Agrément South Africa, Council for Built Environment 2010/2011 Annual Reports
Meeting Summary
Agrément South Africa (Agrément) presented its 2010/2011 Annual Report, describing the last financial year as the best ever in its 42 year history . Agrément received a clean audit report. It supported government’s national priorities and the products that were assessed were in line with these national priorities. Eight products or building systems were approved this year. Most of the products were environmentally friendly, cost effective and could be installed by unskilled workers. A distinction was drawn between the work of Agrément, which dealt with innovative non standardised products, developing its own criteria to test these products, the work of South African Bureau of Standards (SABS), who promoted quality by developing compulsory specifications and standards, and the work of the National Regulator for Compulsory Specifications (NRCS), who enforced their compliance. Agrément reported to the Department of Public Works (Department or DPW) although it was an entity under the Centre for Scientific and Industrial Research (CSIR). It had a budget of R8.7 million, of which R7.7 million was from public funds and the remainder from external sources. This budget was channelled through, but ringfenced at, the CSIR.
Members asked Agrément what it had done to reach out to rural areas, whether it worked with the Industrial Development Trust (IDT) and how well the organisation marketed itself. The issue of how sub-standard Chinese building products were allowed into the market was raised. Members also asked on whether the current challenges affecting the DPW affected this organisation. Further questions related to employment of people with disabilities, how many certifications had been issued for previously disadvantaged communities, and other issues around corporate governance and funding were raised also. Members asked what was done to encourage innovation.
The Council for the Built Environment (CBE) briefed the Committee on its 2010/11 Annual Report. A number of professional councils were represented and provided some input during the questions. The CBE had also received a clean audit report for the year 2010/2011, was in the process of appointing a permanent Chief Executive Officer, was focusing on transformation, particularly transformation that would narrow the divide between urban and rural areas. However, funding constraints continued to pose serious challenges to the organisation. The functions of CBE were pinpointed as being the determination of professional fees, competency standards for registration, registration of built environment professionals, recognition of voluntary associations, appeals and tribunals and observing conformity to International agreements. The changes in the racial composition of candidates were outlined, with 58% black candidates in 2010, but gender transformation was still problematic, as there were 78% male and 22% female in 2010. Issues of corporate governance were also highlighted, relating to the shifting of targets and budget, and the fact that the Audit Committee of the CBE had failed to meet because it could not reach a quorum. CBE also completed a number of International agreements with developing countries.
Members welcomed the clean audit report but questioned some contradictions. Questions were asked about the examinations, transformation and the huge gender disparity. The issue of reprioritising the budget was also raised and the reasons why the audit committee failed to reach a quorum. The issue of recognising prior learning was also raised. The treatment of students from disadvantaged backgrounds was also questioned, and CBE was asked what exactly it did to promote them. Members also wanted clarity on the number of foreigners currently registered in the sector and the proportion of professionals to those in academia. Questions why disciplinary cases were taking long to be completed were also raised, as well as when the appointment of the Chief Executive Officer would be finalised. The various councils responded to questions around transformation, recognition of prior learning, and steps that they were taking to address issues.
Meeting report
Agrément South Africa: 2011 Annual Report presentation
Ms Ntebo Ngcobo, Board member, Agrément South
Mr Joe Odihambo, Chief Executive Officer, Agrément South
It was outlined how the work of Agrément differed from that of the South African Bureau of Standards (SABS), which certified standards, but it was noted that the two worked closely together. Their work was often confused with that of the National Regulator for Compulsory Specification (NRCS), and he clarified that NCSR advised the Minister, in terms of the National Building Regulations and Building Standards Act 103 of 1977, and played a watchdog role in building planning.
Agrément noted that its last year was the best of its 42-year history. It managed to achieve everything that was noted on the strategic plan. Transformation had been addressed, and more than 75% of staff were now either black or female. Agrément achieved a clean audit report for the second year running. He noted that Agrément received its funds through the CSIR and was audited together with the CSIR’s Built Environment Unit. In total it had received R7.7 million from public coffers and R1 million from external sources. Agrément showed expenditure of over R6.9 million. It remained committed to upholding the principles of good corporate governance.
Discussion
The Chairperson commended Agrément for a clean audit report.
Mr M Rabotapi (DA) was satisfied with the presentation, but wanted to know what Agrément was doing to assist rural communities, pointing out that they needed more assistance than municipalities.
Mr Odihambo stated that Agrément did reach rural areas and cited the ‘mud schools replacement programme’, on which it was working in conjunction with the Independent Development Trust (IDT).
Mr Rabotapi queried how inferior Chinese building products were approved for entry into the market.
Mr Odihambo could not answer the question of Chinese products, because Agrément’s mandate related only to innovative products. He suggested that this could be answered by the SABS, which had a mandate to cover standardised material.
