DFFE preliminary budget expenditure; with Minister

Standing Committee on Appropriations

20 September 2022
Chairperson: Mr S Buthelezi (ANC)
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Meeting Summary


The Standing Committee on Appropriations was briefed in a virtual meeting by the Department of Environment, Forestry and Fisheries on their budget expenditure, and the performance plan and strategies to improve their performance.

The Department expressed their disappointment with their performance, particularly the under-spending of their budget. They committed to do better, as they understood that their under-spending affected South Africans on the ground. They gave reasons for their under-spending, highlighting a delay in the disbursement of R318 million by National Treasury and a court decision that declared its transformative efforts through procurement unconstitutional.

Members asked why two companies, Irvin and Johnson (I & J) and Sea Harvest, continued dominating the deep sea trawling industry. What was the Department doing to help the small-scale fisheries sector to penetrate the market? What was the timeline for determining the appeals on fishing rights issues? They also raised concern over illegal fishing by foreign ships.

The Department responded that one of the reasons for their under-spending had been that they had received funding from National Treasury shortly before the financial year ended, so they had been unable to spend all of the money in time. They said that to increase the opportunities for the small-scale fisheries, they were reducing the total catch allowed for the big corporations. They also confirmed that only South African-owned companies were allowed to fish in South African waters.

Meeting report

The Chairperson said the Department of Forestry, Fisheries and Environment (DFFE) had been invited to brief the Committee primarily on the under-spending by the Department of about R1.6 billion, and its interventions to try to avoid future under-spending.

Minister's opening remarks

Ms Barbara Creecy, Minister of Forestry, Fisheries and Environment, said that the Department was appearing before the Committee with the understanding that the primary purpose of the meeting was to present the Committee with a solution so that the level of under-spending that took place last year did not recur.

She said that in April, she and the Deputy Minister (DM) had received the preliminary outcomes for the year, and some branches had performed and spent well while others had not performed well or spent well. She, the DM and the Director-General (DG) had found the underperformance totally unacceptable. She had convened a meeting of senior management in May to look into how to deal with the situation. The presentation would reflect the outcome of that workshop. They had made it clear to the DFFE team that while there may be reasons, there should be no excuses because money was tight. In a situation where the Department had been privileged to have been allocated money by the Treasury and approved by the Committee, it was unacceptable that the money was not used for the purposes for which it was appropriated. The presentation would be made in the same spirit.

They had received questions from Committee Members which the presentation by and large covered, as the questions were about what was being done to remedy the situation. If there were other additional questions, they had the Deputy Directors-General (DDGs) present who would respond.

Referring to the fishing rights issue, she said there were two dispensations -- commercial fishing and small-scale fishing rights. The nine fisheries in the commercial sector had been up for a reallocation of rights, and that process was concluded earlier in the year. They were in the appeals process, and she was the appeal authority, so she would not want to comment on the appeals. What would be shown during the presentation would be the preliminary rights process.

She said there was a lot of detail in the presentation for the small-scale sector, from which the Committee could observe that a lot was being done in that area.

DFFE's budget expenditure

Ms Nomfundo Tshabalala, Direct-General, DFFE, said the Department was not proud to be listed as underperforming. As a result, they took serious measures and engaged top management on the situation. The Department had achieved 68 % of its targets, which was quite low. The Minister and the DM had clearly given the Department a target of 80% and above, which was what each programme should aim for. She reported that the most worrying areas were the environmental programmes, biodiversity and forestry, which had failed to achieve their targets. Given their performances, the Department was implementing performance management interventions which were in line with the requirements of the Department of Public Service and Administration (DPSA) guidelines. All branches that were partially or not fully effective had been tasked with coming up with improvement plans, and discussions on areas of poor performance were held on how to ensure they had clear implementable improvement plans. They had also held a separate workshop to review environmental programmes which had experienced delivery challenges, having achieved less than 50% of their targets.

