Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698925199088.pdf (South Africa)
Tuesday, 7 December 2021] No 165—2021] THIRD SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ TUESDAY, 7 DECEMBER 2021 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly and National Council of Provinces 1.

Bills passed – to be submitted to President for assent ...................................................... 2 National Assembly 1.
Return of Bills for concurrence ........................................................................................ 2 TABLINGS National Assembly and National Council of Provinces 1.

Minister of Finance ........................................................................................................... 3 COMMITTEE REPORTS 1 National Assembly 1.

2.

3.

4.

5.
Finance ............................................................................................................................. 4 Finance ............................................................................................................................. 6 Communications ............................................................................................................. 13 Communications ............................................................................................................. 25 Basic Education .............................................................................................................. 43 National Council of Provinces 1.
2.

Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour ............................................................................... 120 Land Reform, Environment, Mineral Resources and Energy ...................................... 165 ANNOUNCEMENTS National Assembly and National Council of Provinces The Speaker and the Chairperson 1.
Bills passed by Houses – to be submitted to President for assent (1) Bill passed by National Council of Provinces on 7 December 2021: (a) Division of Revenue Amendment Bill [B 19 – 2021] (National Assembly – sec 76).

National Assembly The Speaker 1.

Bills passed by Council and returned to Assembly for concurrence (1) Bill amended by Council and returned for concurrence on 7 December 2021: (a) Local Government: Municipal Systems Amendment Bill [B 2D - 2019] (National Assembly – sec 76).
The Bill has been referred to the Portfolio Committee on Cooperative Governance and Traditional Affairs of the National Assembly.

2 TABLINGS National Assembly and National Council of Provinces 1.

The Minister of Finance (a) Report on the State of Local Government Finances and Financial Management as at 30 June 2020.

COMMITTEE REPORTS National Assembly 3 1.


Report of Standing Committee on Finance on the Pension Funds Amendment Bill [B30 – 2020], 1 December 2021 Motion of Desirability on the Pension Funds Amendment Bill [B30 – 2020], as introduced in the National Assembly on 02 November 2020.

1.

The Committee was, on 16 March 2021, briefed by Dr Dion George, the member who initiated and introduced the Pension Funds Amendment Bill [B30-2020] (“the Bill”).

2.
2.

The Committee published the Bill and requested interested persons to make written and oral submissions on the Bill on 4 May 2021.

3.

On 19 May 2021, the Committee held public hearings and received submissions from nine stakeholders, six of whom also made oral presentations.

4.

On 24 August 2021, the Committee received a briefing on the public submissions and deliberated on those submissions.

5.
5.

On 30 November 2021 the Committee received a letter from the Bill sponsor, Dr George seeking to effect amendments to the Bill to limit the percentage of the pension funds backed loans to 30 per cent, instead of the 75 percent initially proposed in the Bill.

The Committee met on 01 December to deliberate on the Bill and to pass a Motion of Desirability as required by the National Assembly Rules.

6.

The Committee voted on the Motion of Desirability.


Dr Dion George, MP, moved for the adoption of the Motion of Desirability.

Messrs. Wouter Wessels, MP, and Ashor Sarupen, MP, supported the motion.

The members who supported the Bill stated that it would provide some relief to fund members given the difficult prevailing economic environment.

1 4 7.

Mr. Gijimani Skosana, MP objected to the Motion of Desirability, seconded by Mr. Kenny Morolong, MP.
The Members who did not support the Motion of Desirability stated that the Bill was not comprehensive enough as to its implications as no socio-economic or financial impact study had been conducted.

The attached report of the Committee outlines further observations made by the Committee on the Bill.

Ms. Dorothy Mabiletsa and Ms. Zanele Nkomo also objected to the Motion.

8.

Three (3) members voted for and four (4) against the Motion of Desirability.

9.
9.

The Committee therefore rejected the Motion of Desirability on this Bill.

Report to be considered 2 5 2.

Report of Standing Committee on Finance on the Pension Funds Amendment Bill [B30 – 2020], 1 December 2021 The Standing Committee on Finance, having considered the Pension Funds Amendment Bill [B30 - 2020] (National Assembly- section 75), referred to it and tagged by the JTM as a Private Member’s Bill, reports the Bill as follows: 1.

INTRODUCTION AND BACKGROUND 1.1.


The Pension Funds Amendment Bill (“the Bill”) seeks to remove the existing restriction that loans granted by pension funds to their members can only be used for purchasing or improving a home.

The Bill was introduced by Dr Dion George, a Member of Parliament, National Assembly.

1.2.

Section 19 of the Pension Funds Act, 1956 (Act No.


24 of 1956) (‘the Act”) currently enables pension fund members to access a loan where the pension fund assets act as collateral for such a loan in order to obtain a home loan.

The Act however does not permit pension fund members to obtain a loan for any other purpose.

1.3.

Given the unfortunate outbreak of the COVID-19 pandemic, severely impacting the economy, has led many South Africans in financial hardships and destitution.
The Bill sought to amend the act in order to provide relief whereby members of pension funds could obtain a pension-backed loan, secured by guarantee from their pension funds to leverage their pension fund assets prior to their retirement date, without eroding their provision for their retirement.

1.4.
1.4.

The Bill also would enable lending institutions to offer loans to pension fund members at competitive interest rates and over extended or deferred payment periods given that the loan will be fully guaranteed.

1 6 1.5.

The Bill contained on one Clause which seeks to amend section 19 of the Act to offer these pension-backed loans which will not exceed 75 per cent of their share in the value of the fund.

2.

PUBLIC PARTICIPATION AND PROCESS 2.1.


The Committee was briefed Dr Dion George, the Bill sponsor, on 16 March 2021.

On 19 May 2021, the Committee held public hearings and received submissions from nine stakeholders, six of whom also made oral presentations.
The stakeholders who made submissions were: National Treasury (NT), COSATU, FEDUSA the Association for Savings and Investments South Africa (ASISA), the Batseta Council of Retirement Funds (BATSETA), the Institute of Retirement Funds Africa (IRFA), the South African Institute of Chartered Accountants (SAICA), Banking Association of South Africa (BASA), and the Dear South Africa campaign.

2.2.

On 24 August 2021, the Committee received a briefing on the public submissions and deliberated on the Bill.

2.3.
2.3.

On 30 November 2021 the Committee received a letter from the Bill sponsor, Dr George seeking to effect amendments to the Bill to limit the percentage of the pension funds backed loans to 30 per cent, instead of the 75 percent initially proposed in the Bill.

The Committee met on 01 December to deliberate on the Bill and to pass a Motion of Desirability as required by the National Assembly Rules.

3.

KEY ISSUES RAISED DURING THE PUBLIC HEARINGS 2 7 3.1.
The submissions generally empathized with the objects of the Bill but rejected it for a variety of reasons.

Other stakeholders supported the Bill, albeit conditionally, as shall be discussed below.

3.2.

The majority of stakeholders expressed general sympathy towards the objective of the Bill of providing relief to those members of pension funds who were temporarily in financial hardship as a result of the current COVID-19, but rejected the Bill.
They stated that many of the statements made in the Explanatory Memorandum on the Objects of the Bill were not valid and needed to be supported by hard evidence.

3.3.

Other stakeholders, particularly Labour, supported the use of pension funds as surety for workers in applying for loans.

They said that this built upon the existing home loan provisions in the Act which allowed workers to access their funds.
They however submitted that limits needed to be put in place and submitted that the 75 per cent proposed in the Bill was too high.

They submitted that any guarantees be limited to 30 per cent of a pension fund members’ assets.

3.4.

Stakeholders raised issue about the impact of the Bill on retirement savings, stating that if members end up defaulting on their loans, this could substantially erode their retirement savings.
They said that incurring substantial indebtedness could certainly have significant impact upon the pension fund members’s financial security over the long-term, including into their retirement years.

3.5.

They added that retirement savings by South Africans have been extremely low for a lengthy period of time and have not shown any signs of improvement.

Citing the recent 10X 2020 South African Retirement Realities Survey, they said that 49 per cent of people surveyed did not have a retirement plan.
3 8 3.6.

Issues were also raised on the loan provision, with stakeholders stating that the Bill contained no clear mechanisms for the operation of the loan scheme.

They added that there was no evidence that competitive interest rates would automatically be granted by lenders if the loans are pension-fund backed.

They also stated that the loans may end up being unaffordable for highly indebted pension fund members.
They stated that loan defaults could result in guarantees for the loans being called and this will effectively give fund members premature access to retirement savings.

They said that there was a great risk that the longer-term financial consequences of the proposed loan guarantees will far outweigh any short-term benefits.

3.7.
3.7.

Stakeholders stated that the Bill would only benefit a small minority of pension fund members as lending will be subjected to affordability requirements of the National Credit Act (NCA).

They added that this would preclude relief being accessed by those who do not have sufficient income to meet affordability requirements or are blacklisted.

3.8.

Stakeholders further submitted that the Bill could result in an older population that is marred by deficits and insufficient pensions.
They said that this would likely increase the number of persons who rely on the state for old age pensions.

