Department of Environmental Affairs and Development Planning and Cape Nature 2018/2019 Annual Reports; deliberation

Public Accounts (SCOPA) (WCPP)

24 October 2019
Chairperson: Mr L Mvimbi (ANC)
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Meeting Summary

2018/19 Annual Reports

The Committee met to consider the 2018/19 Annual Reports of Cape Nature and the Department of Environmental Affairs and Development Planning.

Serious concerns were raised about the lack of transformation within the Cape Nature organisation, and Members insisted that this needed to be addressed urgently. Other matters debated included the entity’s approach to consequence management, the reimbursement of board members, the status of litigation cases it was involved with, and the setting of targets for permits and licences. It was also asked whether its growth in tourism income would be sustainable, considering some facilities were under-utilised due to the drought in the Western Cape.

The second part of the meeting focused on the Department’s Annual Report, where discussion was directed at attendance at meetings, whether there was a need for an environmental commissioner, and increased expenditure on fire fighting and administration.

Arising from the comments of the Auditor General, the Chairperson advised the Department to start looking at Broad-Based Black Economic Empowerment (B-BBEE) matters, even though the Auditor-General had not yet escalated the issue.

Meeting report

Cape Nature: Section C of annual report
 

The Chairperson stated that the meeting would start by first looking at Section C of the report, and asked whether Members had any questions pertaining to the section.

Mr P Marran (ANC) began by stating that looking at the composition of the board on page 45, table 14, it was dominated mainly by males, which he argued needed to be changed. He also requested clarity on why Prof Denver Hendricks, Chairperson of the Cape Nature board, had attended more meetings than other board members.
 
Dr Razeena Omar, Chief Executive Officer (CEO), Cape Nature, said that the entity was looking at the matter and currently had a whole programme around women and transformation. She requested Members to bear in mind the appointment of the board members was done through the Member of the Executive Council (MEC) on the advice of the standing committee. The entity did all the administrative work, whilst the standing committee interviewed and appointed the board members. With regard to the higher number of meetings attended by the chairperson of the board, she attributed this to the fact that he had attended planning session meetings with the CEO prior to the actual board meetings and meetings around the Bio-diversity Bill.

Based on response by the CEO, Mr Marran said that perhaps in the next five years there would be transformation in terms of gender representation on the board. With regard to the meetings attendedby the board chairperson, he asked whether the meetings with the CEO were part of the 18 meetings that were stipulated under the number of meetings attended in table 14. This question was based on the fact that he was under the impression that the meetings that were being reported on where referring strictly to board meetings.

Dr Omar clarified that the meetings included the additional board committee meetings and consultations on the Biodiversity Bill.

Regarding the gender issue, she said the entity advertised in national and provincial papers and to provincial reserve committees and protected areas advisory committees. When recruiting people and making them aware of vacancies, those who applied were assessed according to the relevant assessment criteria, depending on the business area. The list was then given to the standing committee for interviews. Appointments were based on the recommendations from the standing committee.

Ms M Maseko (DA), continuing on the issue of transformation, that for incoming board members the entity, along with the standing committee, needed to look at the inclusion of previously disadvantaged individuals. She asked what proactive steps were being taken by the entity to ensure they achieved balanced gender representation on the board.

Dr Omar said she agreed with the Committee Members, and with some of the board members exiting in 2020, and with the new Bio-diversity Bill, there was now an opportunity to address the issue.

Mr M Xego (EFF), speaking about transformation, acknowledged that there were deliberations involved, but he still found it disturbing that there were no male or female African board members.

Dr Omar responded that the board took the matter very seriously, and was looking into it. In the previous cycle, the board had had one African member whose term had ended.

Mr Xego said that he found the response unsatisfactory.

The Chairperson asked Dr Omar when the when the board member’s term had ended.

The CEO responded that the member’s cycle had ended two years ago. One of the challenges the board faced was with regard to public nominations for board members. This was a requirement by the Act, but nominations were not forthcoming.

Ms Maseko added that as the Standing Committee, Members had the responsibility, in conjunction with the Department, to ensure that there was a balance in the representation on the board. In future, therefore, the Committee had the authority to request the board to re-advertise should the Committee find the short-listed candidates unsatisfactory.

The Chairperson asked when the next cycle was.

Dr Omar responded that it was in 2020.

The Chairperson said that Parliament took the issue of representation very seriously. He doubted that there were no Africans or women within the Western Cape who lacked the necessary qualifications to qualify for positions on the board. He warned the board that by setting the qualification requirements too high, they might be excluding individuals who had the necessary skills and knowledge, but without the formal qualifications, from participating on the board. Cape Nature should consider headhunting candidates if need be.

