BRRR; report on the oversight visit undertaken during April 2022; Discussion on upcoming Koeberg oversight visit

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Mineral Resources and Energy

18 October 2022
Chairperson: Mr S Luzipo (ANC)
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Meeting Summary

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Tabled Committee Reports

The Committee convened virtually to consider the first draft of the Budgetary Review and Recommendation Report for 2022 and its draft report on the oversight visit undertaken during April 2022. The Committee discussed the upcoming visit to the Koeberg Power Station which would be a joint oversight with the Portfolio Committee on Public Enterprises.

Members noted some amendments and added several observations and recommendations to the draft reports. Both draft reports would be considered and adopted in the following meeting because the additional comments, recommendations and observations from Members needed to be incorporated.

Members expressed the view that the Committee did not get much accomplished in portfolio committee oversight visits that were conducted jointly with other committees.

The Chairperson was concerned about several apologies from Members who were unable to attend the upcoming joint oversight visit to the Koeberg Power Station. The Chairperson had spoken to the Chairperson of the Portfolio Committee on Public Enterprises about the issue, but they agreed to continue with the scheduled oversight visit because it was a date that both Committees had agreed upon. The Members who would be available for the oversight visit would discuss the logistics with the Committee Secretariat. 

Meeting report

The Chairperson welcomed Members and noted that they were meeting after a very hectic three-week exercise, where Members had not gone home in three weeks due to the oversight meetings the Committee had undertaken. Unfortunately, this was what Members had agreed to do when they pledged their service even at their own expense. Members needed to be appreciated for doing their work diligently under serious constraints.

The Committee meeting on Tuesday the previous week had started at 09:00am and ended after 9:30 pm. On Thursday, it had a meeting that started at 14:30 and ended at 00:30am on Friday. This was extremely cumbersome. The Committee had to deal with 13 presentations from 11 entities of the Department of Mineral Resources and Energy (DMRE), the DMRE itself, and the Auditor-General of South Africa (AGSA). The Committee was satisfied that it did its best regardless of the constraints because there were no moments where the members lost concentration on the work done.

The Chairperson appreciated the Members of the Committee and the Committee staff for their dedication to the work. He extended gratitude to the staff, who had to support the Committee on oversight after the long meetings and compile the reports that would be tabled in the meeting. He said the staff members would need more time to finalise the reports.

He asked Members to find a way to do their work better than succumbing to the pressure twhen dealing with the budgets, Annual Financial Statements, audit outcomes, and annual targets because otherwise it would be impossible to finalise a report on 13 presentations within two weeks.

He expressed the Committee’s horror about the incident in Benoni where a 4-year-old girl was kidnapped, and her lifeless body was found mutilated. “Parliament has a duty and responsibility to ensure that South Africa is free of crime, and such elements do not deserve to be among society”, he said. It was even more disturbing that there were allegations that the alleged perpetrator was released on bail on a similar case of rape in the past. Something must be done beyond normal procedures to ensure that society is mobilised and able to deal with such matters vigilantly.

He commended the police for apprehending one of the people responsible for the gang rape case in Krugersdorp. The person arrested was allegedly responsible for the trap that was used to lure the women and he was a former police officer. He said some of the police officers did not deserve to wear the uniform because for a former member of the police to have done this; there must have been cooperation with the people involved in illegal mining for a long time, which did not help the fight against illegal mining and social crimes committed by those involved. These actions must be condemned by public representatives and society.  

Tabling of the draft  Budgetary Review and Recommendation Report (BRRR) for 2022
The Chairperson asked the Committee Secretary to skim through the body of the report, and then read the observations and recommendations. Members would comment or make changes if necessary. He asked Members to comment, make corrections or additions, and add new observations to the report.

Comments on Observations
Mr J Lorimer (DA) suggested a grammatical change to Observation number 2 of the DMRE and on Recommendation number 5.

Mr K Mileham (DA) felt that observation 19 on the entities reporting to the DMRE was irrelevant to the performance of the entity and was not worth capturing in the BRRR report. He was concerned that the issue that he raised regarding the National Nuclear Regulator (NNR) on the previous Thursday night was not captured in the report. He had raised two issues on the NNR. The first one was that the average salaries of the administrative departments were significantly higher than those in the core functional programmes of the entity.

The second observation was that the performance bonuses paid out in the last financial year were R21 million on annual basic salaries of R102 million for the entity. The Chief Financial Officer (CFO) indicated that the top performance bonus was 20%, but R21 million was 20% of the total salary bill, meaning that the average performance bonus was 20%, not the top performance bonus. He felt the Committee needed to investigate the matter because the performance bonuses were out of line with what should have been a norm in the entity.

He was unsure if his concern and observation about the South African National Energy Development Institute (SANEDI) was captured. SANEDI needed to commercialise its projects and the Portfolio Committee needed to push them to drive the commercialisation aspect of their activities.

On the rollout of Requests for Proposals (RFPs) for the various elements of electricity generation, he said one of the things not captured was that the Integrated Resource Plan (IRP) was becoming more outdated. It was based on outdated information from the day it was issued, and needed to be updated.

