DEFF & SAWS Quarter 2 and 3 2020/21 performance; with Deputy Minister

Environment, Forestry and Fisheries

09 March 2021
Chairperson: Mr F Xasa (ANC)
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Meeting Summary

The Committee met virtually to be briefed by the Department of Environment, Forestry and Fisheries (DEFF) and the South African Weather Service (SAWS) on their second and third quarterly reports for the 2020/21 financial year.

The DEFF reported that in the second quarter, it had achieved 62% of its targets, with 22% still work in progress, and 16% not achieved. In the third quarter, it had achieved 61% of its targets, with 29% still work in progress, and 10% not achieved. Expenditure in the second quarter had amounted to R1.97 billion, or 20% of the adjusted annual estimated expenditure of R9.94 billion. This had increased in the third quarter to R2.58 billion, or 26% of the annual budget. This left a balance of R3.96 billion available for the fourth quarter.

Members were disappointed that many of the Department’s targets had not been achieved, and rejected the notion that the COVID-19 pandemic had been primarily responsible. They asked for specific time-frames for the implementation on the Oceans and Coast Programme; why the DEFF had managed to get only halfway through the estuary management process; how long the signatures on the Climate Change Bill had been outstanding; why the high-level panel (HLP) report had been held back; and what the Department’s role in criminal investigations involving fishing licences had been.

The South African Weather Services (SAWS) had four programmes analysed in Quarter 3. The overall Quarter 3 performance in all of these programmes was 77.8 % achieved, and 22.2% partially achieved. The capital expenditure amount for the 2020/21 financial year was R140.6 million, and had been converted into an operational grant to offset the loss of income from aviation, non-regulated commercial revenue and the government grant budget reduction.

Members asked what the effects of the unavailability of radar on research had been. Why had money been transferred from CAPEX to operating expenditure? They also asked for clarity on the reasons for the resignation of the entity’s previous CEO.

Meeting report

Committee matters

fter Members had been welcomed, apologies tendered and the agenda adopted, Mr N Singh (IFP) asked if there had been any progress on the invitation to ESKOM and SASOL to present to the Committee on the mitigation and adaptation methods applied in their respective institutions to curb greenhouse gas emissions.

The Committee secretary said that the invitations, as well as the proposed oversight visit to the Kruger National Park (KNP), would be in the second quarter.

Mr D Bryant (DA) highlighted that there was still an extensive list of outstanding questions relating to conservation and poaching. He wondered when the Committee would get feedback from the South African National Parks (SANParks).

The Chairperson said that the secretariat must follow up.

The Committee secretary said that she had sent the questions last week.

Mr Bryant asked if the questions had been sent to all the Committee Members, because he had not received any answers from SANParks, unless he had missed the email.

The Committee secretary said she would check her emails and confirm with him later.

The Chairperson invited Ms Maggie Sotyu, Deputy Minister of Environment, Forestry and Fisheries to introduce the presenting teams.

The Deputy Minister indicated that the Minister, Ms Barbara Creecy, would not be present for this meeting as she had to attend another meeting in preparation for a National Council of Provinces (NCOP) session scheduled for today.

Regarding the outstanding questions, she said she had received a Department of Environment, Forestry and Fisheries (DEFF) file last week. She had sent a copy of all the responses to the Committee through the Secretariat.

She then introduced the Director-General and senior managers from the DEFF, as well as the team from the South African Weather Service (SAWS).

The Deputy Minister introduced the Director-General (DG) of DEFF - Ms Nomfundo Tshabalala, and her team of senior managers in the form of Deputy Directors-General (DDGs) and Chief Financial Officer regarding today’s agenda. The Deputy Minister also introduced the SAWS team.

DEFF Quarter 2 and 3 performance reports

The DEFF reported that in the second quarter, it had achieved 62% of its targets, with 22% still work in progress, and 16% not achieved.

In the third quarter, it had achieved 61% of its targets, with 29% still work in progress, and 10% not achieved.

Expenditure in the second quarter had amounted to R1.97 billion, or 20% of the adjusted annual estimated expenditure of R9.94 billion. This had increased in the third quarter to R2.58 billion, or 26% of the annual budget. This left a balance of R3.96 billion available for the fourth quarter.

(See attached documents for details on targets achieved and not achieved per programme).

Discussion

Ms C Phillips (DA) said she had numerous questions, and if they could not be responded to in this meeting, she asked for them to be answered in a written format. She commented that it was embarrassing that so many targets had not been met. She asked how many staff were employed to hold two rural and township enterprise supplier workshops a year. She also wanted details of the Department’s organogram, how many staff were employed to conduct rhino horn verification, and details on the criminal cases. She did not accept the view that targets were not met because of COVID-19, and said this was being used as an excuse. Therefore, she would like to have a proper presentation on why the DEFF had not met the targets.

