Department of Environmental Affairs

Overview of mandate, functions, concepts and financial environment

….Ms N Ngcaba

Department of Environmental Affairs Foundational Mandate = Sustainable Development

Constitutional mandate (Sec 24) – 3 SD elements: • Social - environment – not harmful to health or well-

being; “…while promoting justifiable … social development.

• Environmental – protect the environment, for the benefit of present and future generations, through legislative / other measures that -– prevent pollution and ecological degradation;– promote conservation; and

• Economic – secure ecologically sustainable development and use of natural resources while promoting justifiable economic … development.”

Environmental Affairs Mandate

• Environmental Quality and Protection:– impact management,– Pollution and waste management, – air and atmospheric quality, – Climate Change– Meteorological and related Services.

• Biodiversity and Conservation:– Conservation of land and sea scapes – Protected areas– Biodiversity management

• Marine and coastal management– Marine resource management– Monitoring control & surveillence– research

Environmental Impact Assessment (EIA) – An assessment of suitability of a development project in a particular natural environment.

Record of decision (RoD) – Certification of approval of a development by an approval authority (Minister) with/without condition.

Impact Management:-

Prevent and manage potentially negative development impact on the environment through amongst others:-

• Development and implementation of policy and legislative framework for environmental impact management,

• Processing of Environmental Impact Assessments (EIA’s),• Building environmental impact management capacity,• Ensure compliance to conditions of EIA records of decisions (RoD)

and prevent unauthorized development (role of Environmental Management Inspectorate or “green scorpion” – the environmental police).

Environmental Quality and Protection

Environmental Quality ManagementPollution and Waste Management:• Development and implementation of policy, legislation, norms and

standards for pollution and waste management, • Promote reduction, reuse and recycling (through Buyisa-e-bag) of

waste• Processing of applications for development of waste management

infrastructure (this is now linked to impact management processes to avoid duplication),

• Develop capacity for pollution and waste management,• Promote the implementation of polluter pays principle

Pollution – contamination of an environment (land, water and air) – e.g. use of pesticides, mine waste,

Waste – by product of consumption process that may no longer be used in the same production chain. Reduce, reuse and recycle … are commonly applied global principles on waste management – cradle to grave,

Environmental QualityManagementAir and atmospheric quality:

Improve state of ambient air quality:• Development and implementation of policy, legislation, norms and

standards for air quality;• Ambient Air quality management capacity development,• Monitoring of ambient air quality and monitoring infrastructure

development support,• Ozone layer protection,• Ensure adherence to ambient air quality standards.

Ambient Air quality – Air above the earth surface meeting specified standards/not polluted (by gases emitted from industrial or household processes beyond certain limits)

Ozone layer - is a layer of gas in the upper atmosphere which protects humans and other living things from the harmful ultraviolet (UV-B) rays of the sun.

Environmental Quality and protection

Climate Change

• Climate change mitigation and adaptation policy development and research coordination.

Climate Change – refers to a long-term change in weather patterns over durations of time ranging

from decades to millions of years due to increases in concentrations of greenhouse gases, etc. Mitigations – To take action that will reduce greenhouse gas emissions in the atmosphere, acidification of the oceans resulting in sea-level rise phenomenon, etcAdaptation – finding ways to be able to survive the occurrence of natural disasters linked to variations in climatic conditions

Meteorological and related Services (South African Weather Services - SAWS):

• Timely dissemination of the weather forecast information – linked to prevention of natural disasters and also to allow for long and short term planning (e.g. agriculture and aviation safety),

• Ensure accuracy of the weather forecast information,• Ensure good state of weather forecasting infrastructure

(radars, lighting detectors, software etc), maintanance

Meteorological – relates to the study of the changes in temperature, air pressure, moisture, and wind direction in the atmosphere.

Aviation - refers to activities involving man-made flying devices (aircraft)

Biodiversity and ConservationPromote conservation and sustainable utilization of natural resources:-• Conservation of land and sea scapes: Declaration of National terrestrial

and marine protected areas to conserve ecosystems,• Protected areas: Management of National protected areas through

South African National Parks – SANParks and iSimangaliso Wetland Park Authority) – 23 National Parks and iSimangaliso Wetland Park (1st World Heritage Site in South Africa),

• Biodiversity management: Mitigation of threats to biodiversity,• Build a sound scientific base for effective management of natural

resources in partnership with South African Biodiversity Institute (SANBI) which also manages botanical gardens (9 gardens)., incl a network of scientific authorities falling under DST, (CSIR, NRF, Universities, etc)

Biodiversity – describes the variety of life in an area, including the number of different species, the genetic wealth within each species, ...plant life, animal life, ocean life,…Conservation – protection and preservation of the ecological resources for future generationsTerrestrial – in landMarine – in ocean

Marine and Coastal Management – Marine living Resources Fund (MLRF)

Promote conservation and sustainable utilization of marine and coastal resources:-– Allocation of fishing rights,– Marine research to ensure resources

sustainability,– Prevention of illegal access to resources,– Maintain good quality of marine and coastal

environment.(preventing pollution of ocean environment)

