Department budget: briefing

Tourism

16 May 2000
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Meeting report

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
16 May 2000
BUDGET BRIEFING

Documents:
Annual Report 1999/2000
Environmental Affairs and Tourism Vote 9
[e-mail linden@iafrica.com for documents]

SUMMARY
The members were delighted at the presence of Minister Valli Moosa and that the annual report had been prepared so timeously.

The Director General (DG), Dr. Crispian Olver, began his presentation with a plea to the committee to support the educational programme around the environment.

The overall structure of the budget, he said, showed an increase of R169,4 million over last year, an increase of 36.6%. This is very significant, bringing the total budget to R632,230. This is due to the Minister's work in raising the profile and repositioning the Department as a key economic department: "The job creator for this country."

The major increase was around tourism marketing: R100 million, and also in Marine and Coastal Management, which has been significantly prioritised.

He then proposed that he and the CEO, Mr Bouwer, go through each programme and unpack the initiatives. Ms Mahlangu, the Committee Chair, requested that he begin with Programmeme 5: Tourism, in order to maximise the participation of the Minister, who would need to leave shortly. This was agreed to.

Programme 5: Tourism
Tourism now stands at 50% of the current budget for the department. The major marketing effort thus far has been at the established European and American markets. The challenge now is to focus on emerging markets. There is a strong visitor base from Africa and Southern Africa, and interestingly, they are spending more than the average British visitor, on health, shopping and conferences. There is also potential from Asia and the Middle East, and SATOUR will be undertaking a segmentation study to identify potential markets. It is important to focus not only on marketing, but also on gearing up the industry as a whole.

The DEAT's International Tourism Marketing Assistance Scheme is intended to help small, medium and micro tourism entrepreneurs. Transformation is a key issue, and it is important that the growth not replicate the existing ownership structure. R10 million has been budgeted for this project. Initiatives include enabling participants to market their products and services abroad, extending tourism corridors into impoverished areas, and training and human resource development in the hospitality sector.

Discussion
Ms Ramotsamai and Ms Mbuyazi made strong arguments about the non-representative nature of the recent tourism Indaba in Durban. Most of the stands were occupied by white-owned businesses while black crafters where relegated to peripheral locations outside. They questioned the extent to which the budget will really be used to bring people in. In this context, for example, assistance could have been given to disadvantaged entrepreneurs to offset the cost of the official stalls.

The Minister whole-heartedly agreed with how upsetting this had been. He had been struck at how tourism is still only benefiting one sector of the population, and this simply is not good enough. Moreover, not only is there an obligation to make sure that growth is equitably distributed, but there is also a demand for international hospitality. Feedback from the international market indicates that people do not want to come to Africa only to feel like they are in Europe, and so a true transformation makes good business sense too. It is embarrassing that it seems that whites are still in charge.

He suggested that the Committee could have a role in looking at this issue, developing policies and analysing where the blockages are.

The Chair added that the Committee itself could set an example by employing black- owned conference and catering services.

Other questions that the Minister responded affirmatively to were Ms Ramotsamai's proposal that domestic tourism also be targeted, and Mr September's related suggestion that an upgraded rail system may provide a more economical mode of transport for disadvantaged South Africans that would like to tour the country. The Minister added that increased domestic tourism is also the way to raise awareness of the industry.

In response to a question from Mr Mokaba about the impact of tourism on the environment, the Minister said that it would be short-sighted not to attend to this. He gave the example of how the heavy coastal development in Kenya has ultimately resulted in a drop in tourism. What the tourists were coming for - a pristine coastline - no longer exists. The tourist industry must therefore be developed in a sustainable way. This is a lesson that will guide development in northern Kwazulu Natal, for example. It has been decided that the private sector will have access only to those areas that have already been disturbed; pristine areas will not be placed on the market.

The Minister then excused himself since he had a MINMEC meeting to attend, and Ms Mahlangu asked the DG to respond to the remaining questions.

The most important of these was the issue of security, which is a precondition for being able to attract tourists. The DG explained that tourism is a cross-cutting function in government. The Department cannot make things happen without being able to stack up things like transport, infrastructure, security, etc. To address these issues, a DG's cluster on tourism has been set up. It is working on a strategy document that will outline the key challenges for each line department. The document will ultimately be put in front of Cabinet. He would like to do a detailed briefing to the Committee on this.

Programme One: Administration
There has been an increase of R6,4 million. This includes the costs of top management, including a new senior marketing team. The annual report lists contact details on the back.

The Department is moving to new premises, and there is a competition to design a Green Building to house it. This will serve as a model of solar heating, indigenous plants etc, so that even the act of visiting the Department will be an educational one.

Discussion
Ms Verwoerd asked about transformation of the make-up of top management in terms of both race and gender. The figures the DG presented showed that there has been some progress for race, but that gender still lags behind. Ms Verwoerd asked that this be noted.

Programme Two: Environmental Coordination and Communication:
The major development here has been the release of the Safe Environment Report. The challenge is now to roll it out to every municipality and to Southern Africa.

Also, the strategy on sustainable development has been kick-started by South Africa's bid to host the Rio+10 Conference. This could be the biggest environmental conference in the world. It must reinforce our own commitments and leadership role in the developing world. In terms of commitment to Local Agenda 21, the weakness has been on the municipal/local level.