Ms P Madokwe (EFF) said on recurring findings in the AGSA report, what needed to be included was the delay in average creditor’s payments, which affected the Small, Medium, and Micro Enterprises (SMMEs) that were doing business with the state. On the Observations, what needed to be included was the miscommunication between the AGSA and the entities on the findings, which affected some entities’ ability to implement measures and procedures required to resolve them. 

Another observation that needed to be included in the report was that the reason for PetroSA’s underperformance included the issue of employees in the subsidiary as well as the botched exploration initiative and that there had not been any feedback or resolutions in respect of the measures put in place to remedy that situation or to investigate and hold people accountable. The DMRE did not extensively communicate with affected entities whenever it made decisions, especially regarding mine health and safety, as some entities were unable to perform their duties because of the judgment on the Mining Charter, which the Department did not appeal.  

The delay of the Centralised Interim Storage Facility (CISF) feasibility reports cited by the Department due to the National Radioactive Waste Disposal Institute’s (NRWDI) resource constraints also needed to be included in the BRRR. The NRWDI indicated that there was no plan to make provision for the anticipated decommissioning and disposal of the waste in Koeberg because this depended on an incomplete Bill, and there was no plan to build a repository for high-level waste.

There was also an observation on the state-owned mining company (AEFMC, the African Exploration Mining and Finance Corporation) in that it only concentrated on coal mining while there were other mineral resources that were not being explored by the company. The Council for Geoscience (CGS) had also said it was in the process of discovering new material and instead of the mineral resources being referred to the state-owned company for mining and exploration, they would give out mining or exploration rights to new companies.

Another observation was a question she had posed to the Chief Executive Officer (CEO) of the state-owned mining company relating to their retrenchment processes, where the company said everything was done above board, but the CEO of CEF Group SOC Ltd (the parent company of AEFMC) said the retrenchments had been put on hold and everything was under investigation. She said the CEO of AEFMC and the CEO of CEF had said different things and suggested that the issues needed thorough investigation.

Mintek had also said that they had developed several technologies and initiatives, but they needed funding for commercialisation purposes and for the purpose of piloting some of the programmes that would benefit the state and the overall functioning of the country. Another observation was on how state entities were expected to go through the tender process instead of getting first preference when work needed to be done.

She said another observation that was raised was that it did not look like the Department had a plan to ensure proper rehabilitation and/or closure of ownerless ad derelict mines because it lacked the funds to perform such functions.

The Chairperson said Mr Mileham had raised a concern on the risk or danger of the lack of a clear system on bonus determination at the NNR because it seemed like everyone who made a financial improvement in the entity received bonuses. It was recommended that the Department needed to develop a system to determine bonuses for the entities.

There was an observation about the South African Nuclear Energy Corporation’s (NECSA) concerns about the AGSA’s findings, where the Committee suggested that they work with AGSA on the issues that were identified and revert to the Committee on the way forward. The Committee had asked their Board Chairperson to write back to confirm if the Board was dealing with the matter in consultation with the shareholder so they could be held accountable.

The Chairperson asked the Committee Secretary to read through the recommendations in the draft report and the Members would make comments, corrections, or additions, or add new issues thereafter.

Comments on Recommendations
Mr Mileham suggested that on recommendation 6, it needed to be added that the Department needed to do a cost-benefit analysis and decide whether it would be worthwhile to proceed with the existing stock of solar water geysers or if the programme needed to be written off and proceed with something else.

The Chairperson said it was also recommended that the Department engage its sister departments and state institutions regarding the solar water heater programme because it had become a service delivery programme. The Department of Cooperative Governance and Traditional Affairs (COGTA), Department of Human Settlements (DHS) as well as institutions like the South African Local Government Association (SALGA) would have to be consulted.

He suggested the addition of the recommendation that the DMRE, in consultation with National Treasury needed to present a comprehensive strategy, including cost-benefits, to the Committee on the way forward on the water solar heater programme. He asked if Mr Mileham agreed with that suggestion.

Mr Mileham said the suggestion was fine because the important decision to be made was on whether the Department would proceed with the programme or not. Another recommendation was that there were three Independent Power Producer (IPP) programmes, including the Renewable Energy IPP, Risk Mitigation IPP, as well as the Small Embedded IPP, and the entire IPP programme needed to be investigated, the delays that impacted bid windows 6 and 7 and what could be done to reduce those delays given the energy crisis in the country.

Ms Madokwe had a recommendation about the solar water heater programme, but her connection was cut due to load shedding.

The Committee Secretary suggested that Members submit their recommendations in writing so they could be added to the report.  

Tabling of the draft Committee report on the oversight visit undertaken during April 2022
The Chairperson asked the Committee Secretary to skim the body of the report, and then read the observations and recommendations, and the Members would comment or make changes if necessary.

Comments on the body of the report
Mr Mileham was concerned that the Committee did not get much accomplished in joint Portfolio Committee oversight visits as it did when it conducted oversight visits on its own because there would be a lot more people and a lot more questions and comments from Members during discussion periods, which often resulted in their questions not being answered or being postponed for later dates. He also noted that Mr Lorimer’s name was left off the attendance register.