Ms Tshabalala said the DFFE was presenting its formal improvement plans, which she managed quarterly with the DDGs involved. The forestry, waste bureau and environmental programmes had regular engagements, as the situation was quite dire. Compared to the other departments in national government, they had the highest number of key performance indicators (KPIs), which they hoped to reduce by focusing on strategic key indicators that they had started working on gradually as far as performance was concerned. They also proactively ensured that they had terms of reference for all the work that needed to be done by 2022/23, and all those terms of reference had been concluded. They also monitored programmes that were under-spending monthly to check on their progress.

The Department had spent 82 % of their allocation, which resulted in under-spending totalling R1.6 billion, which was a huge sum. One of the reasons was the delays in the Expanded Public Works Programme (EPWP), which was mainly because they had had a negative outcome in the past years, and the Auditor-General (AG) had highlighted the issues around how the Department was spending money through the EPWP by transferring money to implementing agencies that were made quarterly.

Another reason was that the EPWP had been allocated an additional R318 million, which had been received too late in the financial year to implement the projects by the end of the financial year, as all their contracts were found to be irregular.

The third reason was that forestry and fisheries management had been transferred from Department of Agriculture, Forestry and Fisheries (DAFF) to the Department of Environmental Affairs (DEA) as from 1 April 2020. The forestry management branch had come from the Department of Water Affairs to the DAFF, and then to the DEA. As per the two previous Departments where forestry management had been vested, the branch's processes were decentralised, and the procurement processes for the operational expenditure of the plantations were done in the regions where they were situated.

The root causes for supply chain management (SCM) affecting the Department's performance and leading to negative audit findings, were the advance method of payment being discontinued during 2021/22 and the procure-to-pay processes being implemented, resulting in compliance requirements having to be enforced, and this had led to delays in the implementation of some projects in the environmental programme. In order to improve the SCM process, several training workshops have been held with practitioners and officials participating in bid specification, evaluation and adjudication of tenders, to promote compliance.

They had enhanced the Department's capacity by filling all the vacancies. These improvements were being monitored through the Directorate of Internal Control, which had been established to strengthen internal control measures, to fast track dealing with irregular and fruitless and wasteful expenditure. These efforts were being made to get the irregular expenditure condoned by the National Treasury.

Ms Tshabalala reported that all the programmes with low performance in Quarter 4 of 2021/22 showed improvement in Quarter 1 of the 2022/23 financial year. The Department had spent 52% of its annual budget, of which 16% was on women, 4% on youth, but nothing on people with disabilities. It used the 2017 Preferential Procurement Regulations to advance the targeting of designated groups by including a clause in the terms of reference. These had been found to have been illegal by the Constitutional Court, but National Treasury had given them a one-year grace period to continue using the 2017 regulations until new ones were put in place.

Ms Sue Middleton, DDG: Fisheries Management, said the DFFE was implementing programmes that would ensure that previously disadvantaged individuals were able to participate in the fishing industry. The fishing sector contributed less than 1% of the nation's gross domestic product (GDP). She explained that fisheries were managed through total allowed catch (TAC) or total allowed efforts (TAE). Among the programmes that the Department was implementing to improve participation in the industry was a revision of commercial policies to align with the Constitution. Some of the factors that the Department paid attention to while assessing applications for fishing rights included the applicant's profile with regard to race, gender and age for individuals, as well as the applicant's black ownership profile for companies.

New entrants into the fishing industry faced limited access to the sector, which the Department was trying to address by having an open and transparent allocation process. New entrants also lacked access to financial and infrastructural support. There was a lack of business skills in the small-scale fisheries sector which they addressed by providing training and capacity building, as well as developing co-management structures

Ms Tshabalala said the DFFE implemented their job creation interventions through the EPWP, which prescribed recruiting local citizens for participation in its projects. The branches embraced this approach and ensured that local communities were able to benefit directly. All their initiatives have contributed to the EPWP programmes and the fishing industry through its Working for Fisheries Programme, creating 161 jobs.

See presentation for further details


Mr O Mathafa (ANC) encouraged the Department to seek a formal legal opinion on the issue of prequalification as it dealt with evaluation and tenders for minority groups. He wanted to know what it was doing to ensure that there was transformation of the fisheries and forestry sector. One of the hindrances for minority groups seeking entry into the fisheries sector was the exorbitant licensing costs. He therefore sought to know whether there was a fee scale for small-scale fisheries and commercial scale fisheries. If there were no differences in the fee charged, how would the Department assist small-scale fisheries run by minority groups? He asked for the status of the oceans economy master plan, as he hoped the issues he was raising were going to be addressed through that master plan.