The Chairperson asked also about the issue of sub standard products, and wondered whether the monitoring of products could not be added to Agrément’s mandate.
Ms Lydia Bici, Deputy Director General: Policy, Department of Public Works, further emphasised the difference between Agrément and SABS, and cautioned that it should not be confused. She noted that the Department of Public Works (DPW) would review Agrément’s mandate, with a view to ensuring that it had a juristic personality, so that it could have better monitoring capacity and would be able to take actions to prevent or criminalise certain action.
Ms Ngcobo said that public awareness would be stepped up to try to curb the proliferation of poor materials in the market.
Mr Rabotapi asked whether the instabilities in the Department of Public Works were affecting the smooth running of Agrément.
Mr Odihambo explained that the mandate emanated from the Minister of Public Works and Agrément complied with that mandate. The current challenges in the Department of Public Works did not affect the operations of Agrement.
Ms N Ngcengwane (ANC) appreciated the unqualified audit report. She asked about the organisation’s operations, especially how Agrément marketed itself.
Ms Ngcengwane noted her concerns that despite the existence of Agrément, hundreds of houses were demolished for being sub-standard.
Mr Odihambo explained that, to the best of his knowledge, the houses that were demolished were constructed from standardised bricks and thus fell outside the scope of Agrément.
Ms Ngcengwane noted that Agrément worked in conjunction with Independent Development Trust in assisting rural areas.
Ms Ngcobo said that the issue of servicing rural areas had been constrained by limited funding.
Ms N Madlala (ANC) asked if the organisation received extra funding, besides that from government.
Ms Bici noted that the current budget for Agrément came from the Goods and Services entity of the Department.
Ms Madlala asked what Agrément was doing in terms of human resources, the employment of youth and persons with disabilities.
Ms P Ngwenya-Mabila (ANC) asked about internships opportunities and Agrément’s strategy in terms of improving the challenge of scarce skills.
Ms Ngcobo replied that Agrément was working on addressing the issue of employing people with disabilities and internships were offered by the organisation.
Mr Odihambo explained that the decrease in staff was due to a high staff turnover and retirement.
Ms Madlala asked if innovative products were being exported.
Mr Odihambo said that Agrément did not market products, as this was the responsibility of the business entities that owned the innovative products.
Ms Ngwenya-Mabila asked if some products were user friendly
Mr P Mnguni (Cope) wanted clarity on how many certifications were granted for previously disadvantaged companies and people.
Mr Odihambo said he would revert to the Committee on the number of previously disadvantaged people getting certification as he did not have the information at hand.
Mr J Steenhuisen (DA) quipped that he wanted to know if Agrément was politically aligned to the ANC, noting that the last slide seemed to have adopted the ANC colours.
Mr Odihambo assured him that Agrément was an impartial organisation and the colours of the slide were purely coincidental.
Ms P Ngwenya-Mabila (ANC) noted that the Annual Report was not in conformity with the template for annual reports issued by National Treasury.
Mr Odihambo noted this comment.
Ms Madlala asked on why, according to the report, most board members did not appear to have been paid.
Ms Ngcobo said that the reflection of non payment meant that the Board members were civil servants and thus could not be paid for sitting on the Board, according to National Treasury guidelines.
Ms Ngcengwane stated that the country faced problems in terms of sub standard products and acknowledged that the mandate of Agrément did need to be reviewed.
Mr Odihambo commented again on the sub-standard products, saying that Agrément could only work within its mandate. Until this had been reviewed it could do little in terms of substandard products.
Ms Ngwenya-Mabila asked why the entity did not have a dedicated budget, and asked how, in that case, the DPW could expect it to perform satisfactorily. She asked if any representative from the Department sat on the Board. She also wanted clarity with regards to the financial statements.
Mr Mnguni also followed up on the issue of the budget and asked whether Agrément had requested funding for rural areas.
Ms C Madlopa (ANC) enquired Agrément had managed to get an unqualified audit report if it did not have its own account.
Mr Odihambo explained that Agrément’s finances, which were housed in the CSIR, was ring-fenced and was audited through the CSIR Built Environment Unit.
Ms Madlopha asked if it was possible that even though the budget in CSIR was ring fenced, poor performance by CSIR could result in problems for Agrément.
Ms Ngwenya Mabila added that CSIR did not report to this Committee but received Agrément’s funds, and she thought this showed a lack of synergy.
Ms Bici responded that the Department would not complete its regulatory framework without Agrément, thus Agrément sat within Public Works. She said the reason why Agrément’s funds were located in CSIR was historical, but the DPW would be engaging with National Treasury to establish Agrément as a State entity with its own account. She added that because Agrément sat within the CSIR Built Environment Unit its broader governance structure was linked to that of the CSIR.