3.9.

Stakeholders pointed out that there was no socio-economic or financial impact study that had been submitted to support this Bill.
They further said that the Bill has not taken into consideration the implications on the liquidity of pension funds, given that member contributions are invested in terms of a long term investment plan, and that any change in the current investment profile of any retirement fund will have a direct bearing on the growth and sustainability of such funds.

They said that the Bill further 4 9 did not take into account the tax implications in instances where the loan guarantees are called when a member defaults.
3.10.

The National Treasury and other stakeholders raised the issue of the Bill being silent on the tax implications of using a guarantee for up to 75 per cent of the members’ fund assets.

It explained that any adjustment to the tax regime would require a separate money bill.

It said that the current tax regime would require that any payouts from the fund that are made before retirement funds are taxed according to the withdrawal tax table.
It explained that payouts from retirement funds are taxable since the contributions are made before tax is paid, otherwise the income could be received completely tax free.

It explained further that the tax on withdrawals before retirement ranges from 18 per cent on amounts above R25,000 up to 36 per cent on withdrawn amounts above R 990,000.

3.11.
3.11.

NT continued to explain that if a guarantee is called because the member can no longer service a loan, the retirement fund assets that are withdrawn to honor the guarantee would be subject to this tax.

If the guarantee ensures that the post-tax amount of the loan is paid to the loan provider, there may be cases where more than the full amount of the available retirement fund assets are used to service the debt.
There would therefore be nothing left in the fund for the member in such a case, and may also create an additional liability that cannot be serviced by the individual’s assets.

3.12.

It was further added that under the provisions of the Income Tax Act, retirement annuity funds may not provide for access to cash prior to retirement (and then only to one-third of the proceeds at retirement).
These funds would not be suitable as 5 10 guarantors of the proposed loans because pre-retirement access to monies is not allowed.

3.13.

Other stakeholders proposed that a provision be inserted in the provisions of the Bill to provide that withdrawals not to be subject to tax.

They said that this could provide clarity on how the tax payable will be treated on the occurrence of a withdrawal event.

3.14.
3.14.

Stakeholders submitted that the amendments proposed by the Bill would create significant administrative burdens on the Boards of pension funds.

They said that amendments to fund rules would be required, as well as systems and other administrative changes.
The administrative issues raised included the noting/recording of loans on systems, payment of creditors on loan defaults after verifying the correctness of the amounts claimed, applying for tax directives and calculating what balance remains, and staff training.

3.15.

Other submissions made alternative suggestions.

One suggestion was that instead of passing this Bill, NT should introduce appropriate amendments in Parliament through the Financial Sector Laws Amendment Bill during the next 12 months.

4.
4.

COMMITTEE OBSERVATIONS 4.1.

The Committee notes that while stakeholders sympathized with the objectives of this Bill, they regarded it as inadequate and submitted that it did not address issues in a comprehensive manner.

4.2.
4.2.

Among the issues raised by stakeholders were on: the impact of the pension-fund backed loans on indebtedness and long-term savings; implications of the scheme on 6 11 the state; its interplay with the National Credit Act; and tax implications in the event of withdrawal when guarantees on defaulting loans are called.

4.3.

The Committee notes that the Bill was not accompanied by any socio-economic impact study.
Although this is not a prerequisite for the passing of Bills by Parliament, it is regarded as one of good practices that ensures that the costs and benefits of a particular amendment are balanced and do not lead to unintended consequences.

4.4.

The Committee notes further that the interplay of tax issues with this Bill may require the introduction of a money bill, which, in terms of the Constitution and the law, may only be introduced by the Minister of Finance.

4.5.
4.5.

The Committee further notes the letter dated 30 November 2021 from Dr. Dion George, MP, seeking to insert further amendments to the initial proposal by capping guarantees to 30 per cent of a pension fund members’ assets.

4.6.

The Committee also notes the formal written responses sent to the Committee on 30 November 2021, responding to the public comments.

4.7.
4.7.

Lastly, the Committee notes the comments by some stakeholders that NT should introduce a Bill that will be comprehensive and cover all the above raised issues during the public hearings.

5.

CONCLUSION 5.1.

The Standing Committee on Finance, having considered the Pension Funds Amendment Bill [B30 - 2020] (National Assembly- section 75), rejects this Bill Report to be considered 7 12 3.
Report of the Portfolio Committee on Communications on the 2020/21 Third and Fourth Quarter Performance and Expenditure Reports of Government Communication and Information System (GCIS) and the Media Development and Diversity Agency (MDDA), dated 7 December 2021 The Portfolio Committee on Communications (the Committee), having considered the 2020/21 Third and Fourth Quarter Performance and Expenditure Reports of Government Communication and Information System (GCIS), hereafter referred to as “the Department”, and the Media Development and Diversity Agency (MDDA), hereafter referred to as “the Ageny”, reports as follows: 1.
Introduction The Committee considered the 2020/21 Third and Fourth Quarter Actual Performance and Expenditure Reports (October 2020 to March 2021) of the Department and the Agency in a virtual meeting on Wednesday, 18 August 2021.

This report gives an overview of the presentation made by the Department, which mainly focuses on its achievements, output in respect of the performance indicators and targets set for the 2020/21 financial year and related financial performance.
The report also provides the Committee’s key deliberations and recommendations in relation to the performance presentation by the Department.

2.

Organisational Environment The period under review was characterised by high levels of trust in government information on COVID-19, eager anticipation on the vaccine roll-out programme and also fear and anxiety in the public related to job security and COVID-19.
The Department continued its communication programme on key priorities in its campaigns, such as COVID-19; the Economic Reconstruction Recovery Programme (ERRP) and the Gender Based Violence and Femicide campaign, together with key Departments.

During this period, the COVID-19 campaign consumed the larger portion of the Department’s energy, with the second wave anticipated in December 2020 and working with key Departments in ramping up the campaign on all fronts to reduce its impact.
1 13 Government’s focus had also turned to economic recovery with the Department providing support to these initiatives.

Furthermore, South Africa had assumed Chairmanship of the African Union (AU).

Part of the Department’s communication and messaging was on AU agenda 2063, particularly on the adoption of the African Continental Free Trade Area Agreement (ACFTA).
The Department continues to manage the partnership with government departments in a daily Rapid Response meeting and Communication Command, which replicates the Ministerial and Director-General (DG) structure.

The partnerships with Business, Labour, traditional leaders and civil society were solidified in a National Communication Partnership (NCP), which shared content and platforms on COVID-19 and the vaccine plans.
The provincial offices continue to ensure that we partner with local municipalities, CDWs and local communities.

The partnerships with the media has been invaluable in getting necessary information quickly to the public about life-saving interventions.

For the period under review the Department achieved 98 per cent success in paying its service providers within 30 Days as prescribed by the Public Finance Management Act (PFMA).

The Department’s vacancy rate stands at 8,44 per cent.
As of the 31 December 2021, the Department spent 77 per cent of its budget.

This also includes the additional R60 million that was allocated for COVID-19 public awareness.

In the end of the third quarter, one target was not achieved and in the fourth quarter, four targets were not met.

3.

Third and Fourth Quarter Performance The Department achieved 98 per cent of its targets for the third quarter of 2020/21 financial year and 2 per cent of targets were not achieved.
The table below present the Department’s third quarter performance per programme: 2 14 The Department achieved 79 per cent of its targets for the fourth quarter of 2020/21 financial year and 21 per cent of targets were not achieved.
The graph below presents the Department’s fourth quarter performance per programme: The tables below provide details and corrective action on the targets that were not met in the third and fourth quarters: OUTPUT INDICATOR Q3 TARGET ACTUAL OUTPUT DEVIATION REASON FOR DEVIATION CORRECTIVE ACTION 3 15 Percentage of all compliant invoices paid within 30 days 100% of all compliant invoices paid within 30 days Target underachieved by 0.3% 99.7% (1356 of 1360) of all compliant invoices were paid within 30 days.. OUTPUT INDICATOR Percentage of all compliant invoices paid within 30 days Q4 TARGET 100% of all compliant invoices paid within 30 days DEVIATION Target underachieved by 2% ACTUAL OUTPUT 98% (1742 of 1775) of all compliant invoices were paid within 30 days.
Number of copies of Vuk’uzenzele newspaper produced 4.25 million copies of Vuk’uzenzele newspaper produced 3.4 million copies of Vuk’uzenzele newspaper were produced.

Target underachieved by 850 000 4 SCM officials worked extended hours to address the outstanding invoices.

SCM has commenced with electronic approval of invoices to minimise close contact and spreading of the virus.
BCP arrangement with SITA for SCM officials to process payments from SITA offices in Centurion could not be invoked as officials were in isolation CORRECTIVE ACTION Remote working was suspended in mid-February for SCM officials until further notice, as transversal systems are not accessible from home in order to improve compliance on payments within 30 days.

Annual target achieved.

No need for further action Target underachieved due to exposure of some SCM officials to Covid- 19 positive cases.
Officials had to go on quarantine and work from home for few days which impacted the access to certain transversal systems that cannot be accessed offsite.