FINANCES

Topics For Discussion

• State of budgeting environment per MTEF guidelines• Strategic Risks identified per MTEF• Review of baseline adjustments• Prior years & MTEF Expenditure trends • Projected own Revenue generation & constraints• Challenges identified in MTEF allocations and projected

budget constraints• Transfers to Public Entities & Audit Opinions

State of Budgeting Environment

• Global recession and weaker economic conditions

Required responses per National Treasury Guide.• Rigorous baseline assessment• Detailed costing of policy proposals at activity level• Value for money assessment• Reprioritisation and Alternative funding mechanisms for

infrastructure project e.g. Public Private Partnership (PPP)

• Scenario and risk analysis• Coordinated planning with public entities• Implementation readiness• Identification of new outputs and development of

Monitoring & Evaluations plans.

Strategic Risks Identified

Contributory Factor/s

Risk Description

Shrinking Purse & Global recession

-Anticipated further Financial constraints -Reduction of MTEF allocations by National Treasury-Possible decrease in Donor Funds-Insufficient funding of establishment

Restructuring and split

•Possible In-Equitable allocation of resources

Review of Baseline Allocation Trends

2009/10

‘000

2010/11

‘000

2011/12

‘000

Baseline 3 446 860 3 762 673 3 614 173

Requested 450 195 621 000 1 042 000

Initial allocation 68 340 164 393 581 932

Total allocated 3 515 200 3 927 066 4 196 105

Further cuts Jan 09 ( 34 417) (42 990) (48 641)

Final allocation 3 480 783 3 884 076 4 147 464

% Baseline Increase .01% 3.2% 14.8%

Prior Years Expenditure Patterns

Programme Audited Outcome (Unqualified)

2006/2007

R’000

2007/2008

R’000

2008/2009

R’000

1. Administration 167 276 193 120 204 358

2. Environmental Quality and Protection

199 232 241 503 253 508

3. Marine and Coastal Management

324 048 349 298 434 325

4. Tourism 547 248 612 477 693 229

5. Biodiversity and Conservation

279 579 359 833 399 309

6. Sector Services and International Relations

542 281 1 032 526 1 214 149

Total 2 059 664 2 788 757 3 198 878

An average annual spend of 99.8% was achieved

Economic Classification- MTEF Trends

Economical Classification Audited

Financial year 05/06

R’000

06/07

R’000

07/08

R’000

08/09

R’000

Compensation of Employees 209 664 262 506 342 195 396 747

Goods and Services 302 077 281 296 321 723 357 014

Transfers: Departmental Agencies and Accounts

806 558 1 042 176 1 373 701 1 567 304

Transfers: Foreign Governments 6 000 12 421 0 9 000

Transfers: Non Profit Organisations

12 595 44 782 88 152 100 906

Transfers: Households 382 656 406 584 652 638 759 488

Capital Assets 56 136 9 899 10 348 8 419

Total 1 775 686 2 059 664 2 788 757 3 198 878

Economic Classification- MTEF Trends

Economical Classification Medium Term Expenditure Estimate

Financial year 2009/2010

R’000

2010/2011

R’000

2011/2012

R’000

2012/2013

R’000

Compensation of Employees 432 810 477 047 514 448 540 170

Goods and Services 383 152 439 712 525 919 553 674

Transfers: Departmental Agencies and Accounts

1 638 448 1 538 809 1 610 746 1 691 283

Transfers: Foreign Governments 9 000 9 000 9 000 9 000

Transfers: Non Profit Organisations

90 971 64 874 44 874 46 068

Transfers: Households 767 647 871 746 924 051 970 305

Capital Assets 158 755 482 888 518 426 535 421

Total 3 480 783 3 884 076 4 147 464 4 345 921

Donor Funds TrendsDonor/Project Audited Outcome (Unqualified)

Programmes & Projects 2005/2006

R’000

2006/2007

R’000

2007/2008

R’000

2008/2009

R’000

Norway: Environmental Cooperation - - 6 649 11 151

Norway: Marine Fisheries Cooperation - 7 651 14 710 15 447

Denmark: Air Quality Management 236 439 663 306

Denmark: Urban Environmental Programme

- - - 6 627

Denmark: Environmental Capacity Building

3 599 1 237 2 745 133

Denmark: National Waste Management 7 955 10 000 1 300 134

World Bank: African Stockpile - - 3 183

Total 11 790 19 327 26 067 36 981

Donor Funds TrendsDonor/Project Medium Term Expenditure Estimate

Programmes & Projects 2009/2010

R’000

2010/2011

R’000

2011/2012

R’000

2012/2013

R’000

Norway: Environmental Cooperation 12 625 10 917 6 097 -

Norway: Marine Fisheries Cooperation

8 834 7 821 - -

Denmark: Air Quality Management 630 - - -

Denmark: Urban Environmental Programme

2 156 3 385 4 326 2 784

Denmark: Environmental Capacity Building

- - - -

Denmark: National Waste Management

- - - -

World Bank: African Stockpile 738 1 576 2 754 1 563

Total 24 983 23 699 13 177 4 347

Challenges Identified

Challenge Implications99.8 % expenditure trends

Possible future decline in donor funds (from R37 million 2008/9 to R4 million 2012/13)

Lean margin of safety - for commitments , accruals

including unforeseeable & unavoidable expenses

Future Pressure on MTEF, negative impact on service delivery including delays in projects.

