ATC131021: The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs, dated 15 October 2013
The Budgetary Review and Recommendation Report of the Portfolio Committee on Water and Environmental Affairs, dated 15 October 2013
The Portfolio Committee on Water and Environmental Affairs (the Portfolio Committee), having considered the performance and submission to the National Treasury for the medium-term period of the Department of Environmental Affairs (the Department), reports as follows:
1.1. Mandate of Portfolio Committee
To enhance the principles of a developmental state through passing legislation and to facilitate public participation, monitoring and oversight functions over the legislative processes relating to the environment and water; confer with relevant governmental and civil society organs on the impact of environmental and water legislation and related matters, enhance and develop the capacity of committee members in the exercise of effective oversight over the Executive Authority. The mandate of the Portfolio Committee is to:
· Consider legislation referred to it;
· Conduct oversight of any organ of state and constitutional institutions falling within its portfolio;
· Consider international agreements; and
· Consider the budgets, strategic plans, Annual Performance Plans and related performance reports of the departments and entities falling within its portfolio.
1.2. Core functions of the Department and its Entities
The Department is mandated to ensure the protection of the environment and conservation of natural resources, balanced with sustainable and climate variance resilient development and the equitable distribution of the benefits derived from natural resources. In its quest for better use and engagement of the natural environment, the Department is guided by its constitutional mandate, as contained in section 24 of the Constitution of the Republic of South Africa of 1996.
The Department fulfils its mandate through formulating, coordinating and monitoring the implementation of national environmental policies, programmes and legislation with the additional support from entities such as iSimangaliso Wetland Park (iSimangaliso), the South African National Botanical Institute (SANBI), South African National Parks (SANParks), and the South African Weather Services (SAWS). As the national partner in a concurrent function, the Department leads the environmental sector by setting the policy and legislative framework and the norms and standards required for environmentally sustainable development. This role is evident through the large numbers of policy and legislative instruments initiated and processed by the Department.
1.3. Purpose of the Budgetary Review and Recommendation Report
The Money Bills Procedures and Related Matters Amendment Act No 9 of 2009 (the Money Bills Act) sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national Department. In October of each year, portfolio committees must compile the Budgetary Review and Recommendation Reports (BRRR) that assess service delivery performance given available resources; evaluate the effective and efficient use and forward allocation of resources; and may make recommendations on forward use of resources. The BRRR also sources documents for the Standing/Select Committees on Appropriations/Finance when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTPBS). The comprehensive review and analysis of the previous financial year’s performance, as well as performance to date, form part of this process.
1.4. Consideration and assessment of service delivery performance in relation to available resources of the Department and its entities
On 15 October 2013, the Portfolio Committee engaged the Director-General, Chief Operating Officer (COO), Chief Financial Officer (CFO) and relevant Executive Managers of the Department and its Entities on the Annual Report and any supplementary documentation. The purpose of the interaction is for the Portfolio Committee to undertake its constitutional oversight mandate of complying with the Money Bills Act, which is to oversee budget expenditure by government departments, so as to influence budget prioritisation by amending (if necessary) the national budget.
Section 5 of the Act requires the National Assembly, through its committees, to annually assess the performance of each national department, with reference to the following:
· The medium term estimates of expenditure of a department, including its strategic priorities and measurable objectives. These are tabled in the National Assembly together with the national budget;
· The Department’s strategic plans and annual performance plans;
· The expenditure report of a Department published by the National Treasury in terms of section 32 of the Public Finance Management Act;
· The Department’s annual reports and financial statements;
· The Committee on Public Accounts’ reports relating to a Department; and
· Report of the Portfolio Committee on Water and Environmental Affairs: The Consideration of the 2013/14 Strategic Plans, Annual Performance Plans and Budget Allocation of the Department of Environmental Affairs (DEA), iSimangaliso Wetland Park Authority (iSimangaliso), The South African National Botanical Institute (SANBI), South African National Parks (SANParks) and the South African Weather Services (SAWS); and the Indicative Findings of the Auditor-General regarding the interim audit conducted on DEA’s interim financial statements for 2012/13, dated 21 May 2013; and
· Any other information requested by or presented to Parliament.
The Portfolio Committee noted the critical factors informing the strategic and business plans, section 32 reports, annual report and financial statements of the Department and its Entities. In addition, the Portfolio Committee focused on the way in which the Department aligned and accomplished its work over the medium term in relation to its constitutional imperative, legislative mandate, the Medium-term Strategic Framework of Government, National Development Plan 2030, Outcome 10 Delivery Agreements, obligations and commitments stemming from multilateral and bilateral environmental agreements and other international instruments such as the Millennium Development Declaration and priorities emanating from the 2012 State of the Nation Address.
1.5. Compliance by the Department and its Entities
The Portfolio Committee noted with appreciation that the annual report of the Department and its entities were tabled in full compliance with the relevant prescripts and prior to the stipulated time of 30 September 2013. The reports of the Department and entities were tabled on 31 August 2013.
2. Policy Areas
The priority policy areas for the Department over the medium term included 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 (Outcome 10); and focusing on key national and international engagements.
The Department’s programmes are aligned with government’s Outcomes approach, especially having environmental assets and natural resources that are well protected and continually enhanced (Outcome 10) and the related outputs; reduced greenhouse gas emissions, climate-change impacts and improved atmospheric quality (Output 2); sustainable environmental engagement (Output 3); and protected biodiversity (Output 4). The Department leads the implementation of the Outcome 10 delivery agreement and the monitoring of and reporting on the targets set.
2.1. Key policy focus areas
To facilitate and work toward implementation of the key policy focus areas, the departmental approach is to thematically incorporate these areas into six categories – legal, authorisation and compliance enforcement; oceans and coastal management; climate change; biodiversity and conservation; environmental sector programmes and projects (employment creation) and sector services; and environmental awareness and international relations.
Within the legal, authorisation and compliance enforcement component of its work, the Department noted an increase in voluntary compliance with environmental legislation by industry as a result of departmental compliance and enforcements efforts. The Department also recognised the importance of the country’s ability to effectively combat environmental transgressions by increasing the capacity of the environmental inspectorate. Another critical aspect of the work of the Department is to ensure that land and infrastructure development takes place in an environmentally responsible and sustainable manner. The instruments devised by the Department to improve efficiency and effectiveness of the environmental impact assessment system across the county include the development of strategic spatial tools such as Environmental Management Frameworks (EMFs) for certain areas identified as critical development areas with increasing development pressure and some level of ecological or environmental sensitivity; the development and refinement of regulations to legislate environmentally sound development; the development of strategic instruments such as Strategic Environmental Assessments (SEAs) and Strategic Environmental Management Framework for emerging areas key to the South African economy and transitioning to a low carbon economy, such as renewable energy applications; and the development of a web-based registry of applications – the National Environmental Authorisations System (NEAS). To promote behaviour that contributes to sustainable development, interventions are undertaken through the national Environmental Management: Waste Act (2008), particularly boosting recycling efforts through the implementation of the Integrated Waste Management Strategy (IWMS), and through the National Environmental Management: Air Quality Act (2004) aimed at addressing the monitoring and enforcement of ambient air quality standards and emissions to air licensing.