REASON FOR DEVIATION Target underachieved due to backlog of invoices from December recess, closure of the building for decontamination that also took place in December and officials working remotely until mid- February 2021.

The copies of Vuk’uzenzele newspaper for January 2021 edition were produced in December 2020.
Printers and distribution companies close 16 in December and open late in January.

In Q4, two editions for February and two editions for March 2021 were produced.

The January 2021 online edition was published in December 2020 to avoid disruptions that come with festive season holidays.

In Q4, two editions for February and two editions for March were published.

Minister’s approval to publish the PSM magazine was granted after the quarter has ended.
Reason for Deviation The weekly rotational system to avoid the risk of Covid-19 infection amongst employees contributed to the daily updates not being implemented as planned.

Fewer requests than anticipated were received due to January holidays and adjusted Level 3 lockdown that started in December 2020 until end of February 2021 Annual target achieved.

No need for further action Minister’s office to be provided the complete magazine with the foreword to obtain approval on time.
Corrective Action The system has been amended to a monthly rotation to avoid this happening in the future.

Requests are picking up, and more services will be rendered since the country has moved to alert Level 1 lockdown.

Number of online editions of Vuk’uzenzele newspaper published annually Five online editions of Vuk’uzenzele newspaper published per quarter Four online editions of Vuk'uzenzele newspaper were published.
Target underachieved by 1 Number of editions of PSM magazine published annually Output Indicator Updated social media accounts as per content received (excluding public holidays, weekends and holiday periods) Two editions of PSM magazine published One edition of the PSM magazine was published on 12 February 2021 Target underachieved by 1 Q4 target Actual Output Deviation Daily updates on GCIS social media accounts implemented (excluding public holidays, weekends and holiday periods) Daily updates on GCIS social media accounts were implemented except in some days during Feb 2021 (excluding public holidays, weekends and holiday periods).
92 photographic services were provided Few days not updated Target underachieved by 18 Number of photographic services provided per year 110 photographic services provided 5 17 Number of video services provided per year 150 video services provided 118 video services were provided Target underachieved by 32 Media, Advertising and Communications Council established Launch of the Media, Advertising and Communications Council 100% Launch of the Media, Advertising and Communications Council did not take place Fewer requests than anticipated were received due to January holidays and adjusted Level 3 Lockdown that started in December 2020 until end of February 2021 The launch of the MAC Charter Council has been delayed by the need to revise the list of nominated candidates that is fully representative of the gender and geographic dynamics of the sector.
Requests are picking up, and more services will be rendered since the country has moved to alert Level 1 lockdown.

The appointment of the MAC Charter Council will be prioritised in the new financial year, taking into account concerns regarding gender and geographic representation.

4.
4.

Third and Fourth Quarter Achievements The government newspaper (Vuk’uzenzele) had a circulation of 850 000 per issue, showcasing inspiring small to medium businesses that received financial and non-financial support from government.

Radio was used particularly to educate and raise an awareness on non- pharmaceutical health measures against COVID-19.
The government website had 16 628000 in the third quarter up 169 % year on year and 17 481000 views in the fourth quarter up 62% (year on year) and social media accounts continue to grow its audiences, and remain the primary repository of government information.

Other platforms used by the Department include the government news agency, multiple-target newsletters, knowledge-sharing webinars, community radio, mainstream media including TV, radio, online, billboards, short messages (SMS) and others.

6 18 5.
2020/21 Budget Overview The Department was allocated R750,5 million for the 2020/21 financial year, which included the R60 million budget allocation for COVID-19, as illustrated below: 5.1 Expenditure Analysis 5.1.1 Third and Fourth Quarter Programme Expenditure The table below illustrates spending per programme in the third quarter: 7 19 Programme 1: Administration This programme reported an expenditure of R126,7 million or 73 percent of the programme’s 2020/21 available budget of R173, 3 million as at the end of December 2020.
This resulted in the under expenditure of 27 percent from the allocated budget for the quarter.

Programme 2: Content Processing and Dissemination This programme reported an actual expenditure of R348 million or 82 percent of its 2020/21 budget allocation of R422,1 million as at the end of December 2020.

This resulted in the under expenditure of 18 per cent from the allocated budget for the quarter.
Programme 3: Intergovernmental Coordination and Stakeholder Management This programme spent R84 million or 65 percent of its 2020/21 budget allocation of R129.7 million as at the end of December 2020.

This resulted in the under expenditure of 25 percent of the allocated budget for the quarter.
The table below illustrates spending per programme in the third quarter: 8 20 Programme 1: Administration This programme reported an expenditure of R177.8 million or 99 percent of the programme’s 2020/21 available budget of R179.5 million as at the end of March 2021.

This resulted in the under expenditure of one percent from the allocated budget at the end of the financial year.
Programme 2: Content Processing and Dissemination This programme reported an actual expenditure of R416.3 million or 99 percent of its 2020/21 budget allocation of R422,1 million as at the end of March 2021.

This resulted in the under expenditure of one percent from the allocated budget for the financial year.
Programme 3: Intergovernmental Coordination and Stakeholder Management This programme spent R123.4 million or 65 percent of its 2020/21 budget allocation of R118 million as at the end of December 2020.

This resulted in the under expenditure of four percent of the allocated budget.

6.

MDDA The MDDA was set up in terms of the MDDA Act (2002), to enable historically disadvantaged communities and individuals to gain access to the media.
The core activities of the Agency are to provide financial and non-financial support to community broadcast and small commercial media projects, with an emphasis on promoting indigenous languages and contributing to community development and the alleviation of poverty and inequality.
6.1 Overview of the organisational performance The Agency complied with the legislative requirements of National Treasury, Department of Public Service and Administration (DPSA) and Department of Planning, Monitoring and Evaluation (DPME) by submitting the following documents: The third and fourth quarter performance report was submitted to National Treasury and Executive Authority according to prescribed legislation; 9 21 The third and fourth quarter financial reports were compiled and submitted to National Treasury according to prescribed legislation; and The Agency is reporting against the MDDA Strategic Plan for 2020/2021 – 2024/25 and Annual Performance Plan for 2020/2021 as tabled in Parliament in March 2020.
6.2 Quarterly Achievements During the third quarter, the Agency achieved 84 percent of the planned targets for 2019/20, 4 percent up from 80 percent in 2018/19 financial year.

It also achieved a clean audit outcome for the 2019/20 financial year, an improvement from Unqualified Audit outcome in 2018/19 financial year.

The Board approved R20 million Emergency Relief Fund, for community and small commercial media to be disbursed over two phases.
To date, over R16 million disbursed to 210 qualifying beneficiaries.

Emergency packages were R45 000 per broadcaster and print/digital publication tranche, and in second tranche, up to R6000 for radio station, R20 000 for print/digital publications and R290 000 for community televisions.

In the fourth quarter, the Board approved 22 compliant broadcast projects and nine print and digital in February 2021.
The Agency published a call for application for signal distribution during the last week of March 2021.

A total of 40 applications were received and 22 were compliant.

The Agency settled the Sentech debt of 20 applications, which amounted to R11.2 million.

A further R916 076 was paid over to those stations who applied for self-transmission costs.

In total, R12.1 million was paid over to Sentech debt and some beneficiaries towards transmission fees.
Furthermore, the Agency conducted Funders Breakfast event with approximately 60 key decision makers in broadcasting, print, telecoms operators, social media platforms, training partners and other key stakeholders.

The purpose of the event was to attract possible funders to support community and small commercial media.
Lastly, the Agency conducted Grant Funding Outreach Programme for the approved grant and seed funding for 22 community radio stations and 9 community and small commercial print media projects across provinces.

These roadshows were aimed at informing the beneficiaries about the governance compliance, contracting matters and issues related to payments.

10 22 7.
10 22 7.

Observations and recommendations 7.1 Observations In relation to the Department, the Committee noted with concern that: a. one target in both quarters under review, which relates to payment of invoices within 30 days was not achieved; and b. eight targets were not met during the fourth quarter.

The Committee commended the MDDA for achieving a clean audit.

However, it noted with concern that: a. the target on grand funding was not reached; and b.
The Agency continued to not receive any form of funding from commercial printing sector.

The Committee expressed condolences to the Mackenzie family for the loss of a remarkable leader.

Further condolences to the MDDA on the passing of one of their staff members.
7.2 Recommendations In relation to the Department, the Committee resolved that the Minister should: a. ensure that government communication was centralised to the Presidency, following the miscommunication from Cabinet members during the KwaZulu- Natal and Gauteng provinces unrest; b. ensure that the Department paid invoices within the stipulated 30-day period, as non-payment might impact negatively on Small Medium and Macro Enterprises (SMMEs) sustainability; c. ensure that the Department met all its targets; d. ensure that processes are in place to create new and innovative ideas of sending above physical distribution of to people over and communication the Vuk’uzenzele; and e. ensure that there are innovative ways found to carry out outreach amidst the pandemic.
In relation to the Agency, the Committee resolved that the Minister should: 11 23 a. ensure that all targets were met, particularly the target on grant funding as it was likely to impact negatively on the performance of the agency and on the sustainability of its beneficiaries; and b. find a way to engage the commercial printing sector in order to restore the funding it made to the MDDA.
The Committee expressed its appreciation of the work done by the Agency under the leadership of Ms Potye and the Executive Management, especially in ensuring that there was both delivery and accountability in terms of audit processes.