Mr Steenhuisen asked what measures Agrément was using in order to encourage innovation.
Mr Odihambo noted that Agrément did a lot to encourage innovation, worked with the Council for Scientific and Industrial Research (CSIR) and with international partners. New technology which had been certified by Agrement was currently being used at the country’s airports.
Mr Rabotapi (DA) wanted clarity on the criteria used for performance bonuses.
Mr Odihambo clarified that a threshold had to be met before a performance bonus could be given.
Mr Rabotapi asked about the current Board members and requested a list of them.
Mr Odihambo read out the names of the current Board members.
Council for Built Environment (CBE) and the Professional Councils Annual Report 2010/11
Ms Portia Tau Sekati, Chairperson, Council for Built Environment, noted that there were six professional councils represented, and she introduced them. She noted that the Council for the Built Environment (CBE or the Council) was currently in the process of appointing a permanent Chief Executive Officer. CBE supported government in its developmental programmes. It also received a clean audit for the financial year 2010/11.
Mr M Ralephata, Acting Chief Executive Officer, CBE, took the Committee through the Annual Report. He noted that CBE focused mainly on transformation and that all its strategic goals had to be relevant to the national imperatives. CBE promoted transformation to curb the divide between rural and urban areas.
Mr Mfezeko Gwazube, Chief Operations Officer, CBE, took the Committee through the Performance Review Report. He noted that a new strategy had been crafted by the incoming Board, which the Minister of Public Works had approved, although the current and Medium Term Expenditure Framework (MTEF) funding constraints presented material operational constraints. It was noted that CBE and Professional Councils had 13 concurrent mandates, for which the CBE must develop policy guidelines, to ensure consistent application across the built environment professions.
CBE was conducting a Greenhouse Gas mitigation study, which had been used for making input to prepare for the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP17), to be held in
CBE had successfully administered 38 out of 45 beneficiaries that were found academically eligible to continue with their studies, and the number grew from 45 to 53 beneficiaries in the 2011 academic year. The organisation also concluded international agreements with its Ugandan counterparts.
In terms of governance, Mr Gwazube noted that CBE’s Appeals Committee was tasked with the duty of acting as an Appeals body within the built environment. There was a decrease in the total number of reported cases since 2008 (257 reported cases) down to 158 in 2009, and to 171 in 2010.
Mr Gwazube noted that CBE had achieved a clean audit report. It reported an accumulated surplus of R4.1 million for the year. CBE had total revenue of R27.237 million for the year, signifying a 1.16% increase from the previous year, and expenditure was at R31.147 million, which was a decrease of 14% from R36 million in 2010. The decrease in expenditure was due to a cut in administrative costs and other operating expenses. The Audit Committee had failed to meet because it did not reach a quorum.
In terms of transformation in the organisation, 21 of the total staff complement was black, and women accounted for up to 62% of the workforce. It was noted that there were challenges in employing disabled persons.
In relation to the Professional Councils, a guideline on professional fees had been gazetted by Professional Councils in line with CBE policy framework. In terms of recognising new professions, CBE completed a policy paper that was approved by the Minister of Public Works. CBE also worked to ensure public protection and the Professional Councils, through CBE, had noted that six academic institutions were operating unaccredited programmes in 2011. A timetable had been agreed upon for Professional Councils to address this issue.
It was noted, in terms of registration figures for 2010, that 58% of the candidates registered were black, compared to 41% white. However, the statistics for females remained static and low, and only 22% of the professionals were female.
Mr Ralephata said the year under review was successful and they remained committed to the fulfilment of the state’s developmental agenda.
Discussion
The Chairperson expressed her frustration at CBE and the Professional Councils, highlighting an example in which a student had failed the professional examination six times. She asked if there were appeal procedures for people dissatisfied with their examination results, and what assistance, if any, was given to such students.
Mr K Sithole (IFP) wanted to know about the pass rates in the Professional Councils.
Ms Madlopha asked about gender representation, and whether any awareness exercises were conducted to encourage the enrolment of people from disadvantaged communities. She also asked about the treatment of students from disadvantaged communities. She noted that CBE bore the ultimate responsibility to fast track issues of transformation. She asked if the report on the capacity of Professional Councils had been submitted.
Ms N November (ANC) also wanted to know if there were any awareness initiatives for students from disadvantaged communities.
Mr Gwazube noted that the Engineering Council of South Africa (ECSA) said the engineers produced in the country were on par with international standards. CBE acknowledged that black people and women were underrepresented in the sector. It had developed awareness of the profession and suggested collective marketing approach with CBE on the built professions.
Mr Steenhuisen wanted to know why town planners and surveyors did not fall under CBE.
Mr Steenhuisen enquired about the ratio was between practitioners and academics. He also wanted to question the drop in the number of property valuers. He asked for the statistics of foreign nationals working in the industry.
