ATC120425: Report Budget Vote 30: Environmental Affairs, dated 25 April 2012
Water and Sanitation
REPORT OF THE PORTFOLIO COMMITTEE ON WATER AND ENVIRONMENTAL AFFAIRS ON BUDGET VOTE 30: ENVIRONMENTAL AFFAIRS, DATED 25 APRIL 2012
1. Background
The Portfolio Committee on Water and Environmental Affairs (the Portfolio Committee) having considered the directive of the National Assembly (NA) to consider and report on the 2012/13 Budget of the Department of Environmental Affairs (the Department), tabled by the Minister of Water and Environmental Affairs, in terms of the Public Financial Management Act, 32 of 2003, reports as follows:
2. Introduction
The Portfolio Committee held briefings on 5, 6 and 12 March 2012 with the Department of Environmental Affairs to consider their Strategic Plan and Budget Vote. The briefings reviewed the following:
· The Strategic Plan (Annual Performance Plan) of the Department for the 2012/13 to 2016/17 financial years;
· The appropriations to the Department Budget Vote 30 for the 2012 financial years;
· The transfers of monies to entities falling within the mandate of the Department;
· An overview of programmes of, and allocations, to the Department;
· An overview of key performance areas (priority areas) of the Department;
· Synergies with government priorities and international obligations;
· Challenges faced by the Department; and
· Recommendations.
3. Overview of the Strategic Priorities
The Department of Environmental Affairs key strategic priorities include:
· Protecting, conserving and enhancing environmental assets, and natural and heritage resources;
· Ensuring a sustainable and healthy environment;
· Contributing to sustainable economic growth, livelihoods and social cohesion;
· Providing leadership on climate change action;
· Promoting skills development and employment creation by facilitating green and inclusive economic growth; and
· Creating a better South Africa and a better world by advancing national environmental interests through a global sustainable development agenda.
The Department aims to ensure that the potential for economic growth in the sector is maximised, the interface between the environment and development effectively managed and, wherever possible, that it stimulates economic growth that supports transformation. The top strategic priority areas for the Department over the medium-term include: providing support to local government in the areas of air quality management, waste management, biodiversity management, coastal planning and open space planning; strengthening compliance and enforcement activities; drawing linkages between climate change, the green economy and sustainable development; aligning governance systems with the new outcomes approach, paying particular attention to ensuring that environmental assets and natural resources are valued, protected and continually enhanced (Priority Outcome 10); and focusing on key national and international engagements.
In responding to climate change, the Department published the National Climate Change Response Policy White Paper in 2011. The White Paper sets out South Africa’s vision for an effective climate change response and a transition to a climate resilient and low-carbon economy and society. The Department’s work focuses on realising the policy recommendations contained in the White Paper.
The Department also played a critical role in the hosting of the 17th session of the Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Durban, from 28 November to 11 December 2011. The Department hosted an exhibition on South Africa’s climate change response as a side-event during the COP17 Conference. This provided a unique opportunity for green economy players to profile their work and products and for Government to signal its commitment to encouraging a green economy growth path. This conference also provided a rare opportunity for South Africa to broaden the nation’s climate change awareness, and for communicating the country’s national policy response to the phenomenon.
The Department continued to maintain South Africa’s position as the third most biologically diverse country in the world by strengthening the regulatory framework for biodiversity and ecosystem services through targeted amendments that promote the objectives of conservation, the sustainable use and equitable sharing of benefits arising from the use of biological resources and the associated traditional knowledge. On developing infrastructure in the transfrontier conservation areas, the Department has identified 51 potential investment opportunities, with seven of those investment opportunities having yielded investments totalling US$14 million to date. It is important to note that these investment opportunities form part of the Department’s contribution to the regional integration strategy.
Furthermore, employment generation is a key priority in the Department’s Medium Term Strategic Framework, and it has been intensifying its involvement in the Expanded Public Works Programme (EPWP) in relation to generating green jobs. The transfer from the Department of Water Affairs of the Natural Resources Management Programmes, comprising the Working for Water and Working on Fire, has significantly increased the Department’s capacity and responsibility to create employment. Both job generation and critical environmental outcomes such as the management of invasive alien plants, wild fires, wetlands, land and forest degradation, river health; the potential creation of value added industries; and the conversion of invasive alien plant biomass, bush-encroachment biomass and waste materials to energy continue to be realised through these programmes. The Department also fostered the development of the green economy by establishing the Green Fund, whose objectives are to promote environmental protection through a programme consisting of technical assistance, grant assistance, loan assistance and/or own funding for projects that have a substantial public interest. The fund aims to stimulate market development and foster projects that have a high positive environmental impact, strengthen institutional capacity to integrate environmental issues into the economy and society, contribute to the associated knowledge management and attract resources to develop South Africa’s green economy.