He welcomed the news that the Department had an improvement plan that was being monitored, and said it was a step in the right direction. He asked whether sanctions would be meted out against those charged with the responsibility of ensuring the implementation improvement plan, should they fail to perform their duties as expected.

How would the Department’s plan to increase its human resource capital temporarily be affected by National Treasury cap on the compensation of employees, and how would the intended cost be budgeted for?

Mr Z Mlenzana (ANC) wondered whether the Ministry was performing poorly, even if it achieved only 68% of its intended targets. He asked who would be monitoring the Department’s improvement plan and what actions would be taken against the DDGs who did not perform well under the plans. He had noticed three programmes with consistent underspending, and asked when these programmes had last been spot-on in spending. He asked for detailed plans, including timeframes, to transform the forestry sector, as it was a major player in South Africa’s economy.

He asked why the Department did not adjust its spending following the delay in transferring funds from National Treasury. Had the money it received as intervention funding been used to address the urgent matters that had arisen, or was it used for normal spending?

Mr A Sarupen (DA) said that from the presentation, the Department had a large scope and mandate. The biggest under-spender was the forestry department, which had been moved from two previous Departments. He asked what contingency plans had been put in place prior to April 2020 to understand how the programme operated, and the changes that were going to be made. Had the Department worked with other spheres of government to minimise costs and duplication of some of their programmes?

Ms N Ntlangwini (EFF) agreed it was concerning that the Department’s performance was still at 68% while they proudly reported their partial achievements. Regarding appropriations, it was a simple matter of achieving or not achieving -- there was no in-between. She asked for the status of the oceans economy master plan and why fewer than 5% of the deep sea trawler rights were allocated to the Eastern Cape, yet 95 % were allocated to Western Cape companies. There should also be a plan to increase the allocation to Eastern Cape companies.

She asked why Irvin and Johnson (I & J) had 32% of the total allowable catch of the deep sea trawling industry, while Sea Harvest had 37%. When did the Department intend to announce the appeals for the 2021 fishing rights, considering that the lobster season was about to begin?

Ms Ntlangwini found it surprising that the Department was still outsourcing to the EPWP. She speculated why the Department was not doing the work directly themselves, and stopped outsourcing. She asked where the money the Department claimed to have allocated for people with disabilities had gone if there was no spending at all.

She asked what steps the Department was taking to hasten their address to the issue of small-scale fishing rights, and commented that the timeline provided was too long. What were they planning to do to help the small communities who depended on fishing for their livelihood as they waited for the Department’s formal intervention?

Ms D Peters (ANC) asked whether the Department had other programmes that catered to women in the fishing industry, aside from the ones they had for the suppliers. Did it require I & J to have an enterprise development programme, where they would consciously be responsible for taking the previously disadvantaged community from the beginning up to a certain percentage of commercialising their marine operation? She asked whether the big commercial fisheries still overfished, and what the Department and law enforcement was doing to address the situation if it was still ongoing.

She asked whether small communities near inland water bodies such as rivers also required fishing rights. She said that the Department’s expenditure on women and youth was grossly inadequate, considering it was a women-led department.

Ms Peters asked whether the finance and administration functions had not been transferred from the previous Department that housed forestry, or was it a matter that such internal controls had never existed in the former Department. She found it hard to believe that internal controls would never have existed in a department like the DAFF. She also asked if the 30 days' non-payment of service providers contributed to the underspending because some departments used the remaining funds following underspending as a resource available for another departmental spending. She asked if that was what also happened in the current Department.

She said communities in the Northern Cape had raised concerns about some fishing pirates being seen illegally fishing in South African waters. She asked what the Department was doing about that, alongside other concerned departments and law enforcement officers, to safeguard South African marine life.

She asked if the Working for Water programme was meant to use the R318 million received from National Treasury, whether the funds had been received, and the projected timeframe for implementing the various projects, as per the business plan.