Within the oceans and coastal management component of its work, the Department understands the importance of sustaining economic, social and ecological services provided by the marine and coastal spaces. For the financial year under review, the Department developed a draft oceans policy to ensure that there is a clear framework for the management, protection and conservation of South Africa’s coastal and oceans environment. The Integrated Coastal Management Act (2009) also presents the Department an opportunity to proactively reduce incidences of illegal developments and trends of inappropriate/unsustainable land use planning and practices along the coast, thus reducing potential future loss of life and property due to storms and other ocean dynamics. The Department, in conjunction with their partners will continue to maintain South Africa’s research presence in Antarctica; the Prince Edward Islands and the Southern Oceans. Focus will be on recapitalisation of the state of the art polar vessel, the Agulhas II, which shall be used for research and relief voyages to Antarctica, Gough and Prince Edward Islands as well as for High Seas research. The National Programme of Action (NPOA) on land based sources of pollution will be implemented to abate and or reverse impacts of pollution on the oceans and coastal environment.
Within the climate change component of its work, the Department understands the impacts of climate change on global environmental, social and economic systems. In October 2011, Cabinet approved the National Climate Change Response White Paper. The policy paper sets out South Africa’s vision for an effective climate change response, and a transition, in the longer term, to a climate resilient and lower carbon economy and society.
The presentations made by the Department and Entities focused on the prioritised targets, outputs, achievements, challenges and interventions for the 2012/2013 financial year to attain the above. The Portfolio Committee in engaging on this component of the work of the Department was particularly impressed by the collaboration between the Department and the South African Weather Services in relation to the outcomes of prioritised indicators and targets attained for the 2012/2013 financial year. The focus was on the way in which the SAWS assisted the Department on Air Quality Information Management; Monitoring and Modelling changes in climatic conditions over time due to climate change; and Climate Change Adaptation through disaster prevention such as early warning mechanisms on severe weather conditions. The presentations provided the following insights:
Within the biodiversity and conservation component of its work, the Department must ensure the realisation of biodiversity conservation and management as well as mitigation of threats to biodiversity, whilst still ensuring equitable and sustainable use of natural resources to contribute to socioeconomic development. Over the medium term, the Department’s focus will be on expanding the conservation estate to ensure that all ecosystems and geographic areas are represented in line with the protected areas expansion strategy. Effective management of the existing conservation and heritage estate will also be put in place. The Department will ensure protection of indigenous biodiversity from unscrupulous exploitation as well as invasion by alien species to ensure beneficiation and sustainability, and that local indigenous knowledge and species are recognised and protected. To this end, the Department has developed bio-prospecting regulations and is finalising the alien invasive species regulations. The Department also aims to attract investment for infrastructure development in the transfrontier conservation areas in support of regional economic development.
For the 2012/13 financial year, the entities supporting this component of the work of the Department, iSimangaliso, SANBI and SANParks projected certain outcomes in the areas of the expansion of the conservation estate, challenges associated with the management of the Transfrontier Conservation Areas, the establishment of the National Wildlife Information Management Unit, the impact of tightening the permitting regime, the role of SANBI as the national implementing agent of the Adaptation Fund and its role in the implementation of the Biodiversity Sector Skills Plan and the Jobs Fund.
Within the environmental sector programmes and projects (employment creation) component of its work, the Department understands the importance of employment generation as a key priority over the medium term and is intensifying its involvement in the expanded public works programme in relation to generating green jobs. The transfer from the Department of Water Affairs of the Natural Resources Management Programmes, Working for Water, and Working on Fire, has significantly increased the Department’s capacity and responsibility to create employment. Both job creation and critical environmental outcomes will be realised through these programmes, including 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.
Within the sector services, environmental awareness and international relations component of its work, the Department seeks to facilitate environmental cooperative governance across all spheres of government and provide geographically referenced environmental information for decision-making. This part of the Department’s work includes reporting on the state of the environment, promotion of the incorporation of environmental objectives into strategic planning instruments at national, provincial and local government level, development and maintenance of the departmental research and developmental agenda to ensure informed and coherent policy making, as well as facilitation of development and implementation of the national greening programme.
The Department provides support to international negotiations and relations in order to promote South Africa’s global sustainable development agenda as well as the mobilisation of bilateral and multilateral financial and technical resources in support of national, sub-regional (SADC) and regional (NEPAD) environment projects. South Africa continues to play a leading role in the negotiations around sustainable development, chemicals management, climate change, biodiversity and related heritage issues.
To promote environmental awareness and education, the Department has prioritised a school based environmental education programme, as well as community based environmental awareness programmes. On the governance front, the Department and all its entities will continue to work towards improved service delivery, greater transparency and accountability to the South African public. In this regard, the Department will continue to work towards maintaining an unqualified audit opinion.
2.2. Overall service delivery achievement of key policy areas in the 2012/13 financial year
Within the broad key policy focus areas, the overall service delivery achievement in the 2012/13 financial year showed that the Department has a comprehensive Service Delivery Improvement Programme, which is made up of an approved Service Delivery Charter and Service Delivery Improvement Plan (SDIP) supported by a service standard matrix that focuses on improving governance within the Department, consistent with the requirement of the Public Service Regulations. The Service Charter, which underpins the Department’s operations, emphasises the Department’s commitment to serving the general public with humility and in accordance with the Government principles of Batho Pele , which denotes exercising courtesy in the Department’s dealings with the public, consultation, openness and transparency, access to information and proving value for public resources. The Service Charter not only clearly states the Department’s commitments in terms of service delivery but also contains a provision for lodging any complaints insofar as the work of the Department is concerned. The Department monitored compliance with approved service standards internally on a quarterly basis and reported to Parliament and the general public in the Department’s annual report. Accordingly, the Department has achieved the following in terms of service delivery:
· Achievement of 96 per cent on processing and issuing of Threatened or Protected Species (TOPS) permit applications within the prescribed timeframes to traders, exporters or importers of TOPS-listed species; scientific institutions and Government departments and parastatals. This achievement is against the expected target of 85 per cent;
· Achievement of 100 per cent on processing and issuing of CITES permit applications within prescribed timeframe, [L1] 30 CITES permits applications were received and 30 were evaluated and issued. This is against the projected target (standard service) of 85 per cent;
· The percentage of applications for environmental authorisations finalised within prescribed timeframes, provided that no more than 400 applications per annum are received. The annual target for this financial year showed that the Department hoped to attain an 88 per cent on this indicator within prescribed timeframes. Against the projected 88 per cent target set by the Department for the 2012/13 financial year, the Department attained 58 per cent within timeframes. The Department explained that in addition to the actual applications processed, there were also a total of 165 Environmental Authorisations amendments applications processed. A high number of applications were also received and all these factors put a strain on available human resources. A total number of 673 applications were received during this period;
· Attainment of 94 per cent on issuing of Waste Management Licenses within time frames. This is more than the 88 per cent of the target originally planned for achievement in the 2012/13 cycle, [L2] out of the 125 applications received, 118 were processed on time;
· 98 per cent of Marine Research Permits were issued to researchers working on protected species and within Marine Protected Areas (MPAs) within the prescribed 50-day timeframe. This is against the planned target of 100 per cent (74 out of 76 applications were processed on time);
· 85 per cent of applicants (e.g., researchers, people with disability, fishing sport and filming industry, inter alia) were issued with Off-road Vehicle Permits within the 40-day period, as opposed to the achievement of a 100-per cent target initially planned for the 2012/13 performance cycle. Of the 72 applications received by the Department, only 61 applications were processed on time;
· 100 per cent of applications for permits for activities within marine protected areas, such as filming and transportation of marine protected species were processed within the timeframe of 5-10 days. Accordingly, all the 162 applications were processed on time more than the 95 per cent target envisaged; and
· 100 per cent of applications for dumping permits were processed on time, that is, within 45 days. This is actually the planned target for the year under consideration. Six applications were received and processed.
