Department of Environmental Affairs, Isimangaliso & SAWS 2018/19 Annual Reports

Environment, Forestry and Fisheries

10 October 2019
Chairperson: Mr F Xasa (ANC)
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Meeting Summary

Annual Reports 2018/2019

The Committee met with the iSimangaliso Wetland Authority (ISPA) and the South African Weather Services (SAWS) for a briefing on their 2018/19 Annual Reports.

The iSimangaliso Wetland Authority (ISPA), in briefing, indicated that it had an overall positive financial year with most of the targets it had set being achieved, However, despite the positive report, 79% of its revenue came from grants, public contributions etc; income sources that made it difficult for the company to be directed towards larger goals. Revenue due to commercial activity accounted for only 14%. The ISPA claimed that the main factors that affected the growth of tourism in and around the Wetlands Park was a lack of facilities to accommodate as many tourists as possible. On the other hand, the community was not accepting the projects set up by iSimangaliso; projects which, in contrast, were mostly designed, to integrate knowledge and exchange skills, goods and services between the Park and the surrounding community. The Department had granted R5 million to ISPA for aid in their projects and tasks. However, maximisation of revenue could not be achieved because of lack of accommodation and the rebellious nature of the communities towards the projects. However, ISPA did see that it was at fault by not properly educating the community as to how the projects would benefit them. To counter this, a new policy had been set up that permits locals living around the Park to have free access to the beach and rather pay only for other luxury recreational activities. The total revenue for the 2018/19 financial year, amounted to R163 million, of which 79% was from grants. ISPA’s liabilities for the year amounted to R17.3 million, while a pending law suit for damaged private property due to a fire outbreak, and could potentially cost ISPA some R6.83 million. Apart from that, ISPA had saved R10 million that was a surplus from its budget allocation.

Members highlighted that there existed a gap in terms of addressing communications issues between iSimangaliso and the surrounding community in which it exists, noting it as a major focus point towards the growth of the ISPA. They suggested that ISPA should work towards improving its communication with the community because it played a vital role in shaping the name and providing a good image for the park. An inquiry was made about the entity’s Key Performance Indicators (KPIs) appearing to be negative while the Auditor-General stated that the KPIs must be non-negative. They emphasised the importance of staying on budget, not above not below, just on budget. More practically applicable targets need to be met, not just attending meetings. The ISPA did not meet some of its KPIs  was unsettling as there was 0% achieved in terms of the communications system and that needs to be improved. ISPA needed to improve its communication with the surrounding community as this would aid revenue. It was difficult to comprehend how the annual performance of the entity was affected by the resignation of four people. It was also difficult to comprehend how, in the modern age of various transportation modes, it was possible that funds for a project could be delayed and cause the project not to meet its targets.

The South African Weather Services (SAWS) highlighted that it was working towards finding new strategies that could help it in generating more revenue so that the entity can be less dependent on government grants. Measures were put in place to make SAWS known to the population, using media based communications channels such as radio and TV. Deals were signed with 2 TV stations and with 51 radio stations; however the SAWS mobile app had not received as much attention as targeted with only 5571 downloads. In its bursary program, SAWS had provided bursaries to 40 students and was absorbing 100% of them in order to ensure that it never runs out of skilled professionals. A head office was to be set up in Waterklooof area in order to make SAWS more accessible to the public. Despite the positive projects, SAWS was also facing some challenges that led to its financial report being qualified. The CEO was suspended with a case that was pending a hearing. The organisation had acquired a deficit of R68 million in the financial year. SAWS had managed to generate revenue amounting to R382.7 million which was R24 million less than that of previous years. The entity observed a lot of overspending throughout the year which led to its financial report being qualified. However, all the cases that led to mismanagement of funds were under investigation and SAWS was working towards enforcing accountability and making sure that those mistakes are never repeated.