She said that the consistent underspending in the EPWP programme undermined government's efforts to address the pandemic of unemployment. She wanted to know what the Department was doing to ensure that communities were educated about climate change and its effects.

Mr A Shaik Emam (NFP) asked what was being done by the DFFE regarding the irregular contracts that had been identified. Were there any consequences for those who were responsible for such irregular contracts?

What was it doing to ensure that it had the necessary capacity to discharge its mandate, as it was a large Department? Was the failure to spend money in the first quarter a result of poor planning in anticipation of the new financial year?

He requested the Department to disclose the success rate of some of the businesses run by minority groups who had been awarded tenders -- whether they had the capacity to deliver, and if they were delivering on time. He asked why the Department with such a huge percentage of vacancies was not employing the youth. Was it engaging with its colleagues in other departments to address the fact that it was unable to acquire the skills and capacity, despite the availability of unemployed people within the country who had the necessary qualifications?

He asserted that there was little transformation in both the fishing and forestry sectors. There were small communities who relied on forestry for their livelihood, which was controlled by the big corporations who were suppressing their entry into the sector. The same thing was happening with the fishing industry with small-scale fisheries. Therefore, what exactly was the Department doing to transform the business environment for small, medium and micro enterprises (SMMEs)?

The Chairperson said the issues that the Department raised as reasons for underspending seemed like basic management which the Department should be able to deal with, seeing that they were employed for their qualifications. Therefore issues of upgrading skills should arise only in terms of the skills the employees already have. He said that the 54 % achievement in the fisheries sector was a big worry, because fish was a major source of food. He asked for an educated guess on how the year would end in terms of food security.

Department's response

Minister Creecy responded to the issue of underperformance by saying that there was no protection within the Department for those who underperformed. A meeting had been held earlier in the year to instruct the heads of departments to implement performance management processes if there was no improvement. This would, in turn, lead to a performance improvement plan involving coaching, and ultimately to a disciplinary process. This was the legislative process that departments and ministries had to follow when there was underperformance. She confirmed that those who had underperformed were formally undergoing this process, and that there was no protection from her Ministry. They monitored the performance of the various departments, and those that failed to improve would go through the entire consequence management process if necessary. She was not promising that they would improve, but rather that they would take the necessary steps.

The Minister said that they did not have skill problems in the Department. The vacancy rate was not excessive, and they had very highly skilled people. The issue was whether they were all clear that their failure to perform impacted the lives of ordinary South Africans. If that was the issue, the Department would take necessary steps to improve its performance.

Referring to the transfer of the forestry branch to the current Department, she explained that in 2019, when it took over the branch, the former Director-General of the Department had visited all the forestry stations within the country to appraise herself of the situation concerning performance, as well as areas of improvement. It was then that they began the Forestry Master Plan. With the master plan, there was an opportunity for those who had historically been excluded from the forestry industry to participate through a process they refer to as "community forestry associations," under the guidance of the Deputy Minister who was directly responsible for forestry agreements, utilising what they referred to as category B and C forests.

Regarding the fishing appeals, the Minister said that they were trying to begin with the small sector's appeals, which were limited in number, and then proceed to commercial fishing appeals, which were bigger in number.

She said no lobster fishing quotas had been allocated, so there were no appeals, and confirmed that lobster quotas would be allocated.

Minister Creecy said that all environmental laws where one was dealing with a natural resource -- except fisheries and forestry -- had concomitant powers at the provincial and local levels. The Department had a very strong structure that was representative of the Members of Executive Councils (MECs), mayors, and the South African Local Government Association (SALGA), and that was where they coordinated all of the work they would be doing as a Department.

She said there were two areas where the sub-national government underperformed, and air quality was one of them. The responsibility for air quality licences and ensuring compliance with them was with the municipalities, and was not adequately undertaken by a majority of the municipalities for two reasons. One was that many municipalities had not ensured that their monitoring stations were in good order, and the other was that there was inadequate understanding of air quality. This was a major focus area for the Department, including utilising the South African Weather Service (SAWS) monitoring stations to ensure they were able to monitor air quality.

