Forestry Laws Amendment Bill: Final Mandates; Department of Water Affairs and Forestry Annual Report

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Meeting report

LAND AND ENCIRONMENTAL AFFAIRS SELECT COMMITTEE

LAND AND ENVIRONMENTAL AFFAIRS SELECT COMMITTEE
15 November 2005
FORESTRY LAWS AMENDMENT BILL: FINAL MANDATES; DEPARTMENT OF WATER AFFAIRS AND FORESTRY ANNUAL REPORT

Chairperson:
Rev P Moatshe (ANC, North-West)

Documents handed out:
Forestry Laws Amendment Bill [B24B-2004]
Nine Provincial Final Mandates on the Forestry Laws Amendment Bill:
Free State
Mpumalanga
Northern Cape
North West
Western Cape
Limpompo
Eastern Cape
Kwa-Zulu Natal
Gauteng
National House of Traditional Leaders Submission on the Forestry Laws Amendment Bill
Department of Water Affairs and Forestry (DWAF) presentation
Department of Water Affairs and Forestry Annual Report 2004/05[please email
docs@pmg.org.za]

SUMMARY
The representatives of the nine provinces indicated - through their final mandates - that they were all in favour of the Forestry Laws Amendment Bill. The Bill was adopted without any amendments.

The Department of Water Affairs and Forestry delegation provided an overview of its four programmes: Water Resources Management, Water Services, Forestry and Administration. The Department’s 2004/05 financial statements were reviewed and it was noted that the Auditor-General had given an audit opinion disclaimer for the Department's water trading account and its equipment trading account had received an adverse audit opinion. However, the Department had implemented a Financial Management Improvement Plan to address its financial management problems. Its Chief Financial Officer had been suspended.

In the ensuing discussion, Members enquired whether an under-spend adversely impacted on service delivery; why the Department had not discussed the challenges that it faced; how the Department was addressing water services related capacity problems in the municipalities; how the Department was dealing with fraud; whether the Department had plans to address the drought in the Limpopo Province; whether the Work for Water Programme was successful; and whether the Cuban underground water specialists were transferring skills to South Africans. Members raised concerns about the Department’s financial management capacity and its service delivery. People were becoming impatient with poor service delivery and the Department needed to improve on this.

MINUTES

Forestry Laws Amendment Bill: Final Mandates
The Chairperson noted that the Committee had received a submission from the National House of Traditional Leaders on the Forestry Laws Amendment Bill. They had raised certain concerns about the Amendment Bill. The Committee appreciated the submission; however, it had been made too late. As a result, the issues that the National House of Traditional Leaders had raised could not be addressed at this late stage. Nonetheless, the Committee would examine the possibility of addressing the National House of Traditional Leaders concerns, at some point in the future.

Mr M Mzizi (IFP, Gauteng) questioned whether there had been proper communication with the National House of Traditional Leaders. Indeed, the National House of Traditional Leaders should have participated in the public hearings. Nonetheless, at this late stage, the Committee could only note the National House of Traditional Leaders’ submission; it could not deal with the issues that the submission raised.

The Chairperson and Mr Mzizi both commented that the National House of Traditional Leaders should have taken their submission to the provinces. The provinces could have then intervened on their behalf. In the future, the provinces needed to interact with the National House of Traditional Leaders.

The Chairperson asked the provinces for their final mandates on the Bill:

Eastern Cape Province Final Mandate
Ms B Dlulane (ANC, Eastern Cape) stated that the Eastern Cape supported the Amendment Bill.

Free State Province Final Mandate
Mr L Van Rooyen (ANC, Free State) noted that the Free State supported the Bill.

Gauteng Province Final Mandate
Mr M Mzizi (ANC, Gauteng) noted that the Gauteng Province supported the Amendment Bill.

KwaZulu-Natal Province Final Mandate
Ms Y Nahara (Member of the KwaZulu-Natal Legislator) commented that some members of Kwazulu-Natal legislator were concerned that the Amendment Bill did not clearly address the Veld and Forest Fire Act of 1998. Nonetheless, KwaZulu-Natal supported the Amendment Bill in its present guise

Limpopo Province Final Mandate
Ms H Matlanyane (ANC, Limpopo) stated that the Limpopo Province supported the Amendment Bill.

Mpumalanga Province Final Mandate
It was noted that the Mpumalanga Province endorsed the Bill.

North-West Province Final Mandate
The North-West Province supported the Amendment Bill.

