NEMLA Bill: adoption; SANBI 2017/18 Quarter 3 & 4 performance

Environment, Forestry and Fisheries

13 June 2018
Chairperson: Mr M Mapulane (ANC)
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Meeting Summary

The Portfolio Committee on Environmental Affairs meeting was divided into two parts. In the first part, the Committee deliberated on the National Environmental Management Laws Amendment (NEMLA) Bill. In the second, the South African National Biodiversity Institute (SANBI) reported on its performance in the final quarters of the 2017/18 financial year.

Firstly, the Committee dealt with the National Treasury’s proposed amendments to the NEMLA Bill. Secondly, in regard to the issue of ‘wellbeing,’ the Department of Environmental Affairs (DEA) dealt with the new provision it had proposed. This standalone provision, in terms of the Biodiversity Act, was clarified and justified. The provision was made broad so that the Minister may prohibit an activity that could involve killing, transporting, or keeping. Thirdly, the state law advisor referred to the section 48 under the National Environmental Management: Protected Areas (NEMPA) that had been proposed by the Portfolio Committee. This amendment dealt with the very stringent conditions under which mining was allowed in a protected environment. Based on the discussions, the Chairperson suggested that the details on how public participation should take place could be removed.

The Chairperson also raised concerns around the submission by the DEA that everything new must be processed by Cabinet. This would be unfortunate, because it could mean that all the time that had been spent dealing with this Bill had been an exercise in futility. Next week, the Committee would be looking at the B version of the Bill, and be voting on it. For now, all the contentious issues had been dealt with, including section 48.

SANBI gave a breakdown of SANBI’s background and policy and legal framework, and described is six programmes. Out of 39 targets, it had been able to achieve 36. The entity’s financial performance indicated that the cash reserves were sufficient to meet its short-term needs as well as obligations from the project funds received. The Institute was solvent, with total assets exceeding total liabilities by an adequate margin.  

In the discussions, it was highlighted that, among others, there was no performance indicator for the Green Climate Fund. SANBI had been identified as an implementing agent but there was no indicator. The request was that there should be an indicator so that SANBI was able to report on its performance. The Committee also wanted more details on the financial performance. When SANBI talked about its projects and donations, it needed to elaborate on them, especially given that the performance had not been good. Overall, the impression was that SANBI was well run.

Meeting report

NEMLA Bill (B Version): Clause by clause deliberations

Mr Ishaam Abader, Deputy Director-General: Legal Authorisations and Compliance Inspectorate, DEA, said the Department was ready to provide feedback on the issues that had been referred to them by the Committee. Amendments, in line with National Treasury recommendations, had been proposed and also a particular clause in relation to section 57A. Mr Mongameli Kweta, Senior State Law Adviser, was also proposing a clause in respect of section 48. There had been an instruction from the Minister to put on record that any additional or new clauses that were not part of the original Bill would have to go through the Cabinet processes again.  

The Chairperson asked for confirmation that all the additional clauses had to go back to Cabinet.

Mr Abader confirmed that those were the instructions given to him by the Minister.

The Chairperson asked whether this applied to all the clauses that were dealt with, even those that were proposed by the DEA,

Mr Abader responded that he would assume so.

The Chairperson said that the DEA should start with National Treasury’s (NT’s) proposed amendments.

Ms Dee Fischer, Director: Waste Stream Management: DEA, said that the amendment that NT had requested was just for more clarity on the various vehicles. The DEA had done this in the section on vehicles in 24P.

Ms Fischer read 24P (6a), highlighting and clarifying the additions to the Bill in terms of 24P, 6a to d.

The Chairperson asked whether the DEA was happy with the amendments, and that it covered what National Treasury had raised.

Ms Fischer responded that the DEA was satisfied that the amendment covered what NT had raised, although the “in concurrence with the Minister of Finance” had not been removed because when it came to financial issues, the Minister of Finance was normally involved in those decisions.

The Chairperson whether it was ‘in concurrence,’ or ‘in consultation’?

Ms Fischer explained that at the moment, it was ‘in concurrence’. Therefore, it had to be in agreement with the Minister of Finance.

The Chairperson asked where the letter was?

