ATC110419: Report Budget Vote 30: Environmental Affairs

Water and Sanitation

REPORT OF THE PORTFOLIO COMMITTEE ON WATER AND ENVIRONMENTAL AFFAIRS ON BUDGET VOTE 30: ENVIRONMENTAL AFFAIRS, DATED 19 APRIL 2011

All South Africans have a constitutional right to an environment that is not harmful to their health or well-being, and to have the environment protected, for the benefit of present and future generations (section 24 (b) of the Constitution)

 

1.       Introduction

 

The Portfolio Committee on Water and Environmental Affairs (the Portfolio Committee) having considered the Estimates of National Expenditure 2011: Budget Vote 30: Environmental Affairs, and the Strategic Plan of the Department of Environmental Affairs (the Department), for the 1 April 2011 to 31 March 2016 financial years, reports as follows:

 

On 12 and 13 April 2011, following two days of meetings in January 2011, a meeting of the Portfolio Committee was called to deliberate on the following:

 

·         The Strategic Plan (Annual Performance Plan) of the Department for the 2011 to 2016 financial years;

·         The appropriations to the Department Budget Vote 30 for the 2011 - 14 financial years;

·         The transfers of monies to entities falling within the mandate of the Department;

·         An overview of programmes and allocations to the Department;

·         An overview of key performance areas (priority areas) of the Department and its entities;

·         Synergies with government priorities and international obligations;

·         Challenges faced by the Department; and

·         Recommendations.

 

The following six programmes underpin the work of the Department:

 

·                Administration:  Strategic leadership, centralised administration and executive support and corporate services;

·                Environment Quality and Protection:  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 well-being;

·                Oceans and Coasts:  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;

·                Climate Change:  Promote, coordinate and manage an effective mitigation and adaptation response to climate change;

·                Biodiversity and Conservation:  Promote the conservation and sustainable use of natural resources to contribute to economic growth and poverty alleviation; and

·                Sector Services, Coordination and Information Management and International Relations:  Create conditions for effective corporate and cooperative governance, international cooperation and the implementation of poverty alleviation projects.

 

The Portfolio Committee having considered Budget Vote 30, the Strategic Plan of the Department and performance/priority areas, reports that it has concluded its deliberations thereon and reports the following:

 

2. Problem statement and critical sector outputs

 

In using the 2007 State of the Environment Report as a base document to inform the challenges confronting the Department, the following problem statements determined the planned critical sector outputs to help address the identified challenges:

 

·                South Africa’s continued reliance on fossil fuels resulting in greenhouse gas emissions.  To address this, there is, among other things, a need to reduce atmospheric pollutants, and to increase the deployment of renewable energy;

·                Poor waste management:  The relevant output being improved solid waste management and minimisation through collection, disposal, re-use and recycling;

·                Impact of mining activities on the environment:  It was noted by the Portfolio Committee that outputs in this regard are mainly the responsibility of the Department of Mineral Resources as regulated in the Minerals and Petroleum Development Act (MPRDA).  However, the Portfolio Committee is of the view that the Department still needs to oversee work in this area as the lead department on environmental sustainability and in relation to the implementation of outcome 10 (Focuses on South Africa’s environmental assets and natural resources) delivery agreement;

·                Land degradation:  To address challenges around land degradation, poor land practices should be combated;

·                The current networks of protected areas are insufficient to provide ecological services, socio-economic benefits, including climate change mitigation and adaptation. Outputs in this area relate to restoration and rehabilitation of degraded ecosystems (that is, rehabilitation of wetlands through the Expanded Public Works Programme) and the expansion of the conservation estate (land acquisition), water quality and the health of aquatic ecosystems;

·                Severe pollution in the marine environment will be addressed by the improved protection of the coastal environment through, among other things, estuarine management plans and the licensing of outfall pipelines; and

·                Environmental applied research capacity has reduced over the last 10 years.  In this regard, focus will be on devising a research and development strategy for the sector.

