improvements.

Objects of the Bill

One of the recommendations was to strengthen the conservation objects of the Bill and balance it out with the economic factors that had been raised in order to ensure sustainable economic exploitation and oceanic environmental conservation. As such, the phrase ‘Good Ocean Governance’ had been replaced with ‘reasonable use’ of the ocean throughout the Bill.

Clause 3: Application of the Act:

Upon deliberation, it was decided that the issues relating to the transitional arrangements and existing rights to permits be catered for under this section as opposed to the previous version, where they were in different sections.

Clause 4: Conflicts with other Legislations:

The clause was also amended to bring about consistency with other statutes granting similar authorisations which would now be subject to the MSP.

Clause 5: Principles and criteria for marine spatial plan:

The provision was amended to include editorial improvements for coherency and bring about a sound decision-making base in the event of conflicts where co-existence was not an option. In such cases, all principles should apply with regard to the precautionary approach.

The Chairperson sought clarity regarding the principle in 5(i) on efficiency. He asked which, among the principles stated, was the overriding principle in the event of a dispute resolution.

Ms Razack explained that confining the dispute resolution to one principle may be legally problematic in a conflict scenario if the principles were not weighed, based on the facts of each case. It was not possible to pre-empt how each case may present itself and thereby identify one superseding principle to dictate how decisions would be made. The pre-emption of decisions may risk constitutionality challenges.

Mr Gcobani Popose, Director: Oceans and Coasts Branch, DEA said that conflicts may develop in numerous ways due to the nature of the oceanic space, and therefore it was impossible to anticipate which types of conflicts may arise or could be anticipated.

The Chairperson expressed dissatisfaction with the wording of the provision and said that the legislation’s intention would be compromised if there were insufficient empowering provisions that would assist the Committee in making decisions.

Mr Popose said that legally, the law did not apply retrospectively and the decisions that had already been made could not be cured by this legislation. The Minister may, however, review some of the decisions in the ministerial Committee.

The Chairperson said that the issue before the Committee was how to make the dispute resolution process more empowering to pursue the objectives of the Act.

Mr S Makhubele (ANC) said that, to his understanding, the legislative drafters did not want to make one principle supersede the rest and make one biased over the other. The principles had been drafted so as to compete equally upon consideration by the decision-making body and avoid making one principle the main defining principle of the Bill and not be assessed in accordance with the merits of the case under consideration.

The Chairperson said that the Committee would deliberate on this issue later.

Clause 8: Consultation

The clause was amended to address concerns regarding alleged inadequate representation of affected bodies in the consultation scope of the Act.

Clause 9: National Working Group

The amendment to the provision was to the effect that the official nominated from the DEA would be the chairperson and convener of the National Working Group. Public Enterprises would also be added as a department. Transitional provisions would also assist in building flexibility as a way forward to conservation.

The Chairperson said that although the Act would not apply retrospectively, certain decisions made in the past would require a period of transition in order to be put in accordance with the Act.

Mr S Makhubele (ANC) said if the scenarios were put separately, it would bring about a separate standard for all the marine area plans, regardless of the fact that they were developed at different times.

Mr T Hadebe (DA) asked for clarification on whether the transitional clauses applied when there was a total change of use in the activities of the marine area which was contrary to the Marine Spatial Plan.

The Chairperson said that, to his understanding, the Bill established the working group, the DG Committee and the Ministerial Committee. The Working Group formulated the marine spatial plans through a consultation process. Thereafter, it was taken to the DGs and the ministerial committee for final approval. The MSP would determine the particular uses of those marine areas and in case of any conflict, there would be negotiations to resolve the dispute. The transitional clauses would be as per the MSP, although at the moment there was no timeline as regards the transition of the plans.

Ms Razack said that the Members of the Committee had articulated well the intention of the Bill. It was not possible for the DEA to come up with a uniform prescribed transition period for all the plans, since the plans were developed and implemented separately. As such, each plan would have its own capacity requirements and may require its own timelines.

The Chairperson expressed his concern regarding a potential endless transitioning period, and suggested that there should be timeframes on the transition so as to avoid an endless transition period. He suggested that the maximum period of the transition should be five years.