The Committee further committed itself to filling all board vacancies so that the Agency can operate efficiently in delivery of its mandate.
The Committee implored the entity not to appear in the next quarter with the very same challenges The Committee expressed its appreciation of the work done by the Department under the leadership of Ms Pumla Williams and the Executive Management, especially in ensuring that there was both delivery and accountability in terms of audit processes.

Report to be considered.

12 24 4.
12 24 4.

Report of the Portfolio Committee on Communications on the 2020/21 Third and Fourth Quarter Performance and Expenditure Reports of the Department of Communications and Digital Technologies, dated 7 December 2021 The Portfolio Committee on Communications (the Committee), having considered the 2020/21 Third and Fourth Quarter Performance and Expenditure Reports of the Department of Communications and Digital Technologies (DCDT), here referred to as “the Department”, reports as follows: 1.
Introduction The Committee considered the 2020/21 Third and Fourth Quarter Performance Report (01 October 2020 – 31 December 2020 and 01 January 2021 - 31 March 2021 respectively) of the Department and its entities in virtual meeting on 17 August 2021.
This report gives an overview of the presentation made by the Department and its entities to the Committee, focusing mainly on its achievement, outputs in respect of the performance indicators, targets set for the 2020/21 financial year, and related financial performance.

The report also provides the Committee’s key deliberations and recommendations in relation to the performance presentation by the Department and all entities reporting to it.

2.
2.

Organisational Environment The Department is mandated to create a vibrant ICT sector that ensures that all South Africans have access to robust, reliable, affordable and secure ICT services in order to advance socio- economic development goals and support the Africa agenda and contribute to building a better world.
This contributes to the development of an inclusive information society in which information and ICT tools are key drivers of accelerated and sustained shared economic growth and societal development.
1 25 The Department is comprised of various public entities, namely South African Post Office (SAPO), SENTECH, Universal Service Access Agency of South Africa (USAASA), Universal Service Access Fund (USAF), Broadband Infraco (BBI), National Electronic and Media Institute of South Africa (NEMISA), State Information Technology Agency (SITA), the South African Broadcasting Corporation (SABC), Film and Publication Board (FPB), .ZA Domain Name Authority (.ZDNA) and the Independent Communications Authority of South Africa (ICASA).
The 2020/21 Third and Fourth Quarter Performance and Expenditure obligations continued to be implemented during the declared state of disaster, declared by the President on 15 March 2020.

3.

Third and Fourth Quarter Performance Overview The Department committed to achieving forty-four Annual Performance Plan (APP) quarterly targets by the end of Quarter 3 (01 October 2020 - 31 December 2020) of the 2020/21 financial year.
This is a total number of Quarter 3 APP targets of all six (6) Programmes of the Department.

Overall, the Department has achieved eighteen (41%) of the APP targets, and twenty-six (59%) were not achieved.

As at end of December 2020, the Department spent R2 085.5 billion, of which is 64 percent of the Annual Budget against 41 percent of targets achieved for Quarter 3.
For Quarter 4, the Department committed to achieving forty-three Annual Performance Plan (APP) quarterly targets for the period 01 January 2021 - 31 March 2021.

This is a total number of Quarter 4 APP targets of all six (6) Programmes of the DCDT.

Overall, the Department has achieved twenty-five (58%) of the APP targets, and eighteen (42%) were not achieved.
As at end of March 2021, the Department spent R3 172.5 billion, of which is 97 percent of the Annual Budget against 59 percent of targets achieved for Quarter 4.
2 26 3.1 Third/Fourth Quarter Achievements The Department realised significant achievements against the planned Third and Fourth Quarter targets as indicated below: Workplace Skills Plan (WSP) § The Department implemented the WSP through both individual training interventions and corporate (in-house) training – in alignment with the DCDT mandate Integrated DCDT Digital Transformation Strategy § The Department developed the Integrated DCDT Digital Transformation Strategy and monitored the implementation of priority interventions 100% of valid invoices paid within 30 days from date of receipt § All invoices received from suppliers were paid within 30 days Country Positions developed to support the Digital Economy § BRICS 2020 Position Paper Approved and advanced in BRICS Meeting and Outcomes Report of BRICS ICT Ministerial Meeting was developed § South Africa submitted their inputs in line with the approved RSA UPU Position Paper, following which the Report on International Postal Activities was developed and approved Digital Economy Masterplan § The Digital Economy Masterplan was finalised and approved § A report on the coordination of the implementation of identified priority areas of the Digital Economy Masterplan was generated and approved Revision of ICT SMME Strategy § Draft revised ICT SMME Development Strategy was developed and consulted with relevant stakeholders, after which it was approved § A report on facilitating the implementation of the revised ICT SMME Development Strategy was developed and
 approved SOE Oversight § Quarter 2 and 3 performance reports of entities for 2020/21 were analysed and submitted National Radio Frequency Plan The draft NRFP for consultation with Government Services users was developed and subsequently approved 3 27 Broadband § The provision of broadband service to all 970 connected sites were monitored § The feasibility study report for Phase Two funding was developed, and the final report was submitted to DBSA Cybersecurity § A legal entity called COMRIC has been established, which serves as the CSIRT for the mobile operator’s sector E-Government § List of priority services was sourced from government departments and uploaded on the National e-Services Portal Digital and Future Skills § The Digital and Future Skills Implementation Programme was developed.
Through NEMISA the Department facilitated the implementation of training on Coursera online digital skills.
3.2 Third and Fourth Quarter Areas of Under-Achievement The Department did not achieve 16 of its 32 planned quarterly targets as reflected in detail below for the Third and Fourth Quarter targets: Development of the DCDT Organisational structure § The revised organisational structure was not developed and approved as planned due to initial delays in the finalisation of the Service Delivery Model RSA Position - WTSA § Outcomes report of World Telecommunications Standardisation (WTSA) Assembly was not developed as the WTSA was postponed by the ITU until 2022 BRICS Institute for Future Networks § Legal Framework for the establishment of the BRICS Institute for Future Networks was not signed by end of Quarter 4 as new issues emerged that required the parties to renegotiate the Legal Instrument (MoA) 4 28 South African Post Office SOC Ltd Amendment Bill § South African Post Office SOC Ltd Amendment Bill was not submitted to Cluster and Cabinet for public consultation approval as the requirement for additional consultation with key stakeholders resulted in a delay in the project South African Broadcasting Corporation SOC Ltd Bill § South African Broadcasting Corporation SOC Ltd Bill was not redrafted, inclusive of public comments, as the DCDT had to source a legal opinion from Senior Counsel on the independence of the SABC in view of Section 192 Data & Cloud Policy § Public consultation and submission of the Data and Cloud policy to Cluster and Cabinet for approval, was not concluded as planned.
This was due to the extended period required for internal consultation to provide inputs to the draft policy, which affected the approval for public consultation and subsequent finalisation and implementation of the Policy PC4IR Implementation Plan § The draft implementation plan for the PC4IR Report was not submitted to Cabinet for approval as planned.
The target was impacted by the need for extensive consultations which is still ongoing with Industry, National Departments, Provinces and Municipalities SOE Oversight § The Annual Reports of all SOEs were not timeously submitted to Parliament as there were delays in the tabling of the Annual Reports of SAPO, USAASA and USAF § Tabling of the APPs of certain SOEs were delayed due to need for additional analysis as well as the delays in planning workshops due to the impact of the COVID-19 pandemic Performance Management System for ICASA Councillors § Signing of Performance Agreements and the performance evaluation of Councillors by the Evaluation Panel did not take place largely due to delays in the approval of the Performance Management System 5 29 Postbank Bill § Postbank Bill was not submitted to Cabinet for approval as planned.
Reason being that during Cluster consultation, the Department received recommendations, which necessitated further consultation with the Ministry of Finance with regards to the alignment of Post Bank Bill with the State Bank Process State Digital Infrastructure Company Bill § The State Digital Infrastructure Company Bill was not submitted to Cabinet for approval, largely due to capacity constraints related to the legal drafting of the Bill and the Department therefore sought support from the State Law Advisor in this regard State Digital Services Company Bill § The State Digital Services Company Bill was not submitted to Cabinet for approval, largely due to capacity constraints related to the legal drafting of the Bill and the Department therefore sought support from the State Law Advisor in this regard Digital Transformation Centre (DTC) § The DTC was not established as planned as the DTC Agreement could not be finalised until Cabinet approval is received Decoder Installation (BDM) § The Department did not meet the set decoder installation targets largely due to delays in the finalisation of the Service Level Agreement between USAASA and Sentech negatively impacted the project Voucher Distribution (BDM) § The Department did not meet the set voucher distribution targets due to the absence of the voucher implementation plan from USAASA Policy Direction on 5G Spectrum § The Department could not finalise the Policy Direction on 5G Spectrum due to the current litigation between Telkom and ICASA, MTN and ICASA 6 30 4.
Third and Fourth Quarter Budget Overview and Expenditure Analysis per Programme Initial budget allocation of R3.4 billion and total budget reductions amounting to R114 million were effected (COVID-19 stimulus package, SAA and normal adjustment).