Meeting report

Briefing by iSimangaliso Wetland Park Authority (ISPA)
Mr Buyani Zwane, Chairperson, iSimangaliso Wetland Park Authority, highlighted the key performance factors that affected the organisation’s financial year of 2018/19, leading it to achieving 75% of the targets it was set to carry out for the financial year. The Organisation had strengthened its relationship with the local Amakhosi (Traditional leaders, Chiefs) and was working towards improving the lives of the underprivileged living in the surroundings of the wetlands park. The organisation had worked on minimizing retrenchments and empowering the community to ensure that the image of iSimangaliso Wetlands Park, as seen from inside, would be likewise reflected on the outside; hence attracting more tourist to the area and increasing profit. Despite the positive achievements, the organisation had been affected by the death of the Minister of Water and Environmental Affairs, Edna Molewa, which was coupled by a number of changes in the organisation’s managerial structure, resulting in the appointment of the new CEO, Mr Sibusiso Bukhosini. The organisation had existed for two decades and would be looking at 2020 as a year of maturity as the organisation turned 21.

Mr Zwane stated further that the organisation had restructured its procurements methods hence improving its supply chain management. The organisation was looking into partnering with Ezemvelo and neighbouring countries such as Mozambique to attract more tourist into the area. There were some tasks in the organisation that were partially completed, which would be relooked into so as to improve the assets of the entity. An improved performance evaluation system was being set up, which would also lead to improvements in the organisation’s communication structure. The biodiversity in as far as fish species are concerned counted as an advantage to iSimangaliso getting more visitors and being recognised for its status as a World Heritage Site, making it  a beacon and centre of excellence. The organisation had transitioned from an Advisory Board structure to a Management and Authority Board, leading to an overall reorganised structure.

Mr Sibusiso Bukhosini, CEO, iSimangaliso Wetland Park Authority, stated that the organisation was looking into maintaining the status of iSimangaliso in line with the World Heritage Site regulations, to attract more tourist investment into the park. The organisation had empowered the local community by opening up economic opportunities that would motivate commercial interaction between the park and the community, thus strengthening the relationship between the two parties, and hence bringing about ecotourism development and retaining relevancy to the community surrounding the park.  By so doing, the organisation was aligning its mandate to that of the national and provincial goals. The entity had undergone some restructuring wherein the previous post of Director Park Operations was changed to Executive Manager Biodiversity Conservation;Director Business (previously vacant) was changed to Executive Manager Tourism and Business Development, focus.Senior Manager Development and Planning had changed to Socio Economic Environment and Development.

Mr Bukhosini, reporting on the Park Operations, stated  that the entity had achieve 14/11 of its targets for the year, and this had contributed to the strategic conservation of iSimangaliso’s world heritage values. All park management meetings had been successful and 7/6 scheduled Environmental audits had been conducted with equivalent follow-up audits. The entity had also managed to acquire its 120 Environmental Auditors locally, further strengthening the relationship between iSimangaliso and the Community. The entity had cleaned 320km of coastline and had removed 60 871 alien and invasive species with the aid of the R5 million grant from the Department. A series of controlled burning of 1764 hectors had been carried out although this was not in agreement with the total land that of 1750. An appropriated explanation had been included in the actual report.

Mr Bukhosini further went on to highlight the following targets as being achieved fully or in excess, by the entity:
- Percentage Application Processed in respect of development in the buffer zone 100/80
- Percentage of Identified unauthorised developments operating legally 100/100
- Percentage of Completion of Annual Infrastructure Maintenance 100/100
- Percentage Stakeholder Engagements 120/120
- Community based community events 2/2
- It was however observed that the entity had achieved 0/100 percent of its communication targets, making communications a key factor to consider going into the new financial year.

Mr Bukhosini, in highlighting the entity’s transformation, particularly on the Social and Economic Development division, stated that 5/3 of the division’s targets were achieved. Some key projects like training provided to the community in a Skills Development Program, delivered to 107 person over a 5795 day period. To encourage talent development, the entity had provided bursaries to 41 students and had spent only 68.3% of its Broad-based Black Economic Empowerment budget, recording this as a partial achievement, accounted for by the delays that were associated with acquiring funds.

