DEFF, SANBI; SAWS & iSimangaliso Quarterly performance; with Deputy Minister

Meeting report

Department of Environment, Forestry and Fisheries

Mr Ishaam Abader, Acting Director-General, DEFF presented the performance report of the Department for the fourth quarter for 2019/20 and first quarter for 2020/21. Mr Abader said that the Department had two significant achievements, firstly-the creation of additional jobs and an increase in participation in accredited training programmes. Secondly, one of the Department’s implementers, who were under investigation by the Nelson Mandela Bay Metro on fraud and corruption charges, had been suspended; the investigation was ongoing.

The main challenges faced by the Department were air quality management, the implementation of environment programmes, the performance of contractors and capacity challenges.

He said that the first quarter was worse than the last; he brought attention to the challenges caused by the National Lockdown due to the COVID-19 pandemic, saying that these impacted the implementation of planned activities in quarter one.

The title for the expenditure report had also been changed in the 2020/21 financial year, from Vote 27 to Vote 32.

Programme one: Administration

All targets for quarter four had been met or were in progress. Sound corporate governance, effective partnership, cooperative governance and local government support had all been achieved. An audit action plan had been implemented. Value-focused funding and resourcing, and adequate, appropriately skilled, transformed, and diverse workforce initiatives were in progress; as was the establishment of efficient and effective technology services. The capacity, profile and support of the Department had been improved.

Although in quarter one the Department was faced with many challenges due to the pandemic, it managed to achieve good governance which complied with legislative requirements and financial management. The audit processes had commenced and were under implementation. There was an improved contribution to socio-economic transformation and empowerment of previously disadvantage communities, an adequately skilled and transformed workforce that represented the demographics of the country.

COVID-19 was posing a challenge as it slowed down invoicing and procurement; it resulted in the postponement of planned workshops and the non-filling of vacant posts.

Environmental management education and awareness, and human resources were improved.

Programme two: Regulatory Compliance and Sector Monitoring

Compliance with environmental legislation and coherent, aligned decisions support across government were still being worked on but all targets had either been met or were in progress the fourth quarter.

In quarter one, COVID-19 regulations restricted movement and travel impacted the mitigation of environmental threats as investigations and assessments could not all be conducted and only one case out of 49 was handed to the National Prosecuting Authority (NPA).

Programme three: Oceans and Costs

Annual targets for quarter four were met, with 18% of the targets still in progress. The Annual South African Oceans and Coasts Environment Data report was being finalised for publication and the amended National Estuarine Management Protocol (NEMP) would be published in the government gazette early in the 2020/21 financial year.

A lack of data for monitors resulted in the presentation on water quality trends not being compiled and COVID-19 restrictions caused roadshows to not take place. The knowledge, science and policy interface was strengthened.

Programme four: Climate Change, Air Quality and Sustainable Development

Quarter four targets were met but load shedding and burglaries resulted in equipment failures at many air quality monitoring stations. Security measures were being put in place.

In quarter one, COVID-19 restrictions caused training to not be conducted, the practical component could not be done virtually, meetings were also affected.

Programme five: Biodiversity and Conservation

Targets were met or were in progress. The National Environmental Management: Biodiversity Act (NEMBA) Bill was published for public comments and the re-certification of the Bill by the Chef State Law Advisors was being awaited as previous certification had expired due to delays in processing.

Programme six: Environmental Programmes

Many of the targets were still in progress. Toilet blocks in schools had been built in 28 out of 60 schools due to the budget not being approved by the Department of Basic Education (DBE).

A catch up plan to treat invasive alien plants had been developed and the outstanding work would be prioritised in the 2020/21 financial year.

Implementation programmes, work opportunities, clearing of invasive species, rehabilitation of wetlands and degraded lands and materials beneficiation were all delayed or impacted by COVID-19.

Programme seven: Chemicals and Waste Management

The expiration of an air emissions license for one processor in April 2019, closing down of one air processor, the suspension of the tyre supply to one processor and the failure of the three companies awarded a tender had no finalised funding and which were still to set up their plants affected the environmental quality and integrity.