The overall expenditure as at 31 March 2021 amounts to 98 percent of the adjusted budget allocation.

Overall underspending on the budget is mainly due to the hard lockdown that occurred at the beginning of the financial year.
This affected the implementation of projects and other activities of the Department.

Spending was mainly on normal monthly commitments and projects in progress.

4.1 Expenditure per Economic Classification COE: The underspending is due to the vacant posts not filled and salary adjustments not implemented during the financial year.

The development of the organisational structure project is in progress.

Goods & Services: spending was mainly due to the monthly commitments.
The activities of the Department was affected by the COVID-19 lockdown e.g.

restrictions on travelling.

7 31 Payment for Capital Assets: Underspending due to delays experienced in the upgrade of the IT infrastructure project of the department, implementation of the PABX system and the digitisation project.

On Transfers, budget allocation for BDM project was reduced by R78 million.

Included in the Households is the settlement amount (R3.5 million) paid to ex-employees for medical-aid subsidy.
The transfers were paid to the entities in line with the pre-approved scheduled with National Treasury, see table below: 4.2 Programme Performance in Quarter 4 For reporting, this report will focus only on Quarter 4 programme performance as opposed to both Quarter 3 and 4.

Programme 1: Administration The purpose of the programme is to provide strategic leadership, management and support services to the Department.
Administration programme committed to achieve five APP Targets by the end of Quarter 4, 01 January 2021 – 31 March 2021.

Of these APP targets, four (80%) were achieved and one (20%) was not achieved.

A total R215 million (83%) of the allocated budget was spent for the quarter.

8 32 Programme 2: ICT International Relations and Affairs The purpose of the programme is to ensure alignment between South Africa’s foreign policy and international activities in the field of ICT.
ICT International Relations and Affairs programme committed to achieve six APP targets by the end of Quarter 4, 01 January – 31 March 2021.

Of these APP targets, four (67%) were achieved and two (33%) were not achieved.

A total R61.5 million (97%) of the allocated budget was spent for the quarter.
Programme 3: ICT Policy Development and Research The purpose of the programme is to develop ICT policies and legislation that support the development of an ICT sector that creates favourable conditions for accelerated and shared economic growth.

Develop strategies that increase the adoption and use of ICT by the majority of South Africans to bridge the digital divide.
ICT Policy Development and Research programme committed to achieve eight APP targets by the end of Quarter 4, 01 January 2021 – 31 March 2021.

Of these APP targets, three (38%) were achieved and five (63%) were not achieved.

A total R36.1 million (69%) of the allocated budget was spent for the quarter.

Programme 4: ICT Enterprise and Public Entity Oversight The purpose of the programme is to oversee and manage government’s shareholding interest in the ICT public entities and state-owned companies.
Facilitate the growth and development of small, medium and micro enterprises in the ICT sector.

ICT Enterprise and Public Entity Oversight Programme committed to achieve Nine APP targets by the end of Quarter 4, 01 January 2021 – 31 March 2021.

Of these APP targets, 3 (33%) were Achieved and six (67%) were Not Achieved.

A total R1.8 billion (100%) of the allocated budget was spent for the quarter.
9 33 Programme 5: ICT Infrastructure Development and Support The purpose of the programme is to promote investment in robust, reliable, secure and affordable ICT infrastructure that supports the provision of a multiplicity of applications and services.

ICT Infrastructure Development and Support Programme committed to achieve eight APP targets by the end of Quarter 4, 01 January 2021 – 31 March 2021.

Of these APP targets, four (50%) were achieved and four (50%) were not achieved.
A total R1.033 billion (99%) of the allocated budget was spent for the quarter.

Programme 6: ICT Information Society and Capacity Development The purpose of the programme is to develop and implement strategies to build capabilities to bridge the digital divide.

ICT Information Society and Capacity Development programme committed to achieve seven APP quarterly targets by the end of Quarter 4, 01 January 2021 – 31 March 2021.

Of these APP targets, all seven (100%) were achieved.
A total R69.8 million (93%) of the allocated budget was spent for the quarter.

5.
Committee Observations and Recommendations 5.1 The Department Having considered the 2020/21 Third and Fourth Quarter Performance and Expenditure Report of the Department, the Committee noted: (i) its condolences to the MacKenzie family for their loss due to the passing of the Honourable Member and noted his inordinate contribution to Committee work; (ii) and welcomed the newly appointed Minister; (iii) with appreciation for the introductory remarks in particular, made by the Minister and the presentation made by the Department; (iv) the remarks by the new Minister that the tabling of SAPO annual report would be delayed; (v) with concern that the Department did not achieve 16 of its 32 planned quarterly targets; a. and yet it was able to spend 98 percent of its budget over the period and this was unacceptable; 10 34 (vi) its discontentment to compliance in general by the Department and that most entities cannot account adequately; (vii) with concern that entities were duplicating functions; (viii) with concern about the current state of affairs including problems with revenue generation of all entities; (ix) with concern the Department’s not achieved targets include the State Digital Infrastructure Company Bill because it was not submitted to Cabinet for approval; (x) with more concern that the State Digital Services Company Bill was also not submitted for approval as planned due to limited resources; (xi) with further concern that the Digital Transformation Centre was not established as planned; (xii) with concern that the Department did not meet the decoder installation targets largely due to delays in the finalisation of the Service Level Agreement between USAASA and Sentech; (xiii) that the Department did not meet the voucher distribution targets due to the absence of the Voucher Implementation Plan from USAASA; (xiv) that the Department could not finalise the Policy Direction on 5G Spectrum due to the current litigation between Telkom and ICASA, MTN and ICASA; (xv) that the revised organisational structure
 was not developed and approved as planned due to initial delays in the finalisation of the Service Delivery Model; (xvi) that the outcomes report of World Telecommunications Standardisation (WTSA) Assembly was not developed; (xvii) that the legal framework for the establishment of the BRICS Institute for Future Networks was not signed; (xviii) that the South African Post Office SOC Ltd Amendment Bill was not submitted to Cabinet for approval; (xix) that the South African Broadcasting Corporation SOC Ltd Bill was not redrafted; (xx) that the public consultation and submission of the Data and Cloud policy to Cabinet for approval, was not concluded as planned; (xxi) that the tabling of the APPs of certain SOEs were delayed due to need for additional analysis as well as the delays in planning workshops due to the impact of the COVID- 19 pandemic; (xxii) with concern that the signing of Performance Agreements and the performance evaluation contracts of ICASA Councillors still did not take place; 11 35 (xxiii) with serious concern that the Postbank Bill was not submitted to Cabinet for approval as planned; (xxiv) with concern that COVID-19 pandemic is being used as an excuse for regression in performance by the Department and its entities; and (xxv) and commended the Minister for her commitment to hold the Department and entities accountable over non-performance.
5.2 SAPO On SAPO, the Committee noted: (i) with appreciation for the presentation made by SAPO; (ii) with concern that there was a need to focus on this entity especially in respect of its revenue targets; (iii) with concern that SAPO’s organisational performance remains weak with only four of seventeen KPIs achieved and a performance level of only 24 percent; (iv) with concern that revenue growth initiatives and revenue recovery targets were not achieved; a. that the slow recovery in business means a slow recovery in revenue resulting in insufficient budget for operations; (v) that expenditure of R1 626 million exceeded budget by R102 million in Quarter 4; (vi) that SAPO posted a net loss of R444 million against the projected net loss of R28m, a negative variance of R415 million in Quarter 4; (vii) that creditors including accruals increased to R2.9 million; (viii) that an additional amount of R1.3 billion was owed to Postbank by Quarter 4; (ix) its disappointment of the failure to meet targets due to lack of partnerships; (x) with contentment that the Minister assured the Committee that the legislative amendments would be fast tracked and funding models for SAPO and the SABC in particular, would be look at; (xi) that the dire financial position of the entity was a challenge; and (xii) that SAPO was regarded as an oversight priority for the Portfolio Committee because it impacts directly on many service delivery objectives.
12 36 5.3 USAASA/USAF The Committee noted that while USAASA achieved all its targets, it noted its serious concern on the underachievement by USAF of all its targets, particularly in respect of the BDM project.