Raising awareness among the public on climate change was an important point, and they worked with all provinces and municipalities to ensure that they had climate change response strategies. Sub-national government needed to be involved in active partnerships with civil society so that civil society was able to understand the implications of climate change.

Ms Pumeza Nodada, DDG: Forestry and Natural Resource Management, said they were implementing an improvement plan regarding the under-spending at the forestry branch. The plan received contribution from the respective chief directors who had identified the challenges and the issues related to them, and their own improvement plans were drafted and monitored throughout. The chief directors, through their own teams, reported on what they were doing to make sure that there was improvement, based on the reports and interventions. This was then fed into the regular discussion that she had with the Director-General.

They had also been working closely with the support branches -- mainly the Chief Financial Officer --where they had been able to track expenditure and procurement-related matters to see where the bottlenecks were and how to unlock them so that spending took place within the branch. If there was no improvement, the Chief Director would undergo a formal disciplinary process.

They had held discussions with all the senior management service (SMS) members, including middle management, to make sure that everyone was on track and understood what under-performance and under-spending meant, and what measures would be taken if it continued to ensure that everyone was able to contribute and improve their spending. They had also looked at their procurement needs per year, and made sure that instead of short term contracts they became multi-year contracts so that there were no gaps and better management of them.

Regarding transformation, the master plan itself looked at five main commitments:

  • investment by the industry;
  • the jobs that would need to be created;
  • inclusivity, which was aligned to the forest sector charter;
  • issues of competitiveness, which involved how to improve timber yield; and
  • measures that would open up investment and job opportunities.

Based on those five commitments, there were undertakings that the Department was responsible for. There had been a restructuring within the branch to align with what the master plan would require in terms of functions. The capacity the branch had and would need was linked to the fact that, as a Department, they wanted to move away from the direct management of plantations. This would contribute toward implementing the master plan, because the plantations would be brought back into production through mechanisms such as leasing through the community forestry agreements. They were fast-tracking the process and would like to have all the plantations in the Western Cape leased out and the agreements signed.

They were hoping to get the private sector working with the government and the communities' forestry agreements, and there were specific areas that had been targeted. They wanted to finalise all those community forestry agreements within the next six months. They wanted to ensure that there was alignment with the private sector to ensure strategic support for the communities through investments. The Department could provide technical support on issues related to training as part of its role in the master plan, especially ensuring that there was timber availability and that it was providing support to communities and the SMME sector, in getting environmental impact assessment done. They had identified 30 000 hectares that would go through the process, and the request for proposals for conducting the assessments had been issued. They were going through the process of evaluation, and thereafter the process could start to move ahead.

Ms Nodada said that what underpinned the principles of the Community Forestry Agreement (CFA), the leases and the identification of areas of afforestation, were the issues related to land rights when they wanted to identify communities that had land rights in those areas, so that they were part of the process to improve and fast track issues related to transformation. Local beneficiaries would also have an impact in terms of transformation.

They worked closely with the municipality on the grading programs, encouraging them to include youths and women in their grading plans and ensuring their implementation programmes were fast tracked. Based on that, they had a competition called "Upper City Awards," where the municipality with the best performing programmes that included youth and women was recognised. In doing this, they were making sure that more trees were planted.

Ms Nonhlanhla Mkhize, DDG: Environmental Affairs, acknowledged the concerns being raised by the Members, and said she was working with the DG on how to develop and implement an improvement plan which she would monitor regularly to check how they were faring in terms of the annual performance plan (APP), and also in terms of expenditure.

In the case of SCM, they had to look inward and identify the constraints which affected their performance that were within their control as a branch. They had since introduced business processes where there had been none before, which had affected the efficiency of the business. As a branch, they had to strengthen their capacity and recognise how they approached data management. They would then be able to reduce the challenges resulting in their data being rejected, which ultimately affected their final report on the work opportunities created. Being one of the key branches affected by the transition by the Department from pre-payment to payment for goods and services delivered, they had invested in building and strengthening contract management training for colleagues responsible for that function. They had to review and revise their scope of engagement with the entities of the Department in relation to the APP, which had helped them improve performance.