Mr Hadebe agreed with the Chairperson with regard to the need for specified timelines, and said that in a situation where there was a marine plan to be effected, but exploration was taking place in the same location, the marine plan might be stalled endlessly since the transitioning period was unprescribed.

Mr Z Makhubele (ANC) also agreed with the Chairperson, but suggested that there should be caution with regard to exemption of big businesses which may genuinely need a transition period of more than five years. He suggested that there should be provision for a transition period that went beyond five years which could be supported by scientific evidence and avoid abuse of the law.

Ms Suraya Williams, Principal State Law Advisor, suggested that the provision could be amended to include a reasonable period of time with a maximum specified limit so as to avoid an endless transition period. There were a lot of precedents interpreting a reasonable period of time on a case by case basis, and hence avoid abuse of the law.

Clause 10: Directors-General Committee:

The Chairperson said that the Committee had recommended voting in the decision-making process, and also stressed the importance of science in arriving at those decisions. The Department of Planning, Monitoring and Evaluation (DPME)had been assigned to lead the Pakisa programme.

Ms Razack asked whether the Committee would wish the provision to reflect the DPME as the co-chair in the absence of the DG of the DEA.

The Chairperson suggested that it could be left as an understanding between the two departments, and should not necessarily be reflected in the legislation. The DG of the DEA should be the chairperson of the DGs’ committee.

Ms Williams suggested that the legislation should accommodate a co-chair in the legislation so as to avoid uncertainty or any misunderstandings. 

The Chairperson said that the Bill deliberately defined a ‘Director General,’ and assumed that the DG of the DEA played a significant role in the process. The same assumption applied to the working group which should be chaired and convened by an official from the DEA.

The DG suggested that there could be an alternative provided for in the legislation, since during previous deliberations other Departments had expressed their concerns with the chairperson of the DG committee being the DG of the DEA.

Mr Makhubele reiterated that the chairperson of the DG committee ought to be the DG of the DEA, since the Bill itself was being processed by the Portfolio Committee on Environmental Affairs.

Ms S Mchunu asked whether the Bill was clear that in a case where the DG of the DEA was not present in the meeting, an alternate could assume the chairperson’s role.

The Chairperson said that the Committee had previously also decided that the quorum of the DG committee had been agreed as being five.

Mr Makhubele agreed, and said that the Committee had agreed to reduce the quorum to five members since the committee would be frustrated in the event it needed to make decisions but lacked a quorum.

The Chairperson said that decisions in the DG’s committee should be made by majority vote and that it should not be construed as a sub-committee of Cabinet, since it was formed under the Act. The DGs may nominate their alternates, but such persons should be either another DG or a DDG. The DG’s committee was a forum of DGs and as such, persons who were lower than those ranks should not be alternates.

Clause 11: Ministerial Committee

The Chairperson said that there was a need for clarity on how decisions would be made in the Ministerial committee. He suggested that decisions should be reached by a majority vote, with a quorum of five members.

Mr Makhubele expressed his concern that the Committee had agreed that the Ministerial committee decisions should pass by sufficient consensus without specifying a quorum, so as to avoid lobbying.

The Chairperson said that Cabinet would not be playing any role in the decision-making process, but there was a need for clarity on the decision-making process. A majority vote was the only democratic way of making such decisions.

Ms Williams asked whether there should be a deciding vote in the event of an equality of votes.

Ms Razack said that such a provision should not be left out, as the committee would be risking a deadlock.

The Chairperson said that the DG of the DEA, as the chairperson of the committee, should have the deciding vote, since the DEA played a vital role in the processing of the Bill and played a big role in marine spatial planning. The DG would also have the necessary expertise in the Department to advise the committee on the MSP.

Ms Nosipho Ngcaba, DG, DEA, said that during the socio-economic assessment, there had been concerns regarding the role of DEA. As a result, it had been proposed that the DG of the DPME should be the co-chair. Also, there had been concerns from the ministers regarding the voting provision.

The Chairperson said that the voting provision was to bring about legal certainty since the ministers, in practice, did not vote.

Clause 12: Publication

The Chairperson asked on what the role of Parliament was with regard to publication.