5.4 SENTECH The Committee noted: (i) and commended Sentech for its good performance and the overall improvement of the entity governance, accountability and financial positions; and (ii) that there were planned targets that the entity failed to execute.
5.5 SITA The Committee noted: (i) with appreciation for the steady progress achieved by the SITA administration; and (ii) concern as there was a drop in achievement of overall performance targets.
5.6 BBI The Committee noted: (i) and commended BBI on its improvement in performance although there are areas of performance that need further improvement; (ii) with serious concern the significant year on year decline in revenue due to the restrictions imposed under the COVID-19 lockdown; (iii) with serious concern BBI’s inability to raise the funds required during the year in order to procure new equipment to provision services to customers and to settle amounts outstanding for core network equipment which had resulted in lower sales; and (iv) with serious concern on vandalism and theft of property.
5.7 NEMISA The Committee noted: (i) with great concern the poor performance by NEMISA; (ii) with concern that the Acting Chief Executive Officer position has not been filled; (iii) with concern the financial position of NEMISA; 13 37 (iv) with concern that NEMISA had particularly reported under-performance due to COVID-19; (v) with serious concern that connectivity in the rural areas is not being addressed, to the detriment of students originating from these locations; a. that the entity’s training systems fail to cater for rural communities’ training needs and the entity has no contingency plans in place nor an intervention strategy; and (vi) further concern that the failure to access gadgets cannot be a sufficient explanation for lack of performance.
5.8 ICASA The Committee noted: (i) its appreciation for the presentation made; (ii) and commended ICASA for the progress made to date; (iii) with concern the challenges relating to the delays in releasing of spectrum; (iv) with concern lower budget revenue rates at 8 percent lower than budgeted for due to the reduced prime rate; and (v) with serious concern over the lack of conclusion of performance agreements for ICASA Council.
5.9 SABC The Committee noted: (i) with concern that the SABC has not responded to 18 audit findings; (ii) with concern the decline in the collection of TV licences revenues; a. with relief that the SABC was looking into a geographical online system to improve collections as well as an amnesty programme being explored with the Department; (iii) with concern that SABC expenses are more than the allocation; and (iv) that Mr R Marawa matter was operational and that a decision was made to reduce independent contractors; Mr Marawa was informed three months prior to the expiry of his 3-year contract.
14 38 5.10 FPB The Committee noted: (i) its appreciation for the presentation received; (ii) the improvements in performance however note with great concern the existing challenge including high vacancy rate (due to a moratorium on recruitment and selection processes), which largely contributed to the under-performance; (iii) with concern that the revenue for the year to date was under-collected as a result of lower online distribution and classification fees; and (iv) with contentment FPB’s ability to adequately plan and execute its operational deliverables.
5.11 .ZADNA The Committee noted: (i) and commended .ZADNA for its progress to date; and (ii) with concern that .ZADNA’s performance had regressed.

6.
Recommendations 6.1 The Department The Committee recommends that the Minister should ensure that: (i) stability at the Department and all its entities is prioritised; (ii) entities remain accountable and comply to legislation, policies and regulations; (iii) all critical vacancies are filled urgently and all acting positions are eliminated in the Department and its entities; (iv) processes are in place to address all issues identified by the Auditor-General; (v) processes are in place to stabilise the entities and track the implementation of the reconfiguration process; a. the processes towards the merger of entities are expedited; (vi) the Department provides a clear indication of the intervention methods to be implored for all entities; (vii) the relevant legislation amendments are fast-tracked; (viii) the Department and entities provide tangible reasons for regression in performance; 15 39 (ix) the entity oversight branch improves its oversight role in respect of performance agreements and corporate plans and ensure that these are aligned to national objectives; (x) entities and their respective Boards are to be held accountable for non-performance; (xi) the non-payment of entities to Sentech is resolved; (xii) the tabling of SAPO annual report is expedited; and (xiii) that feedback must be given to the Committee at a future date agreed to by the Minister on the issues raised such as commitments to BDM, Broadband, and Spectrum Auctioning and interventions needed at SAPO.
6.2 SITA The Committee recommends that the Minister should ensure that: (i) SITA improves in achieving outstanding targets.
6.3 NEMISA The Committee recommends that the Minister should ensure that: (i) NEMISA addresses all issues in its audit report; (ii) the Acting Chief Executive Officer position is filled expediently; (iii) the financial position of NEMISA stabilises; (iv) contingency plans are in place to address the training system; a. rural communities enrolled in NEMISA courses are prioritised instead of being compromised; (v) COVID-19 is not used as an excuse for non-performance in achieving targets a digital environment; and (vi) challenges to access to digital devices is addressed.
6.4 ICASA The Committee recommends that the Minister should ensure that: (i) a sense of urgency is implored in the release of the much-needed spectrum and all parties are engaged accordingly to resolve the impasse; (ii) ICASA urgently resolves all challenges relating to the release of spectrum; a. appears before the Committee to provide an update relating to current challenges delaying the release of spectrum; 16 40 (iii) ICASA achieves its targets and address all outstanding matters; and (iv) the Committee receives a detailed briefing relating to the Performance Management System of ICASA Councillors in accordance to Section 6A of the ICASA Act No.
13 of 2000.

6.5 SABC The Committee recommends that the Minister should ensure that: (i) the SABC improves its performance targets; (ii) the SABC puts measures in place to improve the collection of TV licences; and (iii) the SABC ensures compliance and resolves all outstanding audit findings.
6.6 SAPO The Committee recommends that the Minister should ensure that: (i) SAPO meets its revenue targets; (ii) in order to stabilise the entity, SAPO improves on its overall performance, in particular its organisational and financial performance; (iii) SAPO implements a coordinated approach with other entities and government departments to address its challenges and support business recovery; (iv) SAPO concludes all partnership agreements in order to complement revenue targets; and (v) SAPO develops an e-commerce readiness strategy in order to remain relevant.
The Committee will continue to pay particular focus on SAPO, especially in respect of its revenue targets, adaptation to technology and a sustainability model.

6.7 FPB The Committee recommends that the Minister should ensure that: (i) the vacant positions are urgently filled at the FPB; and (ii) the FPB performs better in terms of achieving its targets.
17 41 6.8 BBI The Committee recommends that the Minister should ensure that: (i) BBI improves its financial stability; and (ii) BBI has processes in place to reduce vandalism and theft within the organisation.
6.9 Sentech The Committee recommends that the Minister should ensure that: (i) Sentech provides details on the programmes that the entity failed to execute; and (ii) Sentech appears before the Committee to provide an adequate and detailed presentation on reasons why COVID-19 is still cited as the cause for regression.

6.10 .ZADNA The Committee recommends that the Minister should ensure that: (i) .ZADNA addresses non-achievement of its targets; and (ii) .ZADNA does not to incur any further losses.
6.11 USAASA/USAF The Committee recommends that the Minister should ensure that: (i) interventions at USAF be made as it pertains to BDM; (ii) USAF achieves all its planned targets in the future.

Report to be considered.

18 42 5.


The Budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on Basic Education on the performance of the Department of Basic Education for the 2020/21 financial year, dated 7 December 2021 Annual Report on the Performance of the Department of Basic Education in Meeting its Objectives for 2020/21 The Portfolio Committee on Basic Education, having considered the performance of the Department of Basic Education and its entities, reports as follows: 1.
Introduction 1.1 Purpose of the BRRR In terms of Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No.

9 of 2009 the National Assembly, through its Committees, must annually compile the Budgetary Review and Recommendation Reports (BRRR) that assess the service delivery performance of departments given available resources.
Committees are also expected to provide an assessment of the effectiveness and efficiency of the Department’s use of available resources, and may include recommendations on the forward use of resources.

In this regard, the BRRR is a source document for the Committees on Appropriations when considering and making recommendations on the Medium Term.
1.2 The role and mandate of the Portfolio Committee The Portfolio Committee on Basic Education as an extension of the National Assembly is mandated by sections 55 and 92 of the Constitution of the Republic of South Africa (Act 108 of 1996) and the Rules of Parliament to oversee the activities and performance of the Department of Basic Education and its two statutory bodies, namely, the Council for Quality Assurance in General and Further Education and Training (Umalusi) and the South African Council for Educators (SACE).
In this context, the Portfolio Committee on Basic Education focuses its work within the five constitutional mandates of Parliament, which are to process and approve legislation, conduct oversight, ensure public participation, process international agreements and facilitate co-operative governance.
In addition to performing these constitutional mandates, the Committee engages in various activities and programmes focussing on the development and delivery 1 43 of quality public education to all South Africans.

The Committee also deals with matters referred to it by the Speaker or the National Assembly.
1.3 Core functions of the Department of Basic Education The Department of Basic Education (DBE) derives its mandate firstly from the Constitution of the Republic of South Africa (1996), which requires education to be transformed and democratised in accordance with the values of human dignity, equality, human rights and freedom, non-racism and non-sexism.

The Constitution guarantees access to basic education for all, including adult basic education.
Secondly, the National Education Policy Act, 1996 Act 27 of 1996 (NEPA), inscribes into law the policies for the national system of education, the legislative and monitoring responsibilities of the Minister of Education, as well as the formal relations between national and provincial authorities.

