Long Term Fishing Rights Allocation; Marine Living Resources Fund; Department of Environmental Affairs & Tourism 2005/06 Annual

LAND AND ENVIRONMENTAL AFFAIRS SELECT COMMITTEE
30 January 2007
LONG TERM FISHING RIGHTS ALLOCATION; MARINE LIVING RESOURCES FUND; DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM 2005/06 ANNUAL REPORT: BRIEFINGS

Chairperson: Rev P Moatshe (ANC, North-West)

Documents handed out:
Department of Environment Affairs & Tourism 2005/06 Annual Report presentation
2005/06 Annual Report (available at www.environment.gov.za)
2005 Long-term Fishing Rights Allocations presentation
Select Committee on Marine and Living Resources Fund Report: 2002-2005 and 2005/06

SUMMARY
The Department of Environmental Affairs and Tourism presented its 2005/2006 Annual Report to the Committee. The Marine and Living Resources Fund also outlined key aspects of its 2005/2006 Annual Report. A progress report on the 2005 Long-term Fishing Rights allocations was also presented.
 
The DEAT would lend financial and technical assistance to those provinces with a backlog of Environmental Impact Assessments (EIAs). The migration of marine resources from West to East coast posed a challenge to the livelihoods of many fishermen of the West coast and the Department would provide assistance and strategies for this. The department was committed to the training of black tourist guides in foreign languages to increase both the marketability and competitiveness of this field.

The Committee expressed their concerns over the social impact of the migration of fish to the East Coast, the effectiveness of combating poaching of marine resources and the visibility of the “”Green Scorpions”.  Concerns over the pace of transformation of the tourism sector and the neglect of township tours were also highlighted. Rural and underdeveloped areas needed to benefit from higher levels of tourism. The high vacancy rate in the department was also a cause of concern.

Members emphasised that Departments needed to recognize the mandate of the National Council of Provinces and when reporting to the NCOP should provide a provincial perspective.

The Department would provide written responses to the many of questions raised by the Committee.

MINUTES

Annual Report of Department of Environmental Affairs and Tourism
Dr Patrick Matlou (Deputy Director General: Tourism) presented the DEAT’s 2005/2006 Annual Report to the Committee.

Five goals underpinned the work of the Department, which included the creation of conditions for sustainable tourism growth and development for the benefit of all South Africans; the promotion sustainable utilization and conservation of natural resources to enhance economic growth as well as the improvement of the quality and safety of the environment.

The targets, achievements and challenges of all programmes in the Department were highlighted. As part its administrative programme, the department reported an improvement with service delivery as a result of the establishment of a call centre, the development of new recruitment workflows, an imbizo with international stakeholders held in Pretoria and Cape Town. There was thus a 19 percent increase in the traffic on the departmental website as well as a 95 percent uptime on the website.  However the promotion of empowerment and the achievement of representivity in key technical areas were still as challenge. It also struggled to retain a representative and performing team.

The effective marketing of South Africa as a tourism destination was still a challenge. South Africa was not well promoted in the United Arab Emirates, the bi-national Commission postponed the signing of an agreement with Nigeria; there had been a delay in the release of statistical information by Stats SA and the implementation of 2010 Tourism Organising Plan was as yet unfounded.  However, advancements in the transformation of this industry had been achieved with the launch of the Tourism BEE Charter and the appointment of the Tourism BEE Charter Council. A Tourism BEE Charter website had also been completed.

Discussion
Mr M Mzizi (IFP, Gauteng) commended the DEAT for their good work and hoped that this would continue. He asked what the difference was between part-time and full-time bursaries which was part of DEAT's  empowerment promotion strategy.

Dr Matlou answered that the full time tertiary institutions bursaries were for the development of specialized skills, and the cultivation of black scientists. Part-time bursaries further developed the skills of its employees.

In reply to Mr Mzizi asking what “Bojanala” meant, Dr Matlou answered that it meant ‘’ tourism’’ in Setswana and was the bi-monthly stakeholder publication produced by DEAT.

Mr Mzizi noted the Nepad workshop on Invasive Alien species and asked which species were considered invasive?
 
Dr Matlou replied that alien species referred to those which were not indigenous such as the Jacaranda tree.

In answer to a further question, Mr Van Schalkwyk said that the regulations for threatened and protected species as well as the norms and standards for hunting had been finalised by MinMEC in November. It was presently with the state attorneys for checking and will be published by the Minister before the end of March. The standards on alien invasive species had just been finalised and  DEAT would effect this by mid-February for public comment.

Mr Mzizi requested DEAT to explain the challenges that the court cases filed against its air quality authorizations, posed. He noted the 82 percent success rate in such cases.

Mr Lukey (Chief Director for Air Quality Management) explained that although this 82 percent success rate was good, the rate would improve, as its process of authorization became sophisticated and therefore more legally enforceable. The information for issuing of air quality licences, governed by 1965 legislation, had not been sufficiently detailed. The new legislation would improve the enforceability of authorizations as information would be more detailed. The Administrative Justice system strengthened the work of this unit as it could now follow clear guidelines when making administrative and legally robust decisions.

Mr Mzizi said that the DEAT had not yet signed a formal cooperation protocol with the South African Police Service (SAPS) and Department of Water Affairs and Forestry (DWAF). Why not?

Mr Adams said that, given the recent muggings in Kirstenbosch Gardens, and Tafelberg, and the level of poaching, the Green Scorpions were not visible. Could the Department explain where these officials were and give an explanation of their current activities?  Since members were committed and serious about service delivery, government departments were required to be so too. The President’s state of the nation addresses, the budget votes as well as the approval of budgets by parliamentary committees were senseless if service delivery was not improved upon. This was unacceptable.

Mr Lukey responded that the Environmental Protection Unit was not a policing unit, and did not intend to replace the police.  The unit worked in partnership with SAPS rather than in competition as the latter would merely complicate its work. Such assistance was needed especially in situations of danger, in which environmental inspectors could not defend themselves. No formal working agreement between the unit and SAPS currently existed and this could impact on the safety of inspectors when conducting investigations. He added that the relationship with the SAPS was needed to ensure that environmental crimes could be reported at police stations. A memorandum of understanding with the SAPS would strengthen the work of the SAPS.

At this stage, there is no formal agreement for such cooperation and this puts the inspectors in harm's way. DEAT had an excellent relationship with the SAPS, but this relationship should be extended so that people could report environmental crimes at police stations. Currently, unless people report to the Department or provincial departments, the police would not know what to do with environmental crimes such as complaints about noise or burning leaves. The Department would like to strengthen the partnership with SAPS so SAPS could refer to the environmental management inspectorate, as the best trained people. The memorandum of understanding with the South African police service could strengthen the work done.

The Environmental Management Inspectorate did not prosecute crime. It investigated crimes and would then hand the case down to a prosecutor. South Africa had very few environmental prosecutors, and this impacted negatively on the ability to fight well-compiled and investigated cases in courts. Prosecutors who were not familiar with environmental law, and despite a thorough briefing around such issues posed a challenge. A new prosecuting training course in the methods of managing environmental crimes cases had been developed. In Kwazulu-Natal, Mpumalanga and the North West, thirty-six prosecutors had attended, and showed great enthusiasm for the prosecution of environmental crimes.

The growth of the Environmental Protectorate exceeded expectations. Over 800 accredited environmental inspectors were currently in the field. These individuals had survived a tough SETA accredited training course, which required a 75 percent to pass the final examinations.  Inspectors were highly trained in terms of investigation, environmental law as well as additional specialized training in specific fields like poaching. Training in enforcement challenges around poaching in national parks, reinvigorated officials.

Due to the work of this unit, the Department had won all twenty court cases lodged against it. It was true that that the unit chose to investigate and follow the easier cases as this unit was too young to have too many failures. The 100 percent success rate would promote compliance. This would only be achieved if the public believed that if the unit took on a case, it would not lose. The unit built very strong cases and demand a jail sentence. At this point a process of plea-bargaining would be entered into and the Department could gain more victories that had real environmental benefits. This could also include the planting of indigenous trees as part of a sentence.
 