Ms Williams said that the state law advisors and the Parliamentary legal advisors had met and come up with two alternatives, one of which proposed the attachment of days. 

The Chairperson asked whether there should be days attached or not.

Ms Williams said that the same arguments for the transitional provisions could be made here. There should be some form of cut-off time to ensure that there was a flow in the process.

The Chairperson asked for a preference of the ideal time. He suggested that there should be a maximum of two to three months for Parliament to consider and approve the plan, and upon the expiry of such time, the minister may go ahead and publish the plans.

Ms Judy Beaumont, DDG, Oceans and Coasts, DEA, said that it was critical to maintain some form of momentum, and three months was too long.

The Chairperson then suggested that the period should be two months, or 60 calendar days, after which the minister may publish the plans. The period would be calculated from the date the plans were submitted to Parliament. For the Bill to be effective, there was a need to give it more teeth.

 

AGSA: Late tabling of DEA annual report

The Chairperson said that the Committee had received a letter from the Minister explaining why the Department was not able to table its annual report for 2016/17, and therefore the Committee would get reports only from the entities. The Committee had requested the Auditor General of South Africa (AGSA) to prepare a special report in relation to the Public Finance Management Act (PFMA).

Ms Alice Miller, Corporate Executive: AGSA, explained that the disagreement had resulted from the 2016/17 financial year audit, where the DEA had made a decision, based on their interpretation, to account for all payments made under principle agent arrangements, as transfer payments. The AGSA had disagreed with this adopted accounting treatment, and had therefore given an adverse audit opinion. The payments made were in respect of the Expanded Public Works Programme (EPWP) and the Green Fund, which had subsequently been considered as non-exchange transactions.

The AGSA disagreed with the management’s view that the implementing agent contracts resulted in non-exchange transactions. The Department controls and directs the implementing agents appointed, even though the goods and services may be acquired for an entity that was not a party to the contract with the implementing agent. Where assets were acquired or created, these assets belonged to the Department in terms of the contractual arrangements with the implementing agents, and therefore must be recorded in the financial statements of the Department.

The AGSA had disagreed with the Department on the assessment of the principle agent arrangements in terms of the Chapter 16 of the Modified Cash Standards (MCS) under which the Department should have accounted for the transactions as the principal.

On the tabling of the Annual Audit Report, the AGSA had completed the audit, which was signed and provided to the Department on 31 July 2017, in compliance with S40 (2) of the PFMA. The reasons for the late tabling were highlighted in the Minister’s letter to the Speaker of the National Assembly dated 26 September 2017.

With regards to the status of the discussions with the Office of the Accountant General (OAG), the Department had held discussions with the AGSA during the past financial year during which the OAG had appointed a consultant in order to obtain an OAG view. Numerous engagements had subsequently been held between the parties and an unsigned discussion paper was provided relating to the EPWP projects only, and the Green Fund remained outstanding. The OAG had since then asked to provide a formal position for consideration by the AGSA. This position was received on 21 November by the AGSA, and would be assessed to determine the areas where there may be agreements or disagreements, the impact thereof and the way forward.

Discussion

Mr Makhubele asked when the assessment was projected to be concluded and the outcome of the assessment determined. Would the discussions have a basis of reversing the special report that had already been issued?

The Chairperson asked what the AGSA called the current discussion process and the impact of it, since the Act required a formal process of mediation. He asked about the impact of the discussion paper and whether it would result in a change of the audit opinion.                            

Ms Miller said that the challenge they had was that they had had to wait four months before they received the discussion paper. Therefore, in light of challenges that may lie ahead in December, the process could not be projected to be quick, and could be projected to be finalized only around mid-January 2018. On the impact of the report, the audit opinion would be reversed only if the report was factually incorrect and upon the completion of a full assessment. The report issued at the end of July stayed intact and was included in the general report as an outcome.

The National Treasury had appointed a consultant to review its contracts and form a view on where the National Treasury stands. The AGSA had a dispute resolution process with the National Treasury which would be activated only once the impact of the position paper had been assessed and the principle disagreements identified. The outcome of the process would thereby be accepted by both parties.