In terms of the NEPA, the DBE’s statutory role is to formulate national policy, norms and standards as well as to monitor and evaluate policy implementation and impact.
In line with its mandate, the Department has a vision of a South Africa in which all people will have access to lifelong learning, education and training opportunities, which will, in turn, contribute towards improving the quality of life and building a peaceful, prosperous and democratic South Africa.
In fulfilling its mandate over the next five years, the Department is guided by the 2019-2024 Medium Term Strategic Framework (MTSF) designed to reflect the actions outlined in the National Development Plan (NDP).
1.4 Processes followed by the Portfolio Committee in arriving at the report In compiling its BRRR, the Portfolio Committee on Basic Education assessed the performance of the Department of Basic Education with reference to the following: • The strategic priorities and measurable objectives as set out in the 2020/21 strategic plan.
• Expenditure trends drawn from the reports of the National Treasury; • The 2020 State of the Nation Address priorities; • The reports of the Auditor-General of South Africa and the reports on the 2020/21 Budget Vote; 2 44 • The financial statements and annual report briefings, in terms of Section 65 of the Public Finance Management Act No.

1 of 1999, which requires the Ministers to table the Annual Reports and financial statements for the Department and public entities before Parliament.
• Findings of the Portfolio Committee’s oversight visits, including quarterly briefings.

• External sources assessing the performance of the Department.

The briefings on the annual performance and financial statements of the Department and its statutory bodies took place on 9 November 2021 in Parliament.
The Portfolio Committee also met with the Auditor General on the audit outcomes of the Department, the Financial and Fiscal Commission (FFC) and the Audit Committee of the Department of Basic Education on 16 November 2021.

The two entities Umalusi and SACE briefings on their annual performance and financial statement briefings were conducted on 23 November 2021.

All the above meetings took place in a virtual meeting in Parliament.

2.
2.

Overview of the key Service Delivery Environment In respect of the Legislative Mandate, the National Education Policy Act (Act 27 of 1996) (NEPA) inscribes into law the policies for the national system of education, the legislative and monitoring responsibilities of the Minister of Education, as well as the formal relations between national and provincial authorities.
The statutory role of the Department was to: • Formulate policy, norms and standards; • Monitor and evaluate policy implementation and impact; and • Lead the provision of the rights to basic education.

The delivery environment requires that the Department focuses on technical leadership, oversight, and the setting and maintenance of norms and standards in the basic education concurrent function.

3.
3.

Overview of the key relevant policy focus areas 3.1 The National Development Plan (NDP), Vision 2030 There are factors that influence the plans and activities of the Department and such plans are covered in the government mandates namely the National Development Plan (NDP), 2019-2024 Medium Term Strategic Framework (MTSF), and the Action Plan to 2030: Towards the Realisation of Schooling 2030.
3 45 3.2 The Medium Term Strategic Framework 2019-2024 Outcomes Education The Department’s Strategic Plan Outcomes are linked to the 2019-2024 Medium Term Strategic Framework outcomes.
The MTSF 2019 – 2024 Education Priorities were as follows: • Outcome 1: Improved school-readiness of children; • Outcome 2: 10-year-old learners enrolled in publicly funded schools read for meaning; • Outcome 3: Youths better prepared for further studies and the world of work beyond Grade 9; • Outcome 4: Youths leaving the schooling system more prepared to contribute towards a prosperous and equitable South Africa; and • Outcome 5: School physical infrastructure and environment that inspires learners to learn and teachers to teach.
3.3 State-of-the-Nation-Address (SONA) February 2020 In the February 2020 State of the Nation Address 2020, the Honorable President highlighted policy objectives pertaining to Basic Education as follows amongst others: • The investments to be made in Early Childhood Development and early grade learning to yield great economic benefits in the next two decades and beyond.
• Introduction of the three-stream curriculum model, heralding a fundamental shift in focus towards more vocational and technical education.

• • Introduction of technical vocational specialisations schools piloting the occupational stream.
Plans for provision of issuing tablet computers to school students: • Every 10 year-old needed to be able to read with meaning – and early reading programmes • The Department would be introducing Coding and Robotics in Grades R to 3 in 200 schools, with a plan to implement fully by 2022.
3.4 Strategic Priorities of Basic Education for 2020/21 APP – 4 46 The detailed overview of the department Strategic plan 2020/21- 2024/25 sets the tone for key DBE priorities as outlined in the 2020/21 Annual Performance Plan (APP).

The APP sets outlines what the Department intends to do, in the financial year and during the MTEF period to implement the Strategic Plan.
These priorities were approved by the Council of Education Ministers to lay a solid foundation for quality education, in support of improved reading and learning outcomes: • Improving foundational skills of Numeracy and Literacy, especially reading which should be underpinned by a Reading Revolution.

• Immediate implementation of a curriculum with skills and competencies for a changing world in all public schools (Three Stream Model, Fourth Industrial Revolution, Entrepreneurship, Focus Schools, etc.)
• Deal decisively with quality and efficiency through the implementation of standardized assessments to reduce failure, repetition, and dropout rates and introduce multiple qualifications such as General Education Certificate before the Grade 12 exit qualification • Urgent implementation of two years of ECD before Grade 1, and the migration of the 0 - 4 year olds from Social Development to Basic Education.
• Complete an integrated Infrastructure Development Plan informed by infrastructure delivery and regular maintenance which is resourced.

• Work with Sport and Recreation, Arts and Culture, Health, and South African Police Services to teach and promote Social Cohesion, Health and School Safety.

3.5 Programme Performance The Annual Performance Plan summarises the priorities of the Department.

The activities of the Department have been structured into five programmes.
• Programme 1: Administration; • Programme 2: Curriculum Policy, Support and Monitoring; • Programme 3: Teachers, Education Human Resources and Institutional Development; • Programme 4: Planning, Information and Assessment; and • Programme 5: Educational Enrichment Services.

5 47 3.5.1 Programme 1: Administration – The purpose of Programme 1 was to manage and provide strategic and administrative support services to the Department.
The Department detailed 5 Performance Indicators as follows: • Percentage of valid invoices paid within 30 days upon receipt by the Department: The planned target was 100 percent Quarterly.

However, the Department’s actual achievements were as follows: o Quarter 1 – 96.30 percent (1 561 of 1 621); o Quarter 2 – 98.98 percent 2 408 of 2 434); o Quarter 3 – 99.76 percent (4 712 of 4 723); and o Quarter 4 – 99.47 percent (5 448 of 5 477).

There was a negative deviation of 0.88 percent.


The deviation was due to delays by project managers.

The Financial Service Directorate will continue to engage project managers to ensure they comply to submitting invoices within 30 days as required by Treasury regulations.

• Number of reports on misconduct cases resolved within 90 days: The planned target was for four (4) reports Annually.

The Department was able to achieve this target with no deviations.
• Number of capacity-building programmes offered to the DBE officials: The planned target was set at ten (10).

The Department was able to achieve a total of 19 with a positive deviation of nine (9).

The positive deviation was due to the fact that some of the training programmes were addressing training needs identified by officials that emanate from the Performance Management Development System (PMDS) as articulated in the Personal Development Plans.
• Annual Performance Plan (APP) approved by 31 March each financial year: The planned target was for the 2021/22 APP was approved by March 2021.

The Department was able to achieve this target with no deviations.

• Quarterly Reports submitted to National Treasury (NT) and the Department of Planning, Monitoring and Evaluation (DPME) 30 days after the end of each quarter: The planned target was for four (4) Quarterly Reports submitted to NT and DPME 30 days after the end of each quarter.
The Department was able to achieve this target with no deviations.
6 48 The Department reported on further progress made in the key focus areas in Programme 1 in respect of the following: • Research Co-ordination, Monitoring and Evaluation (RCME); • Government Information Technology Officer (GITO); • Quality Learning and Teaching Campaign (QLTC); • International Relations and Multilateral Affairs; • Partnerships; • Parliamentary and Business Processes; • Intergovernmental and Technical Support; • Secretariat Co-ordination and Secretarial Support; • Internal Audit; • Communication and Research; and • Media Liaison.
3.5.2 Programme 2: Curriculum Policy, Support and Monitoring – The purpose of Programme 2 was to develop Curriculum and Assessment policies, monitor and support their implementation.

The Department detailed 30 Performance Indicators as follows: • Number of Technical schools monitored for implementation of Curriculum and Assessment Policy Statements (CAPS): The planned target was set at 18 schools.

The Department was able to achieve this target with no deviations.
• Number of learners obtaining subject passes towards a National Senior Certificate (NSC), including upgraded NSC per year: The planned target was set at 60 000learners.

The Department’s actual achievement was 60 063 learners – a positive deviation of 63 learners.

The programme supported through four platforms i.e.

face-to-face centres, broadcast, online and provision of study materials.

The number of face-to-face classes from 90 to 133 centres throughout the country.
Working in partnership with different entities, the Department introduced the WOZA Matric intervention that broadcast dedicated educational programmes to support Matric learners.

The Woza Matric programmes were on SABC 1, DSTV Catch-up and DBETV Channel 122 on Open view broadcasted matric catch-up lessons in 11 high enrolment subjects to help learners revise.

The Department also 7 49 increased the distribution of its online study materials through the partnerships.
Furthermore, the Department also provided hard copy study materials to more learners.

• Number of Children/Learners with Profound Intellectual Disability (C/LPID) using the Learning Programme for C/LPID: The planned target was set at 3 527 Annually.

The Department was able to achieve only 3 423 with a negative deviation of 104.