Mr Abader said that he had made reference to an email from the Department of Mineral Resources (DMR). A letter could be given to the Chairperson now if he so wished.

The Chairperson asked whether the email had been received from Finance.

Mr Abader confirmed that it was actually an email.

The Chairperson pointed out that it had been requested that this correspondence be distributed to Members yesterday.

Ms Abader apologised for the oversight on the DEA’s part. A copy would be made and then distributed.

The Chairperson responded that it looks like a straightforward issue, confirming that the definitions were being strengthened.

Mr Abader said that the next issue was the ‘wellbeing’ issue, and indicate the proposed rewording that had been requested.

Ms Magdel Boshoff, Deputy Director: Threatened or Protected Species (TOPS) Policy Development, DEA, explained that in terms of the Biodiversity Act, 2004 section 9A, the DEA proposed a new provision as had been requested by the Committee yesterday. This was a standalone provision, similar to something that was in the Animal Protection Act, where the DEA was proposing for it to be included in the beginning of the National Environmental Management: Biodiversity Act (NEMBA) so that it could apply to all the chapters in the Act, and not only to the chapter that dealt with illicit, threatened or protected species.

Ms Boshoff read the insertion to the Committee (see page 23). The DEA did not use the exact wording of the provision in the Animals Protection Act, that the Minister may prohibit the killing of an animal for the skin or a product for commercial purposes. The reason for this was that the provision would be limiting in the bigger context of the activities that were carried out in facilities. If the DEA included ‘killing’, it would relate only to killing and not to all the other activities, like keeping or transporting where the same concerns may arise. It was made broad so that the Minister may prohibit an activity that could be killing, transporting, or keeping, but also not only for commercial purposes, because there may be activities that one would want to prohibit in other circumstances that did not relate to commercial purposes, where there was a concern for wellbeing. The clause was made broad so as to cover any situation that may arise where the Minister would want to prohibit an activity. It had been made a standalone enabling provision, for the Minister to prohibit.     

The Chairperson responded that it was still watered down, but it was acceptable.

Mr Kweta referred to the proposed section 48 under the National Environmental Management: Protected Areas (NEMPA). Yesterday the Committee was thinking along the lines of either having a blanket ban on mining in a protected environment or, alternatively, to allow mining but under very stringent conditions. The Committee was of the view that consideration should rather be given to the stringent conditions under which mining could occur. The proposed amendment of section 48 was partly based on the suggestion by the DMR to the Committee. Further on in the amendment, there were provisions in terms of which the DEA Minister and the Minister responsible for mineral and petroleum resources, could give permission for mining. The provision stated that permission could be given only under particular conditions, meaning that when they considered an application for permission to mine, the Ministers must consider certain conditions.

Mr Kweta read out the conditions. These were the areas or aspects that the Ministers would have to apply when considering applications for permission to mine in these areas. Subsection 5 outlined the process of public participation. He read Subsection 5. These were the conditions under which permission for mining in a particular area must be considered by the Ministers.   

Discussion

The Chairperson asked whether the details of the public participation were not too elaborate.  Could they not find expression somewhere in the regulations? Were there regulations that dealt with public participation?

Mr Abader explained that those were part of the Chapter 5 regulations that dealt with public participation in relation to, for example, the environmental authorisation.

The Chairperson said that the details of how public participation should happen could be removed, because it should be captured somewhere. There should be a provision for public participation. It did not need to be made this elaborate. It could refer to the requirements to consult, as prescribed in the relevant regulations.  Furthermore, 4(a) i and ii were fine. Where there was reference to the fact that the activity should not affect the water quality, should ‘water quality’ be used? Maybe reference should also be made to catchment areas. In terms of (b), it should speak to ‘public participation,’ and that  public participation should happen in respect of whatever provisions that were necessary. Everything from (c) were details that were somewhere else in the regulations. It was encouraging that at least there had to be an endeavour to find out whether there were minerals outside the protected environment first.    

Mr Abader said that the DEA had concluded. Would the Department have to present at next week’s meeting, or was it a Committee process?  

The Chairperson said it would not be necessary. Next week, the Committee would be looking at the B version of the Bill and voting on it, assuming that everything else was fine. The DEA did not need to be present to engage on anything. For now, all the contentious issues had been dealt with, including section 48. It was understood that the DEA had not given input on section 48.