 

 

3. Synergies with Millennium Development Goals and Government Priorities

 

In relation to the Millennium Development Goals, the Department responds to Goal 7, which is Environmental Sustainability.  The following indicators linked to Goal 7 are reflected in the departmental Strategic Plan:

 

·                Protection of species threatened with extinction (number of legislative tools to ensure protection of species and ecosystems, control and eradication of alien and invasive species);

·                Number of legally designated landfill sites (decrease in unlicensed waste disposal sites);

·                Climate change mitigation and adaptation (climate change policy, sector adaptation plans, air quality monitoring system and reduction in emissions); and

·                Proportion of land protected (increase in conservation estate).

 

The Department also responds to the following Presidential outcomes:

 

·                Outcome 10:             Protect and enhance our environmental assets and natural resources;

·                Outcome 4:  Decent employment through inclusive economic growth; and

·                Outcome 11:             Create a better South Africa, a better Africa and a better world.

 

The Department further outlined their specific role and contribution towards the attainment of the Medium Term Strategy Framework Priorities of National Treasury.

 

4. Overview of the Strategic Plan for 2011/16

 

The Department presented an overview of the Strategic Plan followed by detailed outputs and activities of all programmes.

 

The broad goals for 2011/2012 to 2015/2016 encompass the following:

 

Goal 1:  Environmental assets conserved, sustainably used, protected and continually enhanced;

 

Goal 2:  Enhanced socio-economic benefits and employment creation for the present and future generations from a healthy environment; and

 

Goal 3:  A Department that is fully capacitated to deliver the services efficiently and effectively.

 

 

The top priority areas identified by the Department for the current financial year are:

 

a)         Budget:  Department personnel and operations (Support local government, air quality, waste management, coastal planning and open space planning);

b)         Governance systems alignment with outcome 10:  Mining, integrated planning, Environment Management Frameworks (EMFs) and land use issues and rationalisation of entities);

c)         Draw linkages between climate change, the green economy and sustainable development;

d)         Climate change:  Conference of Parties (COP 17) and the White Paper; and

e)         Key engagement: International and national.

 

4.1     Overview of selected strategic objectives and targets for programmes in 2011/14

 

The work of the Department is structured in line with the following programmes:

 

Programme 1: Administration:  Equitable and sound corporate governance, improve access to information, efficient and effective information technology services, and appropriately skilled staff. 

 

The Department has a current approved establishment of 1 086 posts, of which 836 were filled as at September 2010.  Over the medium term, the establishment is expected to fill 858 (79 per cent) posts in 2011/12 to 926 (85.26 per cent) posts in 2013/14. Over the medium term, the department is expected to decrease the vacancy rate from 23.03 per cent in the current year to 21 per cent in 2011/12 and to 14.7 per cent in 2013/14. Spending on compensation of employees is expected to grow from R405.2 million to R451.1 million over the same period.

 

The Department makes use of consultants for the following specialised tasks:  the external and internal audit function, environmental impact assessments and environmental management frameworks, overseeing the effective use of the SA Agulhas (for oceanographic research), training, reviews and studies on environmental and climate change, biodiversity, marine and the social responsibility programmes.

 

In response to issues raised by the Portfolio Committee on the use of consultants and performance bonuses, the Department in relation to:

 

Consultants:  Has established the following criteria for use of consultants:

 

·       Analysis and categorisation of the nature of work to be outsourced, an assessment of duration and whether there will ever be a need for permanent capacity;

·       Provide motivation for the continued use of consultants for certain categories of work; and

·       Provide a phase out plan for the utilisation of consultants for work that can and should be done ‘in house’.  This should include skills transfer.

 

 

Performance bonuses:  It was highlighted that the process includes contracting, assessment of performance and moderation of assessment results.  A five point scale rating is used:

 

1 – Unacceptable, 2 – Performance has not been fully effective, 3 – Fully effective, 4 – Significantly above expectations and 5 – Outstanding performance.

 

Rewards are in three categories: Pay progression (notch); B merit category and A merit category.

 

Programme 2: Environmental Quality and Protection:  Improved compliance with environmental quality and protection legislation.  Pollution and waste management, effective and efficient environmental impact management and improved air quality.

