SA Weather Service Bill: briefing; Report on Study Tours

Meeting report

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This Report is a Contact Natural Resource Information Service
Taking Parliament to People, and People to Parliament
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ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
29 August 2000
BRIEFING BY DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM ON SOUTH AFRICAN WEATHER SERVICE BILL [B54-2000]; REPORTS ON STUDY TOURS BY MEMBERS

Documents handed out:
1. Report to Environment and Tourism Portfolio Committee on meeting to discuss an agreement on the conservation of southern hemisphere albatrosses and petrels.
2. Report to Environment and Tourism Portfolio Committee on the 52^nd International Whaling Commission held in Adelaide, Australia - July 3^rd to 6^th, 2000.
3. Report on visit to London by Parliamentary delegation to attend appeal hearing at the House of Lords.

SUMMARY
Members of the Committee were briefed by officials from the Department on the South African Weather Service Bill. The presentation consisted of four parts:
An explanation of the background and the structure of the Bill plus issues of possible debate (Dr Crispian Olver, Director-General, DEAT);
- Overview of the public involvement in the process and the amendments that were made to the Bill as a result (Mr Gerald Schulze - Chief Director, Weather Bureau)
- The timeline and challenges of the agentisation process (Mr Donovan Nanderson - Program Manager)
- The staff transfer (Ms Phyona Johnson - Deloitte and Touche)

The officials from the DEAT then answered questions from members. The end of the meeting was reports on study tours that members had undertaken over the recess.

MINUTES
South African Weather Service Bill
The Director-General (DG) of the DEAT, Dr Crispian Olver, gave some background to the Bill as it stands presently. The Bill was issued in the Government Gazette on 17 March this year. Four weeks of public comment followed, those comments leading to a variety of amendments that required the Draft Bill to go back to Cabinet for approval. Cabinet approved the Draft Bill on 6 April. The Department hopes that the Bill will be promulgated later this year and the Weather Service agentised by 31 March 2001.

The first part of the Bill that was discussed was the name. The name was to be changed from the South African Weather Bureau to the South African Weather Service. There were many reasons that the DEAT decided to do this, but the DG also noted that this was simply an idea and that there were strong reasons to keep Bureau as well. The justification for changing the name was two-pronged: one, that the agency is providing a service to all South Africans, whether it be commercial or a public service. The second reason is largely symbolic, that a new organisation should have a new name, leave the past behind and promote the service orientation of the new agency. Later on in the presentation Mr Schulze, the Director of the Weather Bureau stated that those who wanted to keep Bureau did so on the grounds that the organisation had built a strong reputation and brand name for itself. The Department asked the Committee to proffer its opinion during deliberations.

The institutional structure of the Bill was then addressed. The Minster of Environmental Affairs and Tourism is given the authority to set policy and to appoint a Board. The Board will consist of six to eight members, including the DG of the DEAT and a CEO who is appointed by the Board. There will be a Memorandum of Understanding (MOU) governing the relationship between the Minister and the Board and between the Board and the CEO. This will provide an accountability framework that will govern the leadership of the agency. The functions of the Board are laid out in Chapter 3 of the legislation. The six to eight members will be appointed by the Minister and will consist of a wide range of stakeholders in the Service linked to the objectives of the agency (Chapter 2). Clause 5(2)(a) outlines the need for effective corporate governance plus a number of technical disciplines.

Dr Olver engaged the Committee by raising what he thought would be the first controversial issue of the Bill. The questions relates to who should be the accounting authority of the agency, the CEO or the Board. The Public Finance Management Act (PFMA) section 49, which governs such decisions states that the accounting authority can be either the Board or the CEO and allows for legislators to make that decision based on the particulars of the situation. The crux of the issue, said the DG, is that he has hesitation giving accounting authority to a committee rather than an individual. With an individual it is very clear who will take the fall if there are problems, with a committee there is no such clarity and mistakes can occur that could have been prevented by someone so motivated. On the other hand, putting the accounting authority in the hands of the CEO undermines the influence and credibility of the Board. Dr Olver told the committee that this was a critical debate and one where the committee would be the final arbiter. The DEAT is in favour of giving the authority to the CEO, said the DG, but want to make sure that policy control rests first with the Minister, then with the Board and finally with the CEO. This would ensure that the Board remains influential in the decision-making structure of the organisation.

Dr Olver also noted that while this Bill may seem straightforward it is the first agentisation (privatisation) since the introduction of the PFMA so will set precedence for future similar endeavours.

Dr Olver moved on to the second major issue. From the public comments the DEAT decided it was necessary to amend the legislation to include a regulatory agency. Critics ask 'why another committee (besides the Board) to regulate us?' The DG pointed to the theory of monopoly situation management, particularly in terms of monopoly pricing. The regulatory committee will act as a check on the Board, whose mandate is to build the service, to make it profitable. The Weather Service, due to the infrastructure it developed as a publicly funded institution, managed to build a capacity level which puts it in a virtual monopoly situation. The regulatory committee would ensure that the public is protected from monopoly pricing.

Dr Olver then entered into what he considered the hottest point of debate. The issue at hand is the problem of transferring staff to the new agency. At this time the Bill provides a guarantee for all current employees that their employment will be maintained after the agentisation. The DG then proposed a more radical alternative to the committee: that the legislation not guarantee jobs. He based his view on the fact that 100% of the upper and middle management are white. In the spirit of the transformation that is being undertaken across the country in all sectors, the agentisation could be seen as an opportunity for the Weather Service to transform itself. Making upper and middle management reapply for their positions would most likely accomplish this goal as well as other endeavours to attract a multi-racial staff further down the organisational structure. On the other hand there are the hazards of removing an experienced staff during such an important transition and whether or not there are enough trained non-white climatologists and meteorologists to fill the void as the country becomes more integrated educationally.

