DEFF, SANParks & Isimangaliso Wetland Park Authority 2019/20 Quarter 3 performance, in the presence of the Deputy Minister

Meeting report

The Chairperson remarked that all those with responsibilities needed understand that they have responsibilities. The meeting would concern third quarter reports. The Portfolio Committee was not the ones who were doing [departmental duties], and it would be “watching” the Department. The Chairperson had interacted with some community members; that was what the PC would normally do “when [it] was at home”. He thought that there was “a sense where people are beginning to be impatient with Government”. It was not a matter of wanting votes; people were beginning to speak for themselves. [People] did not want to rely on whoever is called a Member of Parliament, Minister, Deputy Minister; they speak for themselves. There was a meeting where someone stood up and said, “You will no longer fool us”. He was passing on that message to say that all those who have a responsibility to support the Executive must begin to understand that [the PC] was under pressure. One, there needed to be execution, and two, the PC wanted to see the impact and “value for money”. There is a trend where “you look at the face of people and you think that giving them substandard goods and services is something they will appreciate”. They [people] no longer do that. He noted that the PC mentioned last time that it may not be comfortable when the Department underspends. Now that the last quarter had arrived, all would be looking to the Department to see if where they said that it would do something, did it do it?

There would be a panel discussion on 10 March, organised by Parliamentarians for Global Action (PGA); all members would be expected to attend. The PC would require confirmation of that. The focus would be on small-scale fisheries (SSF) in the country.

On 18 March, there would be a visit by the British Consulate General, who would want to meet the Committee.

The Chairperson had spoken to the Minister, and she was in cabinet committee meeting. The leader of the delegation was the Deputy Minister, Ms Maggie Sotyu.

The Secretary, Ms T Madubela, gave apologies from Members; Ms S Mbatha (ANC), Ms N Gantsho (ANC), Mr J Lorimer (DA), Mr N Capa (ANC) and Ms H Winkler (DA).

Mr P Modise (ANC) gave apologies from Ms T Tongwane (ANC), who was not feeling well.

The Chairperson checked if the PC had a quorum. Since it did, the meeting could start.

Minutes

The Deputy Minister Ms Maggie Sotyu made opening remarks. She gave an apology from the Acting Deputy Director General (DDG) for Forestry, who was assigned for a function that required Deputy Minister Sotyu’s presence; the DDG was representing Deputy Minister Sotyu. There was a delegation consisting of the Department and its entities, SANParks and iSimangaliso Wetland Park (ISWP), led by Ms Nosipho Ngcaba, Director General (DG): Department of Environment, Forestry and Fisheries (DEFF).

The Deputy Minister acknowledged the issue of excuses [being made]. She said that the same exercise that the PC was doing with the Department, the Department was doing over the Department itself. SANParks and iSimangaliso would present highlights and “hindrances” in their reports. Most importantly, the Department and its present entities would show how the targets were not met, and would indicate the plans to remedy its actions, which was to ensure that performances improved for the last quarter of the financial year. The overall performance of the Department for the third quarter was 64%. The Department had gone below its expectations. There are many challenges and concerns, as indicated in the report. The Department had some highlights that it could also “be proud of” as an Executive: There was a relatively high number of young people participating in and benefiting from Programme 6, (the environmental programmes) which is managed by the DDG Dr Guy Preston. Programme 6 did not use much of its funds for the third quarter. The environmental programmes had ensured that more than 38 000 young people are benefitting in sub-programmes such as Working for Fire. The unachieved targets could mostly be attributed to the new amalgamation of Forestry and Fisheries into the Department of Environmental Affairs, as the Department indicated at the last PC meeting, because of some of the serious challenges it inherited as far as those functions are concerned. The Department would go into more detail on how it would remedy all challenges and concerns as indicated in the third quarterly report. With regards to SANParks and iSimangaliso Wetland Park, the mother department is DEFF. These two entities were also hovering just above 60%, where SANParks was at 65% and iSimangaliso was at 67% in their overall performances for the third quarter. With regards to SANParks, a highlight was the successful management of keeping poached rhinos below the 335 target level. Currently, there are 241 fatalities recorded. One poached rhino is “still catastrophic for the survival of the species, but it was pleasing to see the large joint effort of all law enforcement to curb the scourge of rhino and other indigenous wildlife [poaching]. Another highlight for SANParks was the establishment of youth desks to ensure youth development, empowerment, and employment. SANParks had a high percentage recorded of the failure of emerging businesses to promote small, medium and micro enterprises (SMMEs), especially in construction-related projects. Due to the economic meltdown in South Africa and parts of the world, tourism has gone down. There are complete plans to address these challenges. With regards to iSimangaliso, there had been challenges that had inhibited the full potential of this entity. For example, community protest, deforestation, and other major problems, to an extent that at one stage the Department had seen its existence as a major risk. On top of this, iSimangaliso had been mired in irregular expenditure, but because of a commitment by the management, all issues are being attended to, and iSimangaliso would have to explain to the PC. There has been a new administration who proposed drastic changes in the strategy of the organisation on the issue of stakeholder engagement, but especially in the management of the parks, and those who enjoyed economic benefits (catalysed by iSimangaliso) became the main focus. A new board was appointed for iSimangaliso about three to four months ago, and the Department has signed in the new board. The strategy that the Board is proposing is to review iSimangaliso’s current business model, where iSimangaliso and Ezemvelo-KZN Wildlife (Ezemvelo) have an agreement that no longer works for iSimangaliso; the latter is not benefiting from Ezemvelo-KZN Wildlife. The current model only benefits Ezemvelo, and not communities at large. iSimangaliso will explain what it means for the PC. iSimangaliso’s main objective as a UNESCO World Heritage site is to empower the historically disadvantaged communities living inside and adjacent to the park. iSimangaliso is “severely compromised and challenged” by the current model.

The Deputy Minister also noted that during the past weekend, there were articles that were to do with DEFF. One was on the Camps Bay user group, and the other was about the Marion Island issue. The Minister is busy conducting an investigation into those two issues. The Department would bring a report [on the investigations] to the PC as soon as it had seen the reports. There was also the issue of the cyclist Nick Dlamini on Table Mountain. The Minister conducted an investigation, and the Department only received a report on Friday afternoon. The Department had gone through the report, because the report was supposed to go to the Board, and then from the Board to the Minister, so that the Department could look into the recommendations, since there might be some legalities. The Department could then bring the outcome of that report, and also day how it would deal with that matter [of the cyclist], to the PC.

Briefing by DEFF on the 2019/20 3rd Quarter Performance Report

Ms Nosipho Ngcaba, DG: DEFF, presented the 3rd quarter performance report. She introduced Mr Rannoi Sedumo, Chief Financial Officer (CFO) of the Department, who would be taking the Committee through the expenditure report. The DG wanted to go through the delayed progress, which was highlighted in red and yellow. In green was what the Deputy Minister had referred to as highlights. [Please refer to the electronic file referenced at the top right of the PMG web page].

Programme 1: Administration

Both the targets were related to using resources in a manner consistent with legislation, as well as getting an unqualified audit opinion; the Department devised a turnaround strategy, and is making progress in the implementation of that strategy. Corrective measures had been put in place to deal with areas where there were challenges with the previous audit outcome. The vacancy rate was 11.7%, where 34 vacancies were filled since April 2019. The Department implemented fast track filling of vacancies, but had a higher number of internal promotions. These were “more than triple” those appointed for internships in the Department. Other staff is on contract; the Department is managing long-term risks in terms of the costs of the establishment. In areas where there is pressure on performance, the Department has prioritised appointing staff on contract, and not necessarily on a permanent basis. Regarding the Employment Equity targets, the Department met the targets of having black people in the organisation, and exceeded its target of 2% people with disabilities; it had 2.8% people with disabilities. With representation of women in senior management, the Department was at 50% overall; women in leadership roles were at 44%. It was not easy to meet the target of 50%, but it should be borne in mind that the Department was coming from baseline of 30%. In Programme 1, the Department was 76% on target, and it would be able to meet other targets, except for the issue of 50% senior management vacancies, which would not be addressed by the end of the financial year.

Programme 2: Legal, Authorisations, Compliance and Enforcement

With criminal cases being finalized and the dockets handed over to the NPA (National Prosecuting Authority), the Department exceeded its target, but cumulatively, if taking into account previous quarters, it still fell short of the target.

With the integrated strategy for rhino population management, the Department implemented the annual planned activities (outlined in the APP [Annual Procurement Plan]) for rhino protection but was not 100% sure if the rhino population will continue to decline. It continues to be cautious as to whether it will do all of the actions, especially in terms of changing the behaviour of people living around those protected areas, and making sure that it deals with the challenges of poverty, and discourages people to participate in illegal activities such as poaching. On the performance indicator of legislative tools that will ensure conservation and sustainable use of biodiversity: it was off target because there was a delay. The Minister had appointed a high-level panel, which only gazetted towards the end of last year; the Department would not have a draft report by the end of the financial year. However, the high-level panel has initiated its meetings and is starting with stakeholder consultation. There would be a meeting with authorities in the week beginning 9 March 2020, and after that, public hearings. The latter will be made available in published media. The Minister had not yet received a draft report, but the panel would present a progress report by the end of March when they finish consultation. The National Waste Management Strategy was presented to the Directors General of the Sectors, Employment and Infrastructure Development (ESEID) Cluster which recommended it for tabling at Cabinet after the public participation process has been conducted. There were requests from the business sector to extend the deadline for comments. There was a proposal for waste diversion of 50%; some of the industries raised challenges with this target. On Monday 2 March [the day before] the Minister had a meeting with stakeholders in Gauteng to discuss concerns. The Minister has allowed for a realistic engagement with stakeholders so that the Department refines the strategy in accordance of what is more realistic and practical. Overall, Programme 2 was 60% on target, 30% work in progress, and 10% off target (the latter was due to the high-level panel on the management, breeding, hunting, trade and handling of elephant, lion, leopard and rhinoceros which is not likely to conclude before the end of the financial year).