Over and above the weekly monitoring, the branch was one of the recipients of the Presidential employment stimulus. In 2021/22, the stimulus benefit had been allocated to the iSimangaliso and the South African National Biological Institute (SANBI), which had not been able to fully spend what had been allocated because they had received the money in the third quarter of the financial year. Because of the process that they had to go through in terms of amending contracts, they were not able to conclude all the processes which would have allowed them to avoid under-spending.

She said that the Working for Water programme was part of the natural resources portfolio, which was part of the environmental programmes branch, and was an area affected by the transition from pre-payment to post-payment services. The transition was associated with a number of processes that the Department had to put into place to ensure that they were able to deliver as committed in terms of the annual performance plan (APP).

Responding to the issue of outsourcing, she said that they had had to review the extent to which they would be able to manage projects internally within the Department, and had therefore introduced an in-house project management model for some of their areas. However, they were limited in terms of the extent to which they could apply the model across the branch. In that role, they were working towards strengthening capacity in terms of contract and project management to ensure that they were able to identify issues of under-performance in time, before the end of each quarter, to ensure that it did not arise.

She said they had set targets in the APP in terms of youth involvement, but there were also other programmes which had the additional benefit of youth in creating awareness of environmental management issues.

Mr Lisolomzi Fikizolo, Acting DDG: Oceans and Coasts, said that the oceans economy master plan included a very robust draft version. They were working on finalising the implementation plan and, in the same vein, updating the draft.

He said there were five areas in the oceans economy master plan, including marine transport, flight logistics and cargo, freshwater and marine, fisheries, and offshore oil and gas. The implementation plans for these areas were almost finished, and the projected date for completion was the end of November. There were still minor issues that they were sorting out with their colleagues at fisheries management, where they were trying to finalise the issue of small-scale co-operatives, particularly in the Western Cape and the Eastern Cape. In Kwazulu-Natal, consultations included marine special planning, marine protected areas, and small fisheries. The target date to take the plan through Cabinet processes in the first cluster meetings was February 2023.

Ms Andiswa Oyama, Chief Financial Officer, said the Department had received the R318 million from the National Treasury at the end of January 2022, because the final adjusted appropriation was promulgated on 18 January 2. When they received the money at the end of January, it was not feasible to spend all the money by the end of the financial year on 31 March.

For the transformation agenda, the Department had included in their standard terms of reference, as well as their advertisements, a clause that indicated that there were prequalification criteria for certain tenders, where only certain businesses led or managed by minority groups could bid. Once the tenders were closed and they were evaluating the bids, they received a complaint that the manner in which they were executing the transformation agenda was unconstitutional. They had sought a formal legal opinion and had been advised that the process of transformation had not been conducted in a manner compliant with the statute. If they had proceeded with these bids, they would have been non-compliant and the expenditure approved would have been irregular. The Public Finance Management Act (PFMA) was now limiting the Department in putting in those prequalification criteria in order to drive the transformation agenda.

Ms Oyama said that due to the size of the Department, they were advised there was a compensation of employees (COE) ceiling, and therefore they could not expand the structure of the SCM branch. Therefore, they looked for service providers to assist them with quality assurance in the bid, documentation and compliance standard issues. The additional capacity and funds sought were not from the COE budget, because it was a service in nature.

She said 99% of invoices were paid within 30 days as at the end of the 2021/222 financial year, and all accruals were paid within 30 days.

Regarding the directorate for internal controls, the CFO said that such a directorate had never existed as a standalone. The functions were embedded in each and every branch. However, with the effect of the increased size of the Department on its core functions, they had gone back to National Treasury and the Department of Public Service and Administration (DPSA). They requested that they utilise the generic structure created by Treasury, in collaboration with the DPSA. There was no separate directorate that would look at the internal control deficiencies of the Department and try to improve on them, so the reason Treasury had even considered that approach was because it came from a generic structure which was aimed at assisting them with dealing with all the deficiencies that the internal audit had identified, and also by the AGSA.

She said that they had advertised the position of Director: Internal Control, and interviews had taken place yesterday.