The ‘’Green Scorpions", although established, was still small in number. The unit’s successes were not popularised enough, although the unit had been unveiled with much fanfare. The Department needed to focus on highlighting the successes of this unit. He stressed that the ‘’Green Scorpions”’ was a success story and was growing.

Mr Mzizi raised his concerns over the inability of environmental prosecutors to conduct criminal investigations and analyse evidence. Why did the Department not have its own inspectors, as this would ensure it could conduct its own investigations and lessened dependence on SAPS?

The Department intended to establish a relationship with the forensics elements of the South African Police Services. The establishment of its own forensic laboratory and unit would be too costly, and would thus use the SAPS to test environmental crimes. Typically, if an illegal hazardous waste site was found and wanted to test the soil and try trace it back to find out who may have places such hazardous waste. Although willing to assist the unit, the department, the SAPS expressed the need for a formal relationship to establish a clear working relationship.

Mr L J Van Rooyen (ANC, Free State) raised his concerns over contradictory information regarding DEAT’s bursary scheme and the targets set in both the presentation and the 2005/2006 Annual report. The presentation made mention of the rewarding of 50 registered learnerships and 20 fulltime bursaries; 40 part-time bursaries and 60 registered internships. Yet on page 7 of the Department’s 2005/2006 Annual Report, it was mentioned that 32 fulltime bursaries and 60 part-time bursaries had been granted. Such contradictory information was confusing. Could the Department provide the correct figures on the granting of the different bursaries and learnerships?

Dr Matlou said that the Department took the issue of incongruency of information and figures very seriously. The concerns of the members were noted and the Department would review this information contained in both the presentation and its 2005/2006 Annual Report .It would provide the Committee would the correct details in due course.
 
Mr Van Rooyen asked for clarity on the different learnerships offered by the Department. Were the learnerships focused on decreasing the skills shortage within the Department? 

This question was not answered.

Mr Van Rooyen noted the Department’s overachievement on its 42 percent target set on its Black Economic Empowerment Scheme. Why was such a modest target? Was this done to enhance the quality of the reporting for this financial year?

Dr Matlou responded that this was a baseline target that would gradually be improved. In many instances, the Department needed to encourage the achievement of these targets to ensure that senior managers understood the importance of and how to drive the BEE process. The level of representivity of companies procured to deliver certain functions or services for DEAT, was also considered. The Department had always intended to gradually improve on the targets set.

A BEE Chapter Council had been appointed in October 2005 and was currently in its developmental phase. The instititutionalization of this Council’s work remained a priority for better half of 2006. A recently commissioned study into the level of black economic empowerment in large and unlisted companies, as well as SMMEs in the tourism sector revealed that many individuals and companies were unclear about the BEE codes of good practice. These codes also dealt with exemptions and qualifications of SMMEs and were released in December 2006, but the DEAT had determined that those individuals or companies with a turnover of R5 million were absolved from meeting the Charter. The absolution certain actors within the agricultural, tourism and transport industries remained a challenge and concern. DEAT and DTI were in continuous discussions regarding this matter, and the Department had made its position clear on especially sectoral determinations.
He added that Cabinet had approved the codes of good practice and had requested that Minister of Trade and Industry, Mr Mandisi Mpahlwa, to begin the process of gazetting these sectoral charters.

Black economic empowerment in the tourism sector, remained a work in progress. DEAT had encouraged all government departments to promote BEE and compliance with the Act in particular, when undertaking tourism related activities. Although compliance with the Act was voluntary for the private sector, it was compulsory for all government departments and entities. It had requested all government departments to report on at least the grading of this process, and these have begun to be submitted. Improved reporting on spending on BEE related activities in the tourism sector were needed.

Mr Van Rooyen expressed his concerns that only nine percent of all BEE related programmes in the DEAT, benefited women entrepreneurs. Why was this? What was the department’s target in this regard?

This question was not answered. It should be noted that the Department would submit written responses to those questions it could not provide immediate responses to.

Mr Van Rooyen commented that the information regarding the DEAT’s social responsibility programmes and Extended Public Works Programme (EPWP) was very confusing. He said that information in different parts of the 2005/2006 Annual Report cited figures of 50994 000 (pg9) and 75 000 (pg 18) jobs created in the previous financial year. This needed further clarification.

Mr Van Rooyen said that page 29 of the2005/2006 Annual Report made reference to 1,39 million job days created. What did this mean?

Dr Matlou explained that a job day merely referred to an eight-hour working day. This was differentiated from a training day, calculated on the number of hours people spent in training, using the eight-hour working day as a base figure. The number of people for each project under the SRPP would then be multiplied by this figure. Such projects needed to provide both training and temporary employment. However, participants in the SRPP projects were also benefit from further training opportunities. The current figure was 109 000 jobs created and not 1.39 million as earlier indicated.

Mr Van Rooyen noted that pages 9 and 18 referred to both 307 jobs and 27 000 permanent jobs created. Which figure was more accurate?

This question as not answered.

Mr Van Rooyen asked whether the discrepancy between the performance rewards granted to band A, and bands B, C, and D could be explained? Could the standard by which these bonuses were calculated also be clarified?

Dr Matlou responded senior management staff was divided into bands A (directors), B (chief directors) C  (Deputy directors general), D (Directors-general). The funds allocated to level A were higher due to the number of directors in the Department.
 
Mr R J Tau (ANC, Northern Cape) commented that the Department presentation lacked provincial perspective. This showed a lack of understanding of the mandate of the National Council of Provinces (NCOP) as one of the two Houses of Parliament. The NCOP and its select committees served to elevate provincial matters to a national level. Although the broad outline and simplification of DEAT’s work was appreciated, the impact of its work on a provincial level was needed. The provincial relevance and assessment of job creation on a provincial level, and the impact of the bursary scheme needed a provincial perspective. He requested the Department provide a breakdown of its work as it relates to the provinces in the key focus areas. It should emphasise the Conditional Grants given to provinces. Did the subsidies and transfers in its financial statements take account of these grants? Were these transfers and subsidies related to provinces? If not, were these grants allocated to provinces by the national DEAT? For what purposes were provincial grants used? To what extent did these have an impact? Could the Department also provide an assessment of how provinces implemented their provincial plans?

Mr Van Schalkwyk suggested that an additional meeting was needed on specific projects plus progress reports per province. This was quite a complex matter as both National Treasury and the Extended Public Works programme also prescribed the activities reported in the strategic plan (as a baseline). A report could be prepared that included amount of money spent on projects per province and performance to date.

Dr Matlou explained that transfers were only made to DEAT's public entities such as South African Tourism. The SARRP were the main recipient of subsidies and regional levies. Provinces would receive funds for projects that related to SARRP, as well as the impact of the spending by South African National Parks and SAMDI in National Parks and botanical gardens. The bulk of the money allocated to South African Tourism was spent on marketing South Africa internationally.

Dr Matlou acknowledged the importance of a provincial perspective of the work done by the department, when briefing the select committees. Admittedly, the presentation made to the members provided a mere overview of its work, and an additional meeting with the Committee was needed to discuss and present its work as it relates to provinces. The figures and information were available particularly as it related to its Social responsibility and Poverty Alleviation Project, foreign language training, especially in Chinese. Trainees were sourced from different provinces and the statistics could be made available to the Committee. The Department would need to make a commitment to the Committee to provide this feedback.

Mr Lackey answered that intergovernmental cooperation between national, provincial and local level, in matters relating to air quality management was groundbreaking. National-Provincial Air Quality Officers Forum as well as the Provincial- Municipal Air Quality Officers Forum meet quarterly to discuss air quality issues of provincial/national and provincial/municipal importance respectively. He added that the national department was also represented at the on the provincial/municipal air quality officers forum.  It was thus clear that communication coordination between the three spheres of government was apparent. An annual Air Quality Lekgotla was also held during which air quality managers from across the country discuss issues of air quality management. The inaugural session was held the previous year, with a good attendance.