Mr D Bryant (DA) said he agreed with Ms Phillips that the DEFF report had used COVID-19 as an excuse for missing their targets, and said they had to find ways to mitigate, innovate and adapt to the new circumstances to deliver to the people of South Africa continuously. He asked for specific time-frames for the implementation on the Oceans and Coast Programme. Why they managed to get only halfway through the estuary management process? How long had the signatures on the Climate Change Bill been outstanding? Why had air quality management officials not been allowed /able to visit certain different stations, and why had the high-level panel (HLP) report been held back?

Mr Bryant highlighted that the presentation revealed that only one bid was awarded under the fishing right allocation process. Why only this bid, and how many more bids were outstanding? He asked about the role of the DEFF in criminal investigations involving fishing licences. Why was this process delayed? Lastly, he referred to the specific issues surrounding the Western Cape fishing rights allocation process, and wanted to know why they were cancelled and needed to be redone.

Mr Singh added that COVID-19 was a reality, and it had indeed interrupted the working of many departments. Still, there were other matters that people could address from their physical offices and home. What had been done to strengthen the finance department’s capacity so that the DEFF could put all the audit findings to bed in due course? He asked for more information on the Aliwal Shoal engagements. When and where would this engagement take place? Who would be involved in these presentations? What would be the method of consultation? Regarding fisheries, there had to be clear timeframes. What had happened to the draft legislation on the definition of small scale fishers? There were red flags reflected in the 85% spent on fisheries management, but when one looked at the chemical and waste industry, 45% had been spent.

Ms T Mchunu (ANC) concurred with Mr Singh that COVID19 had significantly impacted all the government departments. She was concerned about broad-based black economic empowerment (BBBEE) under Administration (Programme 1) and its inability to extract information. She asked for this to be prioritised so that before the end of the financial year the Committee would be given a report. She also asked whether the Committee could be reassured that all the programmes would reach 50 % of spending by the end of the financial year.

The Chairperson thanked everyone for their questions, and stressed that he would like to see an effort towards minimising irregular, fruitless and wasteful expenditure.

DEFF’s response

Deputy Minister Sotyu asked each Deputy Director-General (DDG) from the DEFF to respond to the questions related to their area. She highlighted that they needed to do better regarding the off-target performance and areas highlighted in amber in the presentation.

Mr Rannoi Sedumo, Chief Financial Officer (CFO), DEFF, answered Ms Phillips on the issues of two workshops. He said that several workshops had been held earlier in the year. The two seminars conducted during the end of 2020/2021 had been initialised to finalise the work that had already been started. No specific staff had been employed to conduct these workshops. Current staff members were used to conduct the workshops and the management in this area. They had also collaborated with the communications unit for assisted with organising the workshop.

Regarding Programme 8 (Forestry), which refers to transfers to municipalities, where the performance was at 8%, he said that they had dealt with these issues. It was basically the rentals that had to be paid to the municipalities. He highlighted that they also had to deal with some contract issues that needed to be finalised to ensure that the money was paid to concerned municipalities on this programme.

On Programme 7 (Chemical and Waste Management), Mr Sedumo said they would supply the name of the companies that were on the transversal contract of National Treasury where the personal protective equipment (PPE) had been procured. Still, there had been struggles in terms of deliveries. They had expected that there would be some blockages, given the fact that most of the departments that received the stimulus programme money were going to be looking for PPE. He was not justifying the companies not delivering, but the Department had expected some kind of pressure on the markets, and the number of companies that were supplying them might have experienced problems with deliveries. For example, it had happened to COVID-19 related PPE early in the year when they were going into lockdown, when they had problems with the suppliers not delivering services on time.

Mr Sedumo said that there should be no tolerance around qualified audits. The Department was working very hard, because the issues were not necessarily with the finance team, but existed throughout the organisation. The strategy was to make sure that everyone must be involved to deal with the challenges. In 2018/19, they had 11 qualifications and these had been reduced to three, two of which were related to irregular expenditure. On the programmes with low expenditure percentages, he said they would provide the required information on the analysis of the issue to compare the performance in terms of the target and the money.

Regarding the BBBEE reporting, he assured Ms Mchunu that the report would go out. He stressed that the BBBEE expenditure was critical in the Department, because it dealt with the inclusive economy and transformation issues.

