DEFF Quarter 1 and 2 2021/22 Performance; DPME Performance Report of DFFE and associated recommendations; with Minister

Meeting report

Opening Remarks by the Chairperson

The Chairperson had welcomed the Members and the Minister of Forestry, Fisheries and the Environment, Barbara Creecy.

The Committee went over the agenda, thereafter adopting it without amendments.

The Chairperson said that the quarterly reports are important because they help the Department to monitor expenditure and progress. The Committee can hold the Department accountable and play an oversight role in monitoring whether targets are being met.

The Chairperson commented that the Department of Planning, Monitoring and Evaluation (DPME) has significant work ahead of it. The Department is now involved in appraisal with DPME and is focusing on its delivery outputs. DPME is being held accountable for its actions.

The Minister said that each Deputy Director-General (DDG) will present their own branch to not make the meeting tedious. The meeting will focus on performance in progress.

She wished the women on the panel a Happy Women’s Day.

DFFE Briefing: 2021/22 First Quarter Performance Report

The Department reported that it had a total of 134 targets: 70% of them were achieved as planned, 18% saw significant progress and 12% of them faced significant delays without any valid or complete supporting evidence – an overall summary of performance per programme for Q1 was provided.

 [See presentation for detail]

DFFE Briefing: Expenditure Report Q1 and Q2 2021/2022 Financial Year

The Department presented expenditure for the quarters under review per programme and economic classification. Expenditure was also outlined for public entities.

Strategies to improve spending included weekly bid adjudication committee meetings, monitoring and management of the procurement plans and weekly budget and expenditure analysis with programme heads.

Regarding the audit action plan, there were a total of 85 findings and 62% were in progress. As part of the audit action plan, recurring findings were flagged and mitigating actions were developed to prevent recurrence. Progress on implementation of audit action plans was monitored and reported on a quarterly basis.

[See presentation for detail]

Discussion

Mr N Paulsen (EFF) wanted to know why the Department did not achieve targets on women representation. He said that he finds it difficult to believe that there have not been sufficient candidates for the designated groups, because there were many people that had reached out to him regarding positions and sent in their resumes.

He wanted to know from the Minister the reason why the closing date for the Fishing Rights Allocation Process (FRAP) was extended. He said that certain deserving applicants were denied allocations within the Department. Many that applied had received responses saying that they were either “excluded” or “unsuccessful”. What is the difference between excluded and unsuccessful? He said that there were applicants that were successful but did not have access to a boat, and those unsuccessful did have access to a boat. For harvesting, having access to a boat is necessary. Why then is the candidate that has access to a boat unsuccessful and the one that does not have a boat successful in their application?

He said that there are discrepancies in companies such as Oceana, Hyper Deep Sea, Premier Fishing, amongst others. Despite the negative publicity Oceana has been receiving, the Department continues to engage with them. What is the rationale for this engagement? Transformations within the Department should consider the companies that the Department chooses to engage with. He said that the Department has failed again to bring about transformation in the Fisheries sector.

Mr D Bryant (DA) asked about regulatory compliance. He said that Water Management had some things that were outstanding. What are the outstanding issues?

He asked what the specific challenges were for Biodiversity and Conservation. How are the game donations carried out to communities? Is it donations of meat or live donations?

He said that he cannot accept that the Department has had significant underperformance due to the payment system.

For areas such as construction, where it says the Department has underperformed, it is important for us to know why the Department has underperformed.

He said that many have been harvesting fish for a while now and it is their livelihoods. Due to their permits not being set in place, this affects their means to make a living. This is going to bring a significant number of appeals. How will the appeals affect targets? While appeals are being processed, will the fishermen be allowed to continue their work with exemption?

Ms C Phillips (DA) referred to slide 36. She wanted to know more about the air quality and whether it was carried out by the Department or by the municipalities.

She asked how many facility structures would there be by the end of 2022. Where will they be located? What are their budgets?

She said that the Administration block has not progressed. This is concerning.

She referred to slide 60. She said that the tire programme has been in place for several years. Where is this programme, and how much money has been spent on it to date?