As an aside, the DG said that there is a need for a linkage between the Municipal Systems Bill and the National Environmental Management Act (NEMA). There are other things lacking in NEMA in terms of pollution, waste, implementation of CITES, and biodiversity. He believes we need a single environmental act that would repeal the old acts, add new chapters to NEMA, and amend the old ones. This will probably not happen until next year.

Discussion
Ms Verwoerd asked for clarification on the DEAT's involvement with local government. The DG replied that there are no effective linkages at present. But the environment and sustainable development need to be put at the center of local government, since they are responsible for service provision and local planning. So, "watch this space." The committee should keep the pressure on.

Ms Mbuyazi asked if there is a national strategy on sustainable development, and if so, how it will reach people on the ground.

Officially, said the DG, the answer is no. But the Reconstruction and Development Programme (RDP) is extremely environmentally oriented, although perhaps not detailed enough. Since the adoption of the RDP, there has been a flowering of policy, and there needs to be an "audit", critical review, of where we are now.

Further, if the Municipal Systems Bill is adopted in its present form, municipal Integrated Development Plans (IDPs) will need to be on the table within the first year. We must succeed in making sustainable development the basis of it.

Programme Four: Weather Bureau:
Although there has been an increase of R6.6 million, there is a deadline to have this function out of the public service by 31 March 2001. The bill for agentisation has already been published. A number of submissions received call for a regulatory framework that would balance the monopoly of the agency and would define public obligations. The committee should be engaging in these debates within the next month.

Discussion
In response to questions about training and transformation, the DG said that transformation and agentisation should go hand in hand.

Programme Six: Environmental Quality and Protection:
Some highlights of this programme are:

- A team working on a more pro-active approach to Environmental Impact Assessments.
- A White Paper on Pollution and Waste Management that has been adopted by Cabinet and will be launched on May 23.
- A pilot project on community based programs, e.g. recycling
- A crackdown on industry and prominent polluters. The law around air pollution is very inadequate and will dealt with in the revised NEMA, but there is a lot that can be done even now.

Discussion
There were several comments about the problems with monitoring and implementation of existing legislation, and questions about new legislation.

The DG responded that the overlap between the DEAT and the DWAF (Department of Water Affairs and Forestry) must be dealt with in new legislation, since the Waste Management function is currently fragmented. He said that the country's entire legal framework was biased towards the mining industry, including the Environmental Impact Assessment process. These issues would engender critical debates, and the revisions to NEMA are going to take time.

The Committee Chair said that the committee needs further discussion of implementation.

Programme Seven: Biodiversity and Heritage:
The DG noted that this topic deserved a whole discussion in itself and that time would only permit a cursory discussion today.

The big challenge for the national parks is funding conservation. The DEAT only provides South African National Parks with only 50% of its budget.

South Africa's approach to funding conservation - i.e. sustainable trade in animal products -- was established in the mind of the international community at CITES this year. Other key initiatives include transfrontier conservation areas, CITES implementation and getting the provinces involved in permitting, and bringing the private sector into hospitality - but only if this increases funding for conservation. More World Heritage sites are in the pipeline.

Discussion
Ms Chalmers asked whether South Africa is able to fulfill the obligations it has committed itself to by signing the many international conventions it has signed.

The DG said there are 24 such conventions at last count. There is a need to look at them more closely and prioritise implementation needs.

Ms Mbuyazi asked if the Committee would have an opportunity to participate in conceptualizing the transfrontier parks that are still being planned. She is particularly concerned that local people will benefit from them.

The DG acknowledged that there are important agreements that need discussion and suggested a separate session at which SANP representatives would be present.

Programme Eight: Antartic and the Islands:
The Department is proposing to agentise this function, and this requires a specialised discussion.

Programme Three: Marine and Coastal Management:
There has been an increase of R27 million.

The major issue here has been the integration of the Marine Living Resources Fund (MLRF), which had been outside the Department. There is a major internal investigation to tighten up financial management, and the increase of R27 million will be massively increased because fishing rights have been under-priced, especially the larger species. The players involved have said they are prepared to pay more if the revenue collection system, the inspectorate, and the licensing system are properly run.

There is a debate about whether the rights allocation function should be in the MCM at all, or whether there should be a dedicated function.

There is also a proposal to establish multi-rights allocations for 2-3 years. These should probably be non-transferrable and there should be an end to paper quotas. Rights should be conditional and may be withdrawn. There needs to be a clear policy framework governing allocations, so that decisions are purely technical and objective.

The idea to specify the species and also to divide the players into small, medium, and large categories. The windows would then be priced accordingly.

The Deputy Director-General of MCM, Horst Kleinschmidt, added that the running of vessels such as the Aghulas have been outsourced since April 1, and they can now be rented out to other countries at phenomenal rates.

The budget for harbors has been doubled from last year, and tenders are now out for emergency repair work.

Finally, MCM can also contribute to tourism by establishing blue flag beaches.

Discussion
In response to questions about whether the Department would really be able to get on top of the problem, the SG said that the problem has been that no parameters were specified for the application process in the past, and the Department itself did not have the capacity to audit the flood of applications it was faced with. But the industry itself also has to accept responsibility for its legalistic approach, which has paralyzed the Department.

That concluded discussion of all the DEAT programmes. The Chair was pleased with the presentation, and proposed that the Committee meet with the Department more regularly - perhaps monthly - in order to be able to discuss the issues more thoroughly.

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