Programme 3: Oceans and Coasts

In the second performance indicator, coastal water quality guidelines were developed for two end-user categories (natural environment and mariculture). The Department calculated water quality thresholds for only one of the two priority areas (namely Saldanha). With this target, the Department will improve capacity and facilitate delayed activities in quarter four. The Minister was to table the Draft Antarctic and Southern Ocean Strategy (ASOS), and submit it to Cabinet for approval for public comments. In quarter four, the target was stakeholder consultation on the Draft ASOS with key stakeholders before resubmission to the Minister. The latter target would be met by the end of the financial year. Where the corrective measure was presenting the strategy to Cabinet in quarter four, documents have been submitted to Cabinet for processing in quarter four. In 2019/20, the first sub-regional MSP (marine spatial planning) plan was to be submitted to the Directors-General Committee for approval. It was not possible to have the DG meeting, so, as a corrective measure, the Department opted to take the sub-regional plan to the Forum of Directors-General. The sub-regional pan is scheduled for presentation on 12 March. Other departments are needed in the sub-regional MSP plan, because the Department may have other development restricted in that sub-regional area; it would have to be as inclusive as possible of those national departments.

For the performance indicator (PI) of “estuarine management strategy developed and implemented”, the Department was to get approval for the publication of the amended National Estuarine Management Protocol. The Department hoped that it would be published in the present quarter and if it was published before the end of March, the Department would achieve the target. Marine protected area (MPA) declarations were processed and published. MPA management needed to be prioritised, and the Department entered into agreements with various partners such as conservation authorities, e.g. Ezemvelo-KZN Wildlife, iSimangaliso, Eastern Cape Parks Board, and Cape Nature. The Department needed to process funding to conservation authorities. There was a delay in securing approval for funding as Treasury only approved the new agreement in February. The target would not be achieved by the end of the financial year, but resources have been secured to fund the intervention. Programme 3 was 55% on target, 27% work in progress, and 18% off-target.

Programme 4: Climate Change and Air Quality

The Department met the target of the first PI, namely developing and implementing the National Framework for Climate Services, which was supposed to enable mitigation and adaptation across the various districts and municipalities. The PI “number of sector mitigation potential and impact studies conducted” is a work in progress. The Department worked with the DTI (Department of Trade and Industry) and the NPC (National Planning Commission) to do an analysis of which sectors will be the most vulnerable to mitigation, and to create job resilience strategies. The work is done – the Department has a revised model to present to Cabinet – but it was delayed. Programme 4 met 92% of the targets; and the Department will be able to catch up on mitigation strategies (hence 8% work in progress).

Programme 5: Biodiversity and Conservation

The Department met all of the targets for this programme. The DG had presented the State of the Environment report, and the National Biodiversity Assessment report compiled by SANBI (South African National Biodiversity Institute). SANBI’s report highlighted the ecosystems which are vulnerable, especially freshwater ecosystems, which are not protected in South Africa. For the PI “Percentage of land under conservation” this is an area where the Department is going to need to improve, and to expand the protected area expansion strategy. The Department will build on that in terms of its next APP going into the future.

Programme 6: Environmental Programmes

This is an area which focuses on the employment of young people and providing them with opportunities. The Department started late because it had to “re-engineer” the whole system to comply with Treasury requirements. There is a plan to catch up, but the Department will not meet the target by the end of the financial year. The Department did not meet the target of creating 46 055 full-time equivalents (where people were supposed to have worked for the whole year). It may meet the target for creating work opportunities, since this involved people who worked for a particular time, and not necessarily for the whole year. Because the Department started late, the targets for the number of wetlands under rehabilitation and the number of hectares of land under rehabilitation/restoration were behind. Some areas may not be rehabilitated because of the season; in some areas, the summer season would mean that interventions may not take place. The Department looked at the initial clearing of hectares versus the follow-up; initial clearing of the hectares was not achieved because the Department did not start on time. On the PI “Number of schools in which toilet blocks are constructed”: The Department is not the Department of Sanitation, but with biomass and waste arising from various operations, it can use that to either make furniture or provide building materials; that is why it had a target to assist DBE (Department of Basic Education) with constructing toilet blocks, for example. The Department started late, and awaited Treasury approval. Part of the challenge was that it got some transfers from DBE, and it created an irregular expenditure for DBE. These matters need to be attended to before the end of the financial year. The programme was 31% on target, 54% work in progress, and 15% off target (i.e. the Department would not be able to catch up with the latter targets before the end of the financial year).

Programme 7: Chemicals and Waste Management

The Department met the first two PIs, but it is behind on “Percentage of waste tyres diverted from landfill sites (recycled or reused)”. Regarding tyres, the Waste Bureau was given the responsibility to operate the diversion process, [but because of difficulties] officials are in the process of developing a new tyre plan which will be implemented now. The Minister has decided that there will be an active plan, and the Waste Bureau will have to focus on its core business in terms of the legislation that was passed in Parliament. The Waste Bureau’s core business is not to run the operation of any of the industry plans; it was a transitional arrangement for tyres, and the Department aims to phase it out within six months. The CSIR (Council for Scientific and Industrial Research) has been given the responsibility by the Minister to prepare a tyre waste plan in consultation with the industry, and to work with the DTI. Once the plan is finalised, it will be published, then all participants can consider how they will be involved in that plan.

For the number of jobs created in the waste sector, the Department did not meet project targets. The number of jobs created were fewer than planned because not all of the programmes were put in place. All the tenders of the Waste Bureau had to be stopped. There were no SMMEs established, but funding was provided to 11 enterprises to support expansion of their operations. Programme 7 was 63% on target, and had 37% work in progress.

Programme 8: Fisheries Management

The Department was taking over the transfer of funds and operations of Fisheries and Forestry only

as of 1 April 2020, but would still report on progress. The first two PIs were on target, namely “number of aquaculture catalyst projects (identified and listed under Operation Phakisa) supported” and “small-scale Aquaculture Support Programme developed”.

The Aquaculture Development Bill lapsed at the end of the 5th Administration. The Minister has considered the Bill for reintroduction in Parliament; however, the Department is still reviewing the version that will be reintroduced to Parliament through stakeholder engagement due to concerns raised by the private sector. The Department would not meet the target of finalising the public participation process in this financial year

On the PI “Commercial fishing rights allocated and appeals process managed”: The Cabinet has approved a new time frame for the fishing rights allocation process (FRAP) process. [FRAP 2020 has been moved to 2021]. The Department has started the process within the project plan, aligned with the new time frame. The Department will integrate the targets as part of the new APP that will be tabled in Parliament in March 2020. The PI on implementing the Small-scale Fisheries Policy was also not achieved. In the Western Cape, the Department was still behind, because the Department had to go through the process of appeals, and conclude the appeals. The Department then had to finalise the list [of small-scale fishers who received rights], and the list was published but co-operatives had to be registered. Therefore, in line with the new timeframe, the Western Cape small-scale fisheries allocation process will be concluded by October 2020, which is in time for the West Coast rock lobster season.

There were no targets for the PI “Sustainable management of fish stocks” for the third quarter. The Department was off target for the PI “Number of Inspections conducted”. There were capacity constraints, and the process of validating whether or not the compliance measures gave desired results is still in progress. The Department did not have the capacity to monitor landings in order to ensure compliance with permit conditions at the end of the third quarter. The Department does have intervention plans, but those plans would not give it the standard of performance that it expects in time for the end of the financial year. The Department is still awaiting validation of the evidence for the PI “Number of joint operations conducted with partners, including Operation Phakisa initiative 5”, but 13 joint operations were conducted in the third quarter, and 46 investigations were conducted with enforcement agencies. There was a delay in the initiation of creating full-time equivalent (FTE) jobs under the Working for Fisheries programme due to a court case against the then-Department of Agriculture, Forestry and Fisheries (DAFF), but the matter has been settled, and staff have begun to work on a project pipeline for the next financial year. Overall, Programme 8 was 40% on target, 30% work in progress and 40% off target. The Department will only be able to implement FRAP in the next financial year.

Programme 9: Forestry and Natural Resources Management

For the PI “Number of hectares planted in temporary unplanted areas (TUPs)”, the Department had an annual target of 945 ha, and a third quarter target of 344 ha. It did not meet the target, due to quarter three rainfall being below average and temperatures above average, with occasional heatwaves in Limpopo and Mpumalanga Provinces. The Eastern Cape is experiencing prevailing drought. The Department planted in the late 3rd and 4th quarters, and would not be able to meet targets. Because of overgrowth in forests, the Department had to do clean-ups. It also had to make sure that it put in place a contracted staff through the environmental programme, and got Expanded Public Works Programme (EPWP) teams to clear the invasives. The Department has also allocated Working on Fire (WoF) teams that would do fire prevention, especially in the Southern Cape.

The target of developing a draft re-commissioning business model for re-commissioning Western Cape state forest plantations will not be achieved because of challenges experienced in the tender process. A plan will be developed to achieve the target in 2020/21. The Department is reviewing the business model for state plantations. Once that process is in place, the Department has other initiatives linked to lowering the risk of fires in the Western Cape forest plantations. The party who partnered with the Department already has plan to exit the area.

The target for the PI “Agro-forestry Strategy framework implemented” were achieved, since the project plan was piloted in two provinces. In Limpopo, the Department looked at integrating ground nuts with moringa. In Sekhukhune, the Department looked at integrating Petra africanum plants with maize, and in Mopani, it was looking at integrating eucalyptus with ground nuts. These projects had young people employed on contract in Limpopo (in Tzaneen, Mopani local municipality) and in Mpumalanga. On the PI “Number of hectares of state indigenous forests rehabilitated”: This is an area where the Department has “made positive strides”. There was a good performance from the Forestry branch in the Northern Cape, where Afro-temperate forest areas were rehabilitated. The Department also had interventions in other indigenous forest areas, such as the Afromontane regions in Keiskammahoek and Ngcobo in the Eastern Cape. In Mpumalanga, it had interventions in the Mariepskop area, and the Soutpan area in Limpopo. The overall performance for the programme was 50% on target, and 50% off-target, due to a delay in areas of investment for the plantations.