He reminded the Committee that one of the most contentious issues at the time of debating t he Air Quality Bill was the capacity to implement and enforce the legislation. The attendance of over 200 delegates at the lekgotla, indicated to a steady build up of this capacity.  Presently, only Kwazulu-Natal, Gauteng and the Western Cape, had provincial/municipal air quality for and structure in place. These provinces had a good working relationship with provinces. Since provinces such as the Northern Cape and the Northwest did not suffer dramatic air quality problems, they were not expected to set similar fora. Mpumalanga was likely to be declared the second national priority area concerning air pollution in near future, and should therefore establish a provincial/municipal air management officers fora. Provincial and municipal coordination was very important if these bodies and initiatives were to work effectively.

Mr Lukey answered that R20 million had been raised by the Environmental Quality and Protection Unit, in the DEAT, to transfer to provinces to assist in mainly the backlogs in environmental impact assessments (EIAs). Certain problems had faced great backlogs, since these provinces had big developments on their books, which they had not been able to clear. While companies were awaiting feedback on these assessments, many provinces lacked the capacity to undertake EIAs. Funds had therefore been raised, with assistance form the National Treasury, to assist in clearing these backlogs.

The Chairperson reminded the Department that the Committee had raised their concerns over the lack of capacity to undertake and complete EIAs during a meeting with the Department the previous year. This meant that big projects, including developments required for the 2010 Soccer World Cup, would be unduly delayed. Greater clarity about this issue was needed.

Mr Lukey replied that the Department had taken the concerns raised by the Committee at that meeting very seriously. It had responded to these concerns in very specific ways, important of which were to provide clear guidelines and directions on the workings of EIA regulations. For instance petrol stations had to be provided with national guidelines on how the regulations worked. Highly technical developments were also being delayed at a provincial level because many of the structures lacked technical expertise to complete these assessments. Rather than reaching premature conclusions, the department had stalled the process to investigate these situations carefully. Support lent to provinces related to these issues. National department had identified specific problems and had instructed provinces to clear backlogs. He reiterated that the department had a clear understanding of why backlogs existed and would provide the necessary assistance to provinces to clear these. The total amount of funds transferred to the provinces was available, and would be provided to the Committee.

Its investigation into the delays and backlogs of EIAs was continuous and would provide resources, where necessary to speed-up the process. The Department, due to a decision by the cement industry to burn hazardous waste in cement kilns, as an alternative fuel, decided in such national issues, a national policy needed to be developed, since burning certain types of waste would lead to pollutants that were internationally controlled. This example affected seven provinces where this kind of initiative had been targeted. The Northwest province would not allow hazardous waste to be burnt in these kilns and therefore refused the conducting of an EIA. This practices was becoming a problem in the Northern Cape, Eastern Cape, Gauteng and Western Cape. It was decided that, as an interim measure, the national department would consider the complex EIAs. Where there is a potential of lack of uniformity, in decision making and also where there are instances where national departments know that provincial counterparts would not have the capacity to conduct a proper assessment, the national department was assisting by either taking these to the national department which was a limited area or by lending support directly to provinces to help them deal with these matters.

The Chairperson said that he was not satisfied with the answer, and requested the Department to provide a written response.

Mr Lukey replied that a report was already being developed. Support to provinces formed part of a capacity building programme for provinces, and progress was reported on a monthly basis. This report would be made available to the Committee.

Mr A Watson (DA, Mpumalanga) asked whether the Air Pollution Act had a bearing on EIAs. Since Mpumalanga, with its mines, power stations and saw mills, was considered a second national priority area in terms of air pollution, would the Air Pollution Act outline guidelines on how such interactions should take place? This week a sawmill was shut down in Barberton due to the actions of a councillor rather that provincial or national department. This councillor contested the company and its pollution. It turned out the sawmill could not afford to adjust the operation to comply. Such issues needed to be looked at.

Mr Lukey explained that EIAs was the one stop decision making process of environmental protection”. The following areas were views as pollution hotspots:

Vaal triangle Air shirt (South Johannesburg, to the Northern Free state) and was managed by the national air quality officer in conjunction with municipal counterparts. An air quality national plan is in development and the department had bought six air quality-monitoring stations to monitor the area in that area. The second priority area was Ekhuhuleni, Witbank and Secunda. Studies from the University of the Witwatersrand and the Air pollution service  indicated that this was the second priority area. National hotspots were areas that extended beyond provincial boundaries. Other potential provincial hotspots were Brits, Rustenburg, Western Cape (the broader Cape Town Area, South Durban and Durban itself, Richards Bay was seen as an emerging pollution hotspot.  These were areas of pollution that could potentially threaten people’s health and well-being. It was added that there would always be localized air pollution problems be it from a sawmill in Barberton or a neighbour burning compost. Although the impact of these may seem insignificant, those individuals in closer proximity could be negatively affected.

Municipalities, for these reasons, must be empowered to implement their constitutional mandate. Constitutionally, air pollution was a municipal function. Although, at national level legislative planning could be done, the implementation should occur at a municipal level.

A review of the major industries’ certifiction in Mpumalanga would start and would be tightened up where necessary to make these more enforceable. This would occur in the next 6-24 months.

Mr van Rooyen, focusing on conditional grant payments to municipalities, wanted to know what monitoring mechanism the Department had in place to ensure that these grants were used purposefully and optimally.

Mr Tau said that the Department had made a commitment in 2004, at the time when no legislative framework existed to guide the establishment of cooperatives in provinces. The Department had made a commitment to explore the idea of cooperatives especially as it related to the development of rural tourism development as part of its local economic development approach. The key issues would have been the provision of support to cooperatives and not only at conceptual level but also committing resources. He added that since 2004, a legislative framework had been developed and had come into effect.

Dr Matlou answered that that the development of cooperatives were part of the overall study of matters relating to the second economy. A study conducted with the Human Sciences Research Council (HSRC), explored the development of cooperatives. Also, the department had transferred funds to the Tourism Enterprise Fund, as well as the tourism enterprise development. R3 million had also been allocated to the Open Africa agency to explore and develop different tourist routes. A variety of SMMEs in each route would then be brought together and marketed. This would ensure a more even distribution of the benefits of the level of tourism. The national department would spearhead the effective marketing of these routes. Since a workshop regarding this issue had been held the previous year, seventeen more workshops had been held. With the agreement of FIFA, non-hotel accommodation would be promoted during the 2010 Soccer World Cup. The promotion of groups of two hundred non-hotel accommodation would ensure that both urban hotels and small businesses benefit from increased tourism. Satellite towns such as George as well as accommodation there would also be promoted during the tournament, and scheduled flights would be offered to host cities.

This remained a work in progress, and Minister Van Schalkwyk, to start the negotiations with FIFA. DEAT was responsible for the development of more B&Bs. It would work closely with the tourism enterprise programme as well as the Tourism Grading Council of South Africa, in this regard.

Mr Tau said that the development of local economies with specific emphasis on building cooperatives could not merely be regarded as part of the development of the second economy. The specific programmes and plans needed to be provided. These cooperatives did not necessarily refer to increased growth of the Garden Route, but also referred to ways to build the capacity of places such as Xunu, in the Eastern Cape, to ensure that these areas were transformed into tourist attractions. As part of the intergovernmental relations, provinces needed to monitor how municipal authorities were encouraging the creation of cooperatives. The development of cooperatives were sometimes confused with the promotion and development of SMME’s. These were distinct entities and contributing towards the development of the historically disadvantaged by absorbing them into the mainstream economy. This issue was also raised in 2004, when enquiring about the extent to which a budget had been set aside to bring people to understand the concept of cooperatives. It could happen that the cooperatives could turn out to be the development of SMME’s. Could the Department explain what the pitfalls of the development of cooperatives were?