Mr Abader confirmed that he had not given input on section 48.

The Chairperson said that was fine. There was still time to do that. The Committee would proceed next week and finalise the Bill. If there was a request for the Bill to be withdrawn, the DEA could do that. The submission that everything new must then be processed by Cabinet meant that everything else that had been requested by the DEA and the Committee, after having dealt with the public participation process, must go back to the Cabinet. It was unclear whether this was how the law-making process was supposed to be undertaken. A Bill was supposed to be introduced in Parliament, people comment, and make public submissions. These were discussed, added, changed, vary and then it becomes the final Bill. If it did not seek to do what was intended, the executive could always at any time withdraw the Bill. This would be very unfortunate, because it would mean that all the time that had been spent dealing with this Bill had been an exercise in futility. It meant that Parliament would not be able to trust, when the next proposed legislation arose, whether the Committee had to get assurances first before it started engaging with it. The Committee did not want to waste its time because that would be tantamount to wasting everybody else’s time.   

Mr R Purdon (DA) echoed the Chairperson. Did the Committee have any idea of the timeframes? After next week, did it know whether the Bill would go back or be withdrawn? Did the Committee have any idea of what it could expect?

The Chairperson responded that the Committee did its work by processing the legislation, like it had started to do and was almost done. If there was any intention of taking it back, it was up to the executive to decide, but subject to the rules of Parliament, because this was a Parliamentary process. It was processed by the Committee, together with the DEA, and if there was anything else, the Committee would receive communication with a reason. It did not make sense. There was a lot that was new that was entering into the legislation, proposed by various other stakeholders, including the DEA. Why would the Committee not touch any other issue that had been commented on by the public? Section 48 had arisen from the comments written by the Centre for Environmental Rights (CER). Next week, the team did not need to attend. It could send one or two representatives. The Committee must ensure that there was a sufficient quorum. The meeting next week was subject to Members attending. If Members did not attend, there would be no quorum and there would be no point in any Committee Members being present because this was going to have to be voted on. At the time that the Committee adopts, there had to be a quorum.

The Chairperson thanked all the DEA representatives for coming. The Bill had been processed quite satisfactorily.  It was a pity that there had been somewhat of a bitter ending concerning section 48, which should not cloud the good work that the officials in the DEA had been doing together with the Committee. It had been a long journey. This was the almost the end. The final end would be when the House looked at the Bill and approved it.

It was a section 76 Bill, so it would have to go to the National Council of Provinces (NCOP), which may decide on its own process -- for example, public participation. If there were changes which had been made in the NCOP, the rules were such that it had to come back to the National Assembly (NA). If the NA did not agree with the amendments, then there was a process which the NA followed, for example, mediation. However, the Committee had never really found itself in that situation. Usually, what got processed there came back and was endorsed. The responsibility rests with the State Law Advisor to look at the Bill, to proof read it, and to finalise the B version of the Bill, and next week the Committee would adopt it.    

SANBI: Third and fourth quarter performance

The Chairperson congratulated the newly-appointed chairperson of the SA National Biodiversity Institute (SANBI), Dr Joseph Matjila, and asked whether he had started officially from 1 June 2018.  

A DEA representative confirmed that the term of the current board was until March 2019, or until a new board was appointed.  

The Chairperson said that ordinarily, when there were changes, the Committee was informed so that these questions did not need to be asked. Courtesy dictated that when there were new appointments, the Portfolio Committee should be informed. Until further notice, the Committee would work with the Chairperson. There had been an issue last time when the Committee had asked SANBI to come, and had received a letter from the chairperson of the board to say that the board would not be able to come, including the executive, because there were a series of meetings. The Committee did not take kindly to getting a late notice that the board would no longer be coming, and that it had to make arrangements for SANBI to come again. It was the Committee that develops a programme and determines the days on which the board had to appear before it and account -- the board does not choose for itself which days are suitable or not suitable. If there is any problem, SANBI makes a request, and the Committee considers it. It does not just get a letter saying that SANBI is not going to come. That was not how things worked. The Committee had been intending to say to the former chairperson that the Committee could not be dictated to. When requested, SANBI had to come to Parliament and account. That was the expectation that the Committee had of public officials of the board and everybody. 