Mr Gwazube said that CBE did not have information on the number of foreigners practising in the country as the register of members was kept by Professional Councils.
Mr J Steenhuisen (DA) pointed out the influx of foreigners into the industry could distort the figures for skills manpower in the country.
Ms Ngcengwane raised a question on the Recognition of Prior Learning by the Councils.
Mr Gwazube noted that ECSA did recognise prior learning. An MOU will be finalised with CBE by the end of November.
Ms November asked if staff members facing disciplinary cases were still reporting for work with pay.
Mr Gwazube noted that those workers facing disciplinary charges were still reporting for work.
Mr Rabotapi wanted clarity on the human resources figures.
Mr Mnguni asked CBE to elaborate more on the Memorandum of Understanding with Professional Councils.
Ms Madlala questioned the bursary scheme and the numbers approved, and wanted clarity when the policy document was submitted to the Minister.
Mr Gwazube noted that policy discussion papers were submitted at different intervals between April and May and covered recommendations from the organisation’s Indaba.
Mr Gwazube noted that bursaries involved a multi-year commitment and there were some challenges related to funding from the MTEF.
Mr K Sithole (IFP) asked why some provinces did not have candidates on the list.
Ms Ngwenya-Mabila asked why the strategic plan did not cover a three-year framework. She noted that the plan was suppose to be tabled before the Committee. She also queried the shift in budget and the failure for the Audit Committee to reach quorum.
Mr Gwazube admitted that some targets which were not met ended up being reprioritised and this was normally done after writing to the Minister. The shift in the budget was due to the fact that surplus funds were available to be used for other plans. Control measures were also put in place to ensure that programmes were line with the budget. It was acknowledged that some targets were not met by the organisation. He noted that the work of internal auditors had assisted in the organisation’s performance.
Ms Tau-Sekati took note of the issue of the Audit Committee and said that corrective steps would be taken to address this. She confirmed that the three year plan had been presented to the Committee.
The Chairperson asked when the Department of Public Works would finalise the appointment of a permanent CEO.
Ms P Tau-Sekati noted that issues of corporate governance were raised in the recruitment process after the Acting CEO had applied without declaring his interest. She said a CEO would be appointed within the next three months.
The Chairperson asked Members of the Professional Councils to comment on any of the questions raised by Members.
The representative from Engineering Council South Africa (ECSA) said ECSA did have the exact number of foreigners working in the country but the largest number of applications from those holding foreign qualifications came from Zimbabweans.
The representative for South African Council for the Project and Construction Management Professions (SACPCM) noted that the Recognition of Prior Learning was in line with the protection of the public in that; if an applicant did not meet the minimum requirements and experience s/he did not qualify. It was stated that an appeal process was possible, and appeals could be made either to this Council or the CBE. Only 1% of its registration was of foreign nationals. SACPMP highlighted that the challenges of transformation could be dealt with at a school level by improving the quality of mathematics and science subjects. The issue of gender was historical but still needed to be addressed. The reason for a decline in membership was due to non payment of membership fees.
The representative for the South African Council for Quantity Surveying Profession (SACQSP) responded to the question of the students, noting that the candidates did not obtain exposure to the architectural profession. Candidates were used for technical aspects and had no solid background in consultancy work, which formed the backbone of the examination. In response to whether the students were engaged with on this matter, SACQSP noted that extensive engagement was undertaken with the students. Assistance was given to students through workshops and online resources prior to examinations. Prior learning was also recognised.
The South African Council for Property Valuers Professionals (SACPVP) said that the high turnover of members was due to retirement of members and the fact that there was a seven year time framework for registration. It noted that municipalities needed to understand the legislative framework in place to make the work of SACPVP.
The representative of ECSA said the ratio of practitioners and academics depended on the economic activity, and where economic activity was low, members tend to move into the academic sector. Their representative also expressed the need for transformation and said a strategic plan had been developed to research why graduates failed to get the right experience, and to conduct further studies into the challenge of few black engineering graduates.
Ms Ngcengwane asked about the issue of unaccredited institutions and the human resources gap that is being caused by retiring members.
The representative for the South African Council for the Architectural Profession (SACAP) noted that his organisation lost a huge number of members who left for greener pastures. In relation to transformation, he acknowledged that lack of funds hampered the work that needed to be done and that alternative registration mechanisms would be examined.
Ms Bici said the CBE Bill was still at the consultation stage and that CBE had participated well in the process. She noted that she hoped its passage would lay to rest the misconceptions about the role of Councils.
Ms Bici added that the MOUs were linked to governance issues and would be looked at in conjunction with the Department.
The Chairperson summed up by noting that a lot more still needed to be done in terms of transformation, as this was a cause for concern.
The meeting was adjourned.
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