Many targets were met or were in progress in quarter one, COVID-19 led to the halting of waste collection, recycling and beneficiation activities and monitoring waste generation.

Forestry and Natural Resources Management

COVID-19 affected the bid for the recommissioning of Western Cape state forest plantations, creating jobs in the forestry sector, registration of the Public-Private Partnership (PPP) project, mapping of indigenous forest management units, the drafting of the indigenous forest transfer policy, and training.

Fisheries Management

Outstanding targets in the fourth quarter would be completed in the coming financial year. COVID-19 resulted in delays and the movement of targets to quarters three and four.

Mr Rannoi Sedumo, Chief Financial Officer, DEFF, presented the Environmental Affairs quarter-four and quarter-one expenditure reports, covering 01 January to 30 June 2020.

In quarter four, the Department spent 98% of the budget. Mr Sedumo justified the underspending of R126 225 000 by the end of the financial year. In programme three, the underspend amounting to R36 million was due to not being able to progress work to the point that payments could be made by year-end in the Oceans Economy Programme. In programme six, R52 million was underspent due to the slow progress of some projects and R12 million of The Green Fund was not transferred to the Development Bank of Southern Africa (DBSA). In programme seven, the underspend of R23 million was as a result of the Department not being able to award new programmes with funds in the Recycling Enterprise Support Programme due to a new process that was being started. In the 30 days’ payment report, the Department made three payments outside of the 30-day timeframe at the Head Office in January.

Mr Sedumo said that there was an overspending in the compensation of employees. Pressure came from the Waste Management Bureau, Waste Economy Phakisa and the Youth Environmental Programme. The Department had written to National Treasury to address the matter and Treasury allowed that in the 2020/21 financial year, the expenditure on these contracted employees would be excluded as they were not part of the establishment of the Department.

By the end of the first quarter in the 2020/21 financial year, 18% of the budget had been spent. The underspending was largely due to the slowing down or stopping of procurement activities due to the pandemic lockdown regulations. As a result there was no new procurement activity aside from the purchasing of Personal Protective Equipment (PPE).

Offices were closed in Cape Town and there were slow payments that affected the 30 days’ payment timeline.

Discussion

Mr N Paulsen (EFF) asked how much of the work by the Department was outsourced to external parties and whether it would not be better to insource and directly managed workers. He also asked why it did not build the competency to carry that work out internally.

Ms H Winkler (DA) asked for a list of the Ministerial Participation Programmes. She asked why the approach towards plastic was a protracted one instead of complete abolition. On targets that were not met in the previous cycle, she asked how the Department was planning on catching up with those targets in the next cycle.

Mr N Singh (IFP) said that it was concerning that industry was dictating what should be done; he asked why the Department was backtracking. On performance targets, he asked why targets had not been met if the budget had been spent. He also asked if the Department was engaging on community participation to prevent the vandalism of air quality monitors and whether there were any generators being put in place in the areas affected by load shedding and power cuts.

Answering the questions of the Members, Dr Christo Marais, Acting DDG: Environmental Programmes, DEFF, said that 73 000 people were involved in the work; insourcing would increase internal employment and administration within the Department. Outsourcing was a way to create opportunities for small businesses in the environment sector.

Dr Marais explained that underperformance by service providers in the previous year put the Department under a lot of pressure, which was further increased by the pandemic. The Department was, however, currently in the process of catching up.

Ms Mamogala Musekene, Acting DDG: Chemical and Wastage Management, DEFF, said that the Department had studied the effectiveness of other countries’ total ban of plastic bags and the study revealed that the ban promoted the illegal proliferation of plastic bags. The Department opted to take a fragmented approach and focus on product design to ensure that bags would be produced from recycled waste. She also mentioned that plastic regulations were open for comment until 07 September 2020 and that the Department was on track.

Mr Sedumo, speaking on the variance between spent funds and targets achieved, said that funds had also been invested in targets that were still in progress. About 98% of the budget had been spent, 67% of targets were achieved and 30% were still in progress.