Western Cape Final Mandate
Mr F Adams (ANC, Western Cape) noted that the Western Cape supported the Bill.

Northern Province Final Mandate
Mr J Tau (ANC, Northern Cape) stated that the Northern Cape supported the Bill.

The Committee then voted on the Bill clause by clause. The Committee, as a whole, voted in favour of the Amendment Bill.

Department of Water Affairs and Forestry 2004/05 Annual Report: Briefing
Mr J Sindane (Department of Water Affairs and Forestry Director General) began by outlining the Department’s mandate as underpinned by the National Water Act; the Water Services Act; the National Forests Act; the National Veld and Forest Fire Act; and the Environmental Conservation Act.

Mr Sindane noted that the Department was responsible for a number of public entities, which included:
- The Trans-Caledon Tunnel Authority (TCTA) was established through the 1986 treaty on the Lesotho Highlands Water Project (LHWP) between Lesotho and South Africa. TCTA had received authorisation from the National Treasury to borrow R 24 billion for the LHWP and R 1.5 billion for the Bergriver Water Project.
- The Komati River Basin Water Authority (KOBWA) was a bi-national water authority between Swaziland and South Africa. It was tasked with implementing phase one of the Komati River Basin Development Project.
- The Water Research Commission (WRC) was responsible for co-ordinating, promoting, financing, and managing research into the preservation, utilisation, conservation, control, supply, distribution, and purification of water supplies and resources. During 2004/05, the Department provided the WRC with R 77 million in funding.
- The 15 Water Boards were tasked with providing bulk water supplies to water providers and municipalities. In general, the financial performance and governance of the Water Boards was good; however, some problems had been experienced with Botshelo Water Board, Bloem Water Board, and Bushbuckridge Water Board.

Mr Sindane outlined the performance of the Department’s four programmes, which were:
- The Administration Programme was responsible for the management of the Department. This included offering administrative support, legal support, office support, information and technology (IT) support, personnel management and financial administration. Some of the Administration Programme’s main achievements in 2004/05 included devising a strategy to implement Workplace Skills Plans; implementing pilot learnerships around water purification and waste water treatment; implementing a performance management and development strategy; organising public campaigns; restructuring the budget from eight programmes into four programmes; and developing mechanisms to implement the accrual accounting system.
- The Water Resources Management (WRM) Programme was responsible for ensuring that the country’s water resources were protected, developed and managed in a sustainable and equitable manner. Some of the main achievements of the WRM Programme included establishing the National Water Resources Strategy; publishing Internal Strategic Perspectives; ensuring that international agreements on the Limpopo Commission, the second phase of the LHWP and the Maputo Basin were concluded; undertaking a pre-feasibility study on the lower Orange River management plan; establishing Catchment Management Agencies (CMAs); establishing Water Users Authorities (WUAs); revising the Water Pricing Strategy; improving co-operation with other developing countries; and undertaking infrastructure developments, such as the proposed De Hoop Dam, the Flag Boshielo Dam, and the Nandoni Dam.
- The Water Services (WS) Programme was tasked with providing effective, efficient, sustainable and affordable water and sanitation services. Some of the WS Programme’s main achievements in 2004/05 were providing the 10th millionth person with safe drinking water since 1994; ensuring that 95% of the municipalities were providing free basic water services; improving water supplies to 1.3 million people; sourcing R 1.2 billion over the next three years to eradicate the bucket system; approving the Free Basic Sanitation (FBS) policy; undertaking health and hygiene education programmes; and transferring water schemes and functions to the municipalities and WUAs.
- The Forestry Programme was responsible for promoting the conservation of plantations and indigenous forests for optimal economic and social benefits. Some of the Forestry Programme’s achievements during 2004/05 included concluding two leases for state plantations as part of SAFCOL’s restructuring; undertaking preparations for the transfer of 97 000 ha of state-owned indigenous forest to the South African National Parks; drafting the Forestry Laws Amendment Bill; developing a national database for veldfire incidents; formalising co-operation with other Southern African Development Community countries; revising the wattle jungle licensing strategy; ensuring that forestry was incorporated into local planning processes; and launching a broad-based black economic empowerment (BBBEE) indaba.