Mr Hadebe said that the Committee should have invited the OAG and the National Treasury so that they could give their side of the story and have the issue resolved once and for all. The situation had persisted since the 2014/15 financial year, and there still remained uncertainty on how the Department should present its financial statements. As a result, this frustrated the work of the Portfolio Committee since they could not debate on the financial statements since they had not been tabled.

The Chairperson said that the Committee had received a letter from the Director General of the National Treasury to the effect that the Acting Accountant General could not join the Committee today since he was engaged in other official business. It was, however, unfortunate they were not available since the National Treasury could have delegated some of its officials to attend the meeting.

Mr Makhubele shared the Chairperson’s concern, and reiterated that it made the work of the Committee difficult in trying to come up with a way forward. The Committee had not been able to table its Budgetary Review and Recommendation Report (BRRR) in the previous financial year for discussion in Parliament, due to the absence of an opinion. He asked whether the Committee should go ahead and table the Special Report

The Chairperson responded that the Committee could not table the special report before it had looked at the DEA’s annual performance report and the AGSA report. The special report was only meant to help the Committee to understand what was wrong. There had to have been fundamental issues picked up by the AG in this audit, since the DEA had been receiving clean audit reports in the previous years. The DEA should explain whether there was genuine disagreement, or a reluctance by the Department to accept the AGSA’s findings. 

Ms Miller said that this was a genuine disagreement, since the publishing of the MCS. The DEA had expressed concerns with the implementation of the MCS. The National Treasury should assist in the interpretation of a transfer payment and provide clarity on it.

The Chairperson said that the DEA had received the position paper yesterday, and had not finalised reviewing it. In the event there was a disagreement, then the parties should follow a mediation process that would be binding upon the parties. He was concerned with the amounts of money budgeted and allocated to environmental projects, and said that the Committee got confidence when the AGSA assured it through their audit reports.

SANParks: First and Second Quarterly Performance Report

Mr Fundisile Mketeni, Chief Executive Officer (CEO), SANParks, said the entity’s overall performance was that 78% of its targets had been achieved, 19% remained work in progress, and 3% were off target.

Some of the positive highlights of the targets reached were in relation to the reduction in the recorded number of fatalities of rhinos and elephants poached as a ratio of the recorded number of poaching activities in KNP. An 11% and 15% reduction year-on-year had been recorded in the first and second quarters respectively. This achievement was attributed to the improved capacity to react, and improved technology.

The deviance from the sustainability threshold of identified key species managed was also highlighted as a key improvement in the case of rhinos, the targets achieved having surpassed the targeted threshold.

Some of the targets which were still work in progress were;

  • The total hectares of land being rehabilitated or restored. There were capacity problems in the Garden Route National Park, and new areas had to be worked in Addo and Kruger National Parks. Only 12 091ha of the 15 415ha targeted had been rehabilitated.
  • The SANParks elephant management implementation plan was aimed at the review of the national elephant norms and standards. However, in the first quarter, the workshop was postponed twice, and in the second quarter, the first consultation meeting had been held with the Kruger National Park rangers.
  • The percentage implementation of the wildlife utilisation strategy was awaiting approval from the Board. A substantial number of applications had been received for wildlife loans, and were awaiting evaluation.
  • The number of social legacy projects implemented was behind schedule in the first quarter, as the planning process took longer than anticipated and there had been a delay in the procurement processes.
  • The total male:female ratio in management was at 1.06 due to the implementation of the Employment Equity Plan and the targeted recruitment plan.

Some of the targets not achieved were:

  • The percentage increase in SANParks Environmental Management Inspectors’ (EMI) admission of guilt fines (J534) for key spp (+total) and arrests for key spp (+total). It was noted that there had been a 43% reduction in J534 fines issued in the first quarter, but a significant increase to 54% in the second quarter.
  • The deviance from the sustainability threshold of identified key species managed in the case of elephants was also highlighted, since the cycad monitoring plan to track sustainability thresholds had not been developed. The plan was, however, being implemented in the second quarter.
  • The percentage implementation of the SANParks cultural heritage management plan, the planned quarterly activities implemented being 60% in the second quarter.
  • The enterprise development strategy implemented was marked as a work in progress. It was behind schedule in the first quarter due to the need to refine and agree on the actual expected deliverable. However, in the second quarter, it became off target.
  • On the enhanced awareness and skills, the total number of participants in the environmental education programme was off target in the first quarter, as the desired number of participants could not be reached. This was attributed to policy changes in the Department of Education, as schools were now required to get permission from the Department for their learners to attend the programmes.
  • The percentage of women in management was below the 50% target for the two quarters. 