3. Overview and assessment of financial and non-financial performance of programmes for the 2012/13 financial year of the Department and its Entities
3.1. Financial expenditure trends of Department and its Entities
For the 2011/12 financial year, the Department had a total budget of R5.2 billion. The Department spent R4.9 billion or 96 per cent of the total available budget by the end of the 2012/13 financial year. Planned expenditure by this point in the year was R5.2 billion – equivalent to 100 per cent of the total available budget. The Department is therefore behind on total spending by R226.8 million or 4.4 per cent. This is mainly due to the Green Fund process that took longer than anticipated and vacancies within the Department. However, the Department noted that the vacant positions had been filled later during the financial year. The sections that follow provide an overview of the available budget and actual expenditure by the end of 2012/13 financial year.
For the 2012/13 financial year, the Department had six programmes: 1. Administration; 2. Environmental Quality and Protection; 3. Oceans and Coasts; 4. Climate Change; 5. Biodiversity and Conservation and 6. Environmental Sector Programmes and Projects. The Administration Programme provides leadership, strategic centralised administration and executive support, corporate services and facilitates effective cooperative governance, international relations and environmental education and awareness. Similarly, the Oceans and Coastal Management Programme promotes, manages and provides strategic leadership on oceans and coastal conservation, including relevant research. The Climate Change Programme improves air and atmospheric quality, leads and supports, informs, monitors and reports efficient and effective international, national and significant provincial and local responses to climate change through the South African Weather Service. The Biodiversity and Conservation ensures the regulation and management of all biodiversity, natural heritage and conservation matters in a manner that facilitates sustainable economic growth and development. It is in the Biodiversity and Conservation Programme where the departmental entities such as the SANParks, SANBI and the iSimangaliso are situated. The Environmental Sector Programme and Projects is the largest departmental programme (in terms of budget allocation) and deals with the implementation of expanded public works and green economy projects in the environmental sector
The purpose of the Administration Programme is to provide strategic leadership, centralised administration, executive support, corporate services and facilitate effective cooperative governance and international relations. In Programme 1: Administration, expenditure was R703 million or 98.2 per cent of the available budget of R715.8 million. Planned expenditure was R715.8 million so the Department is behind by R13 million. This is primarily due to vacancies and these issues have persisted for nine months so far. The Department noted the following key achievement for this programme:
· The Department achieved an unqualified audit report for the 2012/2013 financial year;
· The Department spent 96 per cent of its budget earmarked for the 2012/13 financial year, two per cent less than the envisaged 98 per cent expenditure;
· Achievement of 61 per cent procurement on BEE enterprises, which is actually the projected target;
· The Department has committed itself to the development and implementation of effective and innovative human resources management strategies which will enable it to recruit and retain the best talent in the labour market. To this end, they achieved targets in the following areas:
o The reduction of their vacancies rate from a baseline of 11.5 to 9.7% (147/1521) which also exceeds the public sector target;
o Personnel development through training 635 employees as part of implementation of its annual Workplace Skills Plan (WSP); and
o Finally meeting all Employment Equity targets, including ensuring that 2% of the workforce consists of people with disabilities and exceeding the 50 per cent target set for women employed by 6 per cent.
· The report by the Department of Performance Monitoring and Evaluation on the Management Performance Assessment Tool (MPAT) results for the 2012/13 financial year recognised the Department as one of the top 5 performing national departments, which is an indication that the Department remains committed to ensuring Equitable and Sound corporate governance. All targets in this area were met. Furthermore, all departmental entities also received unqualified Audit Opinions both on Financial and Performance Information;
· The Department finalised a Public-Private Partnership agreement and began with construction of the new green building. The design specification of the building is the first government building, as well as the first in Tshwane, to be awarded a six-star Green rating by the Green Building Council of South Africa (GBSA);
· 94 per cent of parliamentary questions and requests were responded to within the timeframe. Of the 133 parliamentary questions and requests, 125 were attended to within the prescribed time frames;
· One of the focus areas of the programme was to improve capacity, education and awareness within the sector. The Department exceeded its targets in:
o Recruitment and enrolment of 100 unemployed youth on the learnership programme by enrolling 198 youth;
o 108 workshops as opposed to the 80 planned workshops were conducted on environmental career development in response to demands;
o 332 officials trained on Environmental Management Inspectors (EMIs) (Including 94 trained on specialised training) (t: 245 (including 70 EMIs undergoing specialised training);
o Additional 138 officials trained on EIM (t: Additional 70 officials trained (total 494); and
o SAWS contributed to this objective by exceeding the targets set for training.
In summary, 85 per cent of all the targets within the Administration Programme were met (target 100 per cent achieved or exceeded), 10 per cent of the targets were substantially achieved (90 per cent or more of the target was achieved) and five per cent of the targets were not met (less than 50 per cent of the target was achieved). Three challenges were encountered in the Administration Programme during the 2012/13 performance cycle: delays in finalising PAIA requests; delays in the finalisation of the South African Environmental Outlook; and financial constraints that hampered the development of the Local Government Support Framework.
On the above issues, the Portfolio Committee resolved that the Department:
· Submit a written progress report on those departmental activities that were not concluded in the 2012/13 financial year. The Department should explain how this work is going to be accounted for in the 2013/14 reporting cycle and what interventions have been put in place to achieve the targets and improve on related service delivery. Such report must be submitted before 15 November 2013;
· Further engage the Department and the Entities on South African Environmental Outlook Report (including the State of the Environment Report); and all of the sub-sector “State of...” reports that fed into it; the planned sector wide Enterprise Geographic Information System (GIS) and the integration of SANBI’s BioGIS into such system; and the Green Fund and the transition to a Green Economy; and
· That the Department must consider the policy and legislative framework associated with soil protection and sustainable management of soil and brief the Committee in this regard.
3.1.2. Environmental Quality and Protection
The purpose of the Environmental Quality and Protection Programme is to protect and improve 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 wellbeing. Expenditure was R324.9 million or 100 per cent of the available budget of R324.9 million. It is in this regard that the programme realised the following achievements:
· 89 per cent of all the Department’s complaints and incidents were processed and investigated on time against the 85 per cent target planned for the 2012/13 performance cycle. The remaining complaints were received at the end of the financial year and could only be processed in the first quarter of the financial year;
· 21 criminal investigations were finalised and the dockets were handed over for prosecution, exceeding the original target of 18 per annum;
· 82 per cent of notices of compliance with administrative enforcement notices were issued, in contrast to the planned target of 75 per cent;
· Though the scourge of rhino poaching has intensified, the Department has also intensified their fight through implementation of 52 per cent (22 of the planned key activities) of the national rhino strategy as opposed to the planned 40 per cent; and
· 36 857 of households benefited from waste collection initiatives, which is more than the 32 402-household target.