Mr Sindane discussed the Department’s 2004/05 financial statements. The Department’s total expenditure for 2004/05 was R 7 791 558 000 with a 99% spending level. The majority of the expenditure was directed towards water resource management, water services and the water trading account. It was noted that, unfortunately, the Department’s water trading account received a disclaimer of audit opinion from the Auditor-General. Added to this, the Department’s equipment trading account received an adverse audit opinion from the Auditor-General. Nonetheless, the exchequer account and National Forest Recreation and Access Trust received unqualified reports. The Department had developed a Financial Management Improvement Plan to address its audit issues and improve its financial capacity, policies, procedures and training. In addition, a fraud prevention strategy had been developed.

Discussion
Mr Van Rooyen commented that the Department’s Annual Report included unnecessary information. For example, there were 40 pages on human resource management in the Annual Report. This resulted in a very lengthy Annual Report. However it also omitted important information. It should have included details of the President’s State of the Nation Address. There should have also been a graph that outlined its spending pattern. Added to this, the Annual Report had failed to reflect on the challenges that the Department’s programmes had experienced. This would have allowed the Members to understand how the Department’s funds had been spent. It would also address the danger of fiscal dumping. The Department needed to produce short succinct user-friendly Annual Reports.

Mr Sindane responded that the Department would change the format of its future Annual Reports. Indeed, its future Annual Reports would reflect the President’s State of the Nation Address and the challenges that the Department’s programmes faced.

Mr Balzer (Department of Water Affairs and Forestry Acting Chief Financial Officer) added that the National Treasury required the Department to include information on human resource management in the Annual Report. Following this, he explained that it was almost impossible for the Department to fiscal dump since it was no longer fully responsible for the direct expenditure of the MIG allocations. He then noted that the Department had reached 99% spending levels. Added to this, the Department regularly monitored its spending patterns.

Mr Van Rooyen noted that the Annual Report had failed to discuss the achievements and challenges that the Department had experienced in the Presidential Nodal Areas. Mr M Matukane (Department of Water Affairs and Forestry Chief Director: Northern Cluster) replied that the Department was implementing the Olifants River Water Project in the Sekhukhune Nodal Area. The Department was also building the Flag Boshielo Dam, the De Hoop Dam and a filtration plant in other Nodal Areas.

Mr Van Rooyen was concerned that the Department’s under-spend would adversely affect its service delivery. For example, the R 16 million administration under-spend would negatively impact on the Department’s capacity. Mr Balzer replied that the R 16 million, which Mr Van Rooyen had mentioned, related to funds that had been redirected by National Treasury to cover the once off relocation of certain Departmental staff to municipalities.

Mr Van Rooyen observed that the Department’s water and equipment trading accounts had received disclaimer of opinion audit reports for a number of years. Indeed, the Department stock taking procedures had been a problem for the last six years. The Department appeared to have problems with its financial management capacity which needed to be rectified

Mr Sindane replied that the Department had recently restructured its financial department. The old staff members had received sufficient time to address the problems; however, they had failed to do so. As a result, the Department would be hiring some new financial staff. The Chief Financial Officer (CFO) had been suspended due to alleged mismanagement. In the CFO's absence, a team had been established to prioritise and address the problems that the finance department had experienced. This team was providing weekly progress reports to the Department’s senior management.

Mr Sindane added that this team was a responsible for monitoring whether the Department’s regional offices possessed basic financial and accounting skills. This would include examining the stock taking procures of the regional offices. The Department was also considering the possibility of requesting mini annual reports from the regional offices. The Auditor-General would possibly be involved in assisting the regional offices to compile these mini annual reports. Added to this, the Department was examining the structure of the regional offices. It would perhaps be necessary to restructure the regional offices to ensure that they performed properly.

Mr Sindane noted that the Department would be providing the Portfolio Committee with quarterly reports on the progress that it was making towards addressing its financial management and human resource development challenges. Mr Sindane stated that the Department would submit these quarterly reports to the Select Committee.

The Chairperson pointed out that the Select Committee had been requesting quarterly reports from the Department since 1999. The Chairperson enquired why these reports had never been delivered.

Mr Sindane apologised for not having delivered the reports. Nonetheless, he reassured that the Committee that it would receive the quarterly reports in the future.

Mr Van Rooyen noted that the Department had included a Local Government Service Quality Table in its Annual Report. There were some concerning statistics in this Table. For example, some local governments had received very low ratings in terms of acceptable service quality. This situation was unacceptable. What was the Department doing to address this problem?

Mr Sindane replied that the Table outlined whether or not municipalities were testing the drinking water that they supplied. Many municipalities did not have the capacity to test the water. Indeed, 78 municipalities did not have any qualified engineers or technicians, which meant that they could not test the water that they supplied. The Department, however, had sent regional officials to monitor the water quality of the municipalities that lacked capacity. Added to this, the Department had requested the Water Boards to test the bulk water supply that they provided to the municipalities, and to check quality of the end-user tap water.