 

The strategic objectives and targets for the programme in 2011/2014 are to:

 

·       Increase the level of compliance with environmental legislation by:

·         Increasing the percentage of compliance inspections conducted in terms of environmental quality protection related authorisations from 5 per cent in 2009/10 to 25 per cent in 2013/14;

·         Increasing the percentage of reactive administrative enforcement interventions taken in response to complaints and referrals from 30 per cent in 2009/10 to 34 per cent in 2013/14;

·         Increasing the percentage of environmental management inspectors receiving specialised training courses from 40 per cent in 2009/10 to 100 per cent in 2013/14;

·         Improve compliance with legislative timeframes in terms of the National Environmental Management Waste Act (2008) and the environmental impact assessment regulations by 90 per cent in 2012/13 through increasing the licensing capacity and streamlining the authorisation process to ensure less waste which is better managed by increasing the number of households with basic waste collection from 64 per cent of households in 2009/10 to 75 per cent in 2013/14; and

·         Improving the turnaround time for processing new applications from 85 per cent in 2009/10 to 90 per cent in 2012/13.

 

·       Improve air and atmosphere quality by:

·         Reducing the number of metropolitan and local municipalities with ambient air quality problems from 45 in 2009/10 to 43 in 2012/13 through ensuring the alignment of municipal air quality management plans with national norms and standards through an annual review;

·         Ensuring the continued efficient and effective implementation of atmospheric emissions licensing and other regulatory tools provided in the National Environment Management: Air Quality Act (2004) over the MTEF period; and

·         Increasing the number of ambient air quality monitoring stations that provide information to the South African air quality information system from 18 in 2009/10 to 38 in 2012/13.

 

 

Programme 3: Oceans and Coasts: Marine Biodiversity Conservation, Pollution Management, Marine Spatial Planning, Understanding of risks and vulnerabilities to people, property and natural environment and Antarctica Programme focus areas.

 

The strategic objectives and targets for the programme in 2011/14 are to:

 

·       Ensure the effective protection, management and conservation of the ocean and coastal environment through the provision of adequate, relevant and reliable information by:

·         Increasing the number of jointly funded or own funded research projects by universities from 1 in 2010/11 to 4 in 2013/14;

·         Increasing the number of data collection systems installed and providing effective information from 4 in 2010/11 to 6 in 2013/14; and

·         Increasing the number of parameters relating to the oceans and coasts reflected in the national state of environment report from 10 in 2010/11 to 15 in 2013/14.

 

·       Improve the understanding of the value of the ocean and coastal environment through ensuring better information by:

·         Increasing the number of supported campaigns to raise awareness of the value of the oceans and coastal services from 2 in 2010/11 to 5 in 2013/14; and

·         Increasing research observation platforms from 2 in 2010/11 to 4 in 2013/14.

 

·       Ensure the effective and consistent management of the ocean and coastal environment and achieve conservation and protection targets by:

·         Increasing the number of local government institutions able to effectively apply ocean and coastal policy and regulations from 2 in 2010/11 to 3 in 2013/14;

·         Increasing the number of local and provincial authorities with coastal management units from 2 in 2010/11 to 3 in 2013/14;

·         Providing 3 voyages per year to research teams in Antarctica and on Marion Island and Gough Island; and

·         Aligning policy plans, activities and budgets by increasing the number of oceans and coastal issues (such as estuarine management plans and programmes) reflected in various planning arrangement in 2013/14.

 

Programme 4: Climate Change:  Climate Change Policy, enhanced capacity, resilience and reduced vulnerability to climate change impacts, United Nations Framework Convention on Climate Change (UNFCCC), Conference of the Parties (COP 17) and Kyoto Protocol CMP 7 successfully hosted and managed.

 

The strategic objectives and targets for the programme in 2011/14 are to:

 

·       Establish a coherent approach to climate change by:

·         Developing a climate change response policy as set out in the White Paper on Climate Change, the latter of which is to be finalised in 2011; and

·         Coordinating various sectors to take informed actions to mitigate greenhouse gas emissions and adapt to the impacts of climate change through establishing effective ongoing intergovernmental and other coordination and cooperation structures;

·       Implement South Africa’s obligations in terms of the United Nations Framework Convention on Climate Change by:

·         Submitting the second national communications to the Convention by June 2011; and

·         Organising and leading COP 17/MOP 7 (Conference of the Parties of the Convention and Kyoto Protocol) to a successful conclusion by the end of December 2011.