Ms H Matlanyane (ANC, Limpopo Province) said that the Department had stated that 1.15 percent of the Department was represented by people with disability. The Employment Equity Act stated that Departments needed to be 2 percent representatives of people with disability. What were the challenges the Department faced in achieving this 2 percent target? This was a similar challenged faced by most departments.

Dr Matlou answered that the Department had gone through a review of the vacancies of the department had had designated certain posts for these with disabilities. The Department was currently still below the 2 percent target but it remained a work in progress.

Ms Matlanyane expressed her concern regarding the slow finalization of disciplinary cases. She sad that only 45 percent of such cases had been settled. Is this slow progress not hampering the work of the Department?

This question was not answered.

Ms B N Dlulane (ANC, Eastern Cape) requested clarification on the requirements of section 41 (E) PFMA (1999). Should annual reports be submitted to the National Assembly only?  .

Mr Ackerman answered that the PFMA only stated that since the DEAT was a national department, the annual report should only be submitted to the National Assembly.

Mr Adams replied that the national departments were supposed to submit the annual reports to the national parliament, of which the NCOP formed part. Mr Tau asked whether the stipulations of the PFMA or the requirements of the constitutions took precedence. The executive was accountable to parliament, and parliament constituted of two houses; the NA and the NCOP. This context needed to be placed in a constitutional perspective, and then clarified.

The Chairperson requested the Department to clarify this matter.

Dr Matlou apologised for the error made by the DEAT. The PFMA stipulated that an accounting officer for a department, trading entity or constitutional authority must in case of a submit to parliament and therefore to both the National Assembly and the National Council of Provinces.

Mr Ackermann added that he would correct this error in the next report.

Ms Dlulane asked why the Department’s audit committee had resigned? Could reasons be supplied?

Mr Ackerman answered that members of the audit committee were appointed for a period of two years, but only two members had resigned prior to the end of the two-year term. The minister would then appoint a new committee.

Ms Dlulane said that the Annual report referred to the resignation of the audit committee. What were the reasons for this resignation?

Mr Ackermann replied that the members cited work pressure as a reason for their resignation. Subsequent to these resignations, the term of the audit committee expired. A new committee was then appointed.

Mr Van Schalkwyk (Chief Director: TFCAPA) said that the Department accepted responsibility for the delay in appointing a new audit committee. This would not be repeated again.
 
Ms Dlulane wanted to know the weaknesses of the Department’s control systems, cited by the Auditor-general. What mechanisms had been developed to rectify these weaknesses.

This question was not answered.

Ms Dlulane cited the R81.6 million irregular expenditure cited by the Department. Could this be explained?

Mr Ackermann explained that this referred to the contractual payments for line items such as its enterprise development programme. This item had originally been captured under goods and services, but the Auditor-general had advised that these payments should be listed under transfer payments. This listing then was merely a matter of economic classification, and NT needed to approve this irregular expenditure.

Mr Van Rooyen asserted that certain obligations, contained in the PFMA, governed the transfer of funds. The department, by declaring the funds under goods and services opted for an instant solution. This seemed like ‘’creative accounting”. However, the Select Committee on Public Accounts would deal with this matter.

Referring to the increase of consultancy fees, from R96 million to R106 million, Mr Van Rooyen, requested a written explanation for this recurrent problem. Did the challenges faced by the Department, this persistent level expenditure on consultants?
 
Mr Van Rooyen noted that travel costs had increased from R26 million to R40 million. Why and to where were officials travelling? The Department spent money at a frightening pace.
A written explanation was needed for the rise in travel costs.
 
Ms Dlulane noted the non-compliance of provinces to submit performance and management information plans to the Department.  This was a persistent problem. What was the department doing to induce compliance?

Mr Ackermann answered that the Minister had extended the submission date. This would not be repeated. It was predicted that this matter would not appear on their statements again.

Ms Dlulane reiterated that this should not have occurred. Could reasons be supplied for this oversight?

This question was not answered.

Mr F Adams (ANC, Western Cape) noted that the Director-general of DEAT , Ms Pam Yako, had not yet met with the Committee since her appointment. The Committee had made a decision, the previous year to issue such an invitation. Did the Department recognize the NCOP as the a house of parliament? DEAT’s website merely cited the portfolio committee’s members and not those of the select committee. The erroneous reference made to the Select Committee as “Standing Committee” reflected the Department’s disregard for the NCOP. This should not merely be accepted as a printing error.

Mr Adams wondered if the BEE strategy for the tourism sector was successful. Members had attended a workshop, during which township tours and the intention to market township tourism were unveiled with much fanfare. It should also be recalled that the minister, committing himself to these ventures, had slept in a bed and breakfast in Soweto. However, despite such initiatives, hotel chains such as Southern Sun International and Protea Hotels were still being branded and marketed by the Department. Although the Committee appreciated the contributions made by these established business to the tourism sector, township marketing was neglected. Hotels discouraged tourists from visiting townships, and therefore these communities were not benefiting from an influx of tourists, especially in the Western Cape. Campaigns such as the Sho't Left campaign had merely disappeared. Could the department explain to the Committee the current situation?

Dr Matlou responded that closer cooperation between national, provincial and local government was needed in the marketing of townships as an attraction. Although there had been many marketing campaigns, the funds allocated to the Department and thus South African Tourism was largely spent on marketing South Africa, internationally. The nine provincial authorities were responsible for highlighting and promoting specific attractions of each province. Municipalities and local authorities, if resources allowed, would then have to market specific attractions in particular districts.  Budgetary restraints and discrepancies were a huge challenge as some metros had bigger budgets than smaller municipalities. Moreover, certain provinces such as the Northern Cape, had smaller budgets than metros.

Although the Intergovernmental Relations and Framework Act governed much of the departments work, duplication of work and activities needed to be reduced. This would improve intergovernmental relations. A management meeting held the previous day, had resolved to develop strategies to streamline the work of national, provincial and local departments. Issues relating to international marketing had been discussed by the Cabinet Lekgotla the previous week.

Issues relating to township marketing were viewed as part of the general discussion on the work of the second economy, and this initiative could potentially benefit many South Africans. This warranted closer investigation. The office of the deputy president had tasked the DEAT to promote and work on this issue. Government had agreed that the DTI should lead this process and the DEAT would streamline its work in relation to DTI.  It had asked South African Tourism to look at matters relating to second economy marketing, which included township marketing.

It had asked South African Tourism to look at this issue of second economy marketing. Current tourists guides needed to be equipped with unique selling points. Foreign language training would enhance their competitiveness. The Department had enlisted the assistance of Chinese, French and Spanish officials in the training of guides in these three languages. 34 tourist guides had completed preliminary training in Spanish. This foreign language training would prepare guides for the 2010 Soccer World Cup. DEAT was aware that Germany, host of the previous world cup, had guides trained in each of the official languages of the participating countries. There was a shortage of black tourist guides especially those skilful in foreign languages. After the group had learnt Chinese from February 2005 to January 2006, they had been to China last year from August to September. The Department together with the office of the deputy president was trying to develop more skills, apart from the tourist guiding skills needed. This would make these individuals more marketable.

Mr Adams expressed his alarm at the 31 percent vacancy rate in the Department. What could be the reasons for this? President Mbeki always highlighted the importance of service delivery. How could the department deliver on its targets, if such a high vacancy rate was apparent? How could this Department deliver and carry out its mandate if such a situation persisted? People employed in the Department had even left the Department due to the appointment process, when vacancies were apparent.
 
Dr Matlou answered that the vacancy rate in the Department at one stage had been 25, but had increased to 31 following an institutional review. He conceded that the current vacancy rate could result in underperformance, but the Department remained committed to filling these vacancies as soon as possible. It had quickened the recruitment process; including setting timelines and working closely with the corporate affairs officials to ensure that the level of vacancies was reduced and the pace of filling posts were increased.