Briefing by DEFF on the Expenditure Report for the period 1 April 2019 – 31 December 2019

Mr Rannoi Sedumo, CFO, presented the report, which provided information on DEFF’s expenditure [excluding the fisheries and forestry programmes, which will come into the Departmental budget only from 1 April 2020, as the new financial year begins]. He expanded on the following areas:

— Expenditure per Programme

— Reasons for under spending per Programme

— Expenditure per Economic Classification

— Reasons for under spending per Economical Classification

— Graphical Presentation of Expenditure

— 30 Days Payment Report

— Goods and Services: Detail on expenditure

— Goods and Services: Expanded Public Works Programme: Earmarked

— Transfers: Departmental Agencies

— Transfers: Other Agencies

— Capital Expenditure: Detail on expenditure

— Public Entities Review: Expenditure and Revenue

Mr Sedumo said that he would not be going “line-by-line”, but would note the highlights, and explained where there were deviations. The Department was at 64% in its financial performance. At the end of the third quarter, there were programmes that were an “issue”: Oceans and Coasts spent 63% of its budget at the time; Environmental Programmes spent 59% at the time; and Chemicals and Waste Management spent 56%. The reasons for underperformance per programme were given (page 4 of the presentation), and were “more about administrative issues”, where contracts were not done in time, which impacted on when the Department could start projects, etc.

The Department will look into its processes, so that when it enforces its plans, it can start processes early enough, so that it can spend money evenly throughout the year. He then provided the same information from the previous table, but presented in the form of economic classifications such as current payments, transfers and subsidies, payment for capital assets, and payment for financial assets. He then presented a graphical representation of the drawings from the Treasury versus what the Department planned; in some cases, the drawings were more than the actual expenditure, or the drawings were below the actual expenditure (pg. 7). This happened because of the timing between what happened at the end of the month and when the payment had been made.

The 30 days payment period is a critical performance indicator, because the Department deals with small businesses. If it does not pay on time, it could “cause a crisis”. This PI is also critical because of the issue of the economy, and ensuring that there are jobs created by businesspeople. Treasury regulations stipulate that the Department must pay suppliers within 30 days, but the Cape Town office is below ten days.

In Cape Town, fewer than ten days are taken to process payments, while the highest number of days taken by Head Office was 20 days. Both offices were below 30 days, which was a “very good” performance.

The table on goods and services expenditure gave details on the types of goods and that the Department gets. Further detail was given on consultant services and other operating expenditure. The Expanded Public Works Programme (EPWP) gets earmarked funding for projects, such as Working on Water (WoW), Working on Fire (WoF), etc. These are projects that are “critical” for the creation of jobs in various areas, and particularly in areas where the Department gives job opportunities to young people.

Transfers were made to Department entities such as SANBI and the South African Weather Service (SAWS). The Department was on target for the transfers, except in the case of SANBI; at the end of the first quarter, the Department had not transferred the infrastructure grant. The payment was made in January 2020 after verification. The Department had spent 51% overall of its budget for transfers to non-profit organisations, other agencies and employee social benefits. Lack of spending was severe in three cases – for the National Regulator of Compulsory Specifications (NRCS), the Recycling Enterprise Support Programme (dealing with motor vehicle tyres) and the DBSA Green Fund.

There was also a 3rd quarter review of public entities. Mr Sedumo highlighted that the Department had transferred infrastructure and operational funds to entities (e.g. SANBI). He also noted that SANParks had a surplus, SANBI ran at a deficit (mainly as a result of lower visitor numbers), SAWS had a surplus, and ISWP had a surplus. With SANBI there was an additional amount that had been approved for transfer to the National Zoological Gardens in Tshwane, which would assist “slightly” to bring down the deficit that SANBI was running at as at 31 December 2019.

Discussion of the first two presentations

The Chairperson said that there was an opportunity to discuss [the presentations] and to ask questions.

Ms A Weber (DA) began by saying that she understood that when the Department took over, a lot of things had changed, and she thought that the Department was “trying [its] best”. She asked about the statistics given by the Deputy Minister on rhino poaching; she had different statistics to the Deputy Minister. In October/November, the head and deputy of the rhino poaching unit were temporarily suspended. The stats that she had were from SANParks. Between October and November, the spike [in numbers] was 89 rhinos. She was not saying that those were “true stats”, but that is what she had. For her, in the Kruger National Park (KNP) from January to December last year, there were 469 [rhinos poached] in the KNP alone. The total that she had “to date for the year” was 837 rhinos. Limpopo was next in line with 102 rhinos poached. She believed that South Africa “has one of the best anti-rhino-poaching units”, so why does the KNP have the highest poaching numbers? Some parks have zero rhino poaching. Regarding finance – she came across a unit funded by [the Department], and did not see it in the presentation. She used the example of a Rhodes University research unit which does “excellent work” on invasive plants. But she did not see such a unit in the presentation, unless it falls under projects. In light of that, who are these agencies that the Department is funding? “That money must go somewhere, because they [the agencies] are funded”, but she did not see it in the presentation, unless it fell under water projects, or WoF, etc. Who do they report to, and can they come and report to the PC? Such agencies do “incredible work”, but the PC is “unaware of them”. She thought that it would be useful for the PC to see what is happening in those instances, so she would like to see where in the budget they fall into, because the PC did not have referrals to that.

Mr P Modise (ANC) referred to Programme 1, which was Administration. He asked if the Department’s CFO is new, to which the DG replied “Yes”, and asked if the previous CFO was female; the reply was also “Yes”. He was asking those questions because the DG had said that there are currently vacancies at senior management level. The Department said that it will not meet this target by the end of the financial year. He said that the Department was “replacing women with men”. He went on to say that “instead of going hunting for a woman, [the Department] went hunting for a man”; it would then not be possible to meet the target. He suggested that the PC needed to change how it does things: “We must refuse to be a committee that does not bite. We must refuse to be a committee that speaks lots of empty rhetoric and mindless radicalism. We must bite now”. He then noted that the APPs were approved; at the time, the Department said it was going to meet the targets. The DG had multiple pages in the presentation where she told the PC that the Department was not going to meet the targets. The APPs were approved, and accepted by everybody, and the PC agreed that the Department was going to meet these targets. The DG was telling the PC that by the end of the financial year, the Department would not have met those targets; Mr Modise said that he did not think that the Department was “taking [the PC] seriously”, and that he did not think it was being fair to itself, to the PC, or to the people of South Africa. He had hoped that the Minister would be at the meeting, but the Deputy Minister was there. In the previous PC meeting, the Minister mentioned that the Department would give a written submission. There were not clear timeframes, and there had not been any other platforms where the PC could raise this. There were not clear timeframes on when the written submissions would arrive. That would not be fair on the PC or the people of this country. He said that with the reports of Fisheries and Forestry of the past five years, the difference was technology and the English. The PC had gone through the reports, and the reports were similar. The change was in the English, i.e. she/he. There was a COP25 [conference] last year, and there was big delegation there (according to Mr Modise, who was there). He had expected the Department’s report, particularly the part on climate change, and the mitigation factors, to speak to that, to the resolutions, the strategies moving into COP26, etc. How does the Department plan to [speak to that], or will there be a report upon entering COP26? On youth unemployment: Youth unemployment, poverty, and inequality are serious “triple challenges” in South Africa. The DG told the PC that the project initiation [of environmental projects] was delayed – who was it delayed by, and why, and what happens to that person? “I [the person who caused the delay] could still arrive at the Department, delay youth employment, and still eat cheese and relax”. Is there consequence management to that effect? Or is it a situation where the person who delayed employment has been forgiven, and it is not a problem? “The majority of our people remain unemployed, particularly young people”. The PC went to Hout Bay, and the people there said that the PC had come to tell lies there and leave. The PC had only been there once, and it had been six months already. The PC had not been there to give feedback on whatever the people had raised with the Members, and it makes the Members “liars”, as the people in Hout Bay alleged. It was because the PC had not received feedback from the Department, hence the PC was unable to go back to Hout Bay. The issue of small-scale fisheries and their rights – “there is no way that that target cannot be met soon, and there is no way that we can’t go back to those people, because it will indeed prove that we are liars, and true misrepresenters of the people of South Africa”.

Ms T Mchunu (ANC) agreed with Mr Modise that the issue of gender was currently a problem. If the DG could openly say that the Department was not going to meet its vacancy target, then it meant that in the employment of women, in particular in senior positions, that the Department was “not serious” about that matter. “The Department is taking that matter for granted”. The DG was “embarrassing the Minister and the Deputy Minister” because the two are both female, yet the DG was telling the PC that the Department could not employ a woman. Ms Mchunu said that she knew a lot of capable women who were capable of doing the work. The PC could not accept such a situation. She said that something must be done about [hiring women in senior management positions]. The PC was not accepting the issue of the Department not meeting the targets on hiring women. She mentioned how Programme 1 (Administration) had an overall performance of 65%, and when it came to finances, performance was at 70%, which was good. But she was worried about environmental programmes. The EPWP programmes are important, and it was good that the Department has taken precautionary measures to ensure that it does not do things that are unbecoming, or that would “cause the AG [Auditor-General] to fight [the Department]”. But with these unmet targets, and the performances in terms of the financials – does the Department have plan to spend the money, or can it ask for a rollover? A rollover cannot be accepted when the Department is short of funds. In terms of the Minister of Finance, the Department might end up losing those funds. If the Department were to lose the EPWP funds, if the Department is [underspending], and it was about to finish the financial year, then Ms Mchunu wanted a convincing answer that says that the Department was going to make that category work. The EPWP speaks to job availability in the country. It means that the Department would have failed to provide those job opportunities in the community. She then asked about page 30, which concerned fisheries management. As much as the Department did not have full control over the fisheries, but page 30 talked about the number of inspections, and the inspections that are not done – the DG said that there is a capacity constraint. Does the Department have a plan to deal with that capacity constraint? Or how long would it take to complete that particular situation?

In the finance presentation, it talked about the amounts spent on non-profit institutions, where there was one where the Department only spent 35% (page three of the printout). On the DBSA Green Fund, 29% was spent, and on the Recycling Enterprise Support Programme, only 41% was spent. If the Department had a situation of 29% spending, was it likely to spend that money before the end of the financial year, and what will happen if the Department does not spend before the end of the financial year? The slide with the graphical presentation of expenditure (page four of the printout) was very faint. The CFO spoke of a deficit – how could the Department have a deficit when it had budgeted? On there being a surplus: Was it not a surplus because the Department was jeopardising some of the projects? The Department was talking about a surplus when it was doing work as government – how did it get to that point? With a surplus, she would expect it if the Department was generating an income. It is a “serious challenge” when there is a deficit and a surplus. Does the Department have plans to deal with deficits and surpluses? What is the plan to ensure that there are no more deficits, and that a surplus can only be obtained when one is getting income as a department or entity?