Mr Mzizi was concerned that most of the Department’s initiatives were ‘in the pipeline’. He asked when the Department would complete these projects. He noted that a number of Departmental officials were being investigated due to incidences of financial mismanagement. He enquired whether progress had been made around these investigations. Would any of these corrupt officials be prosecuted?

Mr Sindane responded that the investigations, which were being conducted, related to incidences that had occurred at the Bloem, Bushbuckridge, and the Botshelo Water Boards. These investigations were in different stages. For example, the investigation at Botshelo Water Board resulted in the dismissal of the CEO. The possibility of laying criminal charges against the CEO was being considered. Meanwhile, the Department was awaiting reports on the investigations at the Bloem and Bushbuckridge Water Boards.

The Chairperson enquired how much money had been defrauded by corrupt officials and how was the Department curbing fraud.

Mr Sindane responded that the Department had detailed statistics on the fraud cases. For example, in one case the Department had lost R 800 000 due to fraud. The fraud had been committed by a syndicate that had manipulated the Departments payroll system. The employees involved were due to appear in court. He added that the National Intelligence Agency was examining how the Department’s systems could be upgraded. The Department was also considering the possibility of paying employees salaries by cheque. This would possibly curb the problem of ghost workers.

Mr Mzizi noted that the Limpopo Province was experiencing a severe drought. Plans needed to be put in place to ensure that water was effectively harnessed and stored in preparation for the dry season. Mr Matukane replied that drought was endemic to certain areas of the Limpopo Province. He noted that many of the dam levels in the Limpopo Provinces were extremely low. In order to address this problem, the Department would be undertaking a water allocation reform initiative in the Limpopo Province.

Mr A Watson (DA, Mpumalanga) pointed out that many of the private saw mills in the Komatiland, the eastern Limpopo and the north-eastern KwaZulu-Natal areas had experienced a shortage of wood due to forest fires. In order to address this, the government had made 40 000 cubic meters of logs available to the affected saw millers. However, most of the logs had been made available to saw milers in the Bushbuckridge area. As a result, the logs were failing to reach most of the other affected saw millers. He asked whether the Department was aware of this problem. Mr Balzer acknowledged that most of the logs had not reached the small saw millers in other areas. This was due to the fact that the Department had acquired the logs from its plantations, which were mainly situated in the Bushbuckridge area.

Mr Watson noted that many people were losing their jobs due to the restructuring of SAFCOL. The Department needed to intervene to address this problem. Mr Balzer responded that the Department did not have a direct influence over SAFCOL, as SAFCOL fell under the auspices of the Department of Public Enterprises. Nonetheless, the Department would take the issue up with Public Enterprises. However, SAFCOL was mandated to operate on business principles.

Mr Watson observed that the Department had hired a number of Cuban underground water specialists. He enquired whether these Cuban specialists were transferring any skills to South Africans. He added that South Africa appeared to be a work agency for the Cubans. He then asked when the Cuban underground water specialists were returning to Cuba.

Mr Sindane replied that one of the aims of hiring Cuban specialists was skills transfer. However, it was difficult to actually measure skills transfer. Added to this, the skills transfer initiative had proved problematic in areas where there was a low skills base. The Cuban specialists sometimes undertook the work themselves due to a lack of capacity in the Department. All Cuban specialists were in South Africa on three year contracts. Mr Matukane noted that Cuban geo-hydrological specialists were responsible for managing groundwater projects in the Limpopo Province. This was due to the fact that there were very few geo-hydrologists in South Africa. Until recently, there was only one university in South Africa that offered training in geo-hydrology.

Mr Tau was not satisfied with the Department’s response. He noted that the South African government had a strategic partnership with Cuba. Indeed, the Cubans had offered valuable support to South Africa. The Department should not be apologetic about hiring Cubans. South Africa needed Cuba’s assistance in areas where there were skills shortages. Other countries often came to South Africa and depleted its resources without benefiting anybody. Mr Tau was concerned that Mr Watson was ridiculing the Cuban people.

Mr Watson responded that his question was around skills transfers. The Department had admitted that the Cubans often undertook work without offering skills transfers.