Dr Thuli Khumalo, Acting Deputy Director-General: Climate Change and Air Quality Management, DEFF, said that the vandalism and burglary of air quality monitoring stations was not a new problem and a lot of measures had been put in place, such as locating the monitors in or near schools and police stations and removing computers. She said that there was a general problem of vandalism in the country and generators were not advisable as they pump out emissions and contribute to poor air quality.

Ms Winkler said that it was suspicious that the Department seemed to be pandering to industry. She asked why there was an emphasis on plastic bags and plastic utensils were not included. On performance indicators, she asked if this was the final report that the Department had not received a clean audit for the 2019/20 financial year. She also said that some air quality monitors had not been online and that there was an issue of maintenance at some of the stations and asked for clarity on that.

The Chairperson said that 67% achievement of targets was unacceptable. He asked for clarification on the investment in Lesotho. He asked what the role of the Department was in the trans-frontier conservation areas. He said that the work of the Department could not be reduced to project management. Why is employing people a problem? What are the benefits of outsourcing and what are the disadvantages of not outsourcing?

Mr Abader responded that Department had met with the plastic industry and fishing communities and would provide a list of interactions. He said that the situation was not as simple as pandering to industry, but industry employed a lot of people in the country, the phasing in approach would prevent job loss. On employment, he said that there was a slowing down of the jobs that the Department was allowed to create; it would not be feasible to expand the current structure because Treasury wanted it to be reduced. Internal creation of jobs would impact on the wage budget and outsourcing would stimulate the economy by assisting SMMEs.

Ms Khumalo said that monitoring all parameters of air quality was not advisable, but the Department was working on purchasing instruments that would monitor PM2 and PM5; no investment would be made if there was no issue of nitrous oxide.

The list of Ministerial Participation Programmes was provided by Ms Limpho Makotoko, the Department’s DDG for Corporate Management Services: Durban Clean-up, SA Aghulus Welcome, Oceans Day, World Environment Day, Enviropedia Ecologic Engagement, Youth Development Career Expo, International Mandela Day Thaba Nchu, International Mandela Day Mpumalanga, Ozone Day engagements, Marine Week activations Eastern Cape, Marine Week activations KZN Air Quality Lekgotla, Africa, Forestry and Wildlife Conference and Schools Outreach Programme Cape Town.

Mr J Lorimer (DA) asked if his understanding that there was no agreement with the aquaculture industry about the Bill was correct.

Mr Paulsen asked what impact the money that was reallocated due to the pandemic had on the operations of the Expanded Public Works Programme (EPWP) workers.

Ms Winkler asked the Department to account for the R26 409 000 overspend on employee compensation when so many targets had not been met. With regards to the Marine Living Resources Fund (MLRF), she asked for an explanation as to why no additional streams of revenue had contributed. She asked for a better account on why there has been an underspending in recycling initiatives. She also asked when the report of the High Level Panel would be submitted to the Portfolio Committee.

The Chairperson reiterated the need for the report on the activities of the High Level Panel and asked if the Department had a catch-up plan for the targets impacted by the pandemic and asked it to share with the Committee.

On jobs, Mr Abader said that the Department was in discussions with the Presidency and Treasury to get back the jobs. He said that COVID-19 had not allowed targets to be met because many meetings and targets required face-to-face interactions. A written response would be made in terms of the results of The Green Fund and underspending in recycling initiatives. The High Level Panel was still in deliberation and had not finalised the report but it would be shared with the Committee. He said that a catch-up plan and targets had been set for the year; performance plans had been amended and would be monitored for the rest of the year.

Ms Sue Middleton, Chief Director: Fisheries Operations Support, DEFF, said that consultations on aquaculture had commenced but had not been completed as an extension was required. She added that the sector was a diverse one. Abalone farmers wanted less regulation while fish farmers favoured the Aquaculture Bill; so they were trying to find middle ground. She said that the MLRF target was pushed to quarter three to deal with annual audit issues and the Department was looking for additional streams to make them more viable.

