ATC121023: The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs on the Department of Environmental Affairs for the 2011/12 Financial Year, dated 23 October 2012

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The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs on the Department of Environmental Affairs for the 2011/12 Financial Year, dated 23 October 2012

The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs on the Department of Environmental Affairs for the 2011/12 Financial Year, dated 23 October 2012

The Portfolio Committee on Water and Environmental Affairs having assessed the service delivery performance, financial governance and future budgetary allocation of the Department of Environmental Affairs, reports as follows:

1. Introduction

The Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) requires that the National Assembly conduct an annual assessment of the performance of each national department with regards to the medium-term estimates of expenditure, strategic priorities and measurable objectives as tabled in the National Assembly. In line with the Money Bills Act 9 of 2009 and the constitutional obligation of Parliament to conduct oversight over the executive, the Portfolio Committee on Water and Environment Affairs (the Committee) considered the Annual Report of the Department of Environmental Affairs for the 2011/12 financial year.

This report, therefore, provides the committee’s assessment of the service delivery performance of the Department and its oversight over its entities for the 2011/12 financial year. An assessment of the performance of the Department and related public entities was based on of the following:

Ÿ An overview and analysis of the Department’s strategic priorities, measurable objectives, performance indicators and attainment of targets;

Ÿ Financial and non-financial performance of the department for the year under review;

Ÿ Report of the Auditor-General of South Africa ;

Ÿ Financial governance and future budgetary allocation;

Ÿ Achievements and challenges in the service delivery environment;

Ÿ Committee observations; and

Ÿ Recommendations.

2. Department’s Strategic Priorities and Measurable Objectives

2.1 Strategic priorities of the Department

The key strategic priorities, in line with the vision and mission of the Department, over the medium-term comprise the following:

· Support to local government in areas of air quality, waste management, coastal planning and open-space planning;

· Strengthening compliance and enforcement on, amongst other things, rhino poaching and environmental impact assessments;

· Aligning governance systems with Outcome 10, that is, mining integrated permitting, environmental management framework and land use issues;

· Drawing linkages between climate change, green economy and sustainable development; and

· Focus on key national and international engagements.

2.2 Measurable objectives of the Department

Six programmes determine the work of the Department. Within each of the programmes, the Department identified a number of measurable objectives, which relate specifically to the purpose:

In Programme 1: Administration and Support: The purpose is to provide strategic leadership, administration, executive support and corporate services. Within this programme, and for the 2012/12 financial year, the Department achieved the following:

· The Department set a target of 14% to fill its vacancy rate but achieved 11.5%;

· The target for the turnover rate was set at 14%, but 10.6% was attained;

· A target of 56% on women representivity was set and this was achieved;

· On procurement on BEE enterprises, the target set was 58%, but 65% was achieved;

· On public awareness and participation, the target of 5 events was set, and the actual result was 10;

· The 55% target on share of the media voice was attained; and

· The Department attained an unqualified audit report for the 2011/12 financial year and spent 98% of the expenditure.

The challenges encountered in this programme related to a delay in the initiation of the construction phase for the Department’s building. Key issues that were outstanding have been concluded with the preferred bidder and construction has begun in the first quarter of 2012/13.

The Department was unable to meet its target of employing 2% of people with disabilities due to an insufficient pool of relevant skill available, especially in scarce skills categories. The strategy to address this is expected to be finalised for implementation in 2012/13.

In Programme 2: Environmental Quality and Protection : The purpose is to improve the quality and safety of the environment in order to give effect to the right of all South Africans to an environment that is not harmful to their health and well-being. The achievements for 2011/12 reflect the following:

· Although the target set was to address and process 75% of complaints and incidents related to the programme, it attained 100%. Fifty eight (58) cases were received and processed;

· Two hundred and fifty two (252) environmental management inspectors attended specialised training courses/capacity building interventions;

· A target of 50 was set to train officials in environmental impact management, but training reached 66 officials; and

· A target of 42 ambient air monitoring stations reporting to the South African Air Quality Information System was set, but 60 were achieved.