3.1 Policy priorities for 2012/13
The key strategic priorities, in line with the vision and mission of the Department, over the medium term, comprise the following:
· Protecting and enhancing environmental assets, natural and heritage resources;
· Ensuring a sustainable and healthy environment;
· Contributing to sustainable economic growth, livelihoods and social cohesion;
· Providing leadership on climate change action;
· Promoting skills development and employment creation through the facilitation of green and inclusive economic growth; and
· Creating a better Africa and a better world by advancing national environmental interests through a global sustainable development agenda.
4. Overview of Budget Vote 30
There was a name change in one of the Department’s programmes from “Sector Services, Coordination and Information Management and International Relations Programme” to the “Environmental Sector Programmes and Projects” due to the transfer of Working for Water and Working on Fire programmes from the Department of Water Affairs to the Department of Environmental Affairs in the 2011/12 financial year. Notwithstanding this, the focus on spending over the medium term will be on improving service delivery and job creation in the environmental sector, with the bulk of the budget to be spent on job creation projects within the EPWP housed within the Environmental Sector Programmes. This sector targets job creation, while undertaking environmentally friendly projects. The focus of this programme is on the number of full-time equivalent jobs created per financial year. In fact, the Department increased the number of full time equivalent jobs created through EPWP projects from 16 318 in the 2008/09 financial year to 26 881 in 2011/12 and expects to increase this number considerably in the current financial year, aiming to reach about 36 500 in 2014/15. This is expected to increase the number of filled posts in the Department beyond the current 1 246 positions in order to ensure adequate capacity in the management of the Department as well as adequate management and oversight for the implementation of EPWP projects.
The Department’s emphasis on job creation links well to Government priorities, long-term infrastructural and other capital plans that initially surfaced in the 2011 State of the Nation Address, but became more pronounced in the most recent 2012 State of the Nation Address by President Jacob Zuma. The focus on job creation is amply captured in the New Growth Path (NGP) released in November 2010 and sets the country’s sights firmly on the creation of five million new jobs by 2020. The NGP is South Africa’s latest in a long line of documents defining economic policy and seeks to address the high levels of unemployment in South Africa as well as foster sustainable economic growth.
Table 1 below provides a nominal and real per cent increase or decrease in programme allocations for the previous (2011/12) and current (2012/13) financial years:
|
Programme |
Budget |
Nominal Increase/ Decrease in 2012/13 |
Real Increase/ Decrease in 2012/13 |
Nominal Per cent change in 2012/13 |
Real Per cent change in 2012/13 |
|
|
R million |
2011/12 |
2012/13 |
||||
|
|
|
|
|
|
|
|
|
Administration |
387.5 |
775.5 |
388.0 |
344.8 |
100.13 per cent |
88.98 per cent |
|
Environmental Quality and Protection |
336.7 |
323.3 |
-13.4 |
-31.4 |
-3.98 per cent |
-9.33 per cent |
|
Oceans and Coasts |
848.6 |
221.8 |
-626.8 |
-639.2 |
-73.86 per cent |
-75.32 per cent |
|
Climate Change |
129.2 |
31.2 |
-98.0 |
-99.7 |
-75.85 per cent |
-77.20 per cent |
|
Biodiversity and Conservation |
472.4 |
486.4 |
14.0 |
-13.1 |
2.96 per cent |
-2.77 per cent |
|
Environmental Sector Programmes and Projects |
2 027.2 |
2 674.0 |
646.8 |
497.8 |
31.91 per cent |
24.56 per cent |
Source: National Treasury 2012
The Department of Environmental Affairs has six programmes, which comprise:
· Administration, which provides strategic leadership, centralised administration and executive support and corporate services;
· Environmental Quality and Protection protects and improves the quality and safety of the environment to give effect to the right of all South Africans to an environment that is not harmful to health and well-being;
· Oceans and Coasts ensures that Government, industry and the public are informed, supported and regulated to act responsibly to conserve the ocean and coastal environment;
· Climate Change promotes, coordinates and manages an effective national mitigation and adaptation response to climate change;
· Biodiversity and Conservation promotes the conservation and sustainable use of natural resources to contribute to economic growth and poverty alleviation; and
· Environmental Sector Programmes and Projects that is responsible for implementing environmental sector projects and assist in job creation.