Ms Mamogala Musekene, DDG: Chemicals and Waste Management, DEFF, said that the contribution towards under-spending linked to the COVID-19 relief fund for waste pickers was R945 payment per waste picker. The Department had needed to develop an internal system and controls to avoid adverse audit findings. It had taken them time to process because of the interface between the Department of Home Affairs and the National Treasury to avoid paying “ghosts” and ensuring that the bank accounts were linked to relevant waste pickers. She said that they were in the final stages, and about 3 700 applications had already been captured to date. Their database had about 16 000 waste pickers, and the difference between these numbers was because some of the waste pickers did not have the necessary documentation to access the relief funds. The documents needed to be certified by either their municipality or the private centre that they worked at, and foreigners needed to have the requisite documents from Home Affairs. She added that they had moved their service providers in December 2020 from the Post Office to Nedbank, so there had been issues with integration, especially affecting payments linked to waste management.

Ms Sue Middleton, Chief Director: Fisheries Operation Support, DEFF, said that bids that were cancelled and re-advertised were for an implementer and information technology (IT) solution, and a panel of the legal law firm. One bid that was outstanding was from the forensic auditors, which was less urgent. The role of fisheries in criminal investigations had been handing over evidence to the Hawks and the South African Police Service (SAPS), but there were still administrative processes that needed to be followed through from fisheries. The audit had found a number of issues regarding small scale fisheries in the Western Cape.

She said that each province had a different service provider. The Department had found major issues with the service providers appointed in the Western Cape. There were issues with the verification process, including accurate capturing of the information; adjudication of the applications by community panel (biases and gate-keeping), and incorrect and incoherent ways in which appeals were dealt with among the communities.

Consultation processes around the Aquaculture Bill had been taking place since 2015. The specific virtual workshop was on 11 November 2020, and the next would be on 20 June, after which the bill would be submitted for the parliamentary process. They were currently busy with the timelines, and were internally reviewing Phase 1 of the economic assessments for all 12 sectors. The Department was currently reviewing the 12 sector and general policies, as well as the fisheries policies. They would be ready for public consultations by the end of April. She stressed that the amendments would begin only in the 2022/23 financial year, because this year’s priorities would be given to the conclusion of small scale processers in the Western Cape.

Regarding the over-expenditure of fisheries by 80%, Ms Middleton explained that the expenditure reflected in the CFO’s report was different from other branches, because it dealt only with the cost of employment and capital transfers. She added that the financial statements regarding the expenditures would be tabled at next week’s meeting on the Marine Living Resources Fund.

Ms Nonhlanhla Mkhize, DDG: Environmental Programmes, DEFF, said that with environmental programmes, one of the commitments made at the beginning of lockdown was that the fieldwork should be suspended and the rest of the work should be adjusted in line with the lockdown regulations. There had been continuous monitoring of COVID-19 with the number of people involved in the expanded public works programme (EPWP). In terms of adjusting to the new normal, she said that there was a higher risk of COVID-19 infections, so some of the projects had been suspended.

Ms Morongoa Leseke, Acting DDG: Forestry Regulation and Oversight, DEFF, responded on the refurbishment of nurseries. She said the issue they had raised regarding their own officials not able to work due to the pandemic was not new. They had a high number of ageing and ailing workers in this branch. They had managed to advertise many posts and were finalising recruitment to try to deal with incapacitated officials. Ms Leseke said the 1 434 jobs were full-time equivalents, in line with the ministerial determination of the EPWP.

Ms Limpho Maphike, DDG: Corporate Management Services, DEFF, said the organogram of the Department would be shared. The 11 events that Ms Phillips had requested were as follows:

Quarter one

  • Waste picker engagements, including handover of food parcels on 8 and 9 of April in Sasolburg; Departmental initiatives in Kruger National Park on 2 and 24th April;
  • Distribution of food parcels to Golden Gate community on 30 April;
  • Virtual engagements with United Nations Environmental Programme and Wildlife Environment Society of South Africa (WESSA) on Wild Environment Day, 3 June;
  • Climate Change Youth Dialogue on 16 June.

Quarter 2

  • Mandela Day Celebrations with youth and elderly at Ladybrand Primary School and Manyatseng Old age home in the Free State;
  • International Coastal Clean-Up and launch of Inkwazi Isu in KwaZulu-Natal;
  • Arbour Month celebrated in Free State, Northern Cape, North West and in Gauteng.

Quarter 3

  • Unveiling of the Awelani Lodge on 13 November;
  • National Marine Week with schools at WESSA education centre in Durban on 17 October.