The key challenges noted in this programme, focused primarily on:

· Although the Department targeted the inspections of 70 facilities for this financial year, only 46 facilities were inspected. This target could not be met due to financial constraints;

· In relation to the integrated waste management plans, the decision by industry to review the plans meant that the targets are still being reviewed and not approved;

· A baseline was established for the recovery of waste streams, but consultants and discussions with industry required more time than anticipated;

In Programme 3: Marine and Coastal Management : The purpose is to promote the conservation and sustainable use of marine and coastal resources to contribute to economic growth and poverty alleviation. This is also aimed at facilitating transformation and job creation within the sector. The Department, in this financial year, achieved the following:

· The adoption by Cabinet of the Draft Green Paper on Oceans Management Policy;

· The approval by Cabinet of the review of the Draft Estuary Management Protocol;

· The three relief voyages undertaken to Marion , Gough and Antarctica as planned;

· The bi-annual State of the Oceans Report was completed; and

· Twenty five (25) peer review publications were completed against a target of twenty three (23).

The key challenges noted in this programme related to:

· Objections were raised during consultations on the Prince Edward marine protected areas declaration. This was in relation to targeted areas for declaration, which led to delays as additional time was required to finalise the project; and

· In respect of the needs analysis and system design for South African ocean and coastal information systems, the systems specification is complete, however the availability of expertise delayed progress in achieving planned annual targets.

In Programme 4: Climate Change : The purpose is to promote, coordinate and manage an effective national mitigation and adaptation response to climate change. The key achievements noted:

· The White Paper on National Climate Change Response was approved by Cabinet and gazetted;

· Nine (9) climate change provincial summits were successfully convened;

· The climate change response expo was successfully hosted alongside the United Nations Framework Convention on Climate Change (UNFCCC) COP 17 conference in Durban between 28 November and 9 December 2011; and

· Four climate change sectors adaptation plans, including biodiversity, water forestry and agriculture, were at an advanced stage of completion at the end of the financial year.

The key challenges in the programme are:

· The initiation of the Long-Term Adaptation Scenarios (LTAs) process was delayed, as the LTAs had to be aligned with national policy and further consultations need to be undertaken;

· The finalisation of the toolkit review for the South African Weather Service (SAWS) forecasting and Phase II of the South African Risk and Vulnerability is still in progress as it required more time to complete than anticipated; and

· The greenhouse gas sector study on transport was delayed due to human resource constraints.

In Programme 5: Biodiversity and Conservation : The purpose is to promote the conservation and sustainable use of natural resources to contribute to economic growth and poverty alleviation. The Department, for the 2011/12 financial year, achieved the following:

· 100% of genetically modified organisms (GMO) applications were assessed for environmental compliance;

· An amount of 7.3% of land surface is under conservation;

· Five management plans finalised as planned; and

· 31 398 hectares of land rehabilitated and conserved.

In Programme 6: Sector Services, Environmental Awareness and International Relations : The purpose is to promote a global sustainable developmental agenda. The Department achieved the following:

· 65 182 employment opportunities were created through its Social Responsibility Policy Programme (SRPP) and National Resources Management (NRM) programme against a total of 48 084;

· 846 small, micro-medium enterprises were used as part of the Department’s commitment to empower emerging businesses against a target of 250;

· 41 476 indigenous trees were planted against a target of 10 000;

· 32 923 households benefited from collection initiatives led by the Department against a target of 30 000;

· The National Strategy on Sustainable Development was finalised and approved by Cabinet;

· 100 environmental education and awareness workshops were facilitated; and

· 49 746 accredited persons days were created against a target of 32 675.

The key challenges reflected in the programme relate to the fact that the National Resource Management Programme was transferred from the Department of Water Affairs in April 2011. This transition contributed to delays in achieving some of the planned annual targets, as there was a need to align the work of the programme to departmental processes as well as deal with human resource capacity issues.

3. Analysis of the Department’s 2011/12 Annual Report and Financial Statements

3.1 Expenditure trends for 2011/12

An overview of the final appropriation in Vote 30 and the expenditure trends for 2011/12 show that the final appropriation to the Department between 2008/09 and 2011/12 increased from R2.4 billion to R4.2 billion, at an average annual rate of 19.9 per cent. This was mainly due to the increased expenditure to replace the polar research vessel in the Oceans and Coasts programme and to implement job creation programmes in the Environment Sector Programmes and Projects programme.





