National Nuclear Regulator Annual Report 2006/07: briefing

MINERALS AND ENERGY PORTFOLIO COMMITTEE
21 November 2007
NATIONAL NUCLEAR REGULATOR ANNUAL REPORT 2006/07: BRIEFING

Acting Chairperson: Ms B Tinto (ANC)

Documents Handed Out:
National Nuclear Regulator Annual Report 2006/07
National Nuclear Regulator presentation

Audio recording of meeting

SUMMARY
The National Nuclear Regulator presented its Annual Report for 2006/07 and gave an open appraisal of the challenges facing it. The biggest challenge was the attraction and retention of skilled employees. The NNR was battling to compete with lucrative offers made to employees and graduates by international organizations as well as by the private sector. Ancillary to this discussion, the Committee noted that the NNR was not faring well in terms of representivity. The Committee urged the NNR to foster links with tertiary institutions, and to employ an increased number of previously disadvantaged individuals, particularly women and the disabled. Under spending by the NNR was identified as being problematic, and the organization was warned that this will jeopardize any future requests for increased funding from Treasury. Also discussed were the number of failures in achieving strategic objectives The NNR noted that it was in dire need of well structured support roles, particularly in the fields of human resources and information technology. The Committee commended the public entity on the detailed and honest report that had been compiled.

MINUTES:
National Nuclear Regulator (NNR) presentation
In his presentation Mr Maurice Magugumela (CEO: NNR) outlined the mandate of the NNR, looked at key highlights, as well as performance indicators, financial performance and challenges facing the organization. The four focus areas of the NNR in terms of performance review were identified as being: stakeholder satisfaction; human resources; internal business processes; as well as core business objectives.

In terms of financial performance, it was acknowledged that the NNR had an operating surplus of R 18.8 million, which was due largely to unfilled vacancies at year-end. Working capital management had shown a significant improvement on previous financial years. It discussed its post medical liability that appears in the balance sheet as R29,718 million.

The main challenges facing the NNR during the 2007/2008 financial year were noted as:
▪ the retention and attraction of skilled personnel needed to be addressed.
▪ turnaround times for review submissions from authorization holders needed to be improved.
▪ annual dose limits had been exceeded in certain instances at special case mines.
▪ there was a distinct lack of progress in concluding co-operative agreements.

Discussion:
Adv H Schmidt (DA) asked, with reference to the ‘Highlights’ section of the presentation which summarizes specific progress, exactly which facility was concerned. Secondly, with regard the applications received in the previous financial year, he asked if these were predominantly for new mines or mining ventures. Thirdly, with reference to the income statement, it was apparent that the NNR had surplus funding for this financial year. He asked if the NNR had considered that this may detrimentally impact their application to Treasury for funding during 2008. Fourthly, Mr Magugumela was asked to elaborate on efforts by the NNR to retain and attract skilled personnel, and whether there were any university bursaries being offered or similar initiatives underway. Fifthly, in light of the increase in nuclear activity by government, did the NNR envisage a new role for itself in the nuclear industry. He continued that the increase in nuclear activity brought a much greater responsibility for the NNR. Finally, he was noted that over-exposure was currently an enormous problem within the industry. He asked Mr Magugumela to elaborate on the NNR’s efforts to minimize the problem and to mitigate its effects.

In terms of investment in skills development, the country faced a national challenge. The Committee noted that the NNR had only been associated with Stellenbosch University and the University of the North West, and inquired why this was the case. A hands-on approach with regard personnel recruitment was advocated. The sentiment amongst committee members was that the NNR was not doing enough to recruit women and disabled individuals. With regard to the cut-off dates that were not met, the Committee were unanimous in their request for an explanation as to the reasons behind these failures.

Ms N Mathibela (ANC) commended the NNR on their existing linkages with universities, but asked why more was not done 13 years before when the democracy was new. She maintained that the skills shortage should have been addressed long ago. In terms of the over-exposure issue, she asked exactly how many times this phenomenon had been experienced this year.

Mr T Mahlaba (ANC) noted that the nuclear industry was not public service-orientated. With regard to the surplus funding, he asked for an explanation why prior approval was not granted. He asked for a percentage figure for NNR’s vacancy rate as that would assist the Committee in comprehending the magnitude of the issue.

With regard to the number of failures in achieving strategic objectives, Mr Mahlaba said that it appeared as if someone had almost strategized on behalf of management. The excuses given by the NNR for this under performance were that events had been ‘overtaking each other,’ and that certain steps needed to be taken before these objectives could be achieved. However, when viewed holistically, these excuses were inadequate. The scorecard for strategic objectives for internal business processes showed that the majority had not been achieved. The NNR needed to anticipate these failures and plan in a more strategic manner. He asked what happened when targets were not achieved, were they rolled-over and re-prioritized? In terms of gender representation, it was noted that at senior management level, there were no females and this was a concern.

The Chair asked if the NNR’s facilities were secure. Was the NNR satisfied that security had been prioritized and was under control?

Mr Magugumela thanked the Committee for their concerns and felt that they had leveled fair and constructive criticism at the NNR. With regard to Adv Schmidt’s first question, it was mentioned that the Pelindaba site was the facility concerned. In terms of the applications, he noted that these were prospecting permits for new mines.