Regarding the irregularities in the appointment of officials, Dr Matlou responded that when information regarding specific incidences could be provided, the department would be able make a comment. The Department would then consult with its corporate affairs department to consult with Parliament on this issue. The Department took note of the concerns raised by the Department in this regard and admits to the seriousness of the situation.

Mr Adams said that the Departments reference to a R12 million savings on its budget was unacceptable. Members of Parliament had voted for budgets that were intended to be spent by Departments. Departments, in turn pleaded with parliamentary committees to approve respective budgets. Yet at the end of each financial year, it was reported that departments’ had not delivered on nor spent budgets. The DEAT needed to delivery on critical issues, and its ‘’savings’’ was unacceptable. Members would be more understanding, if an over-expenditure, however unacceptable, was reported.

Dr Matlou noted that the department could have overspent rather than under spent on its budget. The Department had indicated that out of a budget of almost R2 billion , it had under spent by R7 million.

The Chairperson asked whether the R12 million was a saving or an under expenditure, as indicated in the presentation?

Mr R Ackerman answered that this R12 million referred to committed funds that was not yet spent. This amount had been rolled-over to the next financial year. Although this reference to savings was confusing, it should be appreciated that the Department had spent 99.6 percent of its budget. Merely, 0.4 percent of this budget remained unspent.

The Chairperson responded that the word “savings” was not an appropriate term, given the explanation by Mr Ackermann. There could be no savings and money needed to be spent to the last point.

Mr Adams reiterated that if the Department were to overspend or under spent, it needed to face the consequences too. Departments were required to spend their entire respective budgets, irrespective of its size.

Mr Adams given the recent muggings in Kirstenbosch Gardens, and Tafelberg, and the level of poaching, the Green Scorpions were not visible. Could the Department explain where these officials were and an explanation of their current activities?  Since members were committed and serious about service delivery, government departments were required to be so too. He said that the president’s state of the nation addresses; the budget votes as well as the approval of budgets by parliamentary committees were senseless if service delivery was not improved upon. This was unacceptable.

Mr Lukey responded that was not a policing unit, and did not intend to replace the police.  The unit worked in partnership with the SAPS rather than in competition as the latter would merely complicate its work. Such assistance was needed especially in situations of danger, in which environmental inspectors could not defend themselves. No formal working agreement between the unit and SAPS currently existed and this could impact on the safety of inspectors when conducting investigations. He added that the relationship with the SAPS needed to be to ensure that environmental crimes could be reported at police stations. A memorandum of understanding with the SAPS would strengthen the work of the SAPS.

At this stage, there is no formal agreement for such cooperation and this puts the se inspectors in harms way. DEAT had an excellent relationship with the SAPS, but this relationship should be extended so that people could report environmental crimes at police stations. Currently, at the moment unless people report to the Department or provincial departments, the police would not know what to deal with these issues. For example complaint about noise, or burning leaves, the police could not deal with such reports of environmental crimes. The Department would like to change such a situation to strengthen the partnership with SAPS and therefore could immediately the SAPS when receiving such complaint could refer to the environmental management inspectorate and thus the best trained people could therefore report on it.  This would not reduce the effectiveness of the inspectorate and it is intended that the memorandum of understanding with the South African police service could strengthen the work done.

The Department intended to establish a relationship with the forensics elements of the South African Police Services. The establishment of its own forensic laboratory and unit would be too costly, and would thus use the SAPS to test environmental crimes. Typically, if an illegal hazardous waste site was found and wanted to test the soil and try trace it back to find out who may have places such hazardous waste. Although willing to assist the unit, the department, the SAPS expressed the need for a formal relationship to establish a clear working relationship.

Environmental Management Inspectorate did not prosecute crime. It investigated crimes and would then hand the case down to a prosecutor who would then need to present the case in court. South Africa had very few environmental prosecutors, and this impacted negatively on the ability to fight well-compiled and investigated cases in courts. Prosecutors who were not familiar with environmental law, and despite a thorough briefing around such issues posed a challenge. A new prosecuting training course for prosecutors in Kwazulu-Natal, Mpumalanga and the northwest had been developed. These trained prosecutors of each province in the methods of managing environmental crimes cases. Thirty-six prosecutors had attended, and showed great enthusiasm for the prosecution of environmental crimes. This would ensure that the prosecutors managing cases would be familiar with issues faced, with the assistance of the Department of Justice and Constitutional Development.

The growth of the Environmental Protectorate exceeded expectations. Over 800 accredited environmental inspectors were currently in the field. These individuals had survived a tough SETA accredited training course, which required a 75 percent to pass the final examinations.  Inspectors were highly trained in terms of investigation, environmental law as well as additional specialized training in specific fields like poaching. Training in enforcement challenges around poaching in national parks, reinvigorated officials.

Due to the work of this unit, the Department had won all twenty-court cases lodged against it. It was true that that the unit chose to investigate and follow the easier cases as this unit was too young to have too many failures. The 100 percent success rate, would promote compliance. This would only be achieved if the public believed that if the unit accepted a case, it would not lose. The unit built very strong cases and demanded a jail sentence. At this point a process of plea-bargaining would be entered into and the Department could gain more victories that had real environmental benefits. This could also include the planting of indigenous trees as part of a sentence.
 
The ‘’Green Scorpions, although established, were still in a small number. The unit’s successes were not popularised enough, although the unit had been unveiled with much fanfare. The Department needed to focus on highlighting the successes of this unit. He stressed that the ‘’Green Scorpions”’ was a success-story and was growing.

The Chairperson said that the Department should answer these concerns in the responses. Members of parliament were being lashed by ordinary South Africans in their respective constituency on issues raised by Members, as well as, how government planned on dealing with these concerns. The Committee had expressed a commitment to be much more vigilant in interrogating the work and performance of Departments.

Dr P Matlou responded that the delegation had listened very carefully to the concerns raised by the Committee. The department would try to clarify a number of issues raised by Members during the process of the meeting but would need, if the Committee approved, provide detailed response to other issues.

Mr Van Rooyen raised his concerns over the ten-month delay in appointing a new audit committee. Why was this?  He added that this delay could explain the observations made by the auditor general are report.

Mr Van Rooyen stressed that the outsourcing of the functions of the audit committee to another company was mind-boggling.  What were the total costs of this outsourcing? Could reasons be supplied for this decision? Did the Department not have faith in its own audit committee?

Mr van Schalkwyk (Chief Director: Transfrontier Conservation Areas) said that the Department took full responsibility for the ten-month delay in appointing a new audit committee and assured the committee that this would not happen again. The internal audit function had been outsourced, and not the functions of the audit committee. The internal control function reports directly to the director general and the audit committee reports to the minister.

Mr Van Rooyen said that the responses made by the Department were confusing. Ms Dlulane also expressed her dissatisfaction with the responses.  Could the Department supply the reason for a 10-month delay, in the appointment of new audit committee. Why was this process stalled?

Mr Van Rooyen asked what the function of the audit committee was, since the internal audit function had been outsourced.

The Chairperson asked what progress had been made regarding the policy development for aquaculture policy.

Dr M Moyekiso (Deputy Director-general: Marine Conservation management) replied Minister Van Schalwyk had approved the aquaculture policy the previous year. This was gazetted towards the end of 2006; public comments had been invited and subsequently received. These comments would be incorporated into a draft policy. The DEAT would present this document to MINTEC in March, and then MinMEC in June. The policy would be ready subsequent to this process.

The Chairperson asked how the department differentiated between marine aquaculture and Finland breeding of Aquaculture as well as the policy for the inland breeding of fish. Is this within the domain of the agricultural department as it has a bearing on these three departments?

Dr Mayekiso confirmed that the departments of Water Affairs and Forestry, Environmental Affairs and Tourism as well as Agriculture and Land Affairs, had a common interest in aquaculture. Two kinds of aquaculture could be discerned: fresh water aquaculture (rivers and dams) and marine aquaculture, which involved the breeding of marine species in salt water. In both instances the Department of Water Affairs and Forestry’s involvements was required to ensure that water resources were not contaminated and compromised. The Department of Agriculture and Land Affairs administered and managed fresh water aquaculture.