She referred to slide 65. What is the prequalification? What is the cause of the total delay in implementing and paying people?

She commented that employing implementing agents is shocking. She wanted to know the timeline for when everything will be sorted out.

Capacity issues were not mentioned in the previous presentation. How has this occurred from then to now?

Mr N Singh (IFP) said that he is worried about the Department's spending. He says that the Department is getting more money than it should because it is getting adequate funds and is not meeting targets.

He said that the audit action plan is worrying as well because of the 85 findings. He is not satisfied with the results. He asked the Minister if she is satisfied with the results and the proposed interventions.

He said that the programme says that certain interventions will take place but there are no timeframes for this. Therefore, without a timeframe, the Department cannot be held to account on this issue.

He said that, on the issue of rhino poaching, he is not happy that the stakeholder consultation was not concluded as well as the issues with the service provider were unsatisfactory. These areas of concern poaching and waste management need more effort from the officials from the Department; they need to meet targets.

Ms A Weber (DA) said that she does not see the Department meeting the target of 90% on annual spending. Is the Department working towards this? Will this be reached before the end of this year?

She said that she is worried about the supply chain management and that they have a lot of the blame to take. Why does supply chain management take so long with responding to issues? Does this only happen with the CBC or are there other programmes as well?

She referred to the slide on improving spending. She said that this plan is to start next year during April. Why is it not starting now?

What percentage is the filling of vacancies at?

Can the Department share the staff’s information with the Committee? Has the consequence management plan started? If so, what is the progress with it?

Why is there no spending on biological assets? This is needed.

She referred to slide four. She said that some of the transfers and subsidies are very low. Why is this?

She said that she needs more clarity on the non-profit institutions. She wants a list of the non-profit institutions that the Department has spent money on.

She referred to slide 14. She wants clarity on the IFS/AFS Plan.

She asked for more information on the animals and marine life, such as the Penguins, that are close to extinction. What is being done about this?

The Chairperson asked about the Waste and Chemical Management Programme. She says that these programmes are opportunities for massive job creation. Why are the targets not met?

She asked what the Department spent during the second quarter.

What will be the reason for lower expenditure? What was brought to the Committee in the second quarter – was that of a lower expenditure?

What does lower achievement of targets mean for the unemployed, poor South Africans? She said that plans are not being properly implemented to see to the issue of unemployment. COVID-19 cannot be the excuse for such low underachievement.

Responses

Minister Creecy said that she will not comment on the fishing rights allocation. She is the appeal authority, and she gives people the opportunity to appeal and have a new hearing for what they feel is an injustice towards them.

She said that issues on iSimangaliso must be dealt with when they are with the Committee. The team is not competent to deal with those issues.

She asked about the slow spending during the first and second quarters. Has the Department managed to catch up? She said that the supply chain capacity was very small. How this had been rectified will be discussed. Several billion in irregular expenditure is due to the history of the Department spending that was not in line with the legislature. Special care is needed now with reissuing contracts.

The programmes are set to alleviate issues of poverty. A prevalent challenge is that there is a requirement to spend money with the Public Finance Management Act. This brings more issues that will be discussed, which impact employment.

She said that some areas do not have enough money.

She indicated that the Committee will be provided with timeframes on the interventions for the Biodiversity programme.

Allocations are being addressed.

A Department official responded to Mr Paulsen on issues regarding the equity-related targets. She said that positions within the Department involved both male and female candidates. The short-listing process also included both male and female candidates. But, based on who would be the most suitable candidate for the position after all the processes, two positions were given to males and two were given to females. These appointments did not affect the equity targets significantly.

She said that the Department has prioritised a recruitment plan that focuses on the filling of open vacancies and equity-related posts.

Ms Andiswa Jass, CFO, DFFE, said that the issues of spending were due to the supply chain management (SCM) areas. The main problem was that the Department would transfer money and not follow the normal procurement processes of discussing these costs with the respective Committees.

Expenditure and budgets are considered within the different branches. Services are also checked for the invoices to flow.