Mr Shonisani Munzhedzi, Acting DDG: Biodiversity and Conservation, DEFF, said that the Department was awaiting the report of the High Level Panel; the timeframe given was the end of November. He said that COVID-19 may have impacted on stakeholder processes but the report would be provided as soon as it came. On overspending, he said that the Department had a ceiling set by Treasury on compensation. There were three programmes to employ people non-permanently. The programmes had been excluded from the ceiling and therefore there was pressure and therefore overspending.

South African National Biodiversity Institute (SANBI)

Ms Carmel Mbizvo, Acting Chief Executive Officer, SANBI, presented the performance of the SANBI during the 2019/20 fourth quarter and first quarter 2020/21.

Some of the achievements of SANBI presented by Ms Mbizvo were the completion of a potential site in the North West province – the stewardship in learning exchange programme and the development of human capital.

She took Members through the SANBI performance reports for quarter four of 2019/20 and 2020/21 quarter one. In quarter four, the organisation was not able to achieve its equity targets on female staff and black staff. She indicated that the entity was still awaiting the results of the year’s external auditing.

Visitor numbers had dropped significantly, especially with international visitors. In quarter one, COVID-19 posed a lot of challenges as schools had been closed and excursions were unlikely. The impact the pandemic had on employees also led to challenges and disruptions that impacted delivery. Other challenges were that there were budget shortfalls and capacity constraints which needed to be managed carefully to not impact the delivery of targets.

Ms Lorato Sithole, Chief Financial Officer, SANBI, took Members through the fourth quarter 2019/20 and first quarter 2020/21 financial performance report of SANBI.

Ms Sithole said that SANBI was under budget by 12% in the fourth quarter mainly due to projects that had been budgeted for to be received. On admission fees, visitor numbers were 40% lower than the previous financial year. With rental income from restaurant tenants, SANBI was 26% under budget. On employee costs, the entity was 11% under budget because of the vacancies that were in the process of being filled. Under budget by 18% on operating expenses due to the projects that SANBI was acting as agencies for. On capital expenditure, SANBI was 44% below budget but had procurement processes that were completed. There was a surplus of 10 million against a budget that should not have a surplus.

In quarter one there was a variance of 29% on total revenue. The greatest contribution was the government grant – SANBI expected to receive R131 million but only received R78 million. There was one unbudgeted and unplanned projected that cost R7.6 million. Other revenue streams managed to generate a little bit of income regardless of lockdown due to contractual arrangements. Investment income exceeded the budget but some of the income had to be paid to the Department. Expenditure showed underspending of seven percent due to employee costs relating to vacant positions which were still vacant due to budget cuts and uncertainties. Operating expenses were lower than budgeted for but would pick up as gardens opened. There was a deficit of R40 million against a budget of R8 million.

South African Weather Services (SAWS)

Ms Nana Magomola, Chairperson of SAWS, addressed the issue of the high number of acting officials within SAWS. She said that the top three posts were vacant because the previous CEO, Jerry Lengoasa, resigned facing serious allegations of misconduct, but the investigation by SAWS could not be pursued further as he was no longer a member of staff. Filling a position in a state-owned entity (SOE), especially one the size of SAWS was usually quite difficult and the pool to draw from was very small. The candidates who had gone through the process that the panel wanted to appoint had not been recommended for appointment and the process had to be started again. The entity was hoping to appoint someone by end of October or early November, 2020

The previous CFO, Ms Busisiwe Shongwe, was placed on precautionary suspension on allegations of misconduct but she immediately resigned in December 2019. SAWS were still considering pursuing civil and criminal charges against Ms Shongwe. The process for a new CFO was at an advanced stage.

The Executive Corporate and Regulatory Services, Ms Julia Mphafudi, was also put on precautionary suspension for allegations of gross misrepresentation, gross negligence, fraudulently channelling recruitment applications to certain agencies and fraudulently increasing certain SAWS employees’ salaries without proper approvals. Due to the lockdown, finalising investigations took time but was finally done and charges were served to her, and SAWS recently received her resignation. A new appointment process would commence immediately.

Mr Mnikeli Ndabambi, Chief Executive Officer, SAWS, presented the annual performance report for the fourth quarter 2019/20 and first quarter of 2020/21.

