Water Affairs & Forestry Five-Year & Annual Review on implementation

Meeting report

Department of Water Affairs and Forestry (DWAF): 5-Year Overview: Achievements and Challenges
Ms Pam Yako, Director General, Department of Water Affairs and Forestry, took the Committee through a substantial list of achievements in service delivery from 2004 to date (see attached document for full details). She drew attention to a licence tracking system deployed countrywide, with the added comment that water licensing could be further improved. Support and funding had been rendered in an effort to upgrade local government. A women’s organisation was launched. An award was won for improved systems for monitoring drinking water quality. Successful greening was achieved with the launching of the “million trees” project. Construction projects were completed, and the Berg Water project was commissioned, within a budget of R1.5 billion. In the field of international relations, the Department had been nominated as the bidding country to host the World Water forum in 2012. Since 2004, water had been provided to 5.03 million people, and sanitation to 4.24 million. Bucket eradication had progressed to a total of 228 991 units, and free basic water had been provided to 8.2 million people.

Ms Yako provided a synopsis of DWAF audit outcomes since 2003/2004. Outcomes ranged from an adverse opinion for 2003/2004, to a qualified opinion for 2007/8. The latter outcome was due to the incomplete asset register, the incorrect treatment of the suspense account, and the disclosure of loans and receivables.

Ms Yako summarised challenges facing the Department as related to the rehabilitation of ageing national infrastructure; negotiation with the Development Bank of South Africa, and upgrading the capacity of local government. The latter challenge related to the development of skills and provision of finance. More specific challenges included water quality issues; water losses in the municipalities, and the impact of land reform on commercial forestry. Oversight functions of the Department also commanded attention.

DWAF: Annual Review Report : Administration
Mr Onesmus Ayaya, CFO, DWAF, commenced with a review of achievements in the field of Corporate Services. He highlighted the intake of 145 graduate trainees and 215 bursaries allocated to engineering, technical and scientific fields. 17 Learner Interns were enrolled and completed an experiential learning programme. A strategic framework on women’s empowerment and gender equality was developed.  Achievements in the field of finance included the approval of a finance structure indicating the segregation between the Main account and the Water Trading Entity. In addition, there was the placement of key Senior Management Service (SMS) members in Finance, being the Chief Financial Officer, three Chief Directors and seven Directors.

Mr Ayaya provided overviews of annual expenditure, the expenditure per programme for 2007/08; and an overview of annual financial statements, the Multilateral Environmental Agreements and an overview of the Waste to Energy (WTE). He supplied reasons for underspending. He noted that with regard to the administration, this was due to the transfer of staff to municipalities, which could not be completed due to protracted negotiations with receiving municipalities. Water resources underspending was due to the De Hoop Dam Project that could not commence as planned. Under expenditure for other programmes was deemed insignificant.

Mr Ayaya reviewed the Auditor-General (AG) reports for 2006/07 and 2007/08. He provided key highlights from the 2007/08 report, which included unverified biological assets and lack of staff skills and capacity. The main challenge faced was the procurement of a clean audit in March 2009. 

Discussion
Mr J Arendse (ANC) said that this Department had a struggle with qualified audits that continued year after year. He was disappointed to see that this had happened again. The main account received a qualification. It had also been a major issue the year before. The Auditor-General’s report mentioned non-compliance previously. He pointed out that there were specific National Treasury (NT) regulations in place. It was not proper for the trading entity to have an overdraft. That overdraft had escalated to R99 million.

Ms Yako replied that financial management was taken seriously, and the DWAF strove to operate to the best of their ability and in compliance with Treasury Regulations.

Mr Ayaya added that matters like transfers to municipalities could not be delayed. Non-compliance was indeed viewed in a serious light. The DWAF had an operating deficit. Donor money appeared in audits because there had been delays in the signing of a contract with the European Union (EU). The auditors had stated that the Department could not spend money that it did not have.

Mr M Sibuyana (IFP) said that the Committee had been informed about achievements on the part of the DWAF. However, the matter of unoccupied vacancies caused grave concern. He questioned how this Department could be expected to show real achievement if there was a serious shortage of skills. He further asked how services could be delegated, given unskilled municipalities. The lack of skills would inevitably impact on administrative capability. Monies would be spent in inappropriate places. He asked how the budget was compiled, and whether this was done in response to actual requirements, or on the basis of estimates compiled in offices. If the latter, money could flow to situations where it was not sorely needed.