In summary, 82 per cent of all the targets projected for completion in the financial year under review were met and the remaining 18 per cent were substantially achieved . Areas that were not fully achieved include for example, that 81 of the targeted 85 facilities were inspected; and Part 8 of Chapter 4 of the Waste Act did not enter into force, but is expected to be operationalised in the 2013/14 performance cycle. Similarly, the target of assisting 56 unlicensed waste disposal sites to obtain licences from provincial authorities was not met as the Department of Water Affairs records of decisions (RoDs), a pre-condition for issuing a waste licence, were not issued on time and hence the Provinces could not proceed with processing of waste management licence applications. Furthermore, a significant number of applications for environmental authorisations were not processed and the Environmental Assessment and Management Strategy was not completed in the performance cycle under consideration this was largely attributed to insufficient capacity
On the above issues, the Portfolio Committee resolved that the Department:
· Should move quickly in implementing the envisaged interventions for overturning the identified challenges that caused the activities which were supposed to be completed in the 2012/13 year to run over to the current financial year. The Department should report these as “ran over” work from the previous reporting cycle in its 2013/14 annual report;
· In terms of the legislative programme of the Department, the Department be required to report on a quarterly basis on the progress against the submitted programme; and in addition to the requirements stemming from the Interpretations Act requiring the tabling of sub-ordinate legislation in Parliament of publication of such legislation, the Department be required to table such sub-ordinate legislation and legal instruments in Parliament 30 days prior to final publication;
· Feedback be given on the system developed for ensuring and monitoring compliance with Promotion of Administrative Justice Act, (No.3 of 2000) (PAJA); and the Centralised-intranet-based system utilised for the management and monitoring of Promotion of Access to Information Act, (No.2 of 2000) (PAIA) queries and applications; and
· Given the impact of insufficient capacity on the efficient implementation of the Environmental Authorisation system, care should be taken to adequately quantify and cost as the capacity required for the efficient and effective implementation of the Coordinated and Integrated Permitting system currently under development for Mining, Environmental and Water Management.
3.1.3. Oceans and Coastal Management
The purpose of the Oceans and Coastal Programme is to ensure that government, industry and the public are informed, supported and regulated to act responsibly to conserve the ocean and coastal environment as well as to honour South Africa’s local and global obligations. The Programme promotes, manages and provides strategic leadership on oceans and coastal conservation, including relevant research. Expenditure was R524.6 million or 100 per cent of the available budget of R524.6million. The Oceans and Coastal Management Programme realised the following strategic objectives in the 2012/13 performance cycle:
· Relevant and up to date scientific information is critical in informing policy decision making which enables effective management and conservation of our ocean and coastal environment. To this end, the following planned research projects were carried out:
o Conducting population estimates for 12 species around South Africa and population estimates for five species around the Southern ocean area;
o 8 research projects on marine top predators and 2 baseline assessment/surveys of the ocean and coastal biodiversity were completed at the Betty’s Bay and the Robberg Marine Protected Areas (MPAs); and
o The Department has made strides towards fulfilling our mandate of developing and implementing national policies to protect and conserve South Africa’s ocean environment;
· The Department made strides towards fulfilling their mandate of developing and implementing national policies to protect and conserve South Africa’s ocean environment by developing and publishing the Green Paper on the National Environmental Management of the Ocean, in October 2012, for public comment, as well as the Southern Oceans and sub-Antarctic islands management strategy; and
· The Department’s targets on protection of the ocean and coastal environment were also achieved, which ensured that full protection was accorded to 9.26 per cent of South Africa’s coastal waters (324/3600km), whereas partial protection was accorded to 13.5 percent (468/3600km km). This slightly exceeded the target of 9 per cent (324/3600km) full protection and 13.5 per cent (468/3600km) partial protection. Two per cent of South Africa’s Exclusive Economic Zone (EEZ) (30 000/150 0000 Km2) is protected, which is the actual target for this category; and the State of the Oceans Report was produced, according to plan.
It can be summarised that 94 per cent of all the targets in the Oceans and Coastal Management Programme were met in the 2012/13 financial year, with the remaining six per cent being substantially met .
On the above issue, the Portfolio Committee resolved that the Department:
· Should liaise with the Department of Transport in effectively regulating oil spillage in South Africa’s territorial waters, which is likely to increase with the mounting threats of sea piracy in the Horn of Africa. The Department should also consider the issue of deep-sea mining and associated pollution in South Africa’s marine space, in this regard; and
· Engage the Department further on the following matters:,
o The Department’s ability to monitor compliance with and enforce environmental legislation in the Ocean;
o The Ocean Research Strategy; and
o Off-Shore and Coastal exploration and mining.
3.1.4. Climate Change
The purpose of the Climate Change Programme is to promote, coordinate and manage an effective national mitigation and adaptation response to climate change. The Programme seeks to improve air and atmospheric quality, leads and supports, informs, monitors and reports efficient and effective international, national and significant provincial and local responses to climate change through the South African Weather Service. Expenditure was R28 million or 97 per cent of the available budget of R28.9 million. Planned expenditure was R28.9 million so the Department is behind by R0.9 million. In the year under review, the Climate Change Programme achieved the following strategic objectives:
· The approved National Climate Change Response Policy spells out specific short, medium and long term activities, which form part of a national effort to mitigate and manage the impacts of climate change. The actions which have been implemented include:
o A review was conducted on 16 plans within the agriculture, fisheries and forestry sector, water sector and disaster management sector;
o Baseline research was completed on Long-Term Adaptation into four sectors (water, agriculture and commercial forestry, biodiversity and ecosystems and health);
o The draft framework for the implementation of flagship projects were developed; and
o The scoping of information for the 2014 Biennial Update Report was undertaken and terms of reference of the compilation of the Biennial Update Report developed.
· The other priority areas for the programme is to ensure that the Department protects and improves the quality and safety of the air quality to give effect to the right of all citizens to air that is not harmful to their health. In this regard, the Department has developed and continues to fine-tune the legislative framework for air quality management (the amendment of the minimum emission standards for industrial control of air pollution, addition of a standard for PM2.5 this year to the national ambient air quality standards and draft vehicle emissions strategy and the strategy to address air pollution in dense low-income communities);
· Partnership with the SAWS in air quality monitoring with a total of 72 stations reporting data on the South African Air Quality Information System ( SAAQIS ) were established, exceeding the original target of 65 stations; and
· Draft vehicle emissions strategy and the strategy to address air pollution in densely populated low-income communities were developed, consistent with the planned target.
Of the planned targets for the 2012/13 performance cycle, 71 per cent were met ; 23 per cent were substantially achieved ; and 6 per cent were not met . Challenges identified in the Programme relate to sector mitigation potential and impact studies of which only 4 out of 9 were conducted, and the lack of finalisation of ‘recommendations on mainstreaming and alignment of 4 sectoral policies and plans’. A further challenge relates to the finalisation of the ‘Draft Climate Change Response Monitoring and Evaluation System Framework’.
22.214.171.124. Key achievements and challenges of Entities exercising functions under this programme:
In relation to the key achievements of SAWS, the Department noted the following:
· Weather-related disaster risk applications were developed and operationalised as planned;
· Agro- and Hydrometeorology Feasibility Study was completed and approved as planned;
· Achieved 77 per cent6 accuracy in 98.8 per cent severe weather warnings accuracy against the target of 71 per cent accuracy;
· Achieved the overall customer satisfaction at 85.3, slightly exceeding the: 85 per cent target;
· SAWS successfully hosted the Meteorological Association of Southern Africa;
· Achieved 40 per cent readiness of identified successors to take over positions in the organisation, exceeding the 30 per cent target;
· 42 of bursaries were granted against the target of :40 and 85 per cent or more of bursary beneficiaries were from previously disadvantaged backgrounds, more than the : 75 per cent target;
· 87 per cent of meteorological technicians were taken, indicating that 13 graduate students were taken out of 15. This exceeds the 62 per cent target for this category; and
· Turnover of staff with critical and scarce skills was reduced to 4.18 per cent against the target of 6 per cent, indicating that fewer staff left in the year under review.