Ms Judy Beaumont, DDG: Oceans and Coasts, DEFF, said that they worked very closely with the provincial authorities during the stakeholder sessions for marine protected areas management plans for Amathole and Aliwal Shoal Marine. For Amathole, the Department was working with the Eastern Cape Parks and Tourism, and for Aliwal Shoal, they were working with Izimvelo KwaZulu-Natal. The workshops at Amathole were scheduled for 16 and 17 March, while the schedule for Aliwal Shoal would be towards the month-end.

In response to Mr Singh, she said there were in fact issues regarding the approach in which the community workshops were held. The challenges were around observing social distancing. In order to improve the challenges around the efficiency of the workshops, the Department had facilitated the workshops physically in a remote setting, and virtually. The Department had detailed estuary management plans in place for each of the prioritised estuaries at Orange River Mouth, Buffalo River and Durban Bay. Each of these management plans had a number of annual targets, so they worked closely with multiple stakeholders, provincial and local authorities.

Dr Thuli Khumalo, DDG: Climate Change, Air Quality and Sustainable Development, DEFF, said that the Climate Change Bill would be taken to the Cabinet in Quarter 3. It had been delayed because of the extended consultations in the National Economic Development and Labour Council (NEDLAC) process.

Regarding the monitoring of networks, the officials could not visit the stations. The monitoring network required a physical presence to calibrate the instruments. Only data management could be done remotely. When there were power failures and load-shedding, the stations did not operate. The interpolation process gets interrupted. She said the faulty equipment highlighted in the report could not be replaced on time. The target had been set before COVID-19, for example. She stressed that during Level 5, there were no permits for officials to visit the station.

Mr Ishaam Abader, DDG: Regulatory Compliance and Sector Monitoring, DEFF, said that the legal opinions were requested in Quarter 3 and were received in February 2021. These financial provisioning regulations were relatively complex, so that was partly the reason for the delay, apart from the fact that the legal advisor had contracted COVID19. To give the responsibility to someone new would probably have delayed the programme longer.

They had 11 positions for staff members to conduct verifications, three permanent staff stationed at OR Tambo international airport, and the remaining staff did verification for private rhino owners, government stock and rhino horn sales.

Mr Abader asked Ms Phillips what exactly she required from them regarding criminal cases. When they receive a complaint, they open a docket, the docket gets allocated a case number, they then investigate the matter, put together the evidence relating to the offence, and hand it over to the national prosecutors for decision making. He could provide Ms Phillips with the number of criminal cases, if this would help.

Mr Shonisani Munzhedzi, DDG: Biodiversity and Conservation, DEFF, said that the High-Level Panel report and National Environmental Management Laws Amendment Bill (NEMLA) were interrelated and mutually inclusive, because the recommendations had been provided by the High-Level Panel to the Minister. The Minister would provide guidance on the way forward. The only outstanding matter concerning the NEMLA Bill would be on the assessment of what the outcomes and impacts of the considerations from the High-Level Report would be. The NEMLA bill provided framework legislation in terms of biodiversity and conservation and certain provisions that would have to do with the matters arising from the High Panel Report. Decisions emanating from the recommendations would fortunately or unfortunately be provided at the end of Quarter 3, by December at the latest.

Follow-up discussion

Ms Phillips typed the following question in the zoom chat regarding the criminal cases within the Department : (1) Alleged crime; (2) Were staff members implicated? If so, had they been suspended, and case numbers? What were the total numbers of staff with co-morbidities?

Mr Abader said that they would respond in writing with the information regarding the criminal cases reported.

Mr Bryant asked if the Department would blacklist the service providers from the Western Cape from the small scale fisheries branch.

Ms Middleton confirmed that the Department had taken legal action against the service provider. The programme was under way so she could not comment on blacklisting. She added that all the remaining questions would be responded to in writing.

The Chairperson concluded the first presentation, and invited the SAWS team to deliver their presentation.

South African Weather Service (SAWS) Q3 performance report

Ms Nana Magomola, Board Chairperson of SAWS, congratulated Mr Abader on his new role as the Chief Executive Officer (CEO). She was happy to confirm that his appointment had been approved by the Cabinet, and they were now finalising the matter. They were in the advanced stage of appointing the Executive of Corporate Regulatory Services. The appointment had been made and she would be starting soon. She asked her team to deliver the presentation.