Expenditure as %

Final appropriation



293 995

293 995


Environmental quality and protection

308 614

298 016


10 598

Oceans and coasts

876 337

876 337


Climate change

137 163

137 163


Biodiversity and conservation

456 577

456 577


Sector services, coordination and information management and international relations

2 128 980

2 046 461


82 469


4 201 626

4 108 549


93 067

For the period under review, the Department reflected an under spending in Programme 2: Environmental Quality and Protection. The reasons for under spending of R19 million related to the incorporation of Buyisa-e-Bag into the Department during December 2011 after the approval of the adjusted estimates. The funds were still under Programme 2. National Treasury granted approval to move the funds of Programme 2 and to increase the transfer payments under the Social Responsibility Policy Programme (SRPP) under Programme 6. The funds were, therefore, shifted to fund the waste management projects under the SRPP. An amount of R9.1 million was under spent, as the acquisition process and installation of the air quality monitoring stations were slower than anticipated. Funds will be reprioritised during the 2012/13 financial year.

In relation to virements for the financial year under review, the Department shifted funds from Environmental Quality and Protection to Administration of an amount of R7.166 million due to administrative expenditure with regard to the hosting of COP17. Funds from this programme were also shifted to Climate Change and Sector Services Coordination and Information Management and International Relations. The Department shifted funds from Sector Services Coordination to Oceans and Coasts to fund the cost for the additional voyages to Marion Island , as well as the shortfall because of the exchange rate for the last instalment of the new polar research vessel.

National Treasury granted approval to increase transfer payments for the following, and after the adjusted Estimates of National Expenditure:

· Increase in the transfer payment to South African National Parks (SANParks) with R4.5 million for the acquisition of two new machinery items;

· Increase the transfer payment to Social Responsibility Policy Programme (SRPP) with R19 million to manage the waste projects incorporated into SRPP as a result of the incorporation of Buyisa-e-Bag into the Department; and

· Increase the transfer payment to Working on Water with R56.3 million to clear invasive alien plants in inaccessible areas and clear areas at risk of veld fires.

3.2 Report of the Auditor-General

The report of the Auditor-General showed that the Department received an unqualified audit. The donor-funding audit for 2011/12 is in progress and will be finalised by end of October 2012.

On other aspects, the Auditor-General reported on the following:

· Irregular expenditure was incurred in the current financial year and condoned by National Treasury during the 2012/13 financial year;

· The Department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury; and

· Transfers to agencies and other organisations made are per prior arrangement and Treasury approval, as well as within disclosure requirements.

4. Medium-Term Expenditure Framework for Additional Funding Proposals

The Committee is of the view that the Department of Environmental Affairs is well managed, compliant with relevant Treasury regulations and achieves satisfactory outcomes against the annual business plan. The Department is, however, not realising its full potential, as it is, hampered by inadequate allocations and a lack of skilled human resources in some projects/programmes.

An overview of the baseline allocation over the MTEF was provided to ascertain the extent to which the Department would effectively undertake its work within the current allocations. The baseline allocation for 2011/12 is R5 billion and over the medium term will increase slightly, reaching an amount of R5.3 billion in 2015/16. A further breakdown of the baseline allocation trends over the MTEF period per programme reveals that money has already been allocated for capital assets or for earmarked funds and cannot be shifted.

The Department argues that there is very little growth in funds, while there is growth in expenditure. National Treasury has indicated that all departmental budgets will be reduced by 1% in 2013/14, 2% in 2014/15 and 3% for 2015/16. Treasury also indicated that there may be no additional resource allocation in the first two years of MTEF, as priority will be given to infrastructure development.

The strategy adopted by the Department to National Treasury has been packaged according to the three priority areas adopted by Government – infrastructure investment, science-based priorities and job creation. The table below provides a breakdown of the additional funding requests over the priority areas:

Priority Areas








Infrastructure Investment

303 889

272 582

477 640

To address the identified challenges related to infrastructure build programmes and lengthy authorization processes.

To develop an integrated permitting system to accommodate any current and future permitting/licensing/authorization requirements of the Department and its provincial/local government partners.

Protected area expansion, high performance computer system for meteorological purposes and waste services infrastructure.

Science Based Priorities

284 818

360 200

387 600

Oceans and coasts hazards risk management, effective management and conservation of biodiversity and implementation of National Climate Change Response Strategy.

Job Creation

775 020

1 184 571

1 298 210

Green Fund, Environmental Programmes: Working for Waste, Working for Coasts and People and Parks.