Mr Magugumela continued that the under spending would indeed make it difficult to procure funding from Treasury for the next financial year. However, the NNR would furnish Treasury with cogent reasons for the under spending, as well as a plan for the way ahead. In terms of the retention and attraction of personnel, the NNR did offer bursaries to both employees and non-employees. In addition, the NNR had training programmes in place, as well as an internship programme which took on ten students at a time. The aim was obviously to cultivate a relationship between such students and the NNR, with a view to future employment. Further, the NNR was currently trying to send one staff member to an international nuclear facility for further training. However, a major problem at the moment was the retention of staff. The NNR could not compete sufficiently with international agencies which were very attractive to graduates and existing staff members. Last year the NNR did not offer university bursaries, but five bursaries have been put in place for this academic year. In terms of association with specific universities, the University of the North West and Stellenbosch University were at the forefront of the campaign, but the NNR was involved with other universities. These specific universities offered courses pertinent to the industry and this was why the affiliation was strong presently.

Mr Magugumela continued that there was no country that had been successful in a nuclear campaign which did not have a list of viable service providers. In addition, the NNR needed a pool of international investors, and widespread research must be actively encouraged. He acknowledged that the NNR had not done well in these areas. In addition, it was pointed out that the NNR was in need of a dedicated Human Resources department in order to facilitate serious long-term development in the staff retention and attraction sphere.

In terms of the increased nuclear activity by government, the NNR’s mandate remained the same. If the industry was going to expand, the NNR’s responsibilities would expand alongside it, and the NNR would have to reflect on the experiences and growth thus far.

He said that the NNR admitted that much needed to be done about its performance in appointing previously disadvantaged individuals (PDIs), particularly women and disabled persons. Currently the NNR employed two people with disabilities, but they were not at a senior level. The nature of the industry made this very difficult to achieve, but the NNR was actively trying to source such individuals. The policy of the NNR was that, where possible, these people would be appointed. Women presently comprised 33% of the NNR’s workforce. In terms of black males and females, the figure was currently at 60% which was slightly better. Recruitment of PDIs was more successful in the lower ranks.

In terms of failing to achieve targets, the NNR accepted the criticism. Hands-on management was actively being advocated, but was currently an area where the NNR was experiencing difficulty. Strategic planning needed to be improved, and the support roles within the NNR, particularly human resources and information technology, needed to be developed. He continued that if these areas were dysfunctional, the entire organization would suffer

Fostering of relationships between universities and the NNR had taken an unacceptably long time. However, the NNR as an organization now had a better understanding of the complexities involved with the problem, and was in a position to address this problem in a sustainable fashion.

Mr Magugumela referred members to page 33 of the annual report, which dealt with over exposure in the nuclear industry. In 2001 there were a large number of incidents, but over the last five years this had improved dramatically. The year 2006 showed only single digit over-exposure, which was still unacceptable but was indicative of tremendous progress. In 2006, both cases came from the same mine. This mine was shut down and was only allowed to reopen when they had addressed the problem. The NNR was very stringent in this regard, and was adopting an approach which was reasonable but firm.

Mr Magugumela said that the vacancy rate was currently at around 15 to 17 %. He acknowledged that this was a high number, and was unacceptable. The NNR had addressed many of its structural problems, and was hoping that this would reflect in next year’s report. He admitted that 11 employees had left, while only 10 had come into the organization. He highlighted the seriousness of the problem and noted that it was not a problem unique to the NNR. Science and related subjects were rare skills in this country at the moment. However, the NNR had adjusted to cope with the problem, and had increased its salaries in order to be more competitive. Employee retention was the most critical aspect of the problem to deal with, as when an employee left it was almost impossible to recruit someone of a similar calibre.

In terms of under achievement with internal business processes, the NNR accepted the criticism. He continued that the crux of the issue had already been dealt with, so declined to elaborate any further. The NNR was hoping to be successful in turning around the situation.

Security was a major concern of the NNR, but the organization was generally happy with security arrangements at nuclear facilities. The security procedures were viable, and security experts had been consulted. In terms of the recent Nuclear Energy Corporation of South Africa (NECSA) incident at Pelindaba, the NNR had sanctioned the organization to make sure that such an incident did not happen again. The NNR had made it clear that security would be considered when the NNR reviews licences. Nuclear safety needed multiple levels of protection, and the NNR needed to make sure that the integrity of the various layers of protection was maintained. In the recent incident, the perpetrator came through the fence. The fence was electrified and alarmed, but it was still penetrated. This was very worrying for the NNR, and NECSA had been mandated to review their entire safety arrangement. As soon as fence was tampered with, the alarm or camera should have picked up the interference. However, no nuclear facilities were threatened or compromised. NECSA was currently conducting an investigation, and the NNR would also look into the matter. He assured the Committee that any negligence would be dealt with appropriately.

The Chair commended the NNR on the detail of its Annual Report and noted that all the issues had been answered by Mr Magugumela in an honest fashion. The Chair urged the NNR to actively address all the issues that had been discussed.

The meeting was adjourned.