Mr N Paulsen (EFF) noted the surplus at SANParks, SAWS, and iSimangaliso. Regarding these surpluses, how will the Department put money back into the operations of those areas? The Department said that SANBI had a deficit as a result of lower visitor numbers – what kind of programmes would the Department have to attract more people to visit? He thought that it was important to do outreach to schools, and get young people involved. He thought that a lot of environmental problems are as a result of not doing enough to ensure that people are aware of how their behaviour impacts on the environment. What kind of programmes would the Department have to attract more visitors, and to encourage more people to visit South Africa’s parks, and actually play a part in the biodiversity programme? On Programme 4, the Department spent 77% of the budget on something that has been “topical and very important”, namely climate change. What will the Department do going forward to get more people involved in playing a role in climate change? It is not just something that is done at this level of government, but also get people actively involved, and have active programmes for young people to get involved in addressing the climate change challenges that South Africa is facing. It is not just something that must be done for the sake of importance; there must be measurements as to outreach being done. Not just to businesses, because as long as there is a demand for businesses to produce, they will carry on producing, but consumers need to know how their consumption and their behaviour impacts the issue of climate change.

Ms Weber wanted to speak about Programme 4 (Climate Change, Air Quality and Sustainable Development). She did not think that 92% of the targets set had been reached; the Department still sits with problems, and air pollution has not changed. One of the targets is “the number of climate change response policy interventions implemented”. It was implemented, but “we don’t see results”. The Department had said that it has 110 government-owned air quality monitoring stations. Are there more? [The stations] report, but what does the Department do with the report? If the air quality reports come back from all 110 stations, and they are not adhering [to air pollution guidelines], what is the process to make sure that the stations are using the implementation of the Department’s prevention plan for clean air? People “really get sick of [the air]; although there are air pollution stations, that report, what is done with that report? Is the Department following up? Are all the areas covered by monitoring stations? Which areas are not covered, and what is the Department doing about that? There are various culprits who are not adhering to the minimum emissions. There was a request for an extension, and the Department gave an extension until 2025. The same people [who asked for an extension] are applying again; they are not only pushing for an extension, but they are also pushing for an exemption. She did not see how that was helping if it had been approved. The minimum emissions are being “extended”, instead of those minimum emissions being adhering to. Ms Weber said that she comes from Mpumalanga, she lived near the coal-fired stations, so she knew what [air pollution] is. What is the Department really doing effectively about air pollution? She suggested adding different targets, which could be outcome-based regarding air pollution. According to South African legislation, it is a ten-year jail sentence or R10 million per month for not adhering. There were extensions for five years, until 2020; has it been extended to 2025? At the end of 2025, it is another five years. For the people living in these conditions, is the Department going to grant another extension again; but in the meantime, pollution gets worse and does not get better.

Responses

The Deputy Minister said that the DG will respond to questions on the DEFF report, and that the CFO will respond to questions on funds. She wanted to say something about the issue of the replacement of the CFO by a man. People who know her know that she is a very honest person. She had discovered that morning that a man had replaced a woman. If she had known the previous day (Monday), she would have raised a concern. She also said to the DG that with every vacant post the Department has in senior management, it would reach the target of having women in senior management. How would it explain the issue of the CFO if it had a man at the meeting? On COP25, she wanted to indicate the processes towards that. The report on [COP25] was going to the cabinet cluster the following day (Wednesday 4 March), and then to the full Cabinet, and then to Parliament before it could come to the PC. With regard to issues of the surplus, etc.: She described the frustrations of going from a PC environment to the Department; there are “so many frustrations”. National Treasury has “such strict measures” about its budget. On issues that Members raised about Programme 6, which was supposed to empower youth and women: people were trying their best. “Every time [those people] sent a submission to the National Treasury, it [came] back”. Some of the programmes were headed by deputy ministers. She “knew where she came from” when it came to issues of youth empowerment and women empowerment. She thought that she needed to have a session with the PC to explain what the challenges are, because she knew that if Parliament and PCs then agree with the Department, [they could] try and approach National Treasury, so that that area could be unlocked.

The DG said that she wanted to clarify that when the Department explained what it would not achieve, it was “trying to be honest and transparent with the Committee”. She was “not going to be defensive”; she was just stating the reasons that the targets were not met. On the rhino numbers: she requested that Mr Shonisani Munzhedzi, DDG: Biodiversity and Conservation explain those numbers; SANParks would add to that later on. But on the question of what the comparison was between SANParks and other conservation agencies, she wanted to note that the KNP is on a border. It is challenging to enforce [conservation laws], and to deal with poachers. On the programme where the Department has research institutions, that is under Programme 6, Dr Guy Preston, DDG: Environmental Programmes would elaborate. The Department had a number of research institutions which it funds. Rhodes University (RU) was a part of that list, as was the University of Cape Town, University of the Western Cape, and the CSIR. An example of research related to the use of biological control, where the Department experimented through working with SANBI and other science institutions. The Department could give a full list of such institutions. With respect to where the Department was with filling vacant senior management posts – it had just started with advertising. It would not meet the targets for the year. The DG explained that the Department did not count people on contract. It could be said that the Department had managers who were women. But the APP itself, which was presented, explained the challenge of meeting the gender [quotas] at senior management level in the Department. It was not a target that the Department set for itself; it was given the targets. The Department had a dedicated plan for people with disabilities to make sure that it tried other means to get people with disabilities into the Department. For gender, it also had a plan, but in some cases, the Department was not getting the ideal candidate. The selection process was similar to tenders; e.g. the Department says that 30% must go to SMMEs. The DG had no way of getting [round the problem that only people who applied could be interviewed.]

On the reports that were to be in writing: The DG had checked, and the Department had already submitted some of the reports. The DG would give a [list] to the secretary, so that Members could track the documents to which the Department said that it would respond to in writing. The Department had attempted to respond to most of the items that it committed to; the Department “did not take the Committee for granted”. The Hout Bay report had already been submitted for approval to come to the PC. The delegation from the Department said that the Hout Bay report had already been submitted for processing. The Department had a report on COP25 that would be presented to the PC.

On whether the Department had a plan to deal with capacity constraints on enforcement, the structure and the budget were still with Fisheries, but the Minister and Deputy Minister had a submission that went to the Minister of Agriculture to outline what were some of the priority posts. The Department wanted to start at present so that by the 1st of April, when it got into the new year, when the funds had arrived, and the structure had been transferred fully to the new Department, the implementation of appointments to increase capacity would be finalised. In the short-term, the Department did have some capacity that it provided on contract, but for the long-term, it would be covered in the next APP.

The DG used the DBSA as an example of where funds were transferred to “other agencies”. There have been changes around accounting, in relation to modified cash standards. There have been changes in how the Department will approach the Green Fund and the DBSA. In future, the Treasury will deal directly with the DBSA, and will not transfer funds directly to the Department. This is because the Treasury has put the Department in a position of having to account for loans. The Department does not handle a loan book, because of the requirements of how it discloses in terms of modified cash standards. The Department has not fully programmed the DBSA and Green Fund because of some of the accounting [requirements]. The Department needs to set a new process and a new system in place in order to be able to fully use those resources in future. But unfortunately, financially the Department is unable to [specify itself the] process between the Department and the National Treasury.

On surpluses and deficits: The CFO was giving an analysis from the Department’s side, as the Department just provides oversight with respect to the entities. By law, the entities are allowed to generate revenue, which is why the Department looks at the entities’ liquidity, and understands what areas are experiencing pressure. The Department understood the pressure on SANBI as being more in terms of infrastructure. The DG said that the entities would elaborate more on their surpluses or deficits.

On more people visiting the parks: SANParks would expand on how the Department supports it and “provincial agencies” in terms of how the Department would improve on transformation goals and outcomes.

On Programme 4: The Department had previously presented to the PC on the monitoring stations, including which ones are government-owned. That information was discussed at length in a full sitting of the Committee. The DG said that the Department had presented the State of the Environment report two weeks ago. This outlined the state of air quality. In the high-priority areas, it was noted that overall, there is a problem with particulate matter as a pollutant in South Africa’s air. Some “drastic measures will have to be put in place, and some of those actions will be included in in the next APP. Sulphur dioxide (SO2) is a key priority area, and the Department will outline how it is dealing with SO2. The Department acknowledges the state of air pollution challenges, and what actions are still needed, including the fact that the Minister still needs to publish regulations for the high-priority areas of air pollution. The outcome-based targets would need to be included in the way that the Department frames its targets in the APP. In the State of the Environment report, the Department outlined emissions challenges, namely from energy sectors, transport, and waste or landfill sites, as well as what South Africa is doing to mitigate and adapt to climate change. The Department takes it commitments to [mitigation and adaptation] seriously. The DG would confirm if all 110 air pollution monitoring stations are government-owned. In a previous meeting, the Department did say which stations were government-owned and which were privately owned, as well as what the actions were for noncompliance. There were also details of what support the Department provided to municipalities to ensure compliance of the stations.

On postponement applications: There was a process followed in terms of postponement applications. There were areas where there were issues with postponement applications, and the DG said that she could provide that information in writing.

Mr Shonisani Munzhedzi, DDG: Biodiversity and Conservation, addressed the question of rhino numbers. The Minister released a report on 3 February 2020 (which would be made available). The report was also on the Environmental Affairs website, and provided an update on rhino poaching statistics in South Africa. It provided an analysis of what happened in 2018 and 2019. Operative numbers were provided, as well as the trends affecting SANParks. The numbers show a general decline in various areas, and in different provinces. If one looks at the geography of some of the areas, such as Mpumalanga, Limpopo, KNP, KZN, one will find that the parks’ proximity and geographical location has an influence on the numbers. The report also provided the number of arrests and sentencings. There is an integrated strategy being used which includes existing entities such as the Hawks, police, defence, customs, etc.

On visitor numbers, particularly in reference to SANBI: The Department does outreach, and encourages more people to come in. More programmes are “something to consider”. These things also apply to SANParks and iSimangaliso. All of these entities have dedicated programmes that interface either with tourists, or with visitors that come in many forms. Some of the visitors are researchers, some are tourists, some are schools. The Department’s role, apart from the transfers to support those programmes, is to put in additional effort. One being support to unlock the economic potential of some these areas to allow these programmes to be successful. Dr Preston’s environmental programmes do put a lot of investment into supporting infrastructure development and infrastructure upgrades, either in SANParks or in iSimangaliso, or in SANBI.