Dr Matjila said that the comments were noted, and proferred a sincere apology from SANBI. SANBI would be taking the Committee through the third and fourth quarters simultaneously.

The Chairperson asked SANBI to concentrate only on the 4th quarter. This was what had been done with other entities. 

Dr Moshibudi Rampedi, Chief Executive Officer: SANBI, outlined the Institute’s six programmes.  These were to:

  • Render effective and efficient corporate services;
  • Manage and unlock the benefits of the network of National Botanical Gardens as windows into South Africa’s biodiversity;
  • Build the foundational biodiversity science; 
  • Assess, monitor and report on the state of biodiversity and increase knowledge for decision making including adaptation to climate change;
  • Provide biodiversity policy advice and access to biodiversity information, and support for climate change adaptation; and
  • Provide human capital development, education and awareness in response to SANBI’s mandate.

Out of 39 targets, SANBI had been able to achieve 36.

Ms Lorato Sithole, Chief Financial Officer: SANBI, referred the Committee to a table detailing the financial performance of SANBI for the 2017/18 financial year.  Highlighting a few of the key financial indicators, she said that income from projects and donations was below the budget due to timing. Overall, the budget for generating own income was exceeded by R1.8 million. Rental income was lower than budgeted, as some of its restaurant facilities were unoccupied. This was specifically at the Karoo and Kwa-Zulu Natal national botanical gardens (NBGs). Investment income was ahead of budget as a result of investments and bank account balances being higher than budgeted for. Other income made up of sundry income, such as plant sales and unidentified deposits, formed a steady flow of cash to the entity. Personnel expenditure was well contained, while the operating expenditure was exceeding the budget. Capital expenditure was exceeding the budget as a result of the three-year cycle on this line item. This amount was the funds which had been rolled over from the previous financial year. The positive variance was fully committed.

Ms Sithole presented a slide on SANBI’s financial position in the 4th quarter of the 2017/18 financial year. Overall, the cash reserves were sufficient to meet the short-term needs as well as obligations arising from project funds received. The Institute was solvent, with total assets exceeding total liabilities by an adequate margin.  Current assets had increased by R47.5 million (14%), and current liabilities have increased by R51.12 million (23%). 

Discussion

The Chairperson said he had a few questions on the financial report. There had been a variance of 19% on the income that was expected from projects and donations. Could the Committee get a sense of what income this was, and what projects and donations these referred to? Furthermore, regarding the 45% variance, there was R75 million budgeted for under capital expenses, and only R41.243 million had been spent. What types of projects were these? Why had there been such a delay in implementation? Almost 50% of capital projects that had been budgeted had not been implemented, against the backdrop of the new botanical gardens that SANBI had planned for. The Committee needed an explanation for this. What happened when someone books a venue -- did SANBI immediately issue an invoice or was an invoice issued only after the venue had been utilised? Why did SANBI allow tenants 75 days to pay, instead of paying monthly?  

Mr T Hadebe (DA) said that the overall impression was that SANBI was well run. However, there were a few worrisome issues. As far as the financial performance was concerned, if the Committee had been given notes on the financial performance, it would have had an explanation for some of its questions. Furthermore, SANBI was accredited to disburse the Green Climate Fund (GCF) funding, but there was no performance indicator for the report on the projects that they had approved. There was no mechanism to show where they were regarding the disbursement of these GCF funds. SANBI did a very crucial job when it came to the GCF, giving advice on issues that were related to climate change. 

Mr Purdon congratulated SANBI on winning another gold medal at the Chelsea Flower Show in England. It was its 35th gold medal in 42 years. This was a tremendous achievement. He asked how this exercise of exhibiting in England was funded. Regarding the finances, the creditor payment period of 33.5 days was commendable. However, the 75 days in which SANBI allowed tenants to pay was a very long time -- could there be a legal opinion on this, since this did not sound correct? Finally, what impact did the recent addition of the National Zoological Gardens in Pretoria have on the financials? 

Ms H Nyambi (ANC) pointed out that under the cash management heading, there was a repetition in the presentation, but with different figures. What was the difference? 