The Chairperson requested data regarding the increase of black tour guides. Was the number really increasing?

The Chairperson said that the DEAT informed the Committee that hunting norms and standards had been developed. Could the Department elaborate on this?

This question was not answered.

 Mr van Schalkwyk explained that alien invasive species also concerned wild life species. The department was working closely with neighbouring countries. As constructive conservation areas were being developed, these areas needed to be managed properly. What South Africa intended doing as far as the bio diversity is concerned is to make sure that it is applicable to the neighbouring countries.

Mr van Schalwyk explained that Conditional Grants was part of the Division of Revenue Act (DORA) for provinces. The Department had not yet made such transfers to provinces, but could in the next financial year to assist provinces in dealing with EIA backlogs. The DEAT remained discussions with National Treasury about this matter.

Mr van Schalkwyk answered that regulation of National Treasury allowed for a 2 percent over-and /or under expenditure. Viewed comparatively, the department was managing its expenditure very well. It would like to spend 100 percent of its budget, however given the size, this goal was quite difficult to achieve.

Mr Ackermann answered that the audit committee was constituted in accordance with the regulations of the PFMA.  It was therefore prescribed that the department have an audit committee. This committee had to look at the effectiveness of internal controls, the quality of the monthly and quarterly reports to be submitted, and it must evaluate the annual financial statements.  The internal audit component conducted the groundwork for the committee. The department also provided the monthly reports to the audit committee to enable them to be able to do the evaluations.

Dr Matlou answered that the department may have to provide more detailed reports regarding the cooperatives. Through the tourism Enterprise programme the Department begun to work with tourism associations in different parts of the country. Working through the Open Africa programme as well, the DTI, to unite the groups and enterprises, but not in cooperatives. The department would consult the DTI and Agriculture regarding this matter and would provide feedback in due course to find out whether the second economy strategy could be linked to the issues around cooperatives. He added that BEE gave a voice to the smaller actors in the industry.

Mr Tau acknowledged the commitment made by the Department to provide the necessary information regarding its work in provinces.  He emphasised the strategic role of the NCOP and select committees as this House of Parliament elevated provincial and local matters to a national level. It was the space in which both local, provincial and national government meet to discuss and debate issues of mutual importance. The minister, in the forms of debate and questions, would thus gain an appreciation of the most pertinent issues faced by provinces. The department needed to be mindful of this strategic role.

Regarding the R640 million the department received for the EPWP, Mr van Rooyen requested a detailed written explanation and progress reports on these projects in each province. The construction of the Kgalagadi road, although started three years ago, was still not completed. These concerns were also raised at the previous meeting with the DEAT, the previous year.

Ms Dlulane wondered how many rural nodes the DEAT had identified. The Department did not supply the necessary comparative details, but merely stated that rural nodes had been  achieved. Could the Department provide cleared details, including the challenges faced in this regard?

This question was not answered.

Dr Matlou requested the Committee’s permission to provide more detailed and written feedback on the questions raised Members. These would be provided to the Committee in due course.

Before adjourning the meeting, the Chairperson requested the Committee to nominate a member to Chairperson the second part of the proceedings.

Mr Adams nominated Mr Tau, with the agreement of the rest of the Committee.

Marine Living Resources Fund: presentation by the DEAT
Mr Abdullah Ismail (Chief Financial Officer: Marine Living Resources) delivered the presentation.

The MLRF was established in terms of the Marine Living Resources Act (MLRF) of 1998. As the fund generated its own income, these sources of income included levies on fish products, licence fees and permits, fines and confiscations, harbour fees and transfers from the DEAT. Personnel expenditure was funded by the vote of the department.

The Office of the CFO had experienced the following challenges since  2002 to 2005/2006 financial year. Revenue into the fund had been erratic over the 2002, 2003 and 2004. Operating expenses had increased significantly. Annual increases for 2003 and 2004 and 2005 had been 25 percent, 27 percent and 50 percent respectively. Cost control had been historically poor and debtors had increased significantly. There was no proper budgeting or budget control process and general accounting principles had not been adhered to.

Achievements of the office of the CFO included the appointment of a full-time CFO; the completion of four years of audit reports and the publication of an audit report.  Legal action had been instituted against previous developers of the failed financial system, Treasury reports had been submitted timeously and debt collectors had been appointed.

Spending trends in 2005/2006 financial year were as follows: 35 percent of total expenditure had been on the costs of maintaining vessels. The DEAT had transferred R501 million for the purchase of four new compliance vessels - two commissioned in 2004/2005 financial year
and the remainder two delivered in 2005/2006. R38 million would be transferred over the 2004-2007 for the Langebaan Coastal erosion project. R108 million had been allocated for the replacement of the research vessel Sardinops and delivery was expected in March 2007.
Total expenditure for the current financial year was R375 million.  

All four auditor-general reports indicated to the following: lack of internal controls, lack of compliance with the PFMA, the lack of proper accounting and fixed asset system and the failure to adhere to the principles of accrual accounting. The Department’s audit committee reports found that internal controls had not been effective; was unable to review the quality of the monthly and quarterly reports.  

2005 Long Term Fishing Rights Allocation: briefing
Dr Monde Mayekiso (Deputy Director General: MCM) delivered the presentation.

Trends in the catch of hake, West Coast Rock Lobster as well as Pilchard indicated to the migration of marine resources to the East Coast.  This shift in the distribution of marine resources, held negative implications for job creation and poverty alleviation. It meant that transport system for transporting fish would rise from R80 million to R750 million per annum. Factories would need to be relocated and therefore diminished economic activity along the West Coast.

The Marine Living resources Act provided a framework to change the pre-1994 allocation of fishing rights. At that time there had been fewer quota holders while one group had been dominant. Established industry had also been highly resistant to changes. However, since 1994 there had been an increase in the number of participants in the fishing industry. These rights allocations were small, with less than 1000 tons each. This lead to complaints that these allocations were non-viable.

The policy objectives of long term fishing rights included job creation, investment, transformation and sustainability. Criteria for this allocation included performance and the rate of transformation. Certain challenges of this process included resource constraints, the large number of applications and business versus social considerations.

The Department was currently conducting public consultation meetings to both accelerate the development of draft subsistence fisheries policy as well as an accelerated development of aquaculture policy. It had also initiated a process of determining economic opportunities in fishing harbours.

Discussion
Mr Watson noted the erroneous reference to the Committee as the “Standing Committee" on the DEAT presentation. Dr Matlou expressed his apologies for this oversight.

Mr Watson was concerned about the negative impact the tracking devices on boats would have on fishing rights. What was the motivation behind this new regulation?

Dr Mayekiso explained that each vessel was required to carry a vessel monitoring system, the VMA. It was the stance of the Department that, if any person wanted to participate in the fishing industry, a vessel needed to be equipped with a vessel monitoring system.

The Department acknowledged the high cost of this devise (R80 000) and some fishermen had complained that, since their businesses were not yielding sufficient profits, installation of the VMS was unaffordable. This posed a challenge, as the department did not have sufficient personnel capacity to track each vessel. The quota holder needed to bear some of the cost of maintaining an electronic tracking system and this also caused a high level of dissatisfaction.

Mr Van Rooyen wanted to know how the allocation criteria for fishing quotas were developed.

Dr Mayekiso explained that two models were used for the allocation of quotas. One could either develop a benchmark or follow a charter in which an external benchmark was set.  One could also allocate quotas based on how better a fishery compared to other contenders without using an external benchmark. Therefore, if a company performed better in terms of the level of internal transformation, it could get a bigger quota relative to other applicants. This was the current model used.

Mr Van Rooyen wondered what the purpose of the verification of applications was. What needed to be verified?

This question was not answered.