The challenges related to SAWS included:
· Aviation Income was below budget by R5.7m and amounted to R73.8 m, which is below the target of R79.5m. This was due to:
o The Aviation industry experiencing lower volume numbers than expected;
o The liquidation and provisional liquidation of airlines had a negative contribution on revenue; and
o SAWS will only be able to recover this shortfall from Aviation experienced in the current financial period in the 2014/15 period in pending approval by the Tariff Regulations Committee;
· Non–regulated commercial income was below budget by R5.3 million amounting to R13.9 m, whereas the target was R19.2m; and
· Bad debts written off for the year amounted to R4.2m; these include, amongst others, airlines One Time and Velvet Sky.
On the above issue, the Portfolio Committee resolved that the Department:
· Should prioritise addressing the outstanding mitigation potential and impact studies to understand the choices at our disposal as a country in responding to the commitments that we have made to mitigate greenhouse gas emissions in international fora. The Department should also report on the status of legislation alignment studies, which are necessary to identify gaps in the lead to formulating optimal instruments for implementing the White Paper on Climate Change;
· Should, with the South African Weather Services, provide further on the approach to and systems in place for the monitoring of and reporting on air quality; and
· Should, with the South African Weather Services, provide a briefing to the Committee on the strategy developed to recover the aviation fees due to it.
3.1.5. Biodiversity and Conservation
The purpose of the Biodiversity and Conservation Programme is to promote the conservation and sustainable use of natural resources in order to contribute to economic growth and poverty alleviation. The Programme ensures the regulation and management of all biodiversity, natural heritage and conservation matters in a manner that facilitates sustainable economic growth and development. Expenditure was R568.4 million or 100 per cent of the available budget of R568.4 million.
It is in the Biodiversity and Conservation Programme where the departmental entities such as SANParks, SANBI and iSimangaliso are situated. The following are the achievements of the Biodiversity and Conservation Programme in the year under review:
· There has been continued focus on increasing the country’s protected area to above 10 per cent and towards international agreed figure of at least 17 per cent of terrestrial and inland-water areas. To this end, the Department in collaboration with SANParks facilitated the inclusion of an additional 1.912 million hectares of land under formal protection resulting in 7.7 per cent of land under conservation (9 393 322 ha/121 991 200 ha), exceeding the set target of 7.4 per cent (9 027 348.8/ as 199 1200ha) for the year;
· An Integrated Management Plan was developed and approved by the Minister for the Mapungubwe Cultural Landscape, as initially planned;
· In terms of the development of draft regulations for the registration of professional hunters and hunting outfitters, consultation of industry and provincial conservation authorities were conducted and a report was compiled, and draft regulations were revised based on the inputs from the workshop, thus meeting the required target; .
· The Black Rhino Biodiversity Management Plan (BMP) was finalised and gazetted for implementation, and approval was also granted for the publication of the Pelargonium BMP for implementation and for the appointment of lead agents for the implementation of the BMP, according to plan. Similarly, targets relating to the development of Management Plans and Guidelines for the protection and conservation of the African Penguin and for the Ramsar sites of De Mond, Seekoeivlei Nature Reserve, Langebaan Lagoon, uKhahlamba Drakensberg and De Hoop, were all achieved on time;
· Risk assessment guidelines for Alien and Invasive Species (AIS) were developed, consistent with the target; and
· 52 per cent of the National Strategy was implemented, for example, 22 of the 42 planned key activities outlined in the strategy were successfully carried out, as opposed to the 40 per cent per plan.
In summary, 75 per cent of the targets set for this Programme were met , about 15 per cent were substantially achieved and about six per cent were not met . The challenge encountered in the Programme relates to the lack of a suitable bidder to finalise the “Environmental Transformational Sector Situational Analysis Report”. Consequently, the Terms of Reference for the appointment of the service provider had been revised, in this regard.
126.96.36.199. Entities working toward service delivery under this Programme – SANBI, iSimangaliso and SANParks
In relation to the key achievements of SANBI, the following was noted:
· In pursuit of the key focus areas of the entity around science-policy interface and protection of our biodiversity the entity achieved and exceeded targets in the following areas:
o 30 peer reviewed publications focusing on trends, risks and benefits associated with emerging invasive, threatened species, GMO impacts, and sustainable use of biological resources and (t:30) and 30 Scientific publications were produced, meeting the target of 30 and exceeding the target of 15, respectively;
o 250 threatened plant taxa were monitored at CREW sites, more than the 220 target;
o 21,120 of records added were to the SANBI species occurrence database and 18,779 of records in database were verified against the target of 12 500 specimens added and 10,000 records verified. Both targets were exceeded;
o National biodiversity offsets framework was developed, to support land-use decision-making;
o State of Biodiversity Report was developed and published based on the National Biodiversity Assessment (NBA) 2011;
o Strategy to implement marine offshore spatial management, including marine protected areas, was developed; and
o The national biodiversity monitoring framework reviewed and updated, with three (3) additional indicators developed or updated and reported;
· Progress has also been made towards expanding National Botanical Gardens estate and associated infrastructure (Preferred site for new national botanical garden in the Limpopo Province identified);
· One of the priority areas of SANBI has been on strengthening revenue generating activities, growing visitor numbers with a focus on previously disadvantaged groups. There has been a 2 per cent annual increase in visitor numbers and 4 per cent annual increase in own income received, as well as a 5 per cent increase in diversification of garden and EE centre users; and
· One of the major achievements for SANBI was external recognition in the form of a Gold Medal received from Chelsea Flower Show 2012 held in London, United Kingdom.
The key challenges noted by SANBI included:
· Draft monitoring framework for species in trade not developed due to capacity constraints. The vacant zoologist post to be filled in next financial year; and
· Report on monitoring of at least 60 emerging invasive species was not finalised due to capacity constraints. Final report to be produced in next financial year.
The key achievements for iSimangaliso included:
· In line with the mandate of the Entity to protect, conserve and present the Park the following achievements were realised:
o 3 criminal cases and 3 civil cases of illegal developments were successfully detected within the timeframe;
o 155 cases of most affected priority species - white vulture were detected;
o Implementation of annual alien invasive removal was concluded; and
o 10 per cent of former commercial forestry and other incompatible land use areas were rehabilitated; and
· The entity exceeded set targets in the following activities aimed at optimising cost recovery and empowering historically disadvantaged adjacent communities:
o R12.8m increase in revenue, exceeding by far the target of R8.6m and 541 027 increase in visitor numbers, beyond the 492 260 visitor target;
o Attained 49 per cent increase in commercial revenue to the Park, which is significantly more than the 2 per cent target;
o The number of BEE SMME’s(ownership in business 40% or more) used was increased to 57, outstripping the 30 target;
o 701 people living in and adjacent to the Park were trained in skills that would equip them for sustainable livelihoods, surpassing the 500 target;
o 47 students were awarded bursaries for undergraduate studies, as opposed to the 25 target; and
o Visitor numbers increased by 13 per cent in comparison to the previous year, against the target of 2 per cent.
The key challenges experienced by iSimangaliso included:
· Number of people trained in art field due to delays with the National Lottery Distribution Trust Fund ( NLDTF ) funding, which necessitated the retrenchment of the project manager. The funding has now been unblocked;
· The number of temporary jobs created was 1 528. The target (4 000) had not been achieved due to the liquidation of the main contractor. ISimangaliso, noted that Sinyathe had been contracted in 2011 for a contract of about R80 million. The contract was terminated after R54 million had been transferred due to non-performance, particularly regarding labour. The company had since gone bankrupt. There was an agreement with the auditors on what could be written off and what not. Sinyathe was owed R6 million, but owed Isimangaliso R11 million for penalties and other outstanding fees. This was a conservative position. The under-performance in labour numbers was related to this. The penalties were being used to deliver on the projects and meet the labour numbers. A contract had been terminated due to non-performance. The key challenges were mainly of an administrative nature;
· 3 new permanent jobs were achieved bringing the present number of permanent jobs to 103 (target 10). The additional jobs would have been created with the opening of the Western Shores which has been delayed as the facilities were not completed timeously due to the abovementioned liquidation; and
· Planned infrastructure was not completed as the contractor was terminated for non-performance and was subsequently liquidated.