Mr D Smith (DA) commented that he noticed there were no African representatives sitting in front of him, referring to the Department’s representatives who were facing in the meeting. He then asked what the ‘other reimbursements’ section in table 17 on page 48 referred to.

Ms Maseko raised a point of order, and asked Mr Smith to clarify what he meant when he stated that there was no African representation in the delegation from the Department.

The Chairperson asked to respond to the question, and said that based on his knowledge of the Employment Equity Act, race was defined as black and white. Black was then divided into Indians, Africans and Coloureds, and that was how be understood Mr Smith’s comment.

Mr D America (DA) indicated that he too found Mr Smith’s comment to be misplaced and inappropriate.

Mr Xego interjected, stating that they needed to face reality. In the Western Cape, in terms of demographics, there were whites, coloreds and Africans.

Mr D America put a point of order forward, stating that Mr Xego was digressing from the stipulated sections under discussion.

Mr Xego responded that the matter being raised was under Section C on page 45.

The Chairperson suggested that the Committee should give the board time to address the issue of transformation. The matter could be looked at in a year’s time, should it remain unresolved.

Mr Smith requested clarity on the two employees referred to on page 51, paragraph 4, who had been charged by the entity. He asked whether there had been any steps taken to recover the loss from the employee who had been found guilty. Additionally, had any sanctions been imposed on the employee who had been found not guilty?

Dr Omar clarified that theother reimbursements’ referred to the travel and accommodation costs for board members who had to travel afar to attend the meetings. Regarding the sanctions, the one employee who was found guilty was dismissed and the other was found not guilty, so there were no charges.

Mr Mohamed Bhayat, Chief Financial Officer (CFO): Cape Nature, added that though the Department had procedures in place to recovery costs, he was uncertain about the steps that had be taken thus far with regard to the employee who had been found guilty.

Mr Smith requested clarification on why there was a significant difference between the reimbursements for Dr Colin Johnson and Professor Aubrey Redlinghuis, considering that they had both attended the same number of meetings.

Dr Omar clarified that though both members lived far within the province, Dr Johnson lived further and hence the difference in their respective reimbursements. Prof Redlinghuis lived in Montagu, while Dr Johnson stayed in Kuilsriver. 

Cape Nature: Section E of annual report

Mr A van der Westhuizen (DA) requested clarity on the gain and loss on foreign exchanges at the bottom of page 72. He also requested an clarification on the increase from R19 million to R26 million in administrative expenses. He asked whether the entity thought the growth in tourism income would be sustainable, considering that some facilities were underutilised due to the drought.

Dr Omar said that though the entity hoped that the tourism income would be sustainable, there had been a decline in tourism in Western Cape. However, it was also looking at upgrading unused buildings such as the Green Conferencing Facility to generate more income.

Mr Mohamed Bhayat indicated that the increased administrative expenses were due to rising utilities’ costs and the Cape Nature’s information communication technology (ICT project) to connect its reserves.

Mr America wanted to establish why the contingent liabilities indicated on page 99 of the report were considered as current expenses as opposed to recurring costs?

Mr Bhayat responded that litigation often took several years, and the entity was unable to make provision for these cases as the costs could not be pre-determined.

On the same issue, the Chairperson asked why Mr P Beukes was taking Cape Nature to court.

Advocate C Marè, Director: Environmental Governance: Department of Environmental Affairs and Development Planning, said that Mr Beukes had hit a rooihartbees with his motorcycle when he was driving in Theewaterskloof. He was currently making a claim for R2 million from the Department and Cape Nature for his medical bills, emotional suffering and damage to his motorcycle. However, thus far he had been unable to prove that the animal was the responsibility of either entities, nor that the animal belonged to the Department or Cape Nature. The case was ongoing.

The Chairperson referred to the case of Mountain to Ocean (MTO) and Cape Sawmills versus Cape Nature, and asked why MTO was taking Cape Nature to court, as he was under the impression that MTO was a government entity and thus Cape Nature’s partner.

Mr Bhayat said that MTO Forestry was a private entity, and was taking Cape Nature to court for its loss of plantation and the subsequent loss of income caused by a fire that had occurred. Though the fire may not have been instigated by Cape Nature, due to the spread of fire, the entity could make allegations that Cape Nature did not fight the fire hard enough or did not do what it was supposed to have done. This was a very complicated issue.

Ms Maseko asked why the entity kept setting low targets for permits and licences, despite it overachieving on the targets over the years.

Dr Omar responded that she would not say that the Department was under-targeting, as this was a demand-driven process.

Dr Ernst Baard, Executive Director: Biodiversity Support, confirmed that the issuing of permits was a demand-driven process and that targets were set based on previous years’ trends.

Ms Maseko asked how the entity set its benchmark for the issue of permits and licences, and what had contributed to the overachievement.