She responded to questions on the strategies to improve spending. She said these strategies noted in the presentation are currently taking place. The budget and procurement plans will be implemented next year. Interim financial statements are submitted during the quarter, after the calendar quarter has ended. The Department has sent in its financial statements to the Treasury, and it is now undergoing audits and other processes.

She added that the things under work-in-progress still have areas that need to be attended to in the weeks to come. Another party is needed to verify whether the evidence attained can be used to address the audit finding. Audit findings are still a work in progress and have not been finalised.

The Oceans and Coasts branch responded to Ms Weber on the issue of the Penguins. They said that there are facilities that are responsible for taking care of sea birds. Ushaka, Pretoria Zoo amongst many others get fish from donations, which they use to feed the sea birds. Breeding of the sea birds are also high-priority.

The team responded to Ms Phillips, saying that there are 16 stations. They are owned by the Department, South African Weather Services, municipalities and provinces.

The team responded to Mr Bryant, on the issue of lions and stakeholder consultations. They said that stakeholder consultations are in progress with regard to this species.

The team responded to Mr Singh on the lack of progress due to not having a service provider. The Minister and the CFO have addressed the challenge is related to supply chain management issues. Service providers need to be able to engage with stakeholder groups for the Department to review progress using the management plans set in place.

On the game donations, as discussed by Mr Bryant, the Department follows the game donation policy and guidelines. Beneficiaries, stakeholders, and so on, receive live game that is breedable.

The team added that the targets that are not met in the current quarter will overlap into the next quarter.

The team responded to Mr Bryant and Ms Weber concerning the change in payment systems. They said that it had brought about a very complex process. The Department had to carefully undergo this change so that there were no irregular expenditures caused. The change in the payment system meant that the Department could fully account for every cent that was spent. Service providers were contacted for their service reports. The Department, alongside service providers, can account for all payments made in the past. It has made it clear to service providers that it will only be paying for goods delivered.

The team responded to Ms Weber on E1590, which is a tender that the Department has finalised for the management of the national resources. They said that the evaluations have been completed, and the adjudication process is in place.

On the SCM-related challenges, the projects were at the planning stages, and the appointment of the service provider would lead to the construction aspect. The Department had to engage with the Construction Industry Development Board (CIDB) for performance-related issues. It also had to ensure that the construction plans were aligned with the standards placed by the Department.

The team then went over questions about waste management and job creation:

The CSIR is assisting the Department with the development and the implementation of the waste management plan. The delivery of the plan involved the SCM, and this caused a delay. The plan is ready and will be published for public comment. Once the comments have been taken into consideration and the relevant changes have been made, the plan will be submitted to the relevant Ministers for the approval process. The waste Bureau has an interim plan to ensure improvements. The new plans that are set in place will still undergo the procurement process set by the Department.

The team responded to the Chairperson on the issue of job creation. Employment contracts need to be amended. Some employees do not want to share their employment contracts. The Department has ensured that its different branches have advertised the available jobs.

Biological assets are dealt with in the forestry branch. The spending on biological assets is assigned by the booklet that the Department follows after its procurement plan.

The team addressed questions on FRAP under the Fisheries branch. In response to Mr Paulsen on the extension of the closing date of FRAP; they indicated that the FRAP 2021 process was an online process. There were technical glitches where the system went down, hence the extension of the closing date. The long period of extension was due to the application being during the December period, which was pushed towards January 2022 for all to have an opportunity to submit their applications.

The application fees are based on the economic value of the Fishery branch. The Minister had decided that the application fee in traditional line fish be waved.

In response to Mr Paulsen, on those being denied on their applications to the Fisheries branches: this is the nature of the rights allocation process. Large numbers of people are competing for a scarce resource. Some are going to be unsuccessful. Returning applicants for the fishing license that had underperformed in the past were dealt with accordingly. The team elaborated that ‘excluded’ meant that one is excluded on a number of criteria, where the application was “faulty” – either materially defected or improperly lodged and/or missing of required documents, amongst others. Unsuccessful applicants meant that they had not scored high enough in regard to other applicants. Response to Mr Paulsen on applicants who had access to boats and those who did not – it is more complex. Access to a suitable vessel is what is necessary for the specific type of fishery. Those that did not have boats possessed catch agreements with people with proper vessels and this was suitable.