In relation to SANParks, the key achievements noted, include:
· The key achievements in SANParks demonstrate their commitment to improve biodiversity conservation in the national park system, optimize its assets and to create opportunities for revenue generation through responsible tourism. The Entity has exceeded set targets in the following areas:
o 50 586 ha of New Area and 244 708 ha follow-up of Area of Alien/Invasive Species rehabilitation against the targets of 43,283 ha for New Area and 212 203 ha for Follow-Up;
o 82.7 per cent of new research projects relevant to SANParks were identified for essential and important categories of research, the target being : 80 per cent identification in “Essential” and “Important” categories;
o 213 327 individuals participated in the SANParks’ Environmental Education Programme, more than the 170 540 target;
o SANParks achieved 70.0 per cent Accommodation Occupancy rate, surpassing the 68.1 per cent target;
o 4 941 697 visitors entered national parks in the year under review, outstripping the planned target of 4 667 000 visitors;
o 434 216 black visitors visited national parks, outdoing the 411 000 target; and
o SANParks achieved 78.1 Customer Satisfaction, beyond the 77.5 per cent target; and
· The entity also focused on optimising benefits for communities adjacent to the parks and promoting access to the parks. In this regard:
o 10 Community-based Socio-Economic initiatives were implemented; and
o Facilitated 25 956 Free Access Entrants to National Parks.
The key challenges noted by SANParks included SANParks’ rhino poaching incidents, which have increased by 76.6 per cent (482) compared to the previous financial year. All incidents took place in the Kruger National Park. In total, 233 suspects were arrested for crimes relating to rhino poaching, of which 33.7 per cent (87) were arrested in the Kruger National Park. Implementation and roll out of the National Strategy on Safety and Security of Rhino Population in SA and the NATJOINTS Priority Committee “Operation Rhino” initiatives, particularly in the KNP, will be prioritised.
On the biodiversity and conservation mandate, the Portfolio Committee resolved that the Department:
· Should continue putting more land under conservation to honour our commitment to the Convention on Biological Diversity where we undertook to set aside a sizable proportion of our land (17 per cent) for conservation purposes. The Department should revert back to the Portfolio Committee for support in case this involves requesting additional money from the National Treasury to purchase private land for the expansion of our national parks. The Department should also continue initiatives such as the stewardship programme to add to land, private and public, meeting formal conservation standards;
· To require of the Department to submit to the Committee a costed and time-bound action plan in terms of the Rhino Horn Stockpile issue; the entering into MOUs with neighbouring countries; key African states and the key user states; the implementation of adopted recommendations of the Rhino Issue Manager as contained in the 2012 Report; and The Strategy and communication plan into the investigation of restricted and controlled trade in Rhino Horn;
· To further engage the Department and SANBI on the approach to the Transformation of the Biodiversity sector; the implementation of the Adaptation Fund; the National Biodiversity Assessment of 2012; and SANBI’s BIO GIS; and
· To further engage the Department, SANParks and iSimangaliso on the strategy for expansion of the Conservation Estate; Mining and Protected Areas; the entrepreneurs’ programme of iSimangaliso; and the management of challenges associated with Transfrontier Conservation Areas.
3.1.6. Environmental Sector Programmes and Projects
The purpose of the Environmental Sector Programmes and Projects is to implement environmental sector projects and assist in job creation through the implementation of the Expanded Public Works Programme and green economy projects in the environmental sector. Expenditure was R2 793. 6 million or 93 per cent of the R3 012. 7 million budget. The Department under spent by R219.1 million or 7.3 per cent of appropriated budget. It is in this context that the Programme achieved the following strategic objective in the 2012/13 performance cycle:
· 99 548 work opportunities were created in excess of the planned target of 74 274; 61 per cent of which were created for youth, which is again more than the 55 per cent target; and 3 067 SMMEs were used during the year under review, exceeding by far the target of 2 572. The target for 600 youth benefitting from the national youth service was also met, whereas 41 emerging invasive alien species were controlled, slightly exceeding the target of 40. Finally, the planned cleaning of a predetermined length of the coastline was conducted on time.
Environmental Programmes met 84 per cent of the planned targets for the year under review, 11 per cent were substantially met and about five per cent of the targets were not met . The key challenges identified in this Programme were the inability to achieve the 55 per cent target for creation of work opportunities for women and also to convert and rehabilitate 1 710 ha of forest stands invaded by invasive species. Only 892 ha were converted and rehabilitated in the 2012/13 cycle due to delays in the finalisation of agreements on priority areas with DAFF, which eventually delayed issuing of contracts.
On the above issue, the Portfolio Committee resolved that the Department:
· Should bring to the attention of the Minister those departmental responsibilities which are held back by other Government departments, particularly when officials from the concerned departments are unable to find workable solutions; and
· Engage the Department further on the job creation programmes included but not limited to the Expanded Public Works Programme; the Biosecurity Programme; and the EcoFactories.
3.2. Transfer to Households, departmental agencies and accounts; and non-profit institutions
A breakdown of transfers to households, departmental agencies and accounts for the 2012/13 financial year reflect a R2 199. 901 million transfer to Households (the Expanded Public Works Programme Projects); an amount of R319. 516 million to the SANParks, R209. 689 million to SANBI, R150. 581 million to SAWS, R71. 090 million to iSimangaliso; R10- million to the National Regulator of Compulsory Specifications and R7 689 million to the Compensation Fund.
Transfer to Non-Profit Institutions amounted to R6, 887 million of which R4 million was given to the Wildlife and Environmental Society of South Africa; R1. 4 million to the National Association for Clean Air; and R1.287 million to the Kwazulu-Natal (KZN) Conservation Fund for the management of the Maloti Drakensberg.
3.2.1. Public Entities source of revenue and expenditure
As mentioned earlier, each of the public entities are mandated to undertake certain functions within the broad objectives and programmes of the Department. In this regard, the Portfolio Committee was interested in the collaboration between the Department and the South African Weather Services in relation to the performance indicators and targets on Air Quality Information Management; Monitoring and modelling changes to climatic conditions over time due to climate change; and Climate Change adaptation through disaster prevention such as early warning mechanisms on severe weather conditions.
In terms of the conservation mandate, the Portfolio Committee interrogated the role and responsibilities of Department, iSimangaliso and SANParks in terms of the management of the Conservation Estate; t he targets set for the expansion of the conservation estate and the challenges in this regard, mostly due to lack of resources; and t he challenges associated with the management of Transfrontier Conservation Areas.
In terms of Rhino Management, the Portfolio Committee deliberated on the establishment of the establishment of the National Wildlife Information Management Unit; The impact of tightening the permitting regime; The statistics and alarming increase in rhino poaching incidents; The statistics associated with arrests and convictions and the challenges in this regard, especially where foreign nationals are involved; The progress in amendment of the legislation to enforce disclosure on rhino horn stockpiles; The management plan developed for white rhinos in terms of the NEM Biodiversity Act; The report and recommendations of the Rhino Issue Manager; The interventions of SANParks related to surveillance, intelligence and the vetting of rangers and managers potentially involved in Rhino poaching; The progress made with the investigation into re-establishment of the border fence between South Africa and Mozambique; The progress made with regards to memoranda of agreement with neighbouring countries; major user countries and other Africa Countries; and t he Outcomes of CITES COP 16 and the implications thereof on the management of the rhino population.