Regarding fiscal dumping, she referred to slide four of the presentation where they had tried to separate the percentage expenditure incurred on a quarterly basis. She said that they had spent only about 22% of the allocated budget in quarter four.

Ms Middleton said there were different licence and application fees for the three fishing sectors. The first was for the small-scale fishing sector, which was exempt from paying all application or licence fees. The second was the recreational fishing sector, which paid an annual fee of R96 and obtained a recreational permit from any post office or the DFFE. Anyone over the age of 12 years could apply for a recreational permit.

The commercial sector had varying application and/or licence fees, depending on the value of the species for which one was applying. Ms Oyama confirmed that appeals did not apply to the West Coast rock lobster because they were allocated in 2015. The start of lobster season would not have any impact on the small-scale fisheries, even though their targeted deadline for finalising the allocations of fishing rights in the Western Cape to small co-ops was in March 2023. The current dispensation would continue until rights were allocated, so all the small-scale fishers in the Western Cape were allowed to carry on fishing until the new dispensation was in place.

Regarding I & J and Sea Harvest, the appeals processes were still underway, but they were the biggest players in the deep sea trawling industry. To allow new applicants into the fisheries, the two companies had lost quite a big percentage of their total allowance catch. There would only be enough fish for the new entrants by taking away from the big players. All the big players had lost a percentage of their allowable catch, compared to the previous allocations.

Referring to recreational fishing, and fishing in the Northern Cape's rivers, she said that Members were correct that that part of fishing was not covered by the recreational sector or permits. The fisheries management branch had a new mandate of dealing with inland and freshwater fisheries. It was a recent mandate, and in the last financial year, one of their targets was the approval of the inland fisheries policy that had now been approved, and they were rolling it out. Unlike the marine sector, this was a concurrent function where they would work closely with the provincial and municipal authorities. She said that there were a number of transformation awarded scores under the transformation section, including the extent to which applicants created new jobs.

She said that the DFFE did not allocate fishing rights to foreign companies -- one had to be a majority South African-owned company. They were neither aware of any foreign fishing nor permitted it. However, foreign vessels could use their right of passage but could not fish through South African waters. They were able to monitor these vessels through a vessel monitoring system which would notify them if a net was thrown into the water.

She confirmed that they had partnerships through Operation Phakisa -- the oceans economy plan. The fisheries branch would not be able to deal with illegal fishing independently, and they relied on partnerships with other law enforcement agencies, particularly the South African Weather Service and the South African Police Service.

Regarding snoek and the Western Cape fisheries' reliance on this species, she said this was caught by small-scale fishers and the traditional line fish sector. Other sectors did catch it, but as a by-catch. Other sectors and big fisheries had limits on the amount of snoek they were allowed to catch, and they were not allowed to target snoek directly.

Ms Tshabalala responded to the issue of irregular expenditure, saying that the Department was conducting investigations. Some had been completed, while others were still ongoing. The irregular expenditure was emanating mainly from prior years. They had therefore had to deal with the backlog first. Where investigations were complete, they instituted consequence management and presented where they had found certain officials to have been responsible. They aimed to ensure they dealt with the whole backlog and sent it to National Treasury. They had sent through the first batch and condoned R300 million in 2021. They had sent through close to R1 billion. The irregularities had arisen due to the Department awarding tenders without fulfilling the objective criteria. The objective criteria had been found wanting, and the Department realised there had been a loss of resources. Services were delivered, but it was a matter of processes not having been adhered to. She confirmed that the Minister sought regular updates so that they eliminated any bad history and had proper controls moving forward.

She said the R3 million spent on purchases from people with disabilities was about 0.2% of the R1.8 billion total. The Department needed to work harder to ensure that they brought disability empowerment on board as far as procurement was concerned.

On the suggestion that the Department obtain a legal opinion on the transformation issue, Ms Tshabalala said that they had received a legal opinion from senior counsel, who had cautioned them not to take it beyond what the legislation said. They were hoping that National Treasury would be in a position to address this matter so that they could accelerate transformation as far as procurement was concerned. She was working closely with the DDGs, and they had a monthly session where they monitored progress and committed to reporting to the Minister and Deputy Minster.

