Department Budget and Strategic Plan: briefing

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
12 April 2005
DEPARTMENT BUDGET AND STRATEGIC PLAN: BRIEFING

Chairperson: Mr E Mthethwa (ANC)

Documents handed out:
Mine Health and Safety presentation
Department presentation: Programme 1
Department PowerPoint presentation
Department Strategic Plan 2005/6 – 2009/10

SUMMARY
The Department of Minerals and Energy presented three briefings to the Committee. The first section comprised the Director-General’s (D-G) overview, which included an overview of the Department’s vision and mission, its key objectives and its programme key focus areas. The second section was the Department’s resource plan and its administration. The third section concentrated on mine health and safety.

Members concentrated on the ability of small-scale miners to comply with mine health and safety requirements; delays in filling the vacancies in the Department; poaching of qualified staff by the private sector; Adult Basic and Education and Training in the mining industry, and the linkages between various mining-related illnesses.

MINUTES

Department briefing
The Director-General (D-G), Advocate S Nogxina, explained that the Department’s mission was to regulate and promote the minerals and energy sectors for the benefit of all. In turn, its vision was the formation of world-class minerals and energy sectors through sustainable development.

Advocate Nogxina also related the Department’s five key objectives. Firstly, it wanted to actively contribute to sustainable development. Secondly, it wanted to redress past imbalances and bridge the gap between the "first" and the "second" economies. The Department saw the implementation of minerals and energy economic policies and legislation as its third objective. Its fourth objective concerned the improvement of the health, cleanliness and safety aspects of the minerals and energy sectors. Finally, it wanted to review, develop and maintain for itself appropriate enabling structures, processes, systems and skills.

Programme 1: Department’s resource plan
Mr A Simelane, Chief Financial Officer (CFO), reviewed the Department’s 2004/5 financial performance and presented the financial projections for 2005/6 – 2007/8. The Department’s 2005/6 budget revealed that of the total allocated budget of R2 117 585 000, the vast majority of the funds constituted transfer payments to the public entities that fell under its jurisdiction.

Of the remaining R496 million, almost half (R241 million) was earmarked for the compensation of employees. In terms of its various programmes, the Department would spend 23% on administration, 22% on mine health and safety and 37% on mineral development. Allocations to hydrocarbons and energy planning (7%) and electricity and nuclear power concerns (11%) constituted the remaining portion of the budget.

Mr Simelane isolated three areas for improvement: the alignment of the budget to work plans; the standardisation of inputs, and the itemisation of the budget.

Administration
The Chief Director of Management Services, Mr G Mnguni, spoke on matters pertaining to human resource development, the re-engineering of structures and processes to improve service delivery by the Department and the enhancement of the monitoring and governance of state owned entities.

It was pointed out that the number of vacancies within the Department currently stood at 163, of which 34 had yet to be processed. While the Department’s staff compliment were 72% black and 47% female, only 22% of all middle and senior managers were female and only 1% of all staff were disabled.

Mr Mnguni expressed his concern at the high staff turnover (9%) of the Department and attributed it partially to the difficulty of attracting and retaining scarce skills. He mentioned the current development of a scarce skills retention strategy.

Programme 2: Mine health and safety
Ms M Hermanus, the Deputy Director-General for mine health and safety, focused particularly on hazards emanating from mining that impacted on public health, fatalities, injuries and occupational disease.

Discussion
Ms N Mathibela (ANC) noted her concern over the capacity of small employers in the minerals and energy sectors to deal with mine health and safety. She asked about the Department’s role in lending the necessary support to these smaller companies in this regard. She also wanted to know whether there was a relationship between incidences of Tuberculoses (TB), Silicoses and HIV/AIDS amongst mine employees.

Mr J Combrink (ANC) questioned the delays in the filling of vacant posts in the Department, especially if they had been budgeted for. He also probed the reasons behind the decrease in bursaries from the private sector for the training of minerals and energy professionals.

Advocate H Schmidt (DA) noted his recent awareness of the expanse of the energy and minerals sectors. He also noted that after the transfer of payments, only a small portion of the budget remained for the use of the Department. Against this background, and its supposed role of providing guidance to the industry, Advocate Schmidt asked how the Department involved itself with the promotion of mine health and safety and what role it played. He mentioned the provision of safety mechanisms via Department sanction, or via the setting of and agreement on standards as possible examples.

Mr G Mosala (ANC) requested clarification on what was meant by vacancies that were still in progress and those that were still unprocessed. He also raised questions around the impact of HIV on the ability of the Department to deliver, and requested information on the Department’s initiatives with regards to adult basic education and training (ABET).

Advocate Nogxina responded that the majority of the vacancies were currently in the process of being filled. He related that the delays in filling vacant posts were in part due to restructuring. He explained that the targets that had been set for mining companies in terms of compliance with the black economic empowerment charter were also a factor. This was because these companies reportedly looked no further for skilled black people and women than the Department itself. In addition, the attractive remuneration packages offered by the private sector were also an issue. The high rate of staff turnover that the Department was experiencing could be attributed to these factors.