Mr Bukhosini, on commercialisation of the park, highlighted that all seven out of seven set targets were achieved, hence adding revenue to the park. The entity had implemented a paid visitor entry system which excluded locals from the paid entry. Locals were to have free access to the beach as opposed to tourist who would pay for visiting the park. This worked positively towards the strengthening of the relationship between the local community and the ISPA. On the Finance and Administration division, 35/27( 4 not achieved, 4 partially achieved) targets were achieved by the entity, although the financial year was observed as a difficult one given the organisational changes that ISPA had to go through, elaborating further by summarising the park revenue achievements. 14% of the Parks revenue had come from commercial activity of the entity with respect to the Wetlands Park, 79% of the revenue still came from grants, subsidies and public contributions. He insinuated that the park’s revenue structure should migrate from that which is mainly depended on grants to one that can commercially sustained itself, hence the motion to improve Ecotourism. Furthermore, the revenue of the park was directed to Ezemvelo and ISPA had little control over the distribution of the revenue. The total revenue for the 2018/19 financial year was thus R163 million, helped by a R10 million decrease in expenditure.

Mr Bukhosini mentioned that assets that were found to be of no more value and were potentially hazardous to the park went through depreciation and amortization of 21%. The total liabilities for the year had amounted to R17.3 million. Furthermore, ISPA was under a law suit for a fire that broke into the commercial property of Siyaqubeka, accounting for a potential material loss of R6.83 million (if ISPA loses the case), for damages, however the entity was confident in its defence for the case.

Mr Bukhosini, in his closing remarks, stated that measures were being taken to ensure that the overall financial performance of the entity would be improved for future reports. Highlighting key establishment such as the Supply Chain Management Unit and the introduction of a Standard Operating Procedure (SOP) system to ensure guidelines exist to carry out any task, the result of which must be measured against the proposed performance criteria. Furthermore, Quarterly Financial Reports had been introduced, to help with understanding better, the deficiencies in the financial statements as they become processed per quarter.

Mr Zwane closed the presentation of ISPA by assuring the Chairperson that a follow through would be done to ensure that work issued out is carried out such as to improve the Ecotourism around iSimangaliso, thanking the Committee for its support throughout time.

Discussion
The Chairperson highlighted that there existed a gap in terms of addressing communications issues between iSimangaliso and the surrounding community in which it exists, noting it as a major focus point towards the growth of the ISPA.

Mr J Lorimer (DA) inquired as to how ISPA was planning to grow its revenue and hence take over control of the park from Ezemvelo, was there a plan in place for this action. Clarity was also required as to what was meant by ‘free access to locals’ and a definition of the term ‘local’ in terms of who was going to get free access to the park and who was not.

Ms H Winkler (DA) requested information about the status of the destruction of Sodwana Bay swamp forest. In terms of infrastructure, information was requested about the roads and port holes in the area as to whether or not these were being given attention. Regarding the mining application in the boundary and its environmental impact as published in a previous report, information was required as to why one of the experts had distanced themselves from the report.

Mr N Capa (ANC) suggested that ISPA should work towards improving its communication with the community because it played a vital role in shaping the name and providing a good image for the park. He asked about the entity’s Key Performance Indicators (KPIs) appearing to be negative while the Auditor-General stated that the KPIs must be non-negative. He emphasised the importance of staying on budget, not above not below, just on budget.

Ms S Mbatha (ANC) wanted to know if a log file existed to record the mileage in the ISPA vehicles so as to account for fuel and other transportation costs, emphasising that proper management of resources was very important. Commending the initiation of the Supply Chain Management Unit, she asked ISPA why it did not implement this earlier. She wanted to know the number of persons that had been trained through the Skills Development Program and of those trained, where there any disabled persons, and women?

Ms Mbatha asked how the negative elements of the monitoring reports were managed. With reference to the depreciative assets, she wanted to know whether there existed relevant documentation such as destruction certificates to help account for the destroyed/depreciated assets. When working with chemicals, safety data sheets are required, to record the how and when the chemicals use by the entity got disposed. Furthermore, she encouraged ISPA improve its communication structure, so as to aid the relationship between it and the community.