Mr Van Rooyen requested more information about the DEAT’s advisory committee.
Who constituted this committee and what was its function?

This question was not answered.

Mr Adams explained that his constituency comprise mostly fishermen (including Kalk Bay, Hout Bay) and had expressed concern and dissatisfaction over the allocation process for fishing rights. There was evidence that people who were not fishermen possessed fishing quotas. Much fanfare accompanied the imbizos the department held with fishing communities and the assurances made by Minister Van Schalkwyk that fishing rights would be properly allocated to those people whose livelihoods depended on fishing. However, this was not the case, as fishermen were being denied quotas and thus the increasing impoverishment of these communities. The department had not lived up to its promises.

Dr Mayekiso explained that as marine resources were low, fishing quotas could not be awarded to all applicants. Although, smaller quotas could have been allocated to a larger population of people, these quantities would not have encouraged the start of small business. Little opportunity for the development of small and medium enterprises would therefore exist, as investment opportunities would be minimal. One cannot a adequate fishing boat, one only had an allocation of 300 kg. The Department, after the conclusion of a case study, was convinced that quota’s awarded needed to be large enough so as to promote the creation of small businesses. This remained an ongoing debate.

Mr Adams informed the department that officials from the verification unit, had not had any contact with fishermen, including these in Kalk Bay, Hout Bay and Yzerfontein. How could a acceptable verification   process be conducted if officials were interacting with fishermen? This placed suspicion on the reliability of the unit’s work.

This question was not answered.

Mr Adams said that women, although possessing the required he necessary medical documentation, and sea capability certificates, were denied fishing quotas. When affected people appealed, as revealed by someone in the MCM, they were intimidated for approaching a member of Parliament to write the appeal on their behalf. This issue was raised with the minister and a response was still pending. He added the attitude of MCM officials towards the fishermen left much to be desired.

Mr Adams voiced his dissatisfaction at the level of spending on consultants, while the performance of the department had lagged.  These consultants were former DEAT employees and were earning much more currently as consultants of MCM.  Given the financial disarray some statements had reflected in the past, whey were these consultants still be employed?  This was unacceptable.

Mr Mzizi requested clarity on the relationship between job creation and the reservation of inshore fishing rights for 40 meters for micro businesses as stipulated in the long term fishing rights, in its policy objectives.

Dr Mayekiso answered that shallow water, with a depth of less than forty meters, were reserved for small quota owners. These were people with limited fishing rights of less than 750kg.   Commercial fishing companies would be allowed to fish offshore depths of more than forty metres. He added that the coastal part of the ocean were reserved for smaller vessels. Fishing in deeper waters by these vessels would pose a security risk. This stipulation was not contradicting the DEAT’s efforts to create employment. As 20 percent of the marine resources were in shallow waters, big fishing companies such as Oceana, could not be permitted to also fish in this zone. This 20 percent was set aside for fishermen using smaller and less capital-intensive vessels.

Mr Mzizi asked whether any penalties would be incurred, if small quota owners fished in offshore.

Dr Mayekiso answered that the department’s inspectors would monitor this situation. For the fishing of lobster, the ocean had been divided into zones. Quotas were allocated according to these zones and could only fish in these zones. Inspectors needed to ensure that different quota holders fish in their designated zones. Inspectors were also aware of who was permitted to catch in shallow and deep waters in a specific zone. This differentiation is based on a scientific model based on how many marine resources were available in deeper water.

Mr Van Rooyen requested the Department to provide the Committee with a detailed response regarding the R73 million that were spent of professional and special services. What did these comprise and who were the beneficiaries?

Mr Van Rooyen also sought further clarity regarding the special operating services of R90 million.

Mr Ismail informed the Committee that Department would submit written responses would be forwarded to the committee secretary.

 Mr Van Rooyen raised his concerns regarding the R19 million indicated as “Other” expenses. It would be preferred if the department could provide Members with a detailed written explanation on this item.

Mr Van Rooyen expressed his concerns regarding the migration of fish from the West Coast. What measures were the Department developing to ensure that those traditionally fishing communities would not suffer under unemployment and poverty. Could the department investigate the idea of relocating these communities to ensure that their livelihoods were not lost? This migration could result in a serious social problem. How did the Department envisage resolving this issue?

Dr Mayekiso conceded that the migration of fish posed a serious problem. The department intended to publish the reality that the West coast fishing had been serious affected by this phenomenon. Department had recognized the need for government interventions in this regard. However, these interventions should not merely be the responsibility of the DEAT. Historically, the fishermen of the West coast had relied on marine resources as a livelihood, while the land in this area was not conducive to agricultural development. Marine resources such as pilchards, and rock lobster had migrated and therefore the need for alternative means of living. Thus the need for government intervention. Aquaculture may provide some assistance, but the development of aqua cultural businesses was timeous. DEAT could merely provide maximum opportunities on projects such as eco-tourism, and the speedy development of aquaculture.

Mr Adams suggested that the development of marine aquaculture should be further investigated, in the context of this migration of fish. The resettlement of certain communities would impact these communities. Had the department looked at these possibilities? Was there a possible programme of action being developed regarding this issue? The breeding of, for instance, crayfish, lobsters or oysters were possible solution to the implication of the migration of fish.

Dr Mayekiso responded that the Department was currently working very hard to develop a policy aimed at the growth and development of aquaculture. This industry had enjoyed a steady growth period over the past few years. Compared to the 600 tons of wild abalone caught in 1996, this same amount had been currently harvested worldwide. There had thus been a steady growth in the cultivation of sea animals. Although this growth was not a response to to the depletion of wild abalone resources.  In DEAT believed that the pace of growth of this industry in South Africa was not satisfactory and was now engaged in projects aimed at speeding up the growth of the industry.

Mr Adams raised his concerns over the costly nature of vessels purchased by the department. A recent newspaper article had highlighted that due to a lack of funding, these vessels could not be operated. This impacted on the ability to safeguard the coastline from poachers. On a recent visit to Elandbaai and Paternoster, poachers were poaching and selling crayfish for R8 to R10 each, in the presence of sea fisheries inspectors. Why can an operating budget not be extended to ensure that these vessels were utilised to guard shorelines. The purpose of these vessels was to patrol the coast for poaching activities. Inspectors, at Rooi-els were merely surveying these poachers and shorelines without acting. This could not persist, as government needed to take action against poachers. Poachers were also depleting the livelihoods of other people.

Mr Ismail answered that the fund had acquired five vessels five years ago, which included also comprised four or five vessels, five year ago that had also comprised vessels of a low calibre vessels, which could rise to speeds of up to seven or twelve knots.  The new vessels could rise to a maximum speed of 25 knots, and had twin turbo engines. It cost the fund, on average, R600 00 per day to keep vessels at sea, and about R220 000 a day to keep it within the docks. National Treasury had been approached and the DEAT, following the medium Term Expenditure Framework (MTEF) process, would receive an additional R100 million over the next three years. The vessels were required to remain at sea for 250 days, and could remain docked for up to 100 days. These vessels could also be hired out, to generate additional income. The Department was thus continuously working towards balancing this priority. A recently released AG report into the viability of these vessels concluded that it was not worthwhile to retain these vessels if these had not been at sea for 250 days.

Dr Mayekiso said that the problem of poaching needed to be considered in broad terms. It needed to be ascertained whether there was poaching in hake, pilchards, pilchards, etc. This broad perspective needed to be held to ensure that all marine species were protected and regulated. The Department had a reasonable understanding of what the situation was regarding the poaching of hake or pilchard industry.. In these fisheries there were few landing spots and therefore inspectors have a reasonable handle on the situation. In the instance of rock lobster for instance, it was difficult for the inspectors to cover all landing sites of quota holders and therefore there. Due to the difficulties in tracking, the department had been designing electronic means of surveillance to cover the whole coast. Therefore, the department had been moving towards electronic ways of observation.