The Chairperson interjected to say that the focus was looking at progress in quarter three.

Dr Guy Preston, DDG: Environmental Programmes (EP), addressed the question about research done within Programme 6. He said that [Environmental Programmes] would submit a table that shows all the research that is done. This research is covered in the budget, under projects that EP runs, because for the most part it is operational research. Rhodes University is part of a suite of universities and other government institutions who do work for EP. The budget is R27 million for this year, and the research programme is very big. There is “probably exceptional return on investment” that EP gets, in terms of finding biological control agents that control the “scourge of invasives”, and in the mass rearing and distribution of these agents. The work being done on the water hyacinth on the Hartebeespoort dam (and many other species) is a result of [this research]. There is employment that comes with that as well. He would give the information [on research institutions] in a report.

On the budget spend: EP had to recalibrate the way that it did its work to comply with modified cash standards. EP was in the process of getting back on track. If one looked at the expenditure, EP spent 30% of its budget in the third quarter. It will come closer to spending the budget, but will not spend the full budget in the last quarter.

Ms Sue Middleton, Acting DDG: Fisheries Management, addressed the question of Hout Bay. In this PC, there is a programme item for this quarter, which is a joint sitting with the PC on Public Works and Infrastructure, specifically on Hout Bay. After that, the Department would be ready to accompany the PC back to Hout Bay for a report-back to the community.

The DG noted that the slide mentioned by Ms Mchunu was on the number of days it takes the Department to pay suppliers. The font looked small, but the slide definitely said that the Department was sticking to the target of paying within 30 days.

The Chairperson said that the PC was under pressure because of time. He welcomed the CFO on behalf of the Committee, and said that the questions raised did not mean that he was not capable of doing what the PC expected from him.

The PC would now proceed to the entities (SANParks and iSimangaliso).

Briefing by SANParks on the 2019/20 third quarter report

Ms Joanne Yawitch, Chairperson: SANParks, introduced the presentation. In the details of the report, the PC would see that there are certain areas where targets have not been met so far, but are likely to be met by the end of the year. Then there were areas where there was a “concerning trend” that SANParks would not meet the targets by the end of the financial year. The Board was “deeply concerned about the overall trend in the tourism industry in South Africa. For many years, SANParks had consistently met or exceeded its tourism numbers and tourism revenues. Given that it is an entity that generates “80% of its resources out of tourism”, the overall decline in the tourism industry is a matter of deep concern to the Board going forward, as well as “the possibility of COVID-19 appearing in South Africa”, and the impact that the latter may have. The reason that [the decline] is of concern is that tourism is important to the overall financial sustainability of SANParks, as well as the fact that many of its community interventions (e.g. the beneficiation programmes, building laboratories in schools) all depend on its ability to keep those tourism revenues up. SANParks would be putting in place proactive mitigation measures, and would come back in a few months to report on the fourth quarter.

Mr Fundisile Mketeni, CEO: SANParks, presented the report.

He responded to the issue of rhino poaching spiking in October and November 2019. SANParks saw a different picture: in October 2018, SANParks lost 35 rhinos, and in November, it lost 37. That was a total of 72 rhinos lost. In October 2019, 26 rhinos were lost, and in November 2019, 39 were lost, which was a total of 65. Why the KNP? One is talking about 2 million ha of land, with a boundary of 1 000km that must be covered. KNP hosts 30% of the white rhinos in South Africa, and 50% of black rhinos. The KNP is bordered by Mozambique and Zimbabwe. There are approximately 2 million people bordering the KNP. On the surplus: SANParks generated 80% of its own revenue from tourism and 20% from Government. For the surplus that it gets, it must always request permission from Treasury [to make use of the surplus]; if it gets permission, it will deploy the surplus on areas where it can grow its revenue, on areas where transformation needs to be done, and on areas where it can deal with marketing and maintenance. It depends where the pressures are.

The CEO said that he would only be addressing the red areas [in the performance report].

Percentage implementation of planned activities undertaken for the three new Marine Protected Areas (MPAs) managed by SANParks

Two MPAs were handed over to SANParks to manage, and it had to develop a plan to do that. In quarter two it developed a plan, but in quarter three, it implemented only 71% of scheduled activities. SANParks had to consult with stakeholders on MPAs, introduce itself to the stakeholders, and improve issues of performance.

Tracking park management effectiveness through the number of national parks achieving a Management Effectiveness Tracking Tool (METT) score of ≥ 67% and progress against identified corrective actions

SANParks was yellow on effectiveness. Every second year, it gets assessed on how it is performing in managing parks. In previous years, SANParks was always above target. In this case, the PI was yellow (work in progress) because of challenges with capacity in the KNP, which are being addressed. Regarding infrastructure maintenance: SANParks was busy with a risk report for the KNP.

Percentage reduction of fossil fuel generated energy consumption in Parks and Kruger

SANParks said that it wanted to reduce, year on year, its fossil fuel consumption, but at the same time, it had developed new infrastructure, which is why it had only achieved a 1% reduction of fossil fuel consumption in the third quarter. Challenges in this area included recent extreme high temperatures and below average rainfall, but SANParks continued to create awareness as a corrective measure around fossil fuel use.

Percentage reduction of water consumption in Parks and Kruger

There were water pipeline leakages in major pipelines. The process is under way for the procurement and installation of water meters. Challenges for the KNP included a leak in the main pipeline in the Lower Sabie tented camp; the Tambotie and Orpen camps being 100% occupied, which led to increased consumption; Mopani camp had a pipe leak; and Staff camps still over use water. SANParks wants to continue with replacement of aging bulk water supply and reticulation systems with high pipe burst frequencies. But the ease of funding of infrastructure investment continues to be a challenge.

Total hectares of land rehabilitated/restored

SANParks does get money from the Department for this purpose. Targets were partially achieved in quarter three, but SANParks was initially focused on catchup. Rehabilitation was partially achieved, because the focus was on initial catch-up, because it was doing initial work and follow-up work.

Percentage implementation of the Annual Rhinoceros Plan

There was only one activity not done, but SANParks had seven targets. This area was marked yellow because of certain parts of the Annual Rhinoceros Plan. This is an area where SANParks “needs to be smart on [its] plans; [it] cannot say 95%”.

Percentage implementation of the Annual Elephant Plan

Seven out of eight activities scheduled for quarter three in the Annual Elephant Plan were implemented. There were elephants crossing over from Zimbabwe and damaging sensitive riparian vegetation in Mapungubwe National Park. SANParks is seeking funding to construct a fence in the riparian plain.

Percentage Implementation of the SANParks Wildlife Economy and Sustainable Use Programme

This was not achieved, mainly because there was a delay on game farm inspections. SANParks inspects farms of applicants to make sure that they hold the farm, and have the correct infrastructure. Site visits took up a lot of time. Site inspections have been finalised, and will be concluded in quarter four.

Total number of visitors to National Parks

SANParks will continue trying to market locally, even if it means giving some discounts, because 70% of SANParks visitors are local, and with the current economic situation, there has been a decline in numbers.

Number of New and Diverse Revenue Generating Products Implemented

While the targets were not achieved, Mr Mketeni announced that the Board would be looking at the Letaba concession the following day (Wednesday 4 March), and that the Skukuza Safari Lodge was ready for operation. Concessions for restaurant operators for Satara, Olifants and Letaba, and bush braai operators had been awarded. Targets in this area would be achieved moving forward.

Percentage of a portfolio of opportunities for SMMEs Developed and Implemented

This area was delayed. A question to ask is “are the projects doable?” There tends to be a “shopping list” of projects which are not always doable. In March, SANParks would have a mini lab for Socio-Economic Transformation (SET) in order to identify projects it could implement in the next five years.

Number of Social Legacy projects implemented

The projects were delayed by document processes, but since the processes had been completed, construction would start soon.

Number of Environmental Education (EE) programmes developed and implemented

The EE programme was developed; however, it will only be finalized after the SET mini lab. SANParks wants to combine the EE programme as part of the SET mini lab because the issue of accessibility by schools is seen as a part of transformation.

Percentage of Employees from Designated EE Groups (People living with Disability)

SANParks was “doing quite well” with this target. Previously, people were told that they must come forward and declare [that they have a disability]. Now, the law says that one must prove that one is disabled, and “produce a certificate”.

Percentage closing of critical competency skills gap

SANParks was delayed because of compiling proper terms of reference (TOR), and finalizing areas of competency to be assessed.

Percentage of payroll spent on the skills development programme

SANParks is behind in this area, but has seen a lot of improvement. In the past, there was a misalignment between the budgeting and the actual training conducted. Training was “a bit slow”, and so the budget could not be matched to the training.

Percentage implementation of Enterprise Risk Management Strategy

The Board would be looking at the strategy and policy the following day (Wednesday); it has gone past the risk and audit committee, and the Board would approve it on 4 March.

Develop and implement national priority maintenance and recapitalisation management system

There was a delay because the tender was not evaluated as planned in the third quarter. Mr Mketeni doubted that the target would be achieved, because SANParks wanted to look at back-to-back infrastructure investment, which is very important for SANParks, and for the country as a whole.

Percentage of Stakeholder management plan developed and implemented

In quarter two, SANParks did say that it wanted to develop a plan. In quarter three, it wanted to consult, but it was delayed by stakeholder mapping. SANParks has a “huge number of stakeholders”, such as large non-governmental organisations (NGOs), schools, young people etc. Therefore, there was a need to map stakeholders so that SANParks knew who it was dealing with. SANParks had only achieved 65% of that goal, but it was now “accelerating” so that it had a better plan to present when it returned to Parliament.

Mr Dumisani Dlamini, CFO: SANParks, presented the financial performance of SANParks.

Statement of Financial Position as at 31 December 2019

Assets had grown since the last financial year. Current assets were at R2.3 billion, while non-current assets declined slightly to R2.9 billion. This was mainly due to depreciation, even though SANParks had acquired assets to the value of R69 million.

Current liabilities increased, and there were two main reasons for this. Firstly, payables from exchange transactions, and unspent conditional grants and receipts. Non-current liabilities increased to R950 277. The two areas that influenced this area were finance lease obligation and employee benefit obligation.