Ms S Mchunu (ANC) commented that, as a new person in the Committee, she was looking at SANBI programmes and it was commendable that they gave more details on what each programme was doing. However, taking Programme One into consideration, why was the heading ‘Render effective and efficient Corporate Services,’ and not just ‘Corporate Services’, where it was about assessment and monitoring? In most of the entities, headings did not tell much of story in relation to the programmes themselves. It was commendable how consideration was given to people with disabilities and ensuring that they adhered to the targets that they had set for themselves. Regarding the number of marketing and brand communication initiatives, the target had been 44 activities to be arranged per annum. While SANBI had over-performed, did this not have a negative impact on the budget? In the financials, as mentioned by the Chairperson, there was a shortage of detail, even in terms of operations. If there was a breakdown of the figures, this made it easier to detect where there was overspending. However, one could not detect overspending when there was no breakdown of, for example, operations. Lastly, there were restaurants that were unoccupied in the Karoo and KZN. In KZN, which ones were those?     

SANBI’s response

Dr Matjila responded that the Chelsea Flower Show event was funded from SANBI’s budget. The costs of the staff and management to participate in the event were covered. There were some who helped SANBI as volunteers, who paid their own costs for participation in the Chelsea Flower Show, which was a good marketing tool, not only for SANBI, but for the whole country. SANBI acknowledged the volunteers for their help. There was a special occasion on which to thank them for their help and contribution at the Chelsea Flower Show.

Concerning the impact of the National Zoological Gardens (NZG), the zoo had been integrated into SANBI on 1 April 2018. There had been a process in which SANBI had engaged with the staff. The biggest impact of this, besides the under-funding that they had come over with, was the people impact which SANBI was currently consulting. The full extent of the integration of the NZG and SANBI would be achieved only as SANBI got further along into the journey. SANBI would then be able to give the Committee a granular view of the financial impact of this exercise. From SANBI’s side, it did come with financial benefits. SANBI would come back to give the Committee a much more accurate picture of this transition.   

Dr Rampedi reponded to the question as to how SANBI reported and how the programmes were designed, with particular reference to Programme 1, and said that, as per Ms Mchunu’s advice, SANBI would improve the programme design so that it was fully reflective of what was undertaken through corporate administration and other related functions, such as monitoring, planning and reporting. Concerning SANBI’s adherence to the 3% disability employment target, SANBI welcomed that. The fact that SANBI had exceeded the targets that it had set by doing more activities than it had originally planned, had not had an impact on its budget, even though it had raised the various modalities of marketing, some of which had been done in partnership with other interested parties. Overall, SANBI welcomed any initiative that created partnerships because they allowed it to raise its income and increase its footprint into its gardens.

Regarding the unoccupied restaurants in SANBI’s gardens, its report indicated that these restaurants were sometimes without tenants. In this reporting period, SANBI had reflected on Karoo and KZN. In KwaZulu Natal, SANBI had two facilities. There was an herbarium in the City of Durban, but the restaurant was in Pietermaritzburg, where SANBI had the National Botanical Garden.

The Chairperson asked if these restaurants were not occupied

Dr Rampedi responded that they were not occupied for the reporting period. SANBI was currently looking for tenants, however. It was advertising and it was on the basis of responses that SANBI would be able to structure a contract with the service provider.  

Ms Sithole responded on the variance in the figures for the projects and donations income, where SANBI was reporting a variance of R18 million, and said the main project which was behind on revenue was the National Implementing Entity on the Adaptation Fund. It should be noted that this was a five-year project, and it was currently in its third year. There were still two more years to go with the project, and SANBI was anticipating that the funds would still be received within the next two years.

The Chairperson asked where SANBI got the money from?

Dr Matjila explained that the money was from the Climate Change Fund.

Ms Sithole clarified that the money was received from the Global Adaptation Fund. The comments on the notes were also noted. Footnotes would be included on the financials in future. Regarding the capital expenditure, where there was under-expenditure of R33 757 000, it should be noted that the capital project was a three-year programme, and it was in its second year. There was still another year to go with the project. However the full R33 million had been fully committed at the end of March. There had been progress in implementing infrastructure projects, but the projects had not reached a stage where payment was due and payable. There had been no delay in implementation. 