 

Programme 5: Biodiversity and Conservation:  Biodiversity conserved, protected and threats mitigated, biological resources sustainably utilised and regulated, improved compliance and biodiversity legislation and fair access and equitable sharing of benefits from biological resources promoted.

 

The strategic objectives and targets for the programme in 2011/14 are to:

 

·       Promote equitable access and shared benefits by assessing 80 per cent of bio-prospecting agreement applications received annually until 2014:

·       Improve the effectiveness of management and increase economies of scale by developing a model for rationalising the management of protected areas and world heritage sites and ensuring its implementation by 2013; and

·       Expand the conservation estate by coordinating the implementation of the national strategy for the expansion of protected areas to have 8 per cent of land as part of the conservation estate by 2013.

 

Programme 6: Sector Services, Coordination and Information Management and International Relations:  Improved socio-economic benefits within the environmental sector, improved sector education and awareness, effective knowledge and information management for the sector, effective cooperative governance and local government support and enhanced international governance, instruments and agreements supportive of South African environmental and sustainable development priorities.

 

The strategic objectives and targets for this programme in 2011/14 are to:

 

·       Promote the empowerment of designated communities by creating 30 056 full time equivalence and 60 111 work opportunities over the medium term through implementing expanded public works programme projects;

·       Promote South Africa’s global sustainable development agenda by increasing multilateral and bilateral funding for implementing environmental programmes in South Africa and SADC from US$35 million in 2009/10 to US$50 million in 2013/14:

·       Promote sustainable development in producing accurate, geographical reference data for environmental policy making and strategic decision making by ensuring the implementation of a geographic information system that is fully operational with full access to spatial information by 2015/16; and

·       Facilitate environmental education through training, awareness raising and improving access to information by conducting 100 workshops at schools and tertiary institutions by 2013/14.

 

Additional to the programmes, the Department indicated that the Natural Resource Management Programme was transferred from the Department of Water, to the Department of Environmental Affairs.  The programme focuses on poverty relief and job creation through implementation of projects such as Working for Water, Fire, Energy and Land.

 

5. Budget overview for 2011/14 medium term allocations

 

The Department presented the budget allocation for the 2011/14 medium term budget framework divided into its six programmes: Administration, Environmental Quality and Protection, Oceans and Coasts, Climate Change, Biodiversity and Conservation and Sector Services, Environmental Awareness and International Relations.  The Department of Environmental Affairs budget allocation increases by R407.6 million (or in real terms by 11.4 per cent) from R2.4 billion in 2010/11 to R2.8 billion in 2011/12.

 

The table below shows the 2011/14 medium term budget allocation for the Department (Vote 30) per programme:

 

Programme	Budget				NominalRandchange	RealRandchange	Nominal % change	Real % change
R million	2010/11	2011/12	2012/13	2013/14	2010/11-2011/12		2010/11-2011/12
Programme 1: Administration	270.2	280.8	360.5	376.7	10.6	-  2.3	3.92 per cent	-0.84 per cent
Programme 2: Environmental Quality and Protection	322.8	330.7	354.4	380.7	7.9	-  7.2	2.45 per cent	-2.24 per cent
Programme 3: Oceans and Coasts	679.9	723.3	227.4	245.7	43.4	10.3	6.38 per cent	1.51 per cent
Programme 4: Climate Change	9.1	223.2	24.4	25.9	214.1	203.9	2352.75 per cent	2240.41 per cent
Programme 5: Biodiversity and Conservation	405.9	430.4	474.7	497.6	24.5	4.8	6.04 per cent	1.18 per cent
Programme 6:  Sector Services, Coordination and Information Management and International Relations	750.6	857.6	958.0	1 116.4	107.0	67.7	14.26 per cent	9.02 per cent
TOTAL	2 438.5	2 846.0	2 399.4	2 643.0	407.5	277.1	16.71 per cent	11.37 per cent

Source:  National Treasury 2011

 

Expenditure trends

 

The largest increased expenditure item over the medium term will be on the acquisition of the polar research vessel to replace the SA Agulhas.