Ms Madokwe also noted the omission of Mr T Langa (EFF) on the register.

The Chairperson asked the Committee Secretary to read through the observations on the report and thereafter, Members would comment, make corrections or additions, and add new observations.

Comments on Observations
Mr Mileham was concerned that the safety concerns and the likelihood of the licence being renewed in 2024 around the life extension project at the Koeberg Nuclear Power Station were not noted. On PetroSA, the other observation was on the impact of the closure of the PetroSA plant in Mossel Bay on the local community.

On NECSA, one of the concerns was the delays in replacing the Safari 1 Reactor with the multipurpose reactor, which impacted NECSA’s ability to deliver its products. The other issue was the lack of coordination and interaction between various state-owned entities.

The Chairperson said another observation on Mossel Bay was the lack of frequent interaction between PetroSA, the municipality and other stakeholders.

He asked the Committee Secretary to read through the recommendations in the report and the Members would make comments, corrections, or additions, or add new issues thereafter.

Recommendations
Members had no comments on the recommendations in the report.

The Chairperson asked that the Members who could not make their comments or recommendations due to load shedding in the meeting be allowed to make their comments when the reports were adopted.  

Ms T Malinga (ANC) agreed with the Chairperson because she could not hear anything said in the meeting and had submissions to make on the reports. She asked to submit her comments to the Committee Secretariat to be infused with the additions made during the meeting.  

Discussion on upcoming Koeberg Oversight Visit
The Chairperson said the Committee had an upcoming joint oversight visit to the Koeberg Power Station with the Portfolio Committee on Public Enterprises (PCPE) because some of the issues raised in previous oversights and meetings were not answered were similar. However, several apologies were received from the Members of the PCMRE after the oversight visit to the North West Province, which was concerning. He had spoken to the Chairperson of the PCPE about the issue, and he told him that they had had no choice but to continue with the oversight because it was a date that both Committees had agreed upon. He asked Members what they thought the Committee needed to do regarding the joint oversight visit.

Ms Madokwe said the Committee needed to first establish the number of apologies and the reasons from the Members and then a decision would be made. She was unsure if it would be good for the Committee to send two or three people to the oversight visit, which was why the reasons and the number of apologies needed to be examined.

The Chairperson said the PCPE said it would continue with the oversight visit and the PCMRE would need to decide what it would do. He said Members’ apologies for non-attendance of meetings or oversight were not usually probed further by the Committee because of the rules. Only the Chief Whips of the specific political parties of the said Members were allowed to probe the merits of their apologies because the Committee would assume that the apologies were granted by the political party Chief Whips.

Ms Ayanda Boss, Committee Secretary, confirmed that only the Chief Whip of the political party of a Member was allowed to probe further into the said Member’s apology. The Committee was not allowed to do so.

Mr V Zungula (ATM) asked the Chairperson or the Committee Secretariat to guide the Committee on the matter because they would know the number of Members required to form a quorum in joint oversight visits.

Ms Malinga felt it was unfair for the PCPE to act the way they did because some members of the PCMRE would not be able to attend the oversight visit, but they were allowed to take over the oversight visit. She agreed with Mr Zungula’s suggestion and agreed with Mr Mileham’s comment that the Members were often dissatisfied with their questions not being answered during joint oversights.

Mr Mileham said apologies could not be taken and included for quorum purposes because that would be illegal, as people needed to be present and able to vote to count for quorum purposes. He said Mr Mahlaule was not the Whip for all the parties in the Committee and was only the ANC Whip and could not decide for every Member of the Committee.   

The Chairperson asked the Members to focus on the issue regarding the oversight visit and added that it was difficult for the Committee to argue with the PCPE because they had agreed with them on the date of the oversight visit. The Committee was a victim of its own commitments, and the Chairperson was not in the position to guide the Members on the matter because he sympathised with the Members because of the tight schedule of the Committee.

He said there was not going to be a need for a quorum and that perhaps they needed to see which Members would be interested in attending the oversight visit even if they had to sacrifice their time on Friday and liaise with the Committee Secretary to organise their attendance of the oversight and then leaving later the same day. The inability of Members to ask their questions during the visit would be the main challenge especially on the finalisation of the report on the joint oversight.

Mr S Jafta (ANC) agreed with the Chairperson that Members who would be able to avail themselves for the oversight visit needed to do so and would be led by the Chairperson because the visit was very important.

Mr M Mahlaule (ANC) said those who would be available must attend and those who would not be available would have to send their apologies.

The Chairperson said those who would be available needed to confirm the logistics with the Committee Secretariat.

Mr Lorimer asked when the Committee could expect to receive the report from the Mpumalanga Office of the DMRE.

The Chairperson said the matter was in the Committee Programme and the Committee would deal with it in November when it dealt with the investigation on the Rehabilitation Funds.

Mr Lorimer asked if the Committee would receive the report in advance before the actual meeting.

The Chairperson said there was a 24-hour deadline for presentations to be sent to the Committee, so they expected to receive it before the meeting.

The meeting was adjourned.
 

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