In terms of other Biodiversity matters, the Portfolio Committee raised questions on the BioGIS system of SANBI and its application in planning, decision-making and policy formulation; the outcomes of the hunting Indaba; The National Biodiversity Assessment Report and its integration into the 2012 South African Environmental Outlook Report; The role that SANBI plays in the implementation of the Biodiversity Sector Skills Plan and the Jobs Fund, especially the Groen Sebenza programme; and The appointment of SANBI as the national implementing agent of the Adaptation Fund.
However, of importance to the Portfolio Committee is the way in which the entities utilise the transfers from the Department of Environmental Affairs, as well as generating their own revenue to meet the mandate assigned to respective Entities. The Tables below provide an overview of the public entities source of revenue and expenditure over the financial year:
Public Entities Revenue
Transfer: Environmental Affairs
1 100 407
Revenue from operating activities/Admission fees/Aviation income/Park revenue
Fair value gain
Non-regulated commercial income
1 058 117
1 679 559
Public Entities Expenditure
Compensation of employees
1 720 845
The public entities reported the following deficits:
· R41.309 million due to damages for SANParks caused by floods amounting to R7 million; outstanding forestry grant amounting to R24.4 million not received in the current financial year, and control takeover of the restaurants in the Kruger National Parks amounting to R10 million;
· R5. 637 million to SANBI due to non-monetary deficit due to reporting changes;
· R15. 748 million to SAWS due to a shortfall of aviation income, shortfall of non-regulated commercial revenue, and bad debt written off in respect of administration expenses; and
· R9. 725 million to iSimangaliso due to a non-cash deficit and bad debt written off in respect of penalties levied on a contractor that subsequently went into liquidation.
3.3. Auditor-General’s Report on the Financial Statement of the Department and its Entities
The Department received an unqualified audit with one matter on material misstatement of commitments, and unauthorised and irregular expenditure. In relation to the matter on material misstatement of commitments, the commitments were overstated by R61.575 million as a result of including LOGIS orders that should have been deleted prior to 31 March 2013. The Department, however, corrected these in the annual financial statements after 31 May 2013, but it resulted in non-compliance to specific matters in key applicable laws and regulations.
The Auditor-General’s opinion of Public Entities showed that all entities received an unqualified opinion. SANBI received an emphasis of matter on leave provisions which needed to be restated on 31 March 2012. SANBI subsequently restated these. SAWS was an unqualified audit with material non-compliance with specific matter in key applicable laws and regulations, specifically a material misstatement of commitments (leases) and these were restated by 31 March 2013 by SAWS. iSimangaliso had an unqualified report and received an emphasis of matter, but had until 31 March 2013 to be restated, which was complied with.
4. Financial and service delivery performance of the Department and its Entities for the First Quarter of the 2013/14 financial year
The Department has a 2013/14 available appropriation of R5.4 billion, which represents a nominal increase of R255.8 million, 18 per cent from 2012/13. Transfers and subsidies account for R3.6 billion of the available budget and of this amount, the Department has so far transferred R598.7 million or 16.6 per cent, mainly to households and departmental agencies and accounts. This means that the Department has an available budget of R1.8 billion for operations. Of this, the Department has spent R382.4 million, or 21 per cent, the majority of which has been used on goods and services and compensation of employees.
4.1. Expenditure trends of Department and its entities and its impact on service delivery
A total of 61 per cent of expenditure to this point was under transfers and subsidies, with 39 per cent on departmental operations. Of operational expenditure, 40.1 per cent was on compensation of employees, 45.9 per cent on goods and services, and zero was spent on interest and rent on land. 14 per cent of expenditure was on payments to capital assets and 0 per cent on payments for financial assets.
Programme 1: Administration
The largest element of operational expenditure to the end of the first quarter in 2013/14 was R157.8 (41 per cent) million spent under the Administration programme mainly on compensation of employees and payments to capital assets. Expenditure under this programme has increased by R78.8 million, or 99.7 per cent, when compared with the same period last year, primarily due to additional spending on payments for capital assets and compensation of employees. The main cost drivers are salary costs and the annual unitary payment for the new departmental building.
Programme 2: Legal, Authorisation and Compliance
The operational expenditure under this Programme to the end of first quarter was R22 million, the majority of which was spent on compensation of employees. Spending under this programme cannot be compared to the previous financial year due to the departmental structural changes in 2013/14. The main cost drivers are compensation of employees and travel and subsistence related to the processing of integrated environmental authorisation applications, enforcement and compliance monitoring undertaken by the Department to improve the level of compliance to the environmental legislation.
Programme 3: Oceans and Coasts
The operational expenditure under this Programme to the end of the first quarter was R79.9 million, the majority of which was spent on goods and services. Expenditure under this programme has decreased by R204.2 million, or 71.9 per cent when compared with the same period last year, primarily due to lower spending on payments for capital assets. This represents a return to expected spending levels, after the once off payment of VAT on the polar vessel SA Agulhas 11 in the previous year. The main cost drivers in this programme are contractors and fleet services used for undertaking research and conservation activities.
Programme 4: Climate Change and Air Quality
The operational expenditure under this Programme to the end of the first quarter was R13.7 million, the majority of which was spent on compensation of employees and goods and services. Spending under this programme cannot be compared to the previous financial year due to the departmental structural changes in 2013/14. The cost drivers are travel and subsistence and business and advisory consultant services related to air quality monitoring around the country.
Programme 5: Biodiversity and Conservation
The operational expenditure under this Programme to the end of the first quarter was R20.1 million, the majority of which was spent on compensation of employees and goods and services. Expenditure under this programme has increased by R1.7 million, or 9.4 per cent, when compared with the same period last year primarily due to additional spending on these items, with the additional spending under goods and services, mainly on legal consultancy services. The main cost drivers are legal, business and advisory services consultants as well as travel and consultancy costs.
Programme 6: Environmental Programmes
The operational expenditure under this Programme to the end of the first quarter was R74.4 million, the majority of which was spent on goods and services and compensation of employees. Spending under this programme cannot be compared to the previous financial year due to the departmental structural changes in 2013/14. The main cost drivers were contractors, fuel, oil and gas, as well as travel and subsistence costs incurred in the delivery of programme objectives.
Programme 7: Chemicals and Waste Management
The operational expenditure under this Programme to the end of the first quarter was R14.5 million, the majority of which was spent on compensation of employees and goods and services (mainly for business and advisory consultancy services, and travel and subsistence). Spending under this programme cannot be compared to the previous financial year due to the departmental structural changes in 2013/2014. The main cost drivers were business and advisory service consultants used for specialised advisory services on chemical waste and pollution management, and travel and subsistence costs related to monitoring of compliance to chemical and waste legislation, especially in municipalities.
4.2. Transfers and subsidies
At the end of the first quarter of 2013/14, the Department had transferred R598.7 million or 16.6 per cent of the total available budget for transfers. Nominal decline in transfers from the same period in 2012/13 was 18.8 per cent or R138.3 million, with the decline being in those of Households. 55 per cent of the transfer budget went to Households with 30.8 per cent transferred to departmental agencies and accounts. 13.9 per cent is for Public Corporations and Private Enterprises, and 0.4 per cent is for Foreign Governments and International Organisations.
Transfers to departmental agencies and accounts to the end of the first quarter were R171.9 million, the majority of which was for SANBI’s operations; SANParks operations; and SAWS capital transfer.