 

Between 2007/08 and 2010/11, expenditure increased from R1.6 billion to R2.4 billion, at an average annual rate of 15.9 per cent.  This was mainly due to increased expenditure in the Oceans and Coasts programme for the replacement of the polar research vessel and in the Sector Service, Coordination and Information Management and International Programme for the weather service, infrastructure development in parks, and poverty relief projects. Over the medium terms, expenditure is expected to grow to R2.6 billion, at an average annual rate of 2.7 per cent.  This is mainly due to increased allocations to expanded public works programme projects, as well as growth in the newly established Climate Change programme.  Transfer and subsidies to departmental agencies and accounts, and to households constitute 47.4 per cent of the annual allocation in 2010/11 and 55.7 per cent in 2013/14.

 

The Department receives additional allocations of R297.9 million in 2011/12, R146 million in 2012/13 and R186.4 million in 2013/14, of which R200 million in 2011/12 is allocated for climate change projects, including hosting the 17thConference of Parties to the United Nations Framework Convention on Climate Change.  However, the Department explained with the President providing responsibilities between the Department of Environmental Affairs (DEA) and the Department of International Relations and Cooperation (DIRCO), it has meant that this budget allocation had to be split with only R93 million remaining with DEA. Other allocations are to provide for compensation of employees, the expansion of the expanded public works programme, combating wildlife and environmental crime, improving oil spill response capability, and infrastructure investment in the iSimangaliso Wetland Park.

 

5.1   Challenges identified by the Office of the Auditor General and National Treasury

 

The following key challenges in relation to the financial management system of the Department were assessed by the Office of the Auditor General and National Treasury:

 

·       Implement effective human resource management to ensure that adequate and sufficient skilled resources are in place and that performance is managed;

·       Prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information; and

·       Implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting.

 

In working on solutions to the above challenges, the Department highlighted the following:

 

·       The Department engaged the National Treasury Assistance Unit (TAU) to review and align its service delivery model and macro organisational structure.  The findings of the study will be available by the end of April 2011.  These findings will then determine the optimal organisational structure;

·       The establishment and vacant posts were reviewed in the current financial year to align the cost of vacant posts with the available budget;

·       Only after consideration by the Auditor-General, it was identified that reporting on some disclosure notes was not correctly interpreted and had to be amended.  The Department had systems in place to correct information after classifying the principles;

·       A central information repository for evidence to support performance reports has been created on Electronic Documentation Management System and evidence is being verified on a sample basis; and

·       The fixed Asset Register has been updated after the transfer of assets to the Department of Tourism was affected.

 

 

The Office of the Auditor-General has been increasing endeavours to ensure clean audit reports through reviewing quarterly reports and providing dashboard reports.  There was a concern about IT systems in relation to governance and access controls.  However, the Department has addressed this and is at an advanced stage in creating systems.  The Auditor-General also indicated that they have been working well with the Department and most areas of concern have been addressed.  There will be a focus on the Expanded Public Works Programme and the effective oversight of all entities.

 

6. Committee observations and recommendations

 

South Africa’s political and socio-economic transition is geared towards ensuring the improvement of the quality of life of all our citizens. Section 24 of the Constitution of the Republic of South Africa, 1996 (the Constitution), has provided the framework and has given shape to South Africa’s new environmental regime during the last 17 years. This gave meaning to the numerous legislative and other measures to operate an efficient environmental governance regime in South Africa.  For example, the proclamation of the National Environment Management Act, Act 107 of 1998 (NEMA), gave expression to an overarching environmental law.  Various mechanisms, such as sustainability of ecosystems, cooperative environmental governance, compliance and non-compliance, enforcement, and regulating government and business impacts on the environment, underpin the NEMA.  NEMA, as the primary environmental legislation is complemented by a number of sectoral laws governing marine living resources, mining, forestry, biodiversity, GMOs, protected areas, pollution, air quality, waste and integrated coastal management.  It has been observed by many commentators that South Africa has a very advanced environmental framework to protect our environment and to promote and advance environmental sustainability in our country. 