Mr P Modise (ANC) stated that more targets needed to be exceeded. More practically applicable targets need to be met, not just attending meetings. The ISPA did not meet some of its KPIs  was unsettling as there was 0% achieved in terms of the communications system and that needs to be improved. ISPA needed to improve its communication with the surrounding community as this would aid revenue. It was difficult to comprehend how the annual performance of the entity was affected by the resignation of four people. It was also difficult to comprehend how, in the modern age of various transportation modes, it was possible that funds for a project could be delayed and cause the project not to meet its targets.

Mr Bukhosini, replied that a key factor that slows down the economic growth of iSimangaliso is the lack of accommodation for tourist in the area, highlighting that St. Lucia was the only place that had facilities for hosting guests in and around the Wetlands Park. A plausible plan would then be to refurbish and commercialise facilities belonging to other entities to help the Park accommodate more visitors and hence generate more revenue.  Only visitors who do not live near the area would pay for touring, however the community in the surrounding area would get free access to the beach and would only have to pay for other recreational activities which are registered as luxury. He proposed that meetings needed to be set up with the traditional leaders in order to get the people around the area to support and see the positive aspects of iSimangaliso that were designed to help the community improve their lives. Furthermore, there were about 14 land claims in the park which could help the community own the land and hence strengthen their socio-economic tiers with ISPA. With all plans in place, the community did not receive proper communication as to what the Wetland Park was about, hence they rebelled against any proposed development in the area by iSimangaliso, developments including the infrastructure refurbishment program, for which about R100 million had been acquired, to help with the revenue growth structure.

Mr Bukhosini further stated that the organisation took occupational health and safety very seriously. Chemicals said to have been disposed, were not exactly disposed as they were used to clear of alien species of plant. The organisation; was going through significant improvements despite the fact that it had achieved a KPI of 13 and more in other parts of the report, thus giving a general positive feel to the whole report. There were mining activities along the periphery of iSimangaliso, from a spot referred to as a buffer zone, although that area had already been declared private by the previous president of the country.

Mr Zwane went on further to request assistance from the Committee with guidance of the organisation into an entity that they envision and would be proud to visit. He stated that after changes in senior management, employees stopped performing the duties for which they were being paid for and hence detachments from the organisation started manifesting. The marketing and research aspects of the entity had not received enough attention in furthering the agenda of the entity. Supporting these two areas would be key, therefore, to sustaining stable revenue for iSimangaliso.

Briefing by South African Weather Services on its 2018/19 Annual Report

Ms Nana Magomola, Chairperson, South African Weather Services (SAWS) Board, opened with an apology for the absence of: the Deputy Chair of the board, Dr Phillip Dexter; Acting CEO Dr Jonas Mphepya and the CEO who is currently under suspension, proceeding with introducing the new SAWS board members to the committee. She stated that operation without a CEO had disturbed the organisation’s progress through the 2018/19 year. However, as a technological and scientific organisation, SAWS was a contributor to the development of future intellectuals of South Africa in as far as technological and scientific advances were concerned in the weather service. SAWS was not yet capable of generating enough revenue to make it independent of grants from the government, from which 50% of its funds emanated. However still, weather enterprises aimed at the youth were being set up and these would potentially increase revenue in the long run.

Mr Mnikeli Ndabambi, Executive Infrastructure and Information Systems, presented the goals that SAWS had aimed for and stated, in fractions, the percentage achievement associated with each goal. The first Goal (3/4 achieved), was the Provision of Products and Services by SAWS to various entities, for example: Eskom – which needed constant updates on the weather in order to plan out power shutdowns and remedy the situations in the cases where disastrous weather would have occurred. Goal 2 (11/15 achieved), was Capability and Capacity Development within and without the organisation, for the benefit of the organisation.  Goal 3 (6/7 achieved) was the Engagement of Stakeholders (ex: Disaster Management entities). Goal 4 (3/3 achieved) was based on Research, Knowledge and Intelligence creation to ensure that SAWS remained globally recognised and fulfilled its mandate to be a global leader in the Weather industry. Goal 5 (0/4 achieved) Growth and Sustainability, was a particular area which was found to be challenging even from previous years. In the 2018/19 there was an overall performance achievement of 70% of set goals and targets that were set, the lowest it has been in recent history, however measures were being put in place to  enhance performance in the incoming financial year.