Statement of Financial Performance

Revenue up to quarter three was R 2.194 billion. Revenue was made up of various components. It was “not where it should be”, partly because the conservation fees were higher than the budget. The fees were higher by R24.7 million. Tourism revenue was R747 million to date, which was R53 million below target. This was mainly because visitor numbers were down by 2.4% up to 31 December 2019. This means that it is “highly unlikely” that SANParks would reach its revenue targets. The “best forecast” was that SANParks would have a shortfall of R5.7 million by the end of the year. Concessions were 3% below budget, and also reflected a negative 6% variance if compared year-on-year.

Gross profit was below the budget, the main reason for that was a delay in opening Skukuza Lodge, which was part of the budget. The tender would have been issued earlier in the year, but “there was a development there which prevented that from happening”. But SANParks was grateful that the hotel was open, and had already started generating income for SANParks.

Grants were R174 million below budget. Some of the grant that was supposed to be paid by the Department had not been received by time SANParks reported in quarter three. Special projects were below budget by R16.3 million.

Expenditure showed underspending by R76.9 million, which was in line with SANParks’ strategic objectives; the objectives indicated that the budget should be below zero. SANParks was not anticipating any over-expenditure of the allocated budget. The biggest portion of the expenditure budget was people costs, because SANParks’ operation is labour-intensive. Even though SANParks is labour-intensive, people costs made up 51% of the total cost of the organisation. That percentage was lower than many public entities, where the benchmark “is around 60 to 70% of the total operation”. SANParks was expecting slight over-expenditure on people costs, mainly because of salary increases being higher than what SANParks budgeted for, as well as the amount paid to contract and part-time workers. Maintenance was below budget; SANParks had issues with construction companies mainly in Kruger, where it had only one construction company for the greater part of the year. SANParks overcame that challenge by appointing 14 construction companies, who are busy with lots of maintenance in the Kruger. SANParks should be able to catch up [on maintenance backlogs] in the new financial year. Operating costs are mainly under control; there was minor underspending on insurance quotes, marketing costs, and data communication.

SANParks’ surplus up to quarter three was approximately R67 million, which was significantly lower than the previous year. SANParks is trying to “spend aggressively” on necessary core expenditure, while reducing the surplus, so that it makes sure that the money is put to use.

SANParks takes financial sustainability very seriously. If one looks at most of the indicators, one can see that SANParks was generating 80% of its own income, with the balance coming from Government. Its income to cost ratio is 1:1, which means that costs have been managed. On fundraising: SANParks understands that the fiscus is currently constrained, hence it ensured that it was becoming less reliant on the state in terms of receiving money. SANParks raised R83 million through fundraising activities.

In the last financial year, as at 31 March 2019, SANParks generated cash resources of R1.8 billion. Cash resources as at 31 December 2019 were approximately R2.2 billion. SANParks is not only serious about financial sustainability, but also maintains a healthy balance sheet for the organisation. SANParks presented a financial strategy which had been approved by the Board. Through that guidance, SANParks was looking forward to maintaining the financial sustainability of the organisation. In terms of debt collection, SANParks was behind, with its average debt collection at 37%, which was probably because most of the debtors were tied up in litigation. Paying creditors took place within 25 days, which met government policies of paying within 30 days.

Briefing by iSimangaliso on the 2019/20 third quarter report

Professor Thandi Nzama, the Chairperson of iSimangaliso Wetland Park, gave an introduction to the presentation.

In the APP that came from 2019/20 revised strategy, there are areas where ISWP had done well. ISWP achieved a 67% overall performance; most of the indicators planned for quarter three were achieved. The indicators which were not achieved will be achieved in quarter four, and those that cannot be achieved will overlap into the 2020/21 financial year.

Black Economic Empowerment (BEE) spend on majority black owned suppliers as a percentage of qualifying expenditure

The entity saw an increase in this area; the target was exceeded at 71%. The focus was on communities that live adjacent to the park, and on women and youth.

Monetary value of non-paying visitors (through fee paying gates)

The monetary value increased by R1 629 751.

One of the challenges was the management agreement between ISWP and Ezemvelo KZN Wildlife (Ezemvelo) [the KwaZulu-Natal provincial parks and biodiversity conservation entity]. Challenges also included deforestation, community unrest, and irregular expenditure.

On the management agreement: These challenges come from the history of previous management and administration. ISWP and Ezemvelo entered into this agreement, and it is making it difficult for ISWP to maximise on tourism revenue generation and conservation operations. Echoing the Deputy Minister’s opening remarks, Prof. Nzama encouraged the PC to review the agreement, which was no longer beneficial to either party. In ISWP, there are facilities which are run by Ezemvelo. “Tourists are always looking for quality experiences, and now when they visit these facilities, they find that they are run down, and impacting negatively on their holiday experiences”. ISWP then loses those tourists, and loses revenue that it might have gotten for the entity. She appealed to the PC to assist ISWP in reviewing the management agreement between the two entities; the agreement had proven to be dysfunctional, and to impact negatively on the operations of ISWP.

On deforestation: There are a number of communities around the park. Prof. Nzama assured the PC that ISWP was trying its best to engage all of the communities, because ISWP understood that one of its responsibilities was to make sure that communities that live adjacent to the park benefit from the tourism and other activities happening within the park. To make sure that communities are engaged effectively, ISWP came up with a stakeholder engagement strategy, and a communication strategy, both of which have been presented and approved by the Board. These strategies will make sure that communities are engaged effectively and efficiently, and that people understand how the park operates, and how they can benefit from the activities happening within the park.

Currently, ISWP is in the process of engaging Ezemvelo. There is a meeting planned to make sure that both parties engage with each other, and find workable solutions. Both entities have realised that the current arrangement is definitely not working.

On irregular expenditure: ISWP has appointed a service provider to investigate and report. The report is due to be tabled at the next board meeting that will be taking place during the fourth quarter. Consequence management will be implemented when necessary. The CEO has developed a turnaround strategy which will make sure that some of the key interventions are developed and put in place. The targets that were not met, and those that were partially met, will be met in quarter four. Some would overlap to the next financial year. Additionally, it became necessary for the previous CFO to be suspended; the acting CFO was attending the meeting. The previous CFO was suspended because of the irregular expenditure.

Regarding targets: “I can confidently say that for this financial year, the entity will actually be able to achieve 91% of targets”. The entity had done very well for this financial year, according to Prof. Nzama.

Mr Sibusiso Bukhosini, CEO: iSimangaliso, gave the presentation. He said he would focus on the red and yellow areas in the report.

Average number of days: Trade Debtor Collection

The target was not met, because ISWP was at 63 days by quarter three [against the target of 60 days]. An issue that was picked up was that the entity had never had a policy on debt recovery. ISWP would formulate a policy, and then present it to the Board.

Development of Workplace Skills plan, and submission to relevant Sectoral Education and Training Authority (SETA)

In the last engagement, ISWP promised as management that it would deliver on that. The outstanding issue was for the Board to approve the Skills Plan, and to submit to the relevant SETA.

Implementation of Employment Equity plan targets

The implementation of employment equity targets will be achieved in quarter four. With the positions that ISWP would be filling, it showed it was serious about having women fill those positions.

Number of Employee satisfaction surveys conducted and recommendations/

findings implemented

The recommendations were looked into, but some of those are part of training programmes that ISWP will do, which are indicated in the Workplace Skills Plan. This would be delivered in quarter four.

Review and revise ICT governance framework

ISWP has appointed a service provider. By the fourth quarter, ISWP would have an ICT governance framework in place, which the Board would have approved.

Number of key ICT systems supporting the Authority’s business

ISWP has taken a resolution that from now on, it will have an integrated financial management system. For a long time, the CEO had been raising issues of financials being on Excel spreadsheets, which are prone to human error. In the next financial year, ISWP would procure an integrated financial management system. Before ISWP does that, it must have a clear governance framework, so that it would outline all the issues that were necessary as far as IT is concerned.

Park monitoring programme implemented

The service provider left the organisation. ISWP tried to re-engage with the service provider. The contract has since been cancelled. A tender was advertised, and a new service provider was appointed.

The overall performance in Programme 1: Corporate Support Services was at 60% on target, 8% work in progress, and 20% off target.

Number of environmental audits conducted

Environmental audits were rescheduled for the fourth quarter.

Number of environmental monitors deployed in the Park

Two environmental monitors resigned, and two will be recruited in the fourth quarter. ISWP was grateful that [monitoring] had addressed the issue of unemployment in the area, especially in youth and women in the area. This type of employment was “contributing significantly to the relationship between the park and the community”.

Number of cubic meters of earthworks in wetland rehabilitation project

The target was not achieved. Funds for the project were received late from DEFF, on 12 February 2020. A mitigation plan is in place to meet the target in quarter four.

Overall, Programme 2: Biodiversity Conservation was at 75% on target, 8% work in progress, and 17% off target.

In Programme 3: Tourism and Bus Development, targets were either achieved or partially achieved.

Number of paid visitors’ entries

There were 66 898 visitor entries whilst the target was 79 500. This can be attributed to a number of factors: ISWP had problems with infrastructure such as access roads, park furniture, etc. The funding that ISWP received is being rolled out, since community engagement has been such that ISWP is in a position to implement plans. There was a concern that money was given to ISWP, but communities were blocking ISWP from implementing programmes. ISWP had to deal with the situation by making sure that it focused on stakeholder management and engagement. Plans are now being implemented, and ISWP hopes that it will see an increase in visitor numbers because of those programmes being implemented.

Revenue to the Park from commercial sources

ISWP received R7 million revenue but the planned target was R7.5 million. ISWP is in the process of advertising for concession contracts, which will be advertised in quarter four.

Overall, Programme 3 was 76% on target, 12% was partially achieved, and 12% of targets had no milestone.

Number of people participating in local economic development programmes (arts and craft) and Number of people participating in rural enterprise programme (business services, training, mentoring, guiding and grants)

There had been significant improvement for Programme 4: Socio-Economic Environment Development. However, ISWP was over-optimistic to expect business people to participate in workshops over December, but mitigation plans are in place to meet the target in quarter four. It proved that ISWP was “wrong - people did not pitch up in the planned meetings”.