However, the Department’s 2007 State of the Environment Report indicates that there are numerous environmental challenges, and that the state of our environment has in fact deteriorated in respect of every facet. This seems to place in dispute the efficacy of our advanced environmental regime.  The Portfolio Committee is of the view that this report and its findings begs the question whether South Africa is moving towards advancing sustainable development and whether the Strategic Plan and budget of the Department are aligned to an environmental governance model which is synchronised with the constitutional right enshrined in section 24 of the Constitution.

Whilst the Portfolio Committee recognised the importance of the technical process and components of aligning allocations to strategic outcomes and targets, a further analysis was required on the links and synergies between environmental sustainability and good environmental governance (in terms of decision-making by the appropriate competent authority) and sustainable development in South Africa.  The Strategic Plan of the Department finds expression in many sections with regard to environmental safety, protection, sustainability and conservation, in accordance with its programme and aligned activities.

Much of the debate in the two days of hearings revolved around the key challenges and anomalies within a fragmented environmental framework which limits the effective functioning and implementation of an institution tasked with good environmental governance, sustainable development, and compliance, and enforcement and coordination of environmental governance (national, provincial and local), and the role of other stakeholders (including Justice, Police, and Health). 

The Portfolio Committee requested the Department to, at some point in their future planning, to reflect on the following broad components of their work, for further engagement with the Portfolio Committee:

·         Institutional arrangements and responsibilities with regard to interdepartmental, intersectoral and different spheres of government that impact on environmental issues;

·         The dissonance between pieces of legislation and competencies of Departments with regard to the implementation of environmental security, especially in respect of mining;

·         The creation of synergies between the prescripts of National Treasury in relation to performance agreement outputs emanating from the Monitoring and Evaluation Unit;

·         Support to local government for land use planning (spatial tools) and decision-making;

·         Ability to assess EIAs and environmental management plans to ensure sustainable development; and

·         The need to expand the use of GIS in the development of spatial decision making tools to facilitate effective land-use management.

 

Specific recommendations by the Portfolio Committee in respect of the current Strategic Plan and budget allocations are:

 

·         A progress report on the state of preparedness on COP 17 should be submitted to the Portfolio Committee by 25 April 2011.  In this regard, the Portfolio Committee recommended that the Department hold a meeting with DIRCO, National Treasury and eThekwini Metropolitan Municipality to ensure that the COP 17 Business Plans are urgently finalised.  Progress in this regard is also to be provided to the Portfolio Committee in the progress report.  On the basis of this report, the Portfolio Committee could request briefings by DIRCO, National Treasury and eThekwini Metropolitan Municipality;

·         The integration of Millennium Development Goals (and other international commitments) in future departmental Strategic Plans and to ensure reporting to Parliament.  This includes ensuring that the Portfolio Committee provides an input into the Department’s contribution to country reports before these are presented to United Nations structures;

·         The Portfolio Committee further emphasised the importance of a clear differentiation of sector outputs and departmental outputs;

·         The Portfolio Committee requested copies of the Minister’s performance agreement to check whether the Strategic Plan is aligned to the agreement;

·         In relation to the entities of the Department, there is a need for an assessment on whether Buyisa-e-Bag is the right vehicle for recycling. (The committee indicated that briefing sessions by entities will be convened in May/June 2011);

·         The Department was requested to reflect on how much of the budget is being used specifically for the actual protection of the environment and to prepare a report to the Portfolio Committee;

·         The Portfolio Committee highlighted that the compliance and enforcement budget and capacity should be increased as this area should be prioritised;

·         There should be better communication strategies and continuous branding and awareness raising about the Environmental Management Inspectorate.  The public has to be made aware that inspectors exist in all spheres of government;

·         The Department has been requested to compile an integrated report for further engagement on all compliance structures, processes and issues in the Department, including cross-cutting compliance issues.  Aspects of performance of our compliance must be done against the background of the deterioration of each aspect of our environment;

·         The Portfolio Committee indicated that they should be briefed in future before ratings and bonuses for performance bonuses are finalised; and

·         A progress report on the impact that existing environmental legislation has had on realising the protection of the environment.

 

 

Report to be considered.