Ms Yako responded that the filling of vacancies was problematic. There was a struggle to find the right people for technical posts. The issue of proper salaries for engineers and technicians, was salient in government organizations  across the board. She admitted that there had been some lack of efforts in the recruiting of skilled personnel, and conceded that a recruitment drive was needed, with more energetic advertising.

Ms Yako then said, with regard to the budget, that a conventional budget process was followed. The Department would try to determine development directions, and ask how it could organise funding. For instance, it had to consider where cash would emanate for the forestry enterprise programme.  Historically there had been funding through donor money. Money could also be generated by diverting funds from programmes where there was under-spending. Equity of funding was crucial. She noted that support functions also had to be budgeted for. The DWAF needed people with knowledge of how various allocations worked, both at the head office and in the regions. A lack of such expertise resulted in misallocation, and in the spending of money that could not be properly accounted for.

Ms M Ngwenya (ANC) enquired about progress made with women’s organisations. She asked if the trees planted by the DWAF were actually growing, and requested a breakdown of the planting per province.

Ms Yako referred to a recent successful launch of women’s programmes, attended by representatives from nine provinces, both young and old. She added that such programmes were showing benefits to women.

Mr M Swathe (DA) remarked that the improvement and sustained development expected of the Department did not seem to be forthcoming. He enquired about the quality of infrastructure developed. He asked for information about convictions for theft by staff in the Department.

Mr Ayaya replied that the DWAF was “remorseless” in its treatment of theft. An investigation of a burglary was under way. He would be able to furnish detail about this in due course.

Ms D Van der Walt (DA) deplored a lack of real seriousness on the part of the DWAF. She referred to the R281 million owed to the European Union, lack of progress with the water sanitation project, and the R44 million for purchase of machinery not reflected in the asset register.

The Chairperson then proceeded to interrogate the DWAF report. She said that there was a mismatch between stated objectives and the report presented. She perceived the actual reporting on entities to be a “cut and paste” copy of the previous year. There was a lack of focus on oversight responsibilities with regard to entities, which had been going on for five years. The report made no mention of accountability to Parliament. There was a discrepancy between what had been reported to the Committee on an ongoing basis, and what emerged from the Report on this occasion. The Committee had received very little insight into the workings of forestry.

The Chairperson queried the process by which the Department arrived at decisions. She advocated a review of the implementation of Acts that governed the DWAF. There had to be a stricter adherence to policy, as set out in certain Division of Revenue Acts. There must also be a more serious consideration of what Parliament expected, and what the National Treasury was trying to say to the Department.

Ms Yako responded that the Annual Report was based on the planning process. There was an annual review of a Strategic Plan. The Auditor General operated on the basis of performance information, where targets were matched to outputs. She conceded that there were targets missed, but argued that the targets had at least become clearer, and for that very reason failure had become more visible.

Ms Yako admitted that the DWAF had not sufficiently adhered to Parliamentary requests to report to it consistently, and pledged future improvement in that regard. She noted, however, that the expectations on the part of Parliament could be complicated. The Department of Public Service and Administration (DPSA) prescribed a format on which the auditing of the Department was based , but Parliament expected things over and above that. In terms of technical reporting, the Department would want to be clearer. There was an acknowledged inability on the part of the DWAF to oversee entities. The intention was to set up more effective ways in which to monitor oversight. The Department often failed to come back to the Committee because certain objectives had not yet been reached.

The Chairperson disputed that the Committee was expecting anything new. All that it asked was that the DWAF speak fully to its own objectives and targets.

Mr M Sibuyana (IFP) assured the Department that their sincerity was not being placed in doubt. However, it was beyond dispute that that the Department could not do without capable officials in key positions. People of quality were needed for supervision and service delivery. Under-servicing to those constituencies that were being represented in Parliament could not be condoned. In view of the need for services, posts had to be properly filled.

Mr Arendse commented on the fact that the percentage of funds voted to the Department, which ended up being spent, seemed to be on the decline. Monies were moved from one programme to another. He enquired about unverified biological assets.

The Chairperson also asked that Mr Ayaya provide clarity about monies written off.