In response to Mr Paulsen on the companies that have negative publicity, and why they have not been excluded from engagements with the Department, there were no grounds to hold against them despite the accusations, as they were not verified. Therefore, they could not be excluded. The Department can exclude parties that they have sufficient proof of that have provided false or misleading information.

The Members that wanted access to third-party information will not be allowed access to that type of information. The score sheets of applicants can be accessed.

Mr Paulsen said that the Fishery branch had failed to deliver a transformation. The response was that the statistics suggest otherwise. The allocation process has brought about significant progress. Black ownership is at 88.76%, by the end of 2022, across the nine branches. Other groups have been doing significantly well. Black ownership at the TAC and TAE is at 91%. Equity employment has also significantly improved since 2005.

In response to Mr Bryant on the granting of exemptions to fishermen, exemptions will not be granted to fishermen that are going through the appeal process, which allows them to continue to harvest fish without a fishing right.

On matters of prequalification – procurement regulations of legislation details, which set out prequalification criteria: this regulation states that, if an organ of the state is applying for prequalification criteria to advance a certain designated group, that organ of state must advertise tenders with specific tendering conditions. These regulations were challenged when some individuals took the Minister of Finance to court because they felt it to be “unfair” and not in line with s2 of the Constitution. Hence, for specific tenders, it was outlined which designated group is being targeted in line with the regulation. Cancellations of tenders over the year were due to not following regulations, sometimes resulting in restarting of the processes. After the court appeals, the Department had realised that, in 2017, the regulations set on the tenders were not in line with the Constitution and this had to be appealed. Whilst in the process of appeal, those that had received tenders were now put on a halt.

The team added that they require the resources that they are receiving. But systemic challenges need to be addressed, especially around SCM.

In response to questions around the audit action plan: there is an audit action plan. Some interventions cannot be implemented and completed in one financial year. The team is progressively dealing with all the areas.

One of the main issues under forestry and biological assets has been dealt with.

The EP programmes reviewed findings in the past that were not properly evaluated. This is being dealt with.

In response to Ms Phillips, on capacity issues, the major issues here are under supply chain management. Spending in the past was done through transfers, which did not require procurement processes. After changes were made to the way in which transfers had to be done, many resources had to be reclassified to goods and services. The Department is trying to create a drastic improvement in supply chain management with proper capacity and procurement plans.

The rate at which infrastructure processes are done is affected by business plans and prior implementing plans.

In response to the Chairperson on low spending: the CFO has addressed this issue. Improvement in delivery will bring about improvements in expenditure.

The Chairperson said that the team needs supply chain management policies that it can follow.

DPME: performance report of the Environment Sector and associated recommendations

DPME presented a performance report on the environment and climate change sector as coordinated by DFFE. Responses were also provided to questions previously raised by the Committee in 2021. DPME looked at sector issues from the 2014-2019 Medium Term Strategic Framework (MTSF) carried over into the 2019-2024 MTSF to analyse the progress made by the environment sector in terms of the 2021/22 performance. These sector issues included greenhouse hag emission reduction, climate change, waste management, roles and responsibilities and transition to a low carbon economy.

A summary of priority progress monitoring was presented along with a summary of performance across interventions.

[see attached for further details]

Discussion

Mr Paulsen said that DPME expects that EPWP will be the solution for job creation. There is a reliance on the private sector to create jobs. What laws will be implemented to ensure fair action to workers? How do we monitor that in those businesses that workers will not be exploited? When profits in a business start to suffer, the first that it affects are workers. Oversight needs to be exercised over these businesses. How do we know that unfair employers will be held accountable?

Mr Bryant and other colleagues requested that written questions be submitted due to time constraints. Members needed to go into Parliament.

The meeting was adjourned.