She said that as a Department they were not proud that their performance turned out the way it had. They really needed to do more and ensure that they delivered to the benefit of everyone on the ground.

Further discussion

Ms Ntlangwini said that contrary to the responses given, there had been an appeal regarding South Coast rock lobster. She asked for an explanation, adding that timelines as to when the appeals would be concluded were required.

She asked what the justification was for I&J and Sea Harvest having a high total allowance catch compared to the black-owned fishing companies with equal capacity and infrastructure. Why did these two companies control the deep sea trawlers? Had the DFFE been able to meet other SMME fisheries besides those from Fish SA? She asked the Department to consider if the endless court cases emanated from the fact that it was focused only on Fish SA not meeting other fishing SMMEs

The Chairperson questioned why I&J and Sea Harvest were dominating the South African fishing industry, and said there needed to be a change. The dominance of the two companies was not good for democracy, and they could be held to ransom at any time by the two companies.

He said that licences had a value that could be taken to banks to secure financing and forge partnerships, so there was a need to revisit to whom licences were given. They did not want the Department to just be a conduit for R2 trillion per year, and R6.6 trillion in the medium term expenditure framework (MTEF), approved by Parliament without seeing what they did in terms of economic transformation.

He said that the South Coast experienced sardines washing back to the coast every season. The communities had raised an issue that this was a once-off event each year, but during that time, people came from the urban areas with good infrastructure to take the fish and then go make good money. He asked whether the DFFE was aware of that situation and what interventions could be made for people along the coast who were mainly poor and depended on this, to try and make it a more sustainable business.

The Chairperson said that he had observed a trend in the forestry sector where they gave people farms that were unproductive due to lack of support. He wanted to know what was happening to get the communities involved in some form of industrialisation.

He asked whether any initiatives were being looked at to reduce the importation of paper and increase local production. What was the Department’s involvement in the zama zama problem and the rehabilitation of mines? What was it doing to deal with the issue of effluent in the rivers and dams? What were the implications of under-spending on clinical waste?

He asked the Department what they were doing to encourage young people to get involved in marine science and related training.

Responses by the Minister

Minister Creecy said the South Coast red lobster was one of the species reappointed under the Fishing Rights Allocation Process (FRAP), and they had received 37 appeals. There were sectors where there were fewer appeals than other sectors, like line fishing. They were trying to fast-track the process around sectors with fewer appeals. She did not want to comment on current FRAP process, because these were matters that were before her, and all she could say was that the issues being raised were exactly the subject of the appeals.

She said that the DFFE was not responsible for rehabilitation of mines. That was the responsibility of the Department of Mineral Resources and Energy (DMRE), and they were working on the issue of policing and the zama zama question. They were trying to introduce new regulations that make it mandatory for mines to invest money upfront in their closure operations. She shared the concerns of many South Africans that mine closures were not properly budgeted for and that subsequent environmental disasters would be the consequence.

 On the issue of the mine dam collapse at Jagersfontein, they had a team working with the DMRE and the Department of Water and Sanitation (DWS). They hosted a visit by the National Council of Provinces (NCOP) Select Committee on Land, Environment, Mineral Resources and Energy. Part of their responsibility would be to bring in experts to assess the damage and advise on the consequences of the damage. They were part of a team that would bring together criminal and civil proceedings to ensure the polluters paid.

The main species affected by poaching were abalone and West Coast rock lobster, which were highly valued. There was both a legal trade and an illegal trade. It was intertwined with organised crime in the Western Cape, which the Department was working on with the SAPS and the fusion centre. They had made some big busts, but it remained a tremendous threat to the wild stock, and consequences of that threat were obviously impacting the livelihood of small-scale fisheries.

There was a big marine training programme which supported the teaching of life sciences in schools. They also had a programme that offered bursaries for life sciences at universities and internships for those qualified in that area. In many instances, they were even starting to employ young black scientists they had supported during their studies. She said that the Department was the biggest employer of scientists in the country. They continued to work with communities to support the leaders of life sciences who would help them in all of their branches.

The meeting was adjourned.

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