Mr Ayaya replied that the Department was often dealing with earmarked funds that could not be used elsewhere. In regard to write-offs, he said that the law of prescription did not allow the Department to recover certain funds that had been outstanding for more than a certain period.  Unverified biological assets were related to the Departmental tradition of resorting to a cash mode. The DWAF was currently preparing half-yearly financial statements for the first time.

Annual Review: Forestry
Dr Moshibudi Rampedi, Deputy Director General: Forestry, DWAF,  reported on community development; transfers and land management; fire governance and regulation, and management of state plantations. She stated that Forestry had managed to maintain a strong commitment to transformation, and that much had been achieved in the way of greening and community development. Regarding the project to plant a million trees, she alluded to questions and statements emerging during the discussion up to that point. She said that the trees were indeed alive and well, and growing. It would have been impossible for the DWAF to plant every single one of a million trees, so there had been outsourcing. One hundred thousand trees had been allocated to every province for planting. Success, in areas like Gauteng, with such projects had been noteworthy, because of commitments from local government. Achievements around greening and community development were also enhanced by support from the private sector.

Annual Review: Water Resource Management
Mr Silas Mkhize, Deputy Director General: Policy and Research, DWAF, reported on water allocation reform. Verification and validation exercises were being carried out, to determine who users were, and how much they were using. Anything not utilised was transferred to others, especially the historically disadvantaged. Feasibility studies were undertaken, and co-operation with neighbouring countries had been instituted. Water resources were being classified, especially with regard to information about reserves.

Infrastructure report
Dr Cornelius Ruiters, Deputy Director General: Water Resource Infrastructure, DWAF, said that infrastructure creation was viewed as a long-term process. Dams like the De Hoop dam were built, and the Berg Water Project supplement scheme was completed. The Hluhluwe Regional Water Scheme Treatment plant was 88% completed. The Vhembe district water treatment plant was 93% completed. Four dams were rehabilitated. Agreements had been reached with platinum mines regarding access to water, and there was reconstruction of access roads to dams.

Annual Review: Water Services
Ms Thandeka Mbassa, Deputy Director General: Regions, DWAF, pointed out achievements regarding water supply and sanitation to clinics and households, and water services to schools. The objective set for total eradication of the bucket system in formal settlements had not yet been reached. There were still 11 000 buckets outstanding. Strides had been made with the development of local government support, with eight technical experts deployed to relevant municipalities. A Water Services Authority legislative handbook was published, as a tool that would enable regulatory support. A water sector business plan and implementation strategy for the 2010 FIFA World Cup had also been developed. 84% of the South African population currently had access to Free Basic Water, and 97.6% of Water Service Authorities were implementing Free Basic Water programmes. In respect of Free Basic Water, she stated that quality remained the challenge.

Discussion
Mr Arendse remarked that forestry and management of forestry were concurrent functions. He enquired about the readiness of other structures to help deal with these functions. He wondered, if and when functions were handed over to other structures, whether the funds would follow. He asked if it could be said that forestry money was efficiently used, and also whether it was sufficient.

Ms Ngwenya asked about the role of the international community in forestry development.

Dr Rampedi answered that the initial structure of the budget for forestry had not been in line with objectives. The sub-programme had had to be re-organised. A forestation was an ambitious project. It was not within the power of the Department to plant trees itself, for instance. What it did do was to grant licences to small growers. The Department could finance, provide access to land, and offer technical support. 64% of forestry land was currently in communal hands. She said that the Department was more or less successful in adhering to the Act that directed its activities. Principles of sustainable forest management were adhered to. There was co-operation with neighbouring countries, and the Department had been able to meet its obligations towards them. Resources were transferred to National Parks, where necessary. The Department had hosted an international conference devoted to governance.

Mr Sibuyana pointed out that there was a lack of involvement with traditional leadership offices. Regarding the transfer of Injaka plantation, of Manzengwenya and Mbazwana, he warned that this could polarise people. In Mpumalanga, people depended on the Klaserie dam for running water, but the Department did not want to provide water for development. Water had been transferred from the Blyde river to the Olifants river, consequently Acornhoek residents could not obtain water from the Blyde river.

The Chairperson stated that in respect of water services, there were transfers and transfers. She asked if this had compromised service production. She then enquired about the responsibilities of municipalities in terms of the Division of Revenue Act, and what was expected of the Department in this regard. She said that water licensing did not seem to be moving anywhere. There were legal challenges against the Department. It was unacceptable that mining concerns were using water without licences. Water boards were speaking about ageing infrastructure entities, and she asked what the long term view of the DWAF was in that regard.