The appointment of the CEO was also a point of contention for the DG. According to the legislation the CEO is chosen by the Board. But since the Board will only be selected after the transformation, the agency will begin its life with no CEO, as the newly formed Board would have to begin a recruitment drive after they were chosen. One of the solutions proposed by the DG is that the legislation give the Minister the authority to appoint the first CEO, or an interim CEO who can guide the new Weather Service in its infancy.

Discussion:
Ms J Chalmers (ANC) asked if it was impractical to suggest that in terms of accounting authority that the CEO be given responsibility along with a mandate to frequently report and consult with the Board.

Ms C Ramotsamai (ANC) asked if the DG could describe the changes from the previous system and asked if a regulatory body was really needed if there is a Board, especially considering the precedence it would set for future privatisations.

Ms M Verwoerd (ANC) noted that there were references in the Bill to international conventions. She asked whether it would be possible for the DEAT to provide clarification to the committee on precisely what conventions would apply to this legislation. The member followed up with a query on the term 'specialised services' and why it was not included in the list of definitions. Ms Verwoerd then asked what part of the legislation specifically cross-referenced to the PFMA. Finally the member asked how the Board/CEO distinction works in the private sector and she commented that it was slightly worrisome to put the accounting authority in the hands of a body (the Board) that only meets four times a year.

The DG responded that a list of conventions that would be relevant would be provided in an information package to be provided to members. Dr Olver agreed with Ms Verwoerd that a definition of 'specialised services' should be added to the legislation. Mr Schulze proceeded to describe to the committee what is meant by 'specialised service'. This term refers to services that are demanded by individual consumers. Examples he used were a movie company who hired a forecaster to fulfill insurance requirements. Section 16(1) is the one that cross-references this legislation to the PFMA.

Ms Nqodi (ANC) stated that the committee needed more information on the staff of the Weather Bureau and the demographics involved.

The DG began his comments by commenting that the CEO they would be looking for, would hold a variety of skills and experiences. The CEO will be someone who can take a directorate of the government and make it a viable entity in the private sector. The model that the DEAT is following is the New Zealand Meteorological Service which is widely considered the most successful agentisation in the world. The Service would be looking for an entrepreneurial leader to lead the transformation and commercialisation process.

The Chair, Ms G Mahlangu (ANC) asked whether there was knowledge that there were in fact people of all races that could fill the technical positions. In the previous session of Parliament (1994-1999) the Committee asked the DEAT to establish scholarships and other mechanisms in their HR structures that would increase the number of qualified non-white individuals in these areas. The Chair asked what has come of that promise.

Due to all the questions surrounding staff transfer and the demographics of the current staff the DEAT decided that the floor should be passed to Ms Phyona Johnson, a consultant from Deloitte and Touche and an expert of the staff transfer. The current structure, says Ms Johnson, consists of 328 staff, mostly at airports around the country. She informed the committee that 100% of upper and middle management was white and that the lower levels were slightly more diverse. Currently most staff have at least technikon degrees and many have higher education as well.

Dr Olver commented at this point that the DEAT was aware that they are dealing with an organisation where transformation has been very slow. At the management level the Bureau is almost facing a crisis of credibility because of the demographics. This is why, says the DG, that the DEAT is looking at more radical ways of handling the staff transfer. The unions have told the Department 'no agentisation without transformation' but the agentisation may actually be a fabulous opportunity to radically transform the agency. What must also be remembered, said Dr Olver, is that an agency such as the Weather Service will need more than just climatologists and meteorologists. An organisation competing in the private sector requires individuals of a variety of skills to make it run. The transfer of staff is the critical debate in the development of this new agency.

Ms Johnson then proposed an amendment to section 17(1) which would eliminate a troublesome clause that allows employees two years to decide whether they want to be a part of the Weather Service. The amendment would immediately transfer all employees to the new service.

Mr P Hendrikse asked if that meant that the entire 100% white male structure was to be guaranteed employment and did not that seem to contradict what the DG had said regarding the transformation of the institution through the agentisation process.

The Chair observed that there was disappointment from the committee that the upper management was all 'pale males' after the commitment that was made from the DEAT last term.

Mr R September asked how many scholarships had the DEAT provided to non-white students and what is the human resource plan that will alleviate some of these glaring problems in the Bureau before it becomes the Service.

Mr Schulze, the Director of the Weather Bureau tried to answer a number of the concerns of the members. In terms of the regulatory committee, Mr Schulze pointed out that this section had been added after the public consultation. There had been heavy pressure, especially from the aviation industry to use a regulatory committee. This would make the process consistent with the one they used in their industry and one that they found had been very effective.

One of the members asked if the aviation industry was aware that they would soon be charged for services that they had previously received for free and how did they react to that.

Mr Schulze replied that obviously the industry was not pleased but that the Bureau had begun negotiations on a 40-year payment plan. The shipping industry would also be charged fees for services rendered. South Africa is currently one of the only nations who do not charge fees for their weather services.

Agentisation Process
Mr Nanderson, Project Manager, was very optimistic about this transformation, noting that it was in fact 'state of the art'. This was because, unlike most similar processes which focused only on the transfer of resources from one institution to the other, the DEAT program had a three-pronged focus:
-The transfer of resources (agentisation)
- A commercialization component
- A human resources transformation
While the agentisation process is usually completed within a year of implementation, the commercialization and transformation goals are much longer term and require a larger commitment from the organisation.

The Committee then moved on to reports on study tours by members. The reports can be obtained by contacting Contact at [email protected]. The document titles are listed above.

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