Overall Programme 4 was 53% on target, 13% off target, and 33% of targets had no milestone.

Financial Performance Report

In current assets, the actual amount in December 2019 was R271.5 million and ISWP budgeted R91.8 million. If one compared past assets and liabilities, assets are positive and liabilities are less, which means that ISWP is in a positive position. However, the entity is still “grant dependent”. ISWP’s current ratio is 1.02, indicating that it is able to cover its short-term liabilities. The debt/equity ratio is 6.7%, as ISWP has no long-term liabilities. ISWP lost some money in terms of lower amounts for paid visitor entry. Altogether, ISWP’s income was R69.5 million as at December 2019; ISWP budgeted R97.1 million. Total expenditure was R94.8 million, while ISWP budgeted R97.1; this meant that there had been no exorbitant spending. There was a depreciation of R27.0 million, which indicated that ISWP had assets that had depreciated.

Discussion

The Chairperson said that people from any entity could respond to questions.

Mr Paulsen mentioned that 70 rhinos had disappeared, and he suggested using drones. For example, unmanned aerial vehicles, specifically the type that “can fly for “5 hours, has fuel-injected hybrid motors, and infrared”. Even at night, one could track animals. The camera is so sensitive; it hovers, and the minute it “sees serious movement”, it focuses on that area. He had seen such cameras in action, and they were “absolutely fantastic”. In the past, he was about to set up a demo with Fisheries, but he saw a conflict, because he wanted people to have access to sea, and this “would prevent them” from doing so. In conservation, one wants the support of the communities, but are always those who will see the potential for rhino horn and wait to steal it. “Maybe we [can] start investing in looking at how we can make use of technology to practically eliminate the loss of rhinos. He knew that the entities wanted to derive income from visitors, but “some of us don’t have money for these things”. Should people only see a rhino or an elephant when they have money? “What do we do to create access for everyone?” If someone comes from the “Far East or Europe, we want him to spend money, but we need an alternative plan for locals”. He understood that things had to be profit-driven, but when it comes to parks, yes, maintenance and visiting is important, but some things have to be subsidized. People will have to be paid to maintain parks, but that does not mean that things must necessarily be [expensive for locals]. South Africa will feel the effect of the coronavirus for a while still, so “there will be a serious down-turn in tourism; globally, not just us”. The Department needs to be prepared for a situation where money from tourism will be reduced. With ISWP, etc., there can be bungalows for people who can afford it, for people who like to wake up to the sounds of animals – if profit is made, it is a bonus. There are some things that should not cost money other than bus fares or plane tickets. There could be a minimal access fee at the gate. He liked going to Kirstenbosch when he was younger; if he went there now, it would be R60. That could be “six loaves of bread”.

Ms Mchunu referred to the target of creating opportunities for SMMEs (page 24, SANParks report). She emphasised that SANParks had to meet that target, because when it was talking about SMMEs, it was talking about the economy. On the issue of environmental education programmes, she was also concerned about how the target had not been met, which again went back to the issue of the economy, and employment that would not increase because targets were not achieved. The CFO spoke about the issue of expenditure on salaries being above the budget. The issue was spoken about before, and it came back again. Is there a plan for dealing with this matter? How can an entity budget, and then pay salaries above the budget? The issue of overtime goes back to management - how does it manage overtime? The Minister of Finance spoke about the issue of the wage bill. On the budget of depreciation: If she asked the CFO of ISWP, he was saying that there is depreciation, but it is “not cash-backed”. “We don’t have the cash that supports that depreciation, and as a result, it is why there is a deficit now”. She understood that in terms of budgeting, when one budgets for depreciation, there must be a percentage that is cash-backed. There must be cash; even if it is only 10% of the depreciation, then money can be saved when one has the R26.8 million in depreciation. How much is cash-backed? On the facilities that belong to Ezemvelo within ISWP: The way that the facility operates should be reviewed and checked. Is Ezemvelo and ISWP having constant meetings to check? If the facilities in ISWP are a problem, then they are bad reflection on ISWP more so than on Ezemvelo. On the suspended CFO: Can the PC get a timeframe? If someone is suspended, she was sure that they were suspended with pay. What is the turnaround time for that suspension?

Mr Modise had compared his notes from both ISWP and SANParks. Both CEOs said that there are infrastructural problems, but both CEOs did not say how to mitigate the problems. He then spoke about ISWP. When ISWP and Ezemvelo entered into a contract, what were the terms and conditions of the contract, and when is it ending? The Chairperson of the Board made a request that the PC must intervene. What does ISWP want the PC to do? Has it made the same call to the executive authority? The DM is sitting here; has ISWP made this call to the Minister? It then becomes difficult to make an accurate prognosis of what is expected of the PC. If ISWP made such a request to the executive, then what was the response? “We are not going to just jump into a [rugby field] when we are soccer players”. On the suspension of the CFO: A suspension is a sanction. How did ISWP arrive at a determination to remove this person? How long is the process? When was this person suspended? When was the irregular expenditure picked up? On slide eight of ISWP: Are there financial implications for that abdication of responsibilities? Had the person started working at the time? If so, ISWP had paid the person something – is there a process to get that money back? If one has a contract and does not pitch up for work, then there must be some action that is taken. Infrastructure contributes “significantly” to a decline in tourism revenue. Given the economic crisis that South Africa is confronted with, what is being done about it? Presenters said that old infrastructure is being repaired - how far are the repairs? There was an issue of communities there disrupting operations, both in ISWP and SANParks. What has been done about that? Perhaps ISWP could share notes on what it did, so that can be applicable to SANParks. On slide 27 of SANParks: The slide said that the youth summit was achieved in March 2020 – was it done before March? Could SANParks take the PC up to speed on the summit? On salary increases (slide 54): He was worried that the better part of the money goes to employee-related costs – what does that mean? On the stakeholder mapping process (slide 48): He was sure that there was a person who was dedicated to stakeholder management full–time. If the person fails to meet the target, then there is a problem. If there is a person who is responsible for stakeholder engagement, then it is not possible to fail in meeting that particular target. Skukuza Safari Lodge has started generating income. He guessed that the income generated by the lodge went to salaries. He was more concerned with the people who work in Skukuza. The conditions in which they live are “extremely terrible”. “The conditions in which our people live in there are terrible”. He thought that when the PC did oversight, it would be taken to hotels, but it would not get to go and see where people live; in his view, people were living “in squalor”. Are there plans to develop the conditions of SANParks employees, in particular, those who live in the parks?

The Chairperson said that time was against the PC, and he would not take further questions. On the issue between ISWP and Ezemvelo: There was a team that came to the PC and raised some issues, along with some NGOs. The PC listened to members of the public; the entities would have to be transparent, and give the PC information. Where it could engage communities, it should do that. There had been problems of not being able to go out of Parliament and meet communities. The PC had promised ISWP some time ago; it was still dealing with that matter, which was an internal matter.

Responses

Ms Yawitch began responding to Members’ questions. The DM interrupted, and said that as protocol dictates, she should start, and direct people to respond to the questions. On the issue of ISWP and Ezemvelo: One was expecting that something would have been done by this time. She said that it was encouraging to hear that there was a meeting planned between the Boards of ISWP and Ezemvelo to iron out those differences. The agreement between the two entities was signed in 2001. Times have changed. It is very important to review what is contained in the agreement. If it can be done in such a way that it suits both parties, then ISWP can do very well. Most of the responsibility that is supposed to be taken by ISWP cannot be taken because of that agreement. Since the two entities initiated the meeting between themselves, the PC could be involved. The last option is the PC. For now, since ISWP had already started with [arranging a meeting], it could continue without the involvement of the PC. On the conditions in KNP: From the following week (beginning 9 March), the DM would be going to that area, and to the hotel, to look at the conditions that people are living under. The Department would be in a position to address whatever wrongs are happening there. The DM then asked that those responding simply answered questions without making opening remarks in order to save time.

Mr Paulsen disagreed with how the DM had spoken in response to Ms Yawitch starting before her.

The Chairperson tried to interject, and Mr Paulsen’s argument became heated. The Chairperson said that that is the order of how the PC conducts its business; it usually allows the Minister or DM to start.

Mr Paulsen interrupted the Chairperson.

Ms Mchunu said Mr Paulsen was out of order; he was not chairing the meeting. According to protocol, it was always the Minister or DM who started, and then others would respond.

The Chairperson asked if the Chairperson of the Board of SANParks could respond.

Ms Yawitch apologised for the lapse in protocol. The issue of staff housing, particularly in the KNP, has been a matter of deep concern to the Board for a long time. Over the past five years, SANParks has spent “over a billion Rand” in trying to renovate and to improve the quality of staff housing. The advances have been much better in the parks outside of the KNP. In the KNP, Skukuza is an area of particular concern. When SANParks talks about the infrastructure plan for the park, the Board has insisted that staff housing is included as a very central part of that infrastructure plan, because it is “undeniable” that SANParks has members of its staff living in “unacceptable conditions”, and SANParks has to address that. The human capital management committee of the Board has spent considerable time in Kruger, including inspecting the staff housing, in order to be able to give direction on that basis.

On employee-related costs: The Board has set a limit of 54% of budget on personnel. If the limit is exceeded, then SANParks cannot run the operation in the parks because there is a risk of the deterioration of infrastructure, and an inability to maintain fences or roads if it goes above the 54% limit. However, it needs to be recognised that one of the things that has placed inordinate strain on the personnel budget is the issue of rhino poaching. SANParks had to set up a ranger corps to deal with that. There is “significant strain” on the budget, but Ms Yawitch thought that from the Board’s perspective, SANParks is very committed to trying to keep the budget under control, while ensuring that staff are remunerated fairly. Over the last four or five years, there have been significant attempts to ensure that the employees at the lowest scale are remunerated fairly. Employees at the lowest scale not being remunerated fairly “has been a big problem for a long time”. There have been attempts to bring wages to levels above the living wage.

On access to parks, particularly for poor people: SANParks has Parks Week every year, where people can go into the parks for free. SANParks’ environmental education programmes do bring “hundreds of thousands” of young people into the parks. SANParks agrees that it is an area where there is room for expansion and innovation. At the same time, SANParks needs to ensure it that does not limit the revenues that it is making. SANParks does not only keep the infrastructure of the parks going. The parks are also an economic asset that brings significant benefit, not only to immediate neighbours, communities and small businesses in the area, but also to but also to the broader areas in which those tourism assets exist. Being able to continue to deliver that benefit to Mpumalanga province, the Eastern Cape, or the Western Cape is something that SANParks is committed to doing.