Dr Baard responded that Cape Nature had looked at the number of permits that had previously been issued. Using statistical procedures, they were able to identify a trend. However, this was a demand-driven process.

Ms Maseko asked why the 2018 target was lower than the number of permits and licences that had been issued 2016.

Dr Baard replied that the Department was unable to stop issuing once they had reached their target, and that also contributed to the entity overachieving on its target.

Dr Omar added that the entity was reviewing the permit system in terms of red tape reduction. She forecast that the number would decrease in future.

Mr Marran, referring to fire fighting and aircraft expenditure on page 72, requested an explanation on why the costs in 2018 -- which had the lowest number of fires -- were higher in comparison to the other years that had fewer fires.

Dr Omar explained that the higher costs were due to the severity of the fires in 2018 and the associated aerial expenses. These fires had included the Knysna and Betty’s Bay fires.

Mr Bhayat said the Department had spent almost R32 million in the past financial year, of which 21% was for the hire of aircraft, 27% for employees fighting the fire, and 30% for contractors employed to fight fires. Fires on the urban edges were especially costly due to the risk to human lives.

The Chairperson concluded the deliberations on Cape Nature’s annual report, and excused the delegation from the Cape Nature.

Department of Environmental Affairs & Development: Section C of Annual Report

Mr Marran said that apart from the Department’s commitment to uphold the requirements of the PFMA, he wanted to find out about the constitutional requirements involved in appointing the environmental commissioner.

Mr Piet van Zyl, Head of Department, responded that the appointment of an environmental commissioner was not the Department’s responsibility. In the Department’s view, there was no need for a commissioner, because the role would be mainly administrative, with no executive powers. The process had been investigated a number of times. Recently attempts had been made to remove the requirement from the provincial constitution. This had been disrupted as the previous Standing Committee’s term had ended before the process was completed. He added that the Western Cape was the only province with the requirement in its constitution, so the process may be started again.

Mr Marran indicated that he had an issue with the fact that the Department was recommending having the provision removed, despite it being outside its authority. He suggested that the matter be discussed by the Standing Committee at the end of the session.

Mr Van Zyl suggested that the matter should be taken to the joint committee of Environmental Affairs and the Premier’s office as well.

Mr Marran indicated that he supported the suggestion.

Mr Xego, in reference to GOVCOM scheduled meetings, asked why the enterprise risk manager had never attended any meetings, and the chairperson of the audit committee had attended only two meetings, whereas other members had attended more than six meetings.

Mr Van der Westhuizen asked how effective the committee was, and what steps were being taken to address the low attendance by its members.

Ms Maseko questioned whether attendance was compulsory for members, and not for the other attendees, as outlined by the second table on page 81.

Mr Van Zyl responded that in his opinion the committee was effective. It was compulsory for GOVCOM members appointed by letter to attend meetings. The other attendees fulfilled an advisory role and were predominately from the Department of the Premier’s corporate services centre.

Addressing the question about the attendance of the risk manager, he said that Mr S Africa had represented Ms A Haq in her absence, since he reported to the risk manager. He believed that the committee’s deliberations were valuable in terms of strategic inputs, and that their attendance was well managed. Regarding the attendance by the chairperson of the audit committee, he said that the chairperson was a new appointment and had started serving his first term at the beginning of January 2019, whereas other members had been on the committee for longer.

Department of Environmental Affairs & Development: Section D of Annual Report

Mr America opened the discussion by looking at the contingent liabilities segment, and requested an update on the employee arbitration award of R517 000 that the Department was contesting.

Mr Van Zyl responded that the latest update on the matter was that it would not be heard before the end of the year. It would mostly likely be addressed between January and March next year.

Mr Marran asked for an explanation for the increase in expenditure on contractors.
 
Mr Johannes Fritz, Director: Financial Management, clarified that the expenditure on contractors referred expenditure on the biometric system, while other funds had been spent on the Berg River alien clearing project.

Audit Outcomes for 2018-19 financial year.

The Chairperson opened by referring to section 5 on emerging risks, and advised the Department to start looking at broad-based black economic empowerment (B-BBEE) matters, even though the Auditor-General has not yet escalated the issue.

Mr Van Zyl responded that the Department currently had a challenge in obtaining guidance from the Provincial Treasury to addressing the matter so that there would be consistency across Departments. However, the Department was following up on the matter.

The Chairperson said the matter of provincial coordination had also been raised at other meetings.

Resolutions/recommendations

The Members agreed to discuss the issue pertaining to the environmental affairs commissioner at a joint meeting, as proposed during the meeting. They also agreed that they would suggest to the board that it should replace outgoing members with historically disadvantaged individuals, in order to address the issue of inclusivity.
 
The meeting was adjourned.
 

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