Mr Mnikeli Ndabambi, Acting CEO, SAWS, presented the entity’s performance for the third quarter:

  • Programme 1 - Weather and climate services had four targets. Three were achieved, while one was partially achieved.
  • Programme 2 - Research and innovation had three targets, and all were achieved.
  • Programme 3 - Infrastructure and information systems had seven targets, of which five were achieved and two were partially achieved.
  • Programme 4 - Administration (including corporate and regulatory services) had four targets. Three were achieved and one was partially achieved.

The overall Quarter 3 performance percentage in all four programmes was 77.8 % achieved, and 22.2% partially achieved.

Mr Norman Mzizi, CFO of SAWS, delivered the financial report for the third quarter. He said the total actual revenue for the period ending on 31 December 2020 was R303.59 million. The government grants received by SAWS were in the form of an operational grant of R235 million, while R14 million was received from the South African Air Quality Information System (SAAQIS) grant.

The capital expenditures (Capex) amount for the 2020/21 financial year was R140.6 million, and had been converted into an operational grant to offset the loss of income from aviation, non - regulated commercial revenue and the government grant budget reduction. The total expenditure when excluding depreciation and amortisation, had amounted to R290.08 million, which was 6.52 % below the budget of R310.30 million. The administrative expenditure amounted to R4.37 million, which was below the budget of R6.87 million by 36.36 %. The compensation of employees expenditure was below the budget of R205 million by R8.33 million. Lastly, the operating expenditure for quarter 3 was R82 million, which was16.90% below the budget of R98.68 million.

[see presentation attached for further detail]

Discussion

Ms Phillips asked for an organogram of the current SAWS staff and for details about the 65% unavailability of radar. What had been the effects of the unavailability of radar on research? Why was money transferred from CAPEX to operating expenditure (OPEX)? She was concerned about the radar tenders that went out in 2019. Why did they have two tenders for 36 months that overlapped by nine months? She also asked for clarity on the resignation of the previous CEO from SAWS.

Ms Magomola said that the organogram had been revised and approved by the board in September 2020 after their recent strategic planning session. It was available and would be sent to the Members.

There was an elaborate report on the reason for the previous CEO’s resignation. He was facing financial misconduct allegations. After the hearings, he had decided to resign after many postponements from his side. However, his case had been reported to the police.

Mr Ndabambi said that radar was used for short time forecasting, such as floods, damaging hailstorms, given within an hour. They also used high satellite resolution to supplement and also the lightning deductions and network, depending on the intensity of severe thunderstorms. The C-band radars were not part of the R240 million, but the money had been used to purchase the S-Band (300 km range) radars and two X- band (100m) radars. He further highlighted that some of the C bands had reached the end of their useful life. Therefore, some would be decommissioned because they were old and vulnerable to frequency interferences, especially the one in De Aar (the Square Kilometer Array) and Port Elizabeth, which had been moved to Skukuza.

Mr Mzizi said the challenge encountered during Quarter 3 by the SAWS was the inability to pay for operating expenses and salaries. A conscious decision was taken to convert the operational grant from CAPEX to OPEX. The total amount of this conversion amounted to R140 million.  

He explained that the service providers had not met the specific requirements to get the radiosonde tenders. Therefore, the tender could not be finalised. The tender had been re-issued and they were currently finalising it.

Ms Phillips asked again on the chat box for the case number of the complaint, to receive the responses in 10 working days, whether the salaries were budgeted for, and why the operating expenses were higher than they were budgeted for.

Mr Bryant asked if criminal charges were laid against the CEO by SAWS. Had they received an update from SAPS regarding the investigations?

Mr Ndabambi said that there had been no tangible feedback on the case of the resigned CEO. They had been reaching out and making follow-ups, but most of the time they could not reach the person who was in charge of the case. They would formulate this in writing to the police commissioner.

He responded that the salaries were budgeted for, but they were supplemented by the revenues generated by SAWS.

Ms Phillips said that she was confused about the tender on radiosondes. The first one had been awarded on 15 February 2019 and the second on 22 November 2019. Was the money paid for these tenders? If not, do they have radiosondes stocks? What were they using to supplement them? If they had higher than expected revenue, why did they still have to supplement the salaries?

Mr Mzizi responded that the salaries amounted R197 million against the budget of R204 million. The total expenditure was R290 million, versus the R303 million budget. They had a challenge of inadequate revenue at the end of Quarter 2 to meet their operating expenditure. Hence, a request was made to convert CAPEX to OPEX. The situation had since improved in Quarter 3 after the conversion of R140 million from CAPEX to OPEX. Hence, the revenue appeared higher.

Mr Ndambambi said a written response regarding the radiosonde tenders would be provided within a stipulated time.

The meeting was adjourned.

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