4.1 Programme 1: Administration
The Administration Programme was allocated R775.5 million in the 2012/13 financial year, which is just over 17 per cent of the entire departmental budget. This reflects a nominal rand increase of R388 million over the 2011/12 financial year, indicating a nominal change of just over 100 per cent. In real terms, that is, taking inflation into account, the budget allocation for the Administration Programme increased by R344.8 million or increased by 89 per cent between 2011/12 and 2012/13. The main reason for this increase is the provision of the unitary payment for the new head office building, which the Department expects to take occupation of by 2014/15. The Management sub-programme received a moderate increase and to a lesser extent, the Corporate Affairs sub-programme.
4.2 Programme 2: Environmental Quality and Protection
The Environmental Quality and Protection Programme received just over seven per cent of the entire budget allocation to the Department. The allocation to this programme decreased from R336.7 million from the previous year to R323.3 million in the current financial year, indicating a nominal decrease of R13.4 million and a real decrease of R31.4 million. This translates to about four per cent nominal decrease and nine per cent real decrease, respectively. This decrease affects all programmes, but is further accentuated by the winding up of the operations of the Buyisa-e-Bag sub-programme whose functions and personnel had been absorbed into the Department. Accordingly, there was no allocation to this sub-programme over the medium-term expenditure framework. The largest proportion of the Environmental Quality and Protection Programme budget allocations over the years has been going to the South African Weather Service sub-programme. In fact, the Minister of Finance stated in his Budget Speech in Parliament that an additional allocation had been made to the National Meteorology Institute for equipment.
4.3 Programme 3: Oceans and Coasts
The Oceans and Coasts Programme received five per cent of the overall departmental budget allocation in the current financial year. The programme experienced a massive reduction in the budget from R848.6 million in the 2011/12 financial year to R221.8 million in the current financial year. This reflects a nominal decrease of R626.8 million and a real decrease of R639.2 million (factoring in inflation), translating to about 74 per cent nominal and 75 per cent real reductions in the budget allocated to the Oceans and Coasts Programme in the 2012/13 financial year. This is attributed to the massive reduction in the budget allocation to the Oceans Conservation sub-programme, which transferred a payment of the final instalment of R626.8 million in the past financial year (2011/12) on the new polar research vessel, which replaced the aged SA Agulhas. However, the maintenance and operation of the vessel is expected to increase the budget of the Oceans and Coasts Programme in the following years. Other sub-programmes such as Oceans and Coasts Management, Integrated Coastal Management and Oceans and Coastal allocations also show real decreases in budget allocations in the current financial year.
4.4 Programme 4: Climate Change
The purpose of the Climate Change Programme is to facilitate an effective national climate change mitigation and adaptation response to counteract the negative consequences of climate change. The Climate Change Programmereceived less than one per cent of the budget allocation to the Department of Environmental Affairs in the current financial year, reflecting a R98-million nominal decrease in the budget from R129.2 million in the 2011/12 financial year to R31.2 million in the 2012/13 financial year. This shows a 76 per cent nominal decrease, whereas in real terms the budget dropped by R99.7 million, which shows a 77-per cent real reduction in the budget allocation for the climate change function despite the critical role of the Climate Change Programme. The most affected sub-programme in this instance is the Climate Change Management, which provides for the management and administration of the overall programme activities. The huge reduction in the budget reflects the once off allocation and payment for COP17-related activities during the 2011/12 financial year. Similarly, the other sub-programmes, such as Climate Change Mitigation and Climate Change Adaptation experienced budget cuts in real terms, in part, due to ongoing global financial challenges.
4.5 Programme 5: Biodiversity and Conservation
The Biodiversity and Conservation Programme was allocated R486.4 million in the current financial year, which is 11 per cent of the overall departmental allocation. This shows a nominal increase of R14 million, indicating approximately three per cent nominal increase in the programme’s budget allocation. However, in real terms, the programme budget allocation dropped by R13.1 million or registered a decrease of approximately three per cent compared to the 2011/12 financial year. Although all the sub-programmes of the Biodiversity and Conservation Programme were affected, the South African National Biodiversity Institute (SANBI) was mainly affected. This is in part, due to an expectation that departmental entities such as SANBI, iSimangaliso Wetland Park Authority and the South African National Parks (SANParks) would generate increased commercial revenue to fund their operations. Of concern however, is the fact that budget restrictions or cuts, as witnessed in the Biodiversity and Conservation Programme could escalate the poaching of rhinoceros by limiting the ability of law enforcement agents (e.g. the Green Scorpions) to ensure relevant conservation laws are effectively implemented and enforced.