Discussion

The Chairperson asked what the acceptable threshold of rhinos poached was.

Mr Mketeni said there was a need to measure and report on the number of animals poached in order to deal with the anxiety related to the extinction of these animals. The threshold represented the maximum acceptable deaths of animals, to build the confidence of South Africans and reduce their anxiety over extinction.

Ms Mchunu asked about the strategy regarding rhino poaching, since there had been a decrease in the rhino poaching awareness campaigns. She asked about the number of South African visitors to the national parks, and if there were any sensitisation campaigns to entice local nationals to visit them.

Mr Mketeni said that there were non-governmental organizations (NGOs) whose campaigns inadvertently associated the rhino horns with money, which in turn had a negative impact on the awareness campaigns. There was a need to synchronize the awareness campaigns so as not to adversely perpetuate adversely the situation by creating more syndicates and poachers. There were also plans in place to entice the younger market to visit the national parks, since the current market was aging quickly.

 

Isimangaliso: First and Second Quarterly Performance Report

Prof Anis Koradia, Interim CEO; Isimangaliso, said that in the second quarter, 27 targets had been achieved and four remained works in progress. These targets assessed the Park’s programmes for conservation and operations, transformation, tourism/commercial activities and corporate governance. All targets had been achieved in Programme One. In Programme Two, the annual target of the number of bursaries awarded was not achieved, since two of the 26 students on the programme had dropped out. Also, the percentage target for procurement from black-owned suppliers was not achieved, but it was expected that the shortfall would be made up in Quarter 3, as the ‘Working for Wetland’ contractors had already begun.

In Programme Three, all targets were achieved, with the exception of the visitor entries which 108 126 visitors against the target of 130 000. This was attributed to the decrease in vehicular entries and the increase in pedestrian entries. In Programme Four, all targets were achieved with the exception of the number of visitor market surveys and the percentage completion of plans requested/required in this financial year.

Ms Abeeda Kadir, CFO: Isimangaliso, said that the Park’s income had exceeded the budget by R33.3 million from the period April to September 2017. This difference was attributed to the basis of preparing the budget in accordance with the modified cash basis required by the PFMA, and the financial statements. Expenditure was above budget by R1.6 million due to higher than anticipated repairs and maintenance costs.

Discussion

Ms Mchunu asked whether there were any opportunities for creating more permanent jobs, especially for those already on the programme. She asked whether they would be absorbed after the completion of the programme.

Prof Koradia said that despite the Park being a small organization, with a R344 million budget and 33 members of staff, they absorbed some of the interns into the programme. There were a lot of demands, and therefore it may be difficult to balance the demands and the desire to recruit more staff.

The Chairperson said that he hoped the Park was investing in community engagements in order to sensitise the local community on its capacity constraints, and thereby foster understanding.

Prof Koradia said that they had been meeting with the local community in an effort to win their support, and the Park would be intensifying its efforts upon receipt of funding from the DEA. The Park had also developed a stakeholder plan which would prioritise stakeholder relations moving forward.

Mr Mark Gordon, DDG: DEA said that the Department was looking at the whole value chain in an effort to identify what could be sourced locally, and thereby create opportunities.

The Chairperson asked whether the Board had commenced the process of hiring a new CEO.

Ms Sibongile Nene, Board Member, Isimangaliso, said that the advertisement for the position was out, and the vacancy was expected to be filled within the next three months.

The Chairperson reminded the Committee that it would be convening tomorrow for the finalisation of the Marine Spatial Planning Bill and for a briefing by the South African Weather Service (SAWS) and the SA National Biodiversity Institute (SANBI).

The meeting was adjourned

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