Mr Ndabambi highlighted that SAWS managed to engage 51 radio stations as contrasted with the target of 40, hence this target was met. However only two out of three TV stations were engaged and 5571 out of the targeted 7300 mobile app downloads were achieved. Furthermore, plans were in place for the establishment of a 17 hector head office in Centurion Park, Waterkloof as for now SAWS was renting premises to give official access of SAWS to its clients. SAWS was in the process of implementing an Impact Based forecast system so as to not give information about the coming weather but also to give information on the potential damage that could be caused by the forecasted weather. Lightning detection systems were being developed. Furthermore, SAWS staff was composed of 40 women, which can be contrasted with the 42% that was targeted.

Ms Busisiwe Shongwe, Chief Financial Officer, stated that the revenue for the 2018/2019 year was R382.7 million which was R24 million less than the revenue of the previous year. Expenses had increased by R52.3 million as compared to that of the previous financial year. SAWS ended the financial year with a deficit of R68.9 million which rendered the financial report to be qualified.
Overall, SAWS had not been able to stick to the budget but had rather overspent the funds, part of the overspending being accounted for by salaries of employees. A new enterprise resource planning (ERP) system was to be implemented to better manage the funds and enforce accountability in the organisation as there was a clear mismanagement of funds. SAWS had requested an internal audit to be conducted and an investigation be carried out to ensure that accountability is enforced.

Mr Itani Phaduli, Board Member, stated that a dashboard kind of system would be implemented to ensure that the audits conducted and the findings be made available to the board and Members, thus encouraging transparency and accountability. The board was working towards finding the root causes of the Auditor General’s findings to ensure that past mistakes were not repeated in the future.

Discussion
Ms Winkler inquired about the progress of the Impact Based Monitoring system that SAWS claimed it would implement as a system for indicating the type of damage that can be caused by disastrous weather conditions, which could lead to loss of life. Furthermore, how was the budget cut of SAWS going to affect its Air Quality Monitoring Systems, given that the current national air quality indicators were already inadequate? Having visited the SAWS website, it felt as if the data there had been manipulated across some average, and clarity as to whether this was true or not was requested.
The committee had requested that the SAWS board be held accountable for the R2 million associated with the suspension of the SAWS CEO (currently under suspension), requesting clarity as to whether the previous board, that was active in implementing the suspension of the CEO, had reimbursed the said amount. Was the last CEO of SAWS paid and if so how much, during his suspension; furthermore, would the current board be held responsible for that payment?

Ms Winkler asked about the R68 million deficit (expenses greater than revenue), seeking clarity on what contributed to this over expenditure in the department. She asked for information about the time frame associated with severe weather warnings. How soon would SAWS clients get warnings before the actual weather strikes?

Mr  Lorimer wanted to know what the charges against SAWS CEO (under suspension) were and how long would it take to complete the process; the Committee was awaiting a full investigative report with clear findings on the matter. He asked where the risk committee was when SAWS was undergoing the mismanagement process that led to the CEO being suspended. Referring to Dr Dexter’s report, the report spoke of multiple cases of fraud and mismanagement. He sought clarity on how many cases of such a nature existed within SAWS.

Ms S Mbatha (ANC) asked what corrective measures were being taken with regards to the targets that were not met, giving specific attention to the SAWS Mobile application which did not get as many downloads as was projected. She further asked as to how many women would be incorporated into SAWS, because this was one of the targets. Given the shortage of specialist in SAWS, she was happy about the SAWS bursary scheme, but wanted to know how the bursars would be retained in order to help with the acquisition of more specialists. She inquired as to how SAWS ended up with such a large sum of deficit. Was there no budget being followed and could SAWS not predict that it was about to over spend?

She requested that the CEO and Chairperson ensure that SAWS sticks to the budget without over or under spending. She emphasised that everyone who spends the government money must and will be held accountable.

Ms N Gantsho (ANC) inquired about frequency of maintenance, asking how often the weather stations were maintained. She further asked if SAWS had any programs in place to cater for high school pupils in conjecture with the bursary scheme that was already in place for the tertiary students. She also requested clarity on what the funds were spent on as the report only stated that there was an over spending but it did not mention, on what exactly was the money spent.