Avoidance of unauthorised expenditure-reduced

Operational and Capital expenditure (OPex & CAPex ) plans – Strategic expenditure (Stratex) implications

Continuous reprioritisation & budget trade offs, & rationalisation – with possible audit implications

Less flexibility in funding for multi year projects and contracts.

Funding of new programs, projects, structure changes

Possible establishment short funding, & increase in vacancy rate -capacity constraints

Internal & external co-ordination of projects

Specialized service delivery consultants - possible budget shortfalls

Audit opinion integrity Possible Audit Exposures in the 99.8% expenditure trends and Performance Audit Exposure

Expenditure Trends over the MTEF period

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

4 500 000

5 000 000

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Years

R'0

00

Increase in Expenditure Trends – overall Department

• Average Percentage increase of 21,8% - ( from R1,8 billion to R3,2 billion) years 2005/6-2008/9

• Infrastructure Development in:National Parks, Botanical Gardens, Weather Service, replacement of the supply and research vessels for the Antarctica and the Marion and Gough islands.

• Poverty relief projects

• Increase in Environment, Conservation & Marine mandates

• Transfers and subsidies to departmental agencies

• Increases to the baseline accounts for the following: - Establishment increase, operations, and accommodation, Inflation

adjustments, baseline adjustments, Climate Change research, policy development and implementation and Buyisa-e-Bag (S21 implementing plastic bag regulations)

Programme 2: Air Quality & Protection

Expenditure increase from R185,287 million in 2005/2006 to R363,395 million in 2012/2013

Programme expanded from a regulatory phase to an implementation phase which includes the following:• Regulatory Services • Pollution and Waste Management• Environmental Impact Management• Air Quality Management and Climate Change

Increase in Expenditure Trends per Programme continued:

Expenditure Trends continued:

Programme 3 Marine & Coastal Management Increase from R262,428 million in 2005/2006 to R1 027,982 million in 2012/2013 Increase due to provision for the replacement of the polar vessel which will

commence during the 2009/10 financial year

Programme 5: Biodiversity and Conservation Increase from R283,195 million in 2005/2006 to R487,137 million in 2012/2013 for establishment of the Transfontier (“boundless” protected areas) conservation initiative

• Transfer Payments to the following Public Entities:South African National Parks, South African National Biodiversity Institute and iSimangaliso Wetland Park Authority

Programme 6: Sector Services & International Relations Expenditure increase from R473,321 million in 2005/2006 to R1 345,701 million

in 2012/2013 for Poverty relief programmes linked to Expanded Public Works Programme (EPWP) and Infrastructure Programme.

Transfers: Public Entities & Audit OpinionsPublic Entity Audited Outcome (Unqualified) (Qualified)

2005/2006

R’000

2006/2007

R’000

2007/2008

R’000

2008/2009

R’000

South African Weather Service 103 690 114 393 180 112 159 916

South African Tourism 362 733 465 187 517 556 588 135

Marine Living Resources Fund 93 322 163 057 147 812 195 351

South African National Parks 143 833 187 440 364 356 434 869

South African National Biodiversity Institute

90 369 94 972 123 196 138 831

iSimangaliso Wetland Park Authority 12 111 16 627 39 169 48 701

Total 806 058 1 041 676 1 372 201 1 565 803

Transfers: Public Entities & Audit OpinionsPublic Entity Medium Term Expenditure Estimate

2009/2010

R’000

2010/2011

R’000

2011/2012

R’000

2012/2013

R’000

South African Weather Service 185 744 230 691 148 571 145 287

South African Tourism 655 669 685 519 729 750 766 238

Marine Living Resources Fund 205 005 210 244 218 306 229 222

South African National Parks 391 231 213 973 286 970 300 469

South African National Biodiversity Institute

145 824 150 577 158 432 163 854

iSimangaliso Wetland Park Authority

50 736 44 365 64 347 67 314

Total 1 634 209 1 535 369 1 606 376 1 672 384

Way forward including risk mitigationContinued anticipation of possible short funding in outer years

Application of efficiency models across all expenditure items.

Re-statement or re- costing of baseline• Targeting costs that carry thru MTEF for efficiency models e.g. short term contracts,

projects, maintenance costs etc.

Alternate Funding Initiatives & Increase in Revenue• Exploring more co-funding mechanisms for external projects- where possible. Timing of Infrastructure and Capital Projects Expenditure:-• Providing for possible cost increases in existing project costs for the current year.• Consider delaying new projects -in the absence implementation readiness and budget.

Maintaining clean audits (Financial & Performance)• Avoiding of unauthorised expenditure or budget overrun thru more tightening of budget

management and due consideration for inflationary costs. • Maintaining the balance between MTEF, Strategic Plan deliverables for the

performance audit opinion due in (2010).

THANK YOU