4.6 Programme 6: Environmental Sector Programmes and Projects
The purpose of this programme is to promote the empowerment of designated communities by creating 201 964-work opportunities and 100 290 full time equivalents over the medium term by:
· Implementing projects under the EPWP;
· Contributing to sustainable development and green and inclusive economic growth over the medium term by facilitating skills development, employment creation and the restoration of natural capital by providing more than 130 000 work opportunities; and
· Contributing to a greener economy by providing bridging finance to encourage the development of green economy enterprises and projects.
The Environmental Sector Programmes and Projects is actually the largest programme in the Department and as a result, it received almost 60 per cent of the budget allocation to the Department in the 2012/13 financial year. The favourable allocation to the programme should be examined in the context of the Government’s drive for job creation and the potential for the different facets of the Environmental Sector Programmes and Projects to contribute in this regard.
Environmental degradation, poverty eradication and rising unemployment are longstanding and pressing issues that this programme is envisaged to tackle. Thus, the concerns for the environment and the emerging debates over the green economy make it extremely relevant to look into the issue of employment and this programme has proven its worth in this context.
The R2.7 billion that was allocated to this programme in the current financial year shows a nominal increase of R646.8 million or a 32 per cent nominal increase over the 2011/12 financial year. However, taking the prevailing inflation rate into account, this translates into R497.8 million or 25 per cent change in real terms, which is still a substantial allocation. The appropriated budget for the programme was spread between Social Responsibility, Policy and Projects; Natural Resource Management; Infrastructure Investment; and Green Fund sub-programmes, with the Infrastructure Investment sub-programme receiving the least allocation in the current financial year. It suffices to state that the Green Fund sub-programme is a new initiative introduced only in the current financial year to manage the Green Fund on behalf of the Government and also to finance technical and investment projects in support of sustainable development. It is expected that the sub-programme shall harness funding from a wide array of sources to enhance the allocation.
5. Progress on the attainment of Millennium Development Goals (MDGs)
In relation to the Millennium Development Goals, the Department responds to Goal 7, which is Environmental Sustainability. The following indicators linked to Goal 7 are reflected in the departmental Strategic Plan:
· Carbon emissions total per capita and per $1 Gross Domestic Product;
· Consumption of ozone depleting substances;
· Proportion of terrestrial and marine areas protected;
· Number of species (vegetation) threatened with extinction;
· Number of legally designated landfill sites; and
· Proportion of fish stocks within safe biological limits
The Department responded through legislative instruments to respond to the above. These include the following:
· Reduction of Carbon Emissions – The Department continuously monitored the levels of carbon dioxide emissions, which currently was sitting at 4.3. Giga tons. Although the South Africa’s carbon emissions shows growth, the Department introduced various programmes to reduce emissions, in order to reach the government’s target of 34 % emission reduction of “Business as Usual” by 2020 and 42 % reduction by 2025. Furthermore, the Greenhouse Gas Inventory was updated and the White Paper Climate Change Policy was adopted and must now be implemented;
· Consumption of Ozone depleting substances – The Department, in conjunction with the Department of Trade and Industry, planned to phase out the use of Hydrochlorofluorocarbons substances (HCFC) by 2013. The Integrated Permitting Systems was developed, in order to allow for the International Trade Administration Commission (ITAC) to become the point of contact for all importers and exporters; and relevant departments to be consulted as required in the process;
· Proportion of Terrestrial and Marine Areas Protected – In terms of the Terrestrial protection, the Department did not meet its target of 9% and 11 % of the proportion of Terrestrial and Marine Protected Areas, respectively, in 2011. The Department has identified the priorities actions for conserving biodiversity by developing the National Biodiversity Framework;
· Number of Species (vegetation) threatened with extinction – The National Environmental Management: Biodiversity Act and Protected Species Regulations were already in place to regulate the movement and subsequent activities involving wildlife species nationally; and
· Number of legally designated landfill sites – The Department developed the National Waste Management Strategy. During the 2011/12 financial year, the Department had rolled out training programmes to landfill sites managers. There were approximately 300 unlicensed landfill sites and the Department assisted 117 municipalities to have waste disposal sites licensed, in order to meet the target of 80% landfills licensed. A request for funding amounting to R980 million was requested from the National Treasury was not approved.
The Department further outlined institutional challenges faced during reporting on the MDGs; namely:
· Unavailability of methodology on some indicators;
· Unavailability of data, in relation to data updates; and
· Absence of the permanent reporting structure. However, Statistics South Africa was in the process of establishing a permanent coordinating body.