Mr Ndabambi said that all targets for programmes one and two in the fourth quarter had been achieved.

Load shedding challenges and aging infrastructure affected the achievement of targets of the Global Atmospheric Watch (GAW) infrastructure that monitored greenhouse gases and observation of upper air infrastructure, but SAWS was in the process of acquiring backup power and implementing GAW Business Case. The Gough Island would also be replaced in the next takeover and new upper air infrastructure would be installed and evaluated.

In the ratio for liquidity, SAWS achieved 0.75 liquidity rate as opposed to 1.5 that was targeted due to increase in cash and cash equivalents, trade payables, unsent government grants and short-term employee benefits. The BBBEE target was not achieved but a task team was implemented.

In quarter one all targets in programmes one and two had been met.

Like the other entities and the Department at large, challenges due to COVID-19 and the national lockdown resulted in a number of unmet targets and delayed some of the targets. GAW targets and Air Quality targets were still in progress due to vandalism, power-failures and old infrastructure but were being prioritised.

Mr Lulama Gumenge, Acting CFO, SAWS, took Members through the Financial Report for quarter four of 2019/20 and quarter one, 2020/21.

In the fourth quarter total revenue was under budget by 5.56 %. Total expenditure was 3.95% above the budget, in terms of revenue; government grant was below budget by R8.65 million due to underspending in the capital expenditure grants as a result of challenges SAWS experienced with the supply chain management unit. The actual was below budget by R1.5 million. Revenue dropped in much by R8 million due to lower air traffic volumes especially internationally due to the pandemic.

Over-expenditure on administration was due to the provision for doubtful debts mainly because of business rescue for South African Airways (SAA) and SA Express and other aviation clients. But debts would be recovered should the situation improve. There was overspending in operating expenses due to the cost of sales because of SAWS trying to boost sales from non-regulated commercial revenue. Overspending in Information Technology was due to spending on internet and data costs. SAWS had started engaging with service providers and were currently on a better rate than the previous one. Overspending on repairs and maintenance was due to underspending in capital expenditure as infrastructure was ageing. Funding by UKNet had stopped which resulted in overspending in equipment expensed.

An economic recovery plan had been put in place and had started to bear results.

In quarter one revenue and expenditure were largely impacted by the national lockdown and was 51% below the budget. Expenditure was also under budget by 21.38%. SAWS were unable to spend the capital expenditure grant during the first half of the quarter due to lower revenue from aviation. Department had approved the conversion of the capital expenditure grant to operational grant to augment loss of revenue from aviation income.

Administration expenditure was over budget due to bad debts as a result of Com Air being put under business rescue in April. The economic recovery plan was being strictly being monitored.

Isimangaliso Wetland Park (IWPA)

Professor Thandi Nzama, Chairperson, IWPA Board, thanked the Department for the support given to IWPA through the funding of strategic infrastructure projects. The implementation of these projects included road construction, road maintenance, building a new lodge, constructing of offices, refurbishment of buildings and several other projects which unlocked business and employment opportunities for people living around the park. The gap that existed between IWPA and the communities was narrowed.

The reviewed contractual obligations had been signed to address challenges between IWPA and Ezemvelo, thus amending the cooperation between the two entities. This would further unlock many opportunities for the park.

Relations between the park and the communities had been improved; vandalism and illegal activity happening in the park was reduced and being reported by the community.

The previous Chief Financial Officer (CFO) of IWPA had been suspended and the matter had been referred by the Commission for Conciliation, Mediation and Arbitration (CCMA) to the Labour Court; the delay in finalizing the matter was from the side of the CCMA as it could not sit due to lockdown regulations. The board resolved by employing Ms Nokuthula Tshabalala.

Mr Sibusiso Bukhosini, Chief Executive Officer, IWPA, presented the performance report for the 2019/20 fourth quarter and the first quarter of 2020/21.

Mr Bukhosini said that IWPA had a Public Finance Management Act (PFMA) compliance issue where creditors were paid after 44.5 days instead of 30 days due to invoices with incorrect dates and IWPA did not have a clear standard operating procedure, which was eventually developed in quarter one. The Workplace Skills Plan was not submitted to the relevant SETA but would be submitted in the 2020/21 financial year – same with the implementation of the plan. Employment equity targets and employee satisfaction surveys were not implemented and conducted; these would take place in 2020/21.