Advocate Nogxina further argued that the Department was a knowledge intensive organisation as it needed skilled professionals such as scientists and engineers. It therefore required a human resources dispensation different from the general prescriptions of the public service if it was to retain the necessary skills and talent to compete with the best in the world.

Advocate Nogxina concurred with Advocate Schmidt on the difficulties that the Department were faced with in, especially, promoting mine health and safety given its budgetary constraints. This was so as the Department did not see itself as a policy formulator only, but as an active partner in policy implementation. It was, in fact, incumbent upon the Department as the Chief Inspectorate of mine health and safety to police these policies and legislation. He also noted that human resources consumed the bulk of the Inspectorate’s budget.

Ms M Hermanus noted that small and medium mining companies shared a number of characteristics that defined their needs. They generally had much less resources than larger mining companies. This hampered their ability to attract and retain the services of skilled employees. It also made it difficult for them to contract the necessary service providers in areas such as medical and occupational hygiene surveillance. Small and medium mining companies also tended to employ less capital intensive methods than larger mining houses.

>From a legislative point of view, this translated into much greater needs in terms of the guidance these smaller companies required. The Department, therefore, needed to ensure that minimum standards were maintained where third parties could not be afforded to do so. Larger companies were, however, opposed to such extensive involvement from the Department’s side as they deemed it too prescriptive.

A survey was currently being conducted on the implementation of new mine health and safety legislation. The aim was to allow larger companies the necessary freedom to innovate and use new technology, but also to provide the necessary support structures to smaller companies.

Ms Hermanus confirmed that there was definitely a triangular relationship between the incidences of TB, Silicoses and HIV. If one had contracted HIV, one would definitely be more susceptible to TB and this would be ideal circumstance for silicosis to accelerate under. Research on this issue was available on the website of the Mine Health and Safety Council. Possible medical interventions were also under consideration to help break this triangle of disease.

Ms Hermanus admitted that the Department was not entirely clear on why there had been a reduction in the bursaries on offer from the private sector as it had not been discussed per se. From other discussions with the industry the view emanated that there might be too many people in the industry. There also seemed to be a correlation between those companies who were reducing their bursary commitments, and those who were reportedly under financial pressure. Plans for further discussions with the industry around these issues were afoot.

Ms Hermanus highlighted the importance and challenges presented by organisational culture in the promotion of mine health and safety. Internationally, the biggest advances in mine health and safety resulted only once there was organisational recognition of its importance. Policing by itself would not be as effective because of the difficulty of maintaining equal levels of enforcement in every workplace, all the time.

Several initiatives were currently under way. In the Mine Health and Safety Council, the focus was currently shifting to the kind of values that would underpin good health and safety practice. Ms Hermanus emphasised that the results would not be instant, but that the process was necessary for mine health and safety to improve in a quantum way.

Ms Hermanus noted that since virtually 70% of the mining industry’s workforce had no form of schooling, the expectation would be that a high level of resources would be committed to Adult Basic Education and Training (ABET). ABET initiatives required co-operation and logistical support from the management corps of the mining sector and thus came at a certain cost. Accordingly, the situation occurred that only individuals earmarked for further advancement would be released for and supported in full-time ABET programmes. The rest of the workforce would then be provided with part-time ABET only, the type of programme that would be very difficult for miners to persevere with if they were working full shift. Attrition levels were currently high in the early stages of ABET programmes. She mentioned that from an initial intake of 20 000 ABET learners into ABET one, perhaps four hundred would graduate from ABET four.

Ms Hermanus identified three areas that needed to be probed in this regard. Firstly, were the ABET delivering mechanisms appropriate? Secondly, why was the industry not able to accommodate more progressive delivery mechanisms? Finally, were individual choices functioning here and what effect were they having? Anecdotal evidence, for instance, suggested that some of the workforce appreciated resources being put into the education and training of their children (rather than for themselves) much more.

Ms Hermanus related that there was currently major tension amongst industry stakeholders around ABET. The problem was the lack of proper resource utilisation. She mentioned that the Department had to return R17 million to the Department of Labour because it was not spent in this area.

Mr Mthethwa (ANC) requested further clarification on the link between HIV/AIDS and Silicosis.

Ms Hermanus explained that because HIV weakened the immune system of individuals, it made them vulnerable to any opportunistic infections. TB was the infectious disease to which the mining workforce was most vulnerable to. This explained the HIV/AIDS-TB "concurrence" found amongst the workers in the mining industry and elsewhere. At the same time, when an individual had TB and it went untreated or was untreatable, it made it far easier for Silicosis to develop and to accelerate.

Mr Mthetwa noted that there was still a lot of ground to cover in the follow up session of the briefing and that some of the issues might overlap with the presentations heard in this session. He highlighted, particularly, the structure of the budget vis-à-vis the Strategic Plan and human resources development issues pertaining to women in management and industry fatalities.

The meeting was adjourned.