1 363 727

1 817 353

2 163450

5. Oversight by the Department of its Entities

Due to time and other constraints, the Committee could not call each of the entities to the Budgetary Review and Recommendation Review hearings. The Department presented the relevant information to the Committee on the following entities:

· South African National Biodiversity Institute (SANBI)

· iSimangaliso Wetland Park Authority

· South African Weather Service (SAWS)

· South African National Parks (SANParks)

All the entities listed above received unqualified annual audit reports. However, SANBI received an unqualified audit with emphasis of matter on the following:

· Material under spending resulting in a surplus at year end; and

· Financial and performance management.

6. Committee’s Observations

The Committee noted that the Department is performing its functions and duties at a strategic level in a highly professional and acceptable manner, but made the following observations:

Access to national parks and other protected areas by persons from historically disadvantaged communities needs to be significantly increased.

The Department should look at creative ways of ensuring that more visitors from historically disadvantaged communities access national parks and conservation areas in South Africa . High priority should be given to increasing the visits of people to conservation areas from jurisdictions immediately surrounding conservation areas.

Integrated permitting

Fragmentation of the environmental regulation of air, land, mining and water issues at national and local government levels is a very worrying reality. Integrated permitting may have considerable potential for achieving greater regulatory integration and improved environmental outcomes. The Committee requests a full report on progress in this regard in the near future.

Compliance and enforcement on rhino poaching

The Committee notes with concern that there continues to be an increase in rhino poaching incidents. The Committee had a high-level engagement with the Department and other government stakeholders involved in the fight against rhino poaching at the end of the last financial year. The Committee requests a detailed presentation by the Department on outcomes achieved since that meeting. The briefing should include details of coordination efforts between the Department and other government departments and entities.

An update on the Department’s progress in coordinating from a national level the oversight over the granting of hunting permits for rhinos is also required

Green Fund – Working on Waste

There is currently a pilot project under the Green Fund for the Working for Waste programme. The approach does not only look at certain elements of waste but at the entire value chain. The Department does not have adequate capacity to implement the project and therefore the management function is transferred to an implementing agent, which receives a management fee of 12%. The Department should provide more detail to the Committee on the way it will monitor and evaluate the process and outcomes of this project.

Strategy adopted by the Department to motivate for increased allocations in the outer years

The Committee noted that the Department receives an amount of R5.1 billion in 2012/13, whereas the Department has requested additional funding of R13 billion over the medium-term framework. This amounts to a 20% increase of their yearly budget. Therefore, while the presentation to the Committee on this aspect was excellent in terms of its forward thinking and planning, the broad generic scope of the strategy may hinder the Department receiving additional allocations over the MTEF period within its infrastructure development, job creation and science-based activities. The reprioritisation and structured approach to motivating for year-by-year allocations for specific projects and programmes would have been a better and more successful approach. The Committee finds it difficult to request additional allocations from National Treasury for the Department in this financial year as the scope is too broad, and without any detailed presentations, it becomes a complex task. The Department needs to start engagements with the Committee much earlier next year.

7. Conclusion and Recommendations

Whilst the Department is performing administratively in a professional manner, the Committee recommends that:

· The Department oversee the work of SANBI to correct the financial management issues raised by the Office of the Auditor General;

· It was difficult for the Committee to assess the targets, as the Committee was not part of the process in determining these targets. The Department of Environmental Affairs, with the Department of Water Affairs, need to sit down with the Committee and the Office of the Auditor-General to assess if targets were justified. Two days in January 2013 will be set aside to deal with these issues and to discuss how best to work toward the determination of realistic indicators and targets for both Departments;

· The Committee convenes a workshop at the beginning of 2013 with the Department of Water and the Department of Environmental Affairs, along with other relevant stakeholders and government departments, to examine the crosscutting functions that various departments have with regard to water and environmental governance; and

· The Committee understood the concerns raised by the Chief Financial Officer with regard to baseline allocations in the outer years, as well as the National Treasury reducing all departmental budgets by 1%, 2% and 3% over the MTEF. In principle, the Committee supports the initiative undertaken by the Department with regard to drafting a generic framework of motivations for additional allocations from National Treasury within the infrastructure development, job creation and science based priorities. However, the Committee was concerned that the Department did not carefully and strategically limit its prioritization list from year to year. The Committee supports the additional allocations requested by the Department for the outer years for conservation, infrastructure, and the rollout of the integrated permitting system.

Report to be considered.


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