Mr Modise stated that SAWS’s marketing and communication strategy was inadequate, stating that the South African people were not getting enough adverts for the SAWS mobile app, hence the download targets not being met. Rehashing Mr Lorimer’s concerns, he wanted to know what the charges were against the SAWS CEO and how long it would take for the disciplinary processes to be completed. Regarding the head office that SAWS wanted to build in Waterkloof, he wanted to know whether a budget existed for undertaking this activity. He stated firmly that SAWS should not think about building using borrowed money. The SAWS report had made mention of foreign entities. He requested clarity on what the term ‘foreign’ meant, in the context of the report. Furthermore, a R68 million deficit was seen as being too much and the PFM did not allow for such a large sum of over spent money. R261.3 million was the salary divided among 484 employees of SAWS and this was too much, Mr Modise asked where the money was going to because the income statement seemed not to match the expenditure statement. How was it possible the internal audit did not pick up this overspending? Where was the board’s risk committee as it was its duty to provide oversight on possible risks that could be faced by SAWS?

The Chairperson stated that the presentation of SAWS reflected poor planning which indicated non-regular spending. He wanted to know why SAWS was not investigating when there was an overspending as the law required that all entities spending government money be held accountable. Money should be used to serve the needs of the people.

Ms Magomola responded that she will take more strict measures to better manage the funds of SAWS so as to produce better results. The CEO was, by law, being paid on suspension; however the contents of the charges could not be disclosed to the committee before the case was resolved. She pleaded with the Committee to wait for the case to be completed first.

Mr Lorimer asked if the contents of the charges against the CEO could be made available to the Committee after the hearing.

Ms Winkler wanted to know how much money had the CEO been paid to date, from the day the suspension became effective.

Mr Phaduli stated that the outcome of the investigation on the CEO would be forwarded to the Committee as soon as the hearing process was conducted. Consequence management and supply chain management were to work together in ensuring better management of funds and other potentially crippling issues within the organisation. Corrective measures were being put in place. 

Mr Ndabambi apologised regarding the said data manipulation and requested time to go and investigate the matter. Maintenance of weather radars was being done regularly and 86% of data was available. On the question of the Impact based Warning System lead time, the warning from the system for disastrous weather would be sent, at most, in an hour’s time and for this reason it was important to have local disaster management systems in place. SAWS’s engagements with the media had since improved and would result in better responses in terms of the number of people engaging with SAWS’s systems. He reported that 100% of the bursars were being absorbed into SAWS, hence improving the entities intellectual resources. Furthermore, a marketing and communications strategy would be put in place to maximise the mobile app downloads.

Ms Shongwe stated that the suspended CEO had been paid above R3 million to date. A letter was sent to National Treasury stating the deficit and detailing the reasons that led to it. A new ERP system was put in place to reduce manual intervention with the system and hence mismanagement of funds would be eliminated future it would be able to monitor the funds adequately.

Ms Julia Mphafudi, Human Resource, SAWS, stated that outreach programs were being carried out to highschools, informing the pupils about meteorology. About 40 students were being funded for tertiary studies, about 10 graduate each year and all of the graduates were absorbed into SAWS. Metrology technician training was provided for those who had matriculated but had not acquired tertiary education. Furthermore, students were being encouraged to register for Masters and PhD. SAWS was about 40% woman and 60% male; interventions were in place to expose more females to SAWS and encourage them to follow meteorology.

Ms Tsakani Ngomane, Departmental Representative and Board Member, SAWS, gave closing remarks, stating that SAWS was a strategic organisation for the country as it provided intelligence on events that could potentially be disastrous to the country. SAWS was complying with the international standards and was one of the world leaders in the weather service industry. SAWS would be working toward improving itself as an organisation for the betterment of the lives of South Africans.

Ms Winkler stated that the Committee had resolved that the board members of SAWS be held accountable for reimbursing the funds that were mismanaged with respect and relating to, the suspension of the CEO and requested clarity on whether this was implemented or not.

Ms Magomola stated that SAWS would come back with a proper answer to the final question of Ms Winkler, as the question could not be answered at that point in time.

The meeting was adjourned


 

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