There have not yet been any transfers to Foreign Governments and International Organisations, all of which was to the Global Environmental Fund membership fees transfer. This was also the case at the end of the first quarter in the previous financial year.
There have not yet been any transfers to Public Corporations and Private Enterprises. This represents a decrease of R9.4 million, or 100 per cent, when compared with the same period last year. This decrease was under the Development Bank of Southern Africa: Implementation of Green Fund Project transfer.
Transfers to Households to the end of the first quarter were R426.4 million, the majority of which was for the Expanded Public Works Programme: Natural Resource Management Programme: Working for Water, Expanded Public Works Programme: Social Responsibility, and Expanded Public Works Programme: Natural Resource Management Programme: Working on Fire transfers. This represents a decrease of R170 million or 28.5 per cent when compared with the same period last year. The majority of the decrease was under the Expanded Public Works Programme: Social Responsibility transfer.
4.3. Scheduled drawings
The complete main/adjusted budget is not made available to the Department at the beginning of the year, but instead the funds are drawn from the National Revenue Fund on a monthly basis. Before the beginning of the financial year, departments submit a schedule for these drawings, which is used here as a proxy of planned spending. The comparison of scheduled drawings with actual expenditure below is used to estimate whether spending is on track.
The Department has spent R981.1 million to the end of the first quarter, whilst having scheduled drawings of R1.4 billion, leaving a lag of R428.7 million at this point of the year. This is mainly due to delays in awarding of funds to Green Fund approved applicants and delays in finalising infrastructure transfers to public entities. The lag is expected to be resolved by the end of the third quarter.
5. Conclusion and Recommendations
The Portfolio Committee, in its conclusions thanked the Department for its professional and highly skilled workforce that has over the past few years, not only managed to attain unqualified audits, but is continuously updating its knowledge base in line with key government policies such as the National Development Plan, and other international and regional agreements and conventions. The Portfolio Committee expresses its appreciation of the performance of the Department and its Entities in terms of Predetermined Objectives, Service Delivery and Governance, but notes and recommends the following:
· Re-emphasises their concerns about areas and functions of the Department and its entities that seems to not be adequately resourced, (as per Report of the Portfolio Committee on Water and Environmental Affairs: The Consideration of the 2013/14 Strategic Plans, Annual Performance Plans and Budget Allocation of the Department of Environmental Affairs (DEA), iSimangaliso Wetland Park Authority (iSimangaliso), The South African National Botanical Institute (SANBI), South African National Parks (SANParks) and the South African Weather Services (SAWS); and the Indicative Findings of the Auditor-General regarding the interim audit conducted on DEA’s interim financial statements for 2012/13, dated 21 May 2013);
· Expresses concerns about the adjusted allocation received by the Department through the adjusted estimate of national expenditure where:
o Request for unforeseen and unavoidable expenses associated with an emergency medical evacuation from Marion Island was not granted. This is especially concerning in light of the fact that a request to increase the budget allocation for the programme associated with research and relief vessels (Agulhas II and the Algoa) required to cover the unexpected quantum of the increases in fuel and food prices was also not favourably considered. The unsuccessful request means that expenses associated with the medical evacuation as well as the increased operational costs of the vessels need to be reprioritised from an already stretched budget allocation; and
o R100M allocated to the EPW programmes (working on Water and Working on Fire) were cut;
· Expresses concerns about allocations to the department and entities in the Medium Term Expenditure Framework in specifically the following areas:
o There is no allocation to the Green Fund in the 2014-2015 financial year in spite of commitments on projects and programmes already made;
o Waste Management and rendering of waste services;
o Adequate resources for the required systems and capacity in the Department of Mineral Resources; The Department and the Department of Water Affairs to ensure the effective and efficient implementation of the integrated environmental management and permitting system for mining and water allocations currently being finalised in Parliament;
o Marine research and Conservation;
o SANParks – Indigenous forest management (R20M); and
o SANParks – Implications of application of municipal rates and taxes to National Protected Areas – in this regard an additional R80M per year will be required and the current accumulated debt totals R300M; and
· The Portfolio Committee noted with concern the cuts effected over the MTEF (2013/14 to 2015/16) to the Department’s baseline allocation in spite of the Department’s motivated submission to Treasury on the consequences of delivery of such cuts and the measures already taken over the past three years to reprioritise the budget and meet the capacity instruments to deliver against its regulatory mandates.
The Portfolio Committee is, however, extremely concerned about the inadequacy of allocations in general, the impacts of the cuts to the baseline of the Department and the fact that requests for additional funding were not granted in terms of areas of work that is substantially under-resourced such as the Ocean research programme and areas where the ability of the country to meet our international obligations and constitutional obligations to South African citizens are being compromised due to insufficient resources. The unsuccessful requests for additional funds in the following areas are of particular concern to the Committee:
· Expansion of the Conservation Estate where over the MTEF Cycle R0 has been allocated against the well motivated R225 million;
· Waste Services Infrastructure where over the MTEF Cycle R0 has been allocated against the well motivated R225 million;
· Oceans research programme where especially in the first year of the MTEF cycle resourcing is inadequate – of the R182 million requested ( and motivated based on commitments and actual costs associated with the existing programmes) only R75 million was allocated – the increased allocations from2014-2015 are however acknowledged;
· Regulatory, monitoring and enforcement systems as well as building the capacity of provinces in this regard in terms of biodiversity management, especially the wildlife crime information unit where R0 has been allocated against the well motivated R343 million;
· Implementation of the climate change response strategy where R0 was allocated against a moderate request R164 700 over the MTEF allocation – The committee is especially concerned over this as it learned that this programme is currently substantially funded through donor support. The committee find this an unsustainable approach to something of such high priority to the Country;
· The working on waste programme where R0 was allocated against the well motivated need of approximately R930 million. The committee is especially concerned about this in light of the high profile of poor waste management and waste services in especially impoverished areas.
· The People in Parks programme which focuses on the development of infrastructure in protected areas through community entrepreneurs and thereby addressing both employment creation and the increased ability of protected areas to generate income through tourism activities – R0 of the R550 million requested over the MTEF cycle; and lastly
· In terms of the fight against rhino poaching, only R75 million of the approximately R250 000 needed was allocated.
The consequences of insufficient resources for these programmes include:
· The inability of the Department and the Country to meet its international obligations and commitments in terms of, inter alia, the United Nations Framework Convention on Climate Change (reduction of green house gas emissions in accordance with the peak, plateau and decline trajectory, as well as facilitating transitioning to a low carbon, climate resilient economy) and the United Nations Convention on Biodiversity (percentage of land under formal protection - in order to realise the agreed 17% of land under protection by 2020 from the current baseline of only 7.7%, the expansion of the conservation estate is essential, whilst land for this purpose has been identified in line with the National Biodiversity Framework, no funds have been allocated to acquire the land needed);
· The inability to implement an integrated and multipronged strategy to arrest the surge in Rhino Poaching and the inability to reverse an increasing trend of wildlife crime in spite of crime prevention being a key priority of government (enforcement strategy);
· The inability to implement programmes and interventions that would, whilst addressing the poor state of waste management services in the majority of municipalities, also create employment for especially youth; and
· The inability to optimally utilise the state of the art research vessels and deployment of South African innovation in terms of research equipment that would increase our understanding of the ocean, the opportunities it offers for the economy and the role it plays in climate change.
The Portfolio Committee on Water and Environmental Affairs recommends the adoption of this Budgetary Review and Recommendation Report (BRRR) for the Department of Environmental Affairs.
[L1] “for example” in correctly used.
[L2] The use of for example is not correct in this context
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