Mr Adams recalled that, at the launch of one of these vessels, the Minister indicated which of these were patrol the coastline, and was thus appropriately equipped. A newspaper article reported that these vessels were not utilized for this purpose due to a lack of funds. A oversight visit planned by the Committee, had also been cancelled for the same reasons. If the Department informed the Committee that there were not sufficient funds, and reports were circulated within the media, it was the Departments duty to provide the correct information.

Dr Mayekiso confirmed that reports abound that these vessels were not operational. Given the financial constraints the Department reduced the time spent on sea from 250 days to 175 days. Moreover, as these vessels were new and undervalued, the shipyard builder was contacted immediately if a problem was detected. This meant that the vessel could not be operated at that time. This was the case with the installation of extra stabilizers on the vessel Saartjie Baardman. The inactivity of vessels was very costly to the Department, but it was an exaggeration to assume that vessels were not in use.

Regarding the cancellation of the study tour, Dr Mayekiso acknowledged the miscommunication between the Department and Members. The Department wanted to take the Committee on a on a proper patrol of the coastline, to ensure that this was not merely a trip out to sea. This would not have been costly, as it was part of the function of the vessels. He apologised for this miscommunication. The department was very excited to have the members and were planning two cruises for this year. These were research cruise and a compliance cruise. These trips would be kept as short as possible.

Mr Van Rooyen expressed his concern over the maintenance cost for the vessels. The costs per day were more in line with a Panamex size vessel on a wage charter from the West coats to the East Coast. On what were these calculations based. Were these costs not perhaps overestimated?

Mr Ismail responded that the costs outlined were for the total fleet, consisting of eight vessels and were therefore not specific to one vessel. The fund had five compliance vessels and three research vessels.

Ms M N Oliphant (ANC; Kwazulu Natal) said that the Department had indicated the intention to transform the fishing industry and to encourage the development of viable small fishing businesses. The DEAT said that these people needed to cash fish and sell these goods to the public. Did the Department have a programme to change these paper quotas to ensure that people have access and participate in the fishing industry? How could such people advanced r assist in terms of achieving the objectives of Black Economic Empowerment. If few quotas were given to different people, the best option would be top allow them to become part of the bigger picture. Different actors within the industry could be contacted to devise means to develop the skills of people and to assist in greater participation in the industry. In this way many more could become part of successful businesses.

Ms Oliphant wondered whether the Department had a training programme in place to assist people after being granted quotas rights. In Kwazulu-Natal in Seculumbo in particular, there wee people that have these licences. Yet some of these licensees were merely selling these fish on the street at a random price, without knowing the market value of these commodities. For example, prawns were sold for R25, while it would cost for less than five Restaurant owners were buying these goods from poor people, consciously of the fact that they do not know what the proper prices of these goods were. How would these people be trained to ensure that they were on the same level as that of the businesses?

Dr Mayekiso continued that the Department had subsistence fisherman policy and a small-scale fishing policy out for public comment. The Department would consider these comments and advice on what should be done in these sectors in order to run these effectively. The comments made by the member had been valid. There would be a debate on whether one would want subsistence fishing to run on a commercial basis and what the consequences of this development would the consequences be of such a development. The department had not yet made a decision, and would do so after considering the public comments. Extension officers were located in the provinces with a high degree of subsistence fishing (like Kwazulu Natal) and these officers were supposed to be liase with communities.

The oyster industry had been restructured, in the Western Cape and had attempted too restructure this industry in KwaZulu Natal. This was a very difficult industry to restructure as restaurant owners and business owners had possessed the rights historically. Yet, even though the Department had changed this policy, and extended rights to those people who “’pick’’ these oysters; these individuals were not asserting themselves in relation to restaurant owners and the business people who do not have these permits. This could be a trading issue and mentoring issue that needed to be addressed within the next few years.

Mr van Rooyen also added that he had witnessed people between Mossel Bay and George, harvesting wild oysters for a restaurant on the beach. One could buy the oyster for R2.00 but would pay R10.00 in restaurants. People did not have any idea of the prices of these items and therefore a high level of exploitation. The recently introduced price system was not satisfactory. Iceland experienced a similar problem in 1966, and then introduced a n Individual Transferable Quota system. Had the department explored other avenues of alternative quota systems? The mentioned system was also adopted by Nieu Zealand and thus proved to be effective.

Dr Mayekiso responded that the department was currently examining two different models. The ITQ model and a model through which one had vertical integration. The ITQ system placed the quota system in simpler terms, and therefore the minister set the standard for instance, one hundred tons that could be caught per year. From this global amount the individual quotas would be calculated. South Africa currently used the individual quota. Yet South Africa did not allow a fully transferable individual quota. Thus the difference between this model and the one applied in Iceland. Although a fully transferable quota made good economic sense, in the South African sense a quota could only be mad transferable when the minister approved such a transfer. A transfer needed to be done in such a way that would realise the goals of transforming the fishing industry. South Africa had a modified ITQ system.

Mr Watson wondered whether the migration of fish from the West Coast to the East Coast could reverse if this was a natural migration. Had the number of fish been reduced due to the abnormal harvesting?

Dr Mayekiso answered that the current migration was due to environmental factors. This was also occurring in Namibia and could be described as a West coast phenomenon. It was suspected that there was an intrusion of hot water from Angola and the temperature of the water along the West coast was much warmer. The fish was simply moving away from this. Although a reverse had happened in the past, this may not occur in this instance, as this had been caused by climate change. The Department would be starting a big study, supported by the World Bank, to investigate whether a relationship existed between the current fish migration and climate change.

Mr Watson said that the Department expected the fishermen to carry the cost of installing the tracking system on their vehicles. Since these fishermen would be the lawful permit holders, what deterrent was there for the poachers? Media reports suggested that fishermen were forced to purchase a certain type of tracking device. Why was this tracking system so expensive, while one supplier monopolised the entire market. Struggling fishermen should not be paying these exorbitant prices.

Mr Ismail explained that the problem with the vessel monitoring system was that the department had internal towers that could track anywhere within the country, but could only detect vessels to a certain nautical mile. As a result tracking needed to occur via satellite. Once one made use of satellite infrastructure the costs tended to increase. The costs of maintaining this infrastructure were also high for the DEAT. The R80 000 was partially a requirement in case of an emergency to detect these vessels.  South Africa did not have the technology nor the resources to develop such technology, and it therefore had to purchase this product internationally. This company had the rights to the product and there was no local supplier.

Mr Van Rooyen asked whether foreigners were also granted these quotas?

Dr Mayekiso answered that Taiwanese and Japanese fishermen had been fishing for tuna in South African waters over the past 10 years.  This had since been stopped since South Africans needed to fill that void. However, South Africans had admitted that it could only fish for tuna through joining joint ventures with foreigners. Currently, some fishermen with official permits were in partnership with North Korean fishing vessels. 

Mr Van Rooyen wondered whether the solution to the impact of the migration of fish were not the encouragement of subsistence fishing rather than commercial fishing.

Dr Mayekiso confirmed that this was a very difficult issue to address. The Department had developed the industry, on a commercial basis, currently a source of employment for many. In this context, subsistence fishing would thus not be viable. Fisheries had become a business all over the world and a lot of the fish were now exported. There should be an accommodation of subsistence fisheries and the department believed that subsistence and commercial operations as well as recreational operations must be accommodated.

The Chairperson said that this issue needed further exploration, rather than being dismissed without looking at the possibilities. The Committee was being informed by the political challenges the country was faced with, especially the level of poverty and unemployment

The Chairperson said that it was the first time the Marine Living Resources Fund presented such a detailed report to the Committee. The Committee had been eager to receive such detailed information for a very long time.  The different questions and the particular information the Department wanted to communicate with Members highlighted the need for another meeting with the Department. These simplified explanations for challenges highlighted by the Department needed to be simplified to ensure that affected communities, such as the fishing communities, gained a cleared understanding of the issues involved and the implications.

The meeting was adjourned.