The Chairperson asked whether there was a list of projects which were supposed to be funded. SANBI had budgeted R75 million for 2017/18, but only R41 243 000 had been spent. This meant the R33 757 000 that was not spent would have to be moved to the next budget. When SANBI did project planning, it was done over a term -- three years -- and each year SANBI allocated funding for the project. If something did not happen, it was either a function of poor planning or poor execution of the project. Could the Committee get a list of all those projects which were not performing well and why there was such poor performance?

Dr Matjila said that the list would be supplied.

Ms Sithole referred to the figure for creditors as a percentage of cash and cash equivalents, and said that the correct figure was the 7%, apologising for the duplication.

Concerning SANBI allowing tenants 75 days to pay, management agreed with the Committee that 75 days was quite extensive. It was an historical issue that was still being addressed, as new leases were being entered into. The previous leases were drafted in such a way that when tenants had to pay there was a percentage of the revenue which SANBI would also take as revenue, and they would have 30 days to submit their revenue statements. Over and above that, they would have an additional 45 days to settle the invoice. With the new agreements, SANBI was ensuring that it fell within the acceptable standard of 30 days. 

The Chairperson asked for an indication of where these tenants were, and what the extent was?

Ms Sithole responded that this would have been in SANBI’s gardens, as it ran different operations throughout the gardens. There were different restaurants.

Dr Matjila asked whether the Committee wanted a view of how SANBI structured its commercial arrangements.

The Chairperson said that he wanted a sense of what the extent of the tenants was, and those whose leases were due to expire, so that this matter could be addressed. SANBI would be in the red for as long as this matter was not addressed. It was an issue of receiving money on time. This could be dealt with when SANBI returned to the Committee.

Ms Sithole responded on the process of booking venues, and said that when a client booked a venue, SANBI issued an invoice for the full amount, but they paid a deposit. The balance would then be due before an event took place. It depended on how early the clients came through to SANBI to make a booking. It could vary from 30 days to up to a year.

Regarding the concerns around the severity of the internal control deficiencies, the impression was that there had been an improvement as at the year end. SANBI would only be able to confirm this once it had received the final report from the Auditor General (AG).

Ms Carmel Mbizvo, Head: Biodiversity and Policy Advice, responded that with regard to the Green Climate Fund and the mechanism for tracking the disbursement of these project funds, SANBI had not yet started disbursing funding for the projects. It was at the point of getting designs on those projects. SANBI, however, took note of that request and would provide information once it started disbursing those funds.

Finally, she referred to the Custodians of Rare and Endangered Wildflowers (CREW) programme, which was a very exciting citizen scientist project. SANBI’s mandate was to monitor and report on the status of South Africa’s biodiversity. Through involving normal citizens in identifying plants, SANBI was able to make a big savings. Volunteers give of their time and go out on field trips and help in the identification of plants, where they are, and what they are. SANBI had more information on the programme on its website.

The Chairperson reiterated his concern was that there was no performance indicator for the Green Climate Fund. SANBI had been identified as an implementing agent, but there was no indicator. The request was that there should be an indicator so that SANBI was able to report on its performance. The Committee was also asking for details on its financial reporting. The same approach had been asked from other entities, such as SANParks. When SANBI talked about projects and donations, it needed to elaborate on them, especially given that the performance had not been good. SANBI should not assume that the Committee knew what the projects and donations were. When SANBI referred to operations, it needed to elaborate more, especially in so far as the big items were concerned. When SANBI returned to report, it was expected that it would report on those.

Dr Matjila thanked the Committee for the good feedback and the fair comments. SANBI sometimes assumed a lot because it dealt with these issues on a daily basis. SANBI would return with the details.

The Chairperson said the Committee had planned to visit the National Zoological Gardens, during which it could have got information and presentations on the challenges and the issues. The Committee’s trip had been cancelled by the person who was supposed to approve it. The Committee had resolved to summon the person who had cancelled the trip to explain why he had made this decision. It was looking at some other dates in the future to fly to Pretoria for a site visit, but also to engage on the issues regarding the transition and the handing over of the Garden.

The meeting was adjourned.       

Present

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