6. Committee observations and recommendations
Having noted the integrated, holistic nature of the Department’s strategic planning and implementation of its work over the past few years, the Committee commends the systematic, analytical approach to the protection and conservation of our environment within a developmental agenda. However, the Committee through its engagements with the Department raises the following issues for further consideration:
· New departmental structure and whether budgets allocated to new posts
The Department noted that while continuing to perform its functions and mandate, it underwent significant restructuring. In August 2011, the Minister of Water and Environmental Affairs approved the new structure. The implementation thereof is subject to approval by the Department of Public Service and Administration (DPSA). The restructuring led to the establishment of the Environmental Advisory Services Unit, whose mandate is to provide specialised intelligence and scientific information on various national issues, such as Hydraulic Fracturing and Environmental Impact Assessments. Furthermore, the Environmental Quality and Protection Programme was divided into two, namely: Legal, Authorisation Compliance and Chemicals and Waste Inspectorates. To comply with the above structure, 78 posts were created.
· Compilation and completion of the assets register for moveable assets from the Department of Water Affairs
The Working for Water and Working for Fire projects falling under the EPWP were transferred from the Department of Water Affairs to the Department of Environmental Affairs. This resulted in the transfer of an electronic asset register document from one Department to the other. Though the Department of Water Affairs has provided an electronic copy of the Asset Register for movable assets, in relation to the Working for Projects, the Department of Environmental Affairs will still have to verify the information contained therein.
· Clarity on the spend of the R800 million allocated to the Green Fund
The Committee requested clarity on the manner in which the R800 million that was allocated for the Green Fund would be used. The Department stated that this allocation would be released to the Department over a period of two financial years: R300 million in the first year and R500 million in the second year. The Department stated that the purpose of this Fund is to promote environmental protection through a programme comprising technical assistance, grant assistance, loan assistance and/or own-funding for projects that have a substantial public interest. This will stimulate market development and foster projects that have a high positive environmental impact, strengthen institutional capacity to integrate environmental issues into the economy and society, contribute to the associated knowledge management and attract resources to develop South Africa’s green economy. The Committee commends the establishment of this Green Fund, considering the slow pace of the capitalisation of the Green Climate Fund that was operationalised at the COP17 talks in Durban.
· Waste management at local government level
The Committee needed clarity on the budget allocations specifically made towards waste management, particularly at the local government level.
· Waste sites
The Department should conclude the status of the 300 unlicensed waste sites.
· National database for contaminated land and categories of those contaminations
The Department should explain whether there is a national database for contaminated land and categories of those contaminations.
· Roles and relationships of Departments in relation to mining activities
The defining of the roles and relationship between the Department of Environmental Affairs and the Department of Mineral Resources with regard to the planning and authorisation of mines.
· High levels of rhino poaching
The high level of rhino poaching - 448 rhinos were killed by poachers in 2011 and the rate of poaching has increased in 2012.
Having deliberated on the 2012/13 Budget Vote, the Portfolio Committee on Water and Environmental Affairs recommends the following;
· The Portfolio Committee noted that the Department did not inform the Portfolio Committee about the proposed changes to the structure of the Department before they were enacted. In future the Portfolio Committee should be briefed on such a matter;
· The Department needs to continue engaging with National Treasury about increased budgetary allocations for waste management, particularly at a local government level;
· Noting the transversal nature of the implementation of the Climate Change response strategy, the Department needs to ensure that the relevant government departments and all spheres of government actively engage with the contents of the White Paper on Climate Change, and begin taking action within their respective spheres. In this regard the Portfolio Committee will hold public hearings on the implementation of the of the White Paper on Climate Change in June 2012 to assess the state of response thus far; and
· The Portfolio Committee will in due course be calling before it the Department, and any other entities it deems appropriate, to provide input to the Committee and receive oversight from the Committee, on the following matters, including, but not limited to:
o Rhino poaching and the effectiveness of the current response measures;
o The Environmental Impact Assessment process and regulations;
o The relationship between mining and environmental governance, and the effectiveness of the existing statutory framework; the context and implementation of the Sustainable Development Strategy, adopted by Cabinet in November 2011; and
o The implementation of the National Waste Management Strategy.
9. Conclusion
Having considered the Budget Vote and Strategic Plan for 2012-2016 of the Department of Environmental Affairs, the Portfolio Committee recommends that the House, endorse Budget Vote 30: Department of Environmental Affairs.
Report to be considered.
References
Department of Economic Development (2010). The New Growth Path: The Framework.
Department of Economic Development, Pretoria.
Department of Environmental Affairs (2011). Department of Environmental Affairs Annual
Report 2010/11. Department of Environmental Affairs, Pretoria.
Department of Environmental Affairs (2012). Strategic Plan 1 April 2012 to 31 March
2017. Department of Environmental Affairs, Pretoria.
National Treasury (2012). Estimates of National Expenditure.
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