The Chairperson then said that she wanted to address with some urgency the situation that the Committee had experienced at Bushbuckridge. Effectively the Department and a municipality were at war with each other. The people had no water, and the Committee was outraged to see that people were queuing for water at empty pits. There had been a fatal incident as a direct result. The DWAF assured the Committee that things would be fine, that the incident would be reported, and that action would be taken. She implored the Department to look back over the preceding five years. Objectives had been formulated with regards to equity. The Department had committed itself to play a part in overcoming skewed distribution in South Africa. In 2004, there had been hopes of building a better South Africa, creating jobs, and fighting crime. Looking to the present, 20 people in the Chairperson’s constituency alone had had their water cut, without justification, and she feared that the real figure could be much higher.

Mr Sibuyana stressed the paramount importance of water supply. There were dams like the De Hoop dam that were there for the benefit of the mines, and were not at the disposal of the people. He referred to the plight of Bushbuckridge. There were promises of boreholes to be dug, but people were still scooping from wells. Promises of service delivery were not materialising.

Mr Arendse drew attention to the DWAF regulatory unit for water services. The question, as he saw it, was how the DWAF would monitor socio-economic rights, municipalities, water services and sanitation. Municipalities were not going far enough with the raising of the Citizen’s Voice programme. He ventured that the DWAF had to run that programme, not the municipalities. Nonetheless the municipalities had to be resourced much better.

Ms Mbassa initiated DWAF’s responses to the various concerns. She stressed that municipalities were supposed to deliver on their mandate, especially with regard to water and sanitation. The Department was debating this internally. The Department was committed to supplying local government. However, it could not be assumed that all municipalities were capable, as some were certainly not. Water boards could be called upon to help them. The Department was identifying municipalities that could perform. In order for certain departments to be held to an oversight role it might be that the Constitution would need to be altered.

She noted that she had received an SMS that 10 boreholes had been drilled in Mpumalanga.

The Chairperson expressed some irritation at the response. She reiterated that promises had been made, for the short, for the medium, and for the long term. However, nothing had come of this. An SMS was not enough to conciliate Parliament. She wanted to see positive results.

Ms Mbassa continued her response with a reference to funding transferred to municipalities. The Department had to appoint consultants to help the municipalities manage. Due to a weakness in the DWAF oversight function, some municipalities offended against a basic right to water with water cuts. This matter was being looked into. Infrastructures had been transferred to certain municipalities, but had been inoperative within a year. The Department was looking at asset management across the country. Capacity limitations frustrated the reaching of targets. There had to be alignment between housing, electricity, water and sanitation targets. The state of infrastructure was seen as a challenge.

Mr Mkhize then responded on the questions around water licensing. There were application procedures for water licences in place, but this took on average ninety days. Often the information received from the applicant was not adequate. Possible Black Economic Empowerment objectives had to be stated in an application, and the Department often had to revert to the applicant about these requirements, which was time-consuming. He went on to state that unlawful use of water by the mines had occurred, but the Department had developed procedures to screen them. He noted that representatives had been sent out to enquire into the crisis at Bushbuckridge, as also into the water cuts. There had to be agreement between the municipalities and the people.

Dr Ruiters reviewed the status of existing dams. He said that the Klaserie dam had been built for agriculture. The De Hoop dam was not only intended for mining, but also for domestic use. The Inyaka dam was intended for domestic use. Dam utilisation was an issue that had to be attended to.

Dr Ruiters replied to an earlier question by Ms Ngwenya by stating that labour-intensive strategies were employed in the building of dams in Limpopo. There had been a rehabilitation of existing infrastructure, which included a commitment to utilise local labour. He referred to budget allocation with the statement that growth nodes had been identified in South Africa, to which concentrated effort would be directed.

The Chairperson expressed regret that there was insufficient time for further interrogation. She referred to the qualified audit that the Department had received, saying that although the Committee recognised the achievements of the DWAF, the qualified audit regrettably cast a shadow on the good work of the Department. She thanked the Department for its work with her over the past five years, and asked also that the Committee’s thanks be extended to the Minister of Water Affairs and Forestry. She urged the Department to commit themselves to a clean audit in the following year..

The meeting was adjourned.