Information systems technology to support the authority’s business was approved but not procured; this would be done in 2020/21.

Late receipt of funding impacted biodiversity conservation and socio-economic environment development. The Department would deposit funds monthly.

In quarter one, COVID-19 posed the biggest challenge to IWPA. Underspending of budget was due to the moratorium from Treasury with regards to procurement when the national lockdown began.

Vacancies would be filled because the process was underway.

Ms Nokuthula Tshabalala, Interim Chief Financial Officer, IWPA, presented the financial report for the fourth quarter 2019/20 and first quarter 2020/21.

Due to the unspent grant, the current ratio was at 0.98 below the norm, putting IWPA in a negative position so IWPA could not spend because consultants and contractors they had were procured irregularly.

Park revenue was under budget due to reduced visitors to the park due to fear of COVID-19.

Administration fees and management fees were also reduced due to delays in the roll out of infrastructure projects. This was corrected and would reflect in quarter two.

The new tourism business strategy and fast tracking of projects would rectify the increase of 16% of project net profit.

IWPA recorded a net loss of R2.8 million. Expenditure was higher because towards the end of the year, funding of R36 million was received from the Department and this was above the original fiscal allocation IWPA had. Funds were used for maintenance and repair of infrastructure which was dilapidated.

In quarter one, COVID-19 impacted current ratio, revenue, expenditure and the status of the entity but negotiations with Department were ongoing. Security costs were increased due to additional security that had to be procured to protect the park assets and game.

Personal costs were higher as minimal project personal cost recoveries were made due to minimal project expenditure. Budgets cuts were made by Treasury.

Discussion

Mr Paulsen asked how SANBI had benefitted from all of the research carried out and the publications that were published.

Ms Winkler asked why the SAWS Durban Upper air infrastructure targets were not met and what they planned to do about it. She asked what issues were preventing SAWS from getting additional reliable data instead of only 75% from the air quality monitors.

Ms Winkler asked for feedback on the SAWS investigations. She asked for the current poaching figures at Isimangaliso. Concerning the Working for Water Programme, she asked whether it was not possible to update the mandate of the programme to also include river health, focusing on pollution and sewerage, instead of only focusing on the clearing of invasive species.

The Chairperson said that there was no difference between SANBI’s performance and the Department’s performance, and reiterated that such poor performance could not be accepted.

Ms Mbizvo said that SANBI was also concerned about the low performance but corrective measures had been put in place and the entity was closely tracking to ensure that it made up for lost time. The relaxation of government restrictions meant that the entity could catch up on visitors and income. She said that research and publications demonstrate SANBI’s productivity on research, publishing and peer-reviews, making it available for others to access. They were valuable to make biodiversity accessible, to assess the state of South Africa’s biodiversity and they informed the decision-making and planning processed of the entity.

Mr Ndabambi said that the main challenge of upper air infrastructure was that old generators could not be fixed. In quarter one, SAWS faced challenges of vandalism but it was trying to mobilise with communities in order to address this. In terms of the irregular appointments, investigations were being concluded.

Mr Bukhosini said that as of quarter four and quarter one, there was no poaching in priority species. Communities were working together with the park. Two hippos, nine impalas and four inyalas were poached; these were not very significant.

Dr Marais indicated that the Department did solid waste management and river restoration together with the Department of Water and Sanitation but it could not get involved in non-solid waste removal as it was unqualified, but it was working closely with Water Affairs as well.

The Chairperson thanked his colleagues and said that it was the resolution of the meeting that on 02 September 2020, the Committee would reconvene for the presentation of SANParks. He handed over to the Deputy Minister for parting comments.

The Deputy Minister thanked the Chairperson and the Members for the opportunity to present and engage with the Members. She confirmed the return on 02 September 2020. She said that the Department had noted everything that was raised by Members and any other issues that the Committee have could be sent to the Department for consideration.

The meeting was adjourned.