Mr Mketeni also responded to questions. On drones: SANParks has tested different types of airborne technologies. SANParks found that these technologies are very expensive. Some of the cameras that are proposed are “not always suitable for the African bushland”. Some cameras were used in Syria and Afghanistan, where it is desert. SANParks found that the cameras could not differentiate between shade, animals, and humans. The testing is continuing. SANParks listened to many presentations from different companies, locally and overseas, but it found the technology to be “very, very expensive”. It is an area where SANParks needs a lot of fundraising in order to invest in the technology. But SANParks does have air mobility and ground mobility. There is also technology to detect [activity], but the use of drones is something where SANParks is continuing tests.

There needs to be a balance between the private and the public. That is why there is Parks Week. There is currently a focus on youth; SANParks is considering a youth travel desk. While there is the idea of “kids in parks”, there also needs to be the promotion of “youth in parks”, so that youth can afford to attend the parks. There is also the Wild Card, where people can get one for single or multiple destinations; it is similar to a loyalty card.

On SMMEs: Slide 27 talked about SMMEs and commercial activities in national parks. Last year, the Board approved a policy for an incentive in terms of commercial opportunities in national parks. There is a need to identify what the opportunities are. Treasury approved that ring-fencing policy. SANParks needs to be able to identify those opportunities, so that as it puts out opportunities, it knows that those opportunities are ring-fenced per the policy, for small black-owned businesses in particular. Slides 33 to 35 talked about other SMME opportunities that are being created in SANParks, in the implementation of funding that it gets from the Department. Full-time equivalent jobs were achieved, 538 SMMEs were supported in the EPWP programme. R149 million was spent on SMMEs. There were two components to supporting SMMEs – namely, commercialisation in SANParks, and other SMME support that is given through the EPWP. He agreed that the EE programme was an area that needed to be accelerated. In the past, SANParks may have done the wrong calculations of the number of EE programmes happening in the park.

On salaries: The Board did ring fence 54% of the budget for salaries. Overtime is paid to rangers and tourism staff. If every position is filled, and overtime is avoided, then SANParks would still pay more, because of better packages, allowances, leave pay, all types of leave, travel allowance, etc. If one has to choose between overtime and filling every position, it would be more expensive for SANParks [to fill every position].

On infrastructure: SANParks had not come to the PC with solutions, but there are three areas where SANParks wants to “bite the bullet”. It must look at the feasibility of recapitalization. It is starting to do conditional assessment of its infrastructure, because it needs to know what it is managing, “both above the ground and below the ground”. SANParks is also exploring the use of facilities management. There would be a company managing a building for it, and making sure that cleaning and maintenance is done. If SANParks does those things, it will reduce the number of complaints. SANParks wants to see an improvement in terms of loss of revenue. That will be the condition to whatever company SANParks will appoint in future to do facilities management for it.

On disruptions by communities: The disruptions were more about service delivery. People felt that to have an impact, for local government to listen, it would be necessary to block the roads going to KNP. For now, things were quiet, but the was the possibility of further protests moving forward.

On stakeholder management: SANParks was “weak” in that area, but good at communication. This is why it was now building capacity in that area. SANParks “does not need spin doctors, [it] needs people who can do proper public relations and stakeholder engagement”.

On Skukuza Lodge: Initially, SANParks was trying to see what is non-core must be done better by the private sector. The lodge was built with government money. Something went wrong in the tender process when SANParks wanted to get an operator [for infrastructure]. Food and beverages are managed by a company.

In the parks, but especially in Kruger, SANParks did some calculations, and it would need R700 million to deal with all the backlog of staff houses. SANParks did make a presentation to the Board to say that over the last five years, it spent “more than a billion”; the DG could attest to that, since the money came from the Department.

Mr Dlamini responded to questions. On the shortfall: There is no current shortfall, but based on the tourism numbers being down, and based on the fact that the revenue target is behind, SANParks was anticipating a shortfall at the end of the year, but was working hard to make sure that it does not happen.

On salaries versus the budget: An issue that SANParks experienced in the current financial year was that it budgeted 6.5% for staff increases, but the outcome of wage negotiation was an 8% increase. In that regard, there might be a shortfall because one is settling for much higher wages than what was budgeted for. Within the organisation, SANParks did an initiative called “Equal Work for Equal Pay”, which means that people doing a particular job need to be paid what it is worth. That exercise is meant to correct the injustices of the past, and make sure that SANParks pays people the correct salary. SANParks did not budget for that amount, and it is approximately R44 million, but it said, “Let’s bite the bullet and do the right thing for our staff”. It would absorb the R44 million within the current baseline. SANParks is prioritising funds in order to be able to do that.

On infrastructure: The two exercises of recapitalization and conditional assessment would give two products: an asset management plan and a maintenance plan. The latter would say how SANParks would systematically maintain its infrastructure, because SANParks requires a system to be able to deal with maintenance. There are currently 14 construction companies working in Kruger, who were trying to catch up with the maintenance. Part of the exercise is to comply with GIAMA (Government Immovable Asset Management Act), which deals with managing assets within the public sector.

On salary increases: The staff at a lower salary base have been getting bigger increases than anyone in the organisation. For example, such staff received 8% in 2015, while the average inflation was 6.1%. In the previous financial year, average inflation was 4.7%, while staff received an 8% increase

On employee-related costs: As much as SANParks is aware that it has many employees, it is managing its employee costs to the minimum. Employee costs are currently at 51%. A large chunk of the budget is used to deliver on the mandate of SANParks over and above what it pays in salaries.

On Skukuza Lodge: It is a ring-fenced project. It happened by default that SANParks had to manage the lodge, since the service provider pulled out at the last minute; SANParks did not want to allow the asset to go to waste. SANParks is currently spending R3.2 million for the current financial year, which was not budgeted for. But SANParks will absorb that amount, because the lodge will generate money. “For the following year, we have allocated R17 million for staff salaries”, but SANParks was not appointing the full staff complement

The DG noted that it was correct to say that the youth summit had not yet taken place. What was shown on the slide are the activities that were targets for the project plan. In that project plan, there are planned activities, which includes the youth summit in March 2020.

Prof Nzama thanked the PC for its support in the process of ISWP reviewing the management agreement. ISWP would have to hold continuous meetings to make sure that there was agreement between ISWP and Ezemvelo. If ISWP did not find a solution, then it would bring the matter back to the PC. ISWP would try its best to find a solution, because as long as it was unable to find a solution, then ISWP would not really be able to generate the resources it requires. This management agreement has a serious negative impact on the operations of ISWP. ISWP is trying not to be reliant on grants. The entity needs to work on a new business model, and it has started working on that business model.

On stakeholder engagement: Communities around the park have problems such as land dispossession, and dissatisfaction with the benefits that local communities are getting from the park. The presence of a World Heritage site on people’s land gave them the impression that they will get maximum benefits from the park. The majority of people were not getting benefits from the World Heritage site, but not all people were aware of what the benefits are, so ISWP has come up with a communication strategy. ISWP has a list of key stakeholders that it needs to talk to, so that more people can become aware of the benefits of ISWP.

Mr Msizeni Phakathi, Acting CFO: ISWP responded to questions.

On the issue of assets: Assets are a non-cash item. This goes back to the issue of the arrangement with Ezemvelo. ISWP inherited assets, which are known as investment assets. Ezemvelo runs the assets. Ezemvelo generates income, and the expectation in terms of the agreement is that it must maintain the assets. But if one looks at Ezemvelo’s three-year budget, one will not find a budget for maintenance. That leaves ISWP with infrastructure challenges. From a financial position, stating that the infrastructure is an investment asset is to indicate what ISWP has. It must be reported from an accounting point of view.

On the suspension of the CFO: Mr Phakathi implemented a turnaround strategy. He was not happy with only Public Finance Management Act (PFMA) policies being in place for the entity. He wanted to go deeper, and there is something called standard operating procedure. One goes deeper with that because it says to analyse each expenditure and to find out what happened, and who did what, where, and why. In executing the procedure, ISWP discovered anomalies, and it transpired that the CFO was part of that process, and that person was charged. Regarding the turnaround time: The person was served with a precautionary suspension on 14 February 2020, and there would be a hearing on 6 March 2020.

On abdicated responsibility: It is an issue of contract management. When one manages one’s contracts, service providers find it very difficult to be “dodgy”, because when they submit an invoice, one questions if the work was done, if the work was planned, and can ISWP confirm that which the service provider said they will do. At some point, he pointed out that because of this approach, he discovered that ISWP was paying one contractor about R90 000, but the income that ISWP was generating was about R10 000. So, when one focuses on internal controls, one saves a lot of money for the public entity. That was what he did in terms of improving internal control, because the AG has for a number of times raised “serious concerns” about internal control in ISWP.

On infrastructure: It is twofold. Where ISWP received grants from the Department, ISWP managed to sort out the issue with the communities, because of the stakeholder engagement and management strategy. ISWP is now working together with these communities. There would be problems here and there, because one cannot solve all of them, but ISWP has a situation where it is allowed to implement these programmes. The only infrastructure giving problems is that where ISWP does not have powers to go and maintain the asset, because of the agreement between ISWP and Ezemvelo. ISWP markets the park, and people come, and they are disappointed, because “beds are falling apart, floors [do not] have tiles, maybe there is no hot water”. It is a “very compromising situation”, but at least ISWP is meeting the Board of Ezemvelo, and now it will be looking at those issues. Ezemvelo owes ISWP revenue from tourist levies. For each tourist that comes into the park, a community levy must be paid, which will later be paid to the communities. If one looks at income on ISWP’s side, it is low, because money belongs to ISWP but is not in its coffers.

The Chairperson thanked the DM, DG, CEOs, chairpersons and CFOs. The entities are the ones doing the execution, not the Committee. If entities do what they are supposed to do, then people will be happy. That is what politics is about, it is about people being happy. If people are not happy, then the Committee will not be happy. At the end of the financial year, the PC’s expectations are that what entities committed to, they achieve. Strategies, plans, etc. are the entities’ responsibility.

The meeting was adjourned.