Mr Watson noted that the Rand Water Board was constructing a pipeline from Mamelodi to Ekangala. He observed that the old Renosterkop Dam was closer to Ekangala than Mamelodi. Why could a filtration plant not be established at the Renosterkop Dam? This would allow water to be piped from the Renosterkop Dam to Ekangala. Added to this, the Vaalbank townships, which were close to the Renosterkop Dam, had taps but no water. The Renosterkop Dam could also be used to pipe water to the Vaalbank townships.

Mr Balzer responded that the Department had examined all the possible oppositions around the water supply to Ekangala. It was found that Mamelodi had spare capacity. It was found that it would take a shorter time to build a pipeline from Mamelodi to Ekangala, than to construct infrastructure at the Renosterkop Dam.

Mr Watson noted that a number of dams were being built as part of the Komati Basin Project. Were there any plans to promote economic activities, such as tourism, around these dams? Mr Sindane responded that the Department worked with provincial and local governments around their growth and development strategies and their integrated development plans (IDPs). This included linking water related matters, such as water supply and tourism, to the growth and development strategies and IDPs. Indeed, the Department, along with local governments, had been involved in cleaning up the Vaal River to enhance its tourism potential. Mr Balzer added that the Department was preparing Sustainable Utilisation Plans (SUPs) for a number of dams. These SUPs would include a tourism component.

Mr Watson asked when phase two of the Lesotho Highlands Water Project (LHWP) would begin.

Ms Matlanyane commented that R 1.3 billion had been allocated to municipalities in the Limpopo Province to improve water services and sanitation. However, only R 40 million of this had been spent. She asked why the remainder of these funds had not been spent. Was it due to a lack of capacity?

Mr Sindane responded that municipal under-expenditure was concerning. When the Department detected a municipal under-expenditure, it would write to that municipality requesting a report on why there had been an under-spend. Following this, the Department would then request an action plan from the municipality. The Department would also offer assistance to the municipality. Added to this, the Department would inform the relevant provincial government about the municipality’s under-expenditure. The government had also implemented Project Consolidate to assist municipalities that were experiencing problems with under-expenditure.

Mr Sindane noted that there had been a public debate around a lack of capacity in certain municipalities. In order to address the capacity problem, the Department was considering the possibility of re-hiring retired civil engineers. These engineers could be deployed at the Department’s regional offices so that they could be dispatched to municipalities that had capacity problems. The Department was also negotiating with certain training institutions to ensure that learners were paired with these experienced engineers.

Mr Tau asked for an update on the Working for Water programme. Were its objectives being met? Mr Sindane replied that the Working for Water Programme was a success. It had assisted with poverty alleviation and employment creation. Nonetheless, certain challenges had been experienced. For example, there were certain issues around the participant exit strategy. The Department was working towards addressing these problems.

Mr Tau commented that certain of the WUAs still mainly benefited privileged consumers. He enquired how the Department was addressing this problem. Mr Sindane responded that the idea of establishing the WUAs was to ensure that previously disadvantaged people also benefited from their services. However, the Minister had raised certain questions around the WUAs. Indeed, the Minister had asked whether the WUAs were carrying out the government’s mandate. As a result, Mr Sindane had pledged to undertake a study to examine how WUAs operated in other countries. This would allow the government to tighten up the legislation that surrounded the WUAs in order to ensure that they delivered on their mandate.

The Chairperson asked what plans the Department had to deliver water to people in the rural areas.

The Chairperson noted that many people in the townships and rural areas were becoming bitter and angry about poor water services. People in these areas were waiting for delivery. The fact that funds were underused was extremely serious. The Members would feel the people’s pressure when they returned to their constituencies. They would be asked by people why the Department was not delivering effectively. The Committee needed to take the Department to task. The Committee wanted comprehensive progress reports from the Department. For example, when would the bucket system be eradicated? Did the Department know how to eradicate the bucket system? There could not be a situation where projects were left incomplete. If Department employees were not performing properly, they should not then claim that there was a lack of capacity. The Chairperson was concerned that the Department’s Annual Report did not reflect the reality on the ground. One needed to be able to measure what was delivered on the ground.

Mr Sindane responded that he sympathised with the Select Committee’s sense of frustration. The Department would forward data on the eradication on the bucket system to the Committee. Added to this, it would provide extensive progress reports to the Committee on the projects that it was undertaking, which included its activities in the Nodal Areas.

The Chairperson responded that it was important that the Committee receive such information which needed to be simple and to the point. The Members would then be able to check on the projects that had been undertaken in their constituencies. The Committee and the Department needed to work together to ensure that there was effective delivery.

The meeting was adjourned.

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