COVID- 19 restrictions resulted in closing of special care centres and some learners remained at home even when special care centres were eventually allowed to operate by the DSD.
In addition, some residential high care special care centres did not allow teams to have direct contact with the learners fearing that the learners may get infected with COVID-19.

Therefore, outreach team members could not reach all the learners to provide the necessary services that enables these learners to use the Learning Programme for LPID.
Some of the corrective actions included the following: ü Some learners remain at home and some learners in residential high care centres cannot to be reached because centres management is protecting learners from getting infected with COVID-19 ü Remote support will be provided where and when necessary ü DBE to ensure that PEDs provide appropriate PPEs to team members so that they continue providing services ü DBE is working with DSD to assist Special Care Centres (SCCs) to comply with COVID-19 regulations so that SCCs are able to open and operate safely2.
ü The closure of special care centres resulted in teams not conducting cognitive assessments whose results enables learners to be on-boarded onto the Learning Programme for LPID ü The DBE will use the online tracking tool to monitor and support PEDs and ensure the necessary support, that enables learners to participate in learning and development, is provided.
• A National Report produced on monitoring on the implementation of the Policy on Screening, Identification, Assessment and Support (SIAS) as a mechanism for early identification and intervention: The planned target was set at having an approved National Report on monitoring of the implementation of the Policy on SIAS as a mechanism for early identification and intervention.

This target was achieved with no deviation.


8 50 • Amend legislation to regulate the new ECD landscape: The planned target was set at having a joint submission for determination on the ECD function shift was submitted to the Minister of Public Service and Administration.

The actual achievement reported by the Department indicated that a diagnostic report had been approved.

Draft determinations were not provided as this was dependent on the promulgation of the proclamations.
The proclamations were not finalised by the end of 2020/21.

The delay in signing the proclamations, which would enable the labour relations process to start, where DBE and DSD would negotiate the number of posts and staff to be transferred, delayed the finalisation of the submission for determination as it needed to include the resources in terms of posts, budget and assets that will be transferred.
The President signed the proclamation on 30 June 2021, allowing for the finalisation of the submission for determination.

The joint submission was submitted to the DPSA on 21 July 2021.

• Develop new funding models for ECD delivery: The planned target was set at a report on investigation into the ECD funding models.

This target was achieved with no deviation.


• Conduct and ECD census to inform the integration of ECD into the Educational Management Information System (EMIS): The planned target was set at preparation for ECD census to be concluded.

The Department reported the actual achievement as being a signed MOU between DBE and the Lego Foundation as well as South Africa ECD census 2021 request for tender provided.

The Department indicated that the preparations for the ECD census was not concluded.
This was due to delays in appointing a service provider and therefor the ECD census pilot was only conducted in June 2021.

The pilot was successfully conducted and a pilot report was submitted to the Department on 5 July 2021.

• Develop and operationalise an ECD Human Resource Development (HRD) Plan: The planned target was set at a report on ECD service delivery model and its workforce implications.

The Department achieved this target with no deviation.
• Number of Districts monitored on implementation of the National Curriculum Statement (NCS) for Grades 10 – 12: The planned target was set at eight (8).

The Department achieved this target with no deviation.

• Number of provinces monitored on extra support classes to increase the number of learners achieving Bachelor level passes: The planned target was set at three (3).

The Department achieved this target with no deviation.
9 51 • Number of schools monitored for implementing compulsory entrepreneurship education: The planned target was set at 90 (10 per province).

The Department actual achievement was only 86 – a negative deviation of four (4).

The negative deviation was as a result of the following: o The closure of schools due to COVID-19; o The delay in starting the monitoring of schools; and o The data collection process commenced on 24 September 2020 –10 March 2021.

Instead of May 2020.


The consequence being that in some provinces, the target of 10 was not achieved, and in some it surpassed the target of 10 as noted below: § Eastern Cape: 11; § Gauteng: 9; § Free State: 10; § KwaZulu-Natal: 9; § Limpopo: 11; § Mpumalanga: 10; § Northern Cape: 10; and § North West: 9 • An Annual Sector Report produced on the implementation of the General Education Certificate (GEC): The planned target was set at an approved Annual Sector Report on the implementation of the GEC.
Although the target was achieved, the Department indicated that the GEC Programme was not yet implemented.

The GEC pilot study did not take place in 2021 due to the disruptions in schooling and the low school attendance among Grade 9 learners.

The GEC pilot study has been scheduled for the 3rd and 4th school terms of 2021.

The pilot study report will be consolidated from 9 PED reports.
• An Annual Sector Report is produced on schools that are prepared to respectively implement and pilot the Technical Occupational Stream: The planned target was set at an approved Annual Sector Report on Schools of Skills that pilot the Technical Occupational Stream in 2020/21.

Although the target was achieved, the Department indicated that PED reports not provided to substantiate achievement by 31 May 2021.

Reasons for the deviation was due to delays in submission of reports by PEDs.
PEDs were chased and all reports were submitted to AGSA on 9 July 2021.

10 52 • Number of schools monitored on the implementation of the reading norms: The planned target was set at ten (10).

The Department achieved this target with no deviation.

• Number of schools monitored on the implementation of the Incremental Introduction to African Languages (IIAL): The planned target was set at ten (10).

The Department achieved this target with no deviation.
• Number of underperforming schools monitored on the implementation of the Early Grade Reading Assessment (EGRA): The planned target was set at ten (10).

The Department achieved this target with no deviation.

• Number of schools with Multi-grade classes monitored for implementing the Multi-grade toolkit: The planned target was set at ten (10).

The Department achieved this target with no deviation.
• An Annual Sector Report produced on the implementation of the National Reading Plan: The planned target was an approved Annual Sector Report on the implementation of the National Reading Plan.

The Department achieved this target with no deviation.

• An Annual Sector Report produced on the number of public schools monitored on the availability of readers: The planned target was an approved Annual Sector Report on the number of public schools monitored on the availability of readers.
The Department achieved this target with no deviation.

• Number of schools per province monitored for utilisation of Information and Communications Technology (ICT) resources: The planned target was set at 27 (three per province).

The Department achieved this target with no deviation.

• Percentage of public schools provided with Home Language workbooks for learners in Grades 1 – 6 per year after having placed an order: The planned target was set at 100 percent.
The Department achieved this target with no deviation.

• Percentage of public schools provided with Mathematics workbooks for learners in Grades 1 – 9 per year after having placed an order: The planned target was set at 100 percent.

The Department achieved this target with no deviation.

11 53 • Percentage of public schools provided with workbooks for learners in Grades R per year after having placed an order: The planned target was set at 100 percent.
The Department achieved this target with no deviation.

• An Annual Sector Report produced on the learners provided with Mathematics and English First Additional Language (EFAL) textbooks in Grade 3, 6 and 9: The planned target was an approved Annual Sector Report on the learners provided with Mathematics and English First Additional Language (EFAL) textbooks in Grades 3, 6 and 9.

The Department indicated that two (2) PED reports substantiating the Annual Sector Report was not provided.
The affected provinces submitted their reports in June and the Annual Sector Report was updated.

• The number of schools monitored for home language in which Literacy Grade 1 – 3 Lesson Plans have been developed for Terms 1 – 4: The planned target was set at ten (10).

The Department achieved this target with no deviation.

• Number of special schools with access to electronic devices: The planned target was set at 140.

The Department reported an achievement of 145 – a positive deviation of five schools.
This was due to the rollout of electronic devices and connectivity to Public Special Schools funded by the Mobile Networks Operators (MNO) not the Department.

Therefore, the rollout of the equipment is based on the availability of funding from the MNOs.

It is in this regard that the number of schools provided with ICT resources exceeded the DBE target of 140 schools for 2020/21.
• An Annual Sector Report is produced on the number of teachers trained on inclusion: The planned target was an approved Annual Sector Report on the number of teachers trained on inclusion.

The Department reported that three PED Reports not provided to substantiate achievements.

The Department has written to the PEDs requesting them to submit reports on specific dates for 2021/22.
• An Annual Sector Report is produced on the number of learners in public special schools: The planned target was an approved Annual Sector Report on the number of learners in public special schools.

The Department reported that PED Reports not provided to substantiate achievements.

The Department has written to the PEDs requesting them to submit reports on specific dates for 2021/22.

The PED reports were later submitted.


12 54 • An Annual Sector Report is produced on the percentage of public special schools serving as resource centres: The planned target was an approved Annual Sector Report on the percentage of public special schools serving as resource centres.

The Department reported that four PED Reports not provided to substantiate achievements.

The Department has written to the PEDs requesting them to submit reports on specific dates for 2021/22.
The four PED reports were submitted.

• An Annual Sector Report is produced on the establishment of Focus Schools Per Provincial Education Department (PED): The planned target was an approved Annual Sector Report on the establishment of Focus Schools per PED.

The Department achieved this target with no deviation.
The Department reported on further progress made in the key focus areas in Programme 2 in respect of the following: • Mathematics, Science and Technology (MST); • Enhancement of Programmes and Evaluation of School Performance; • Rural Education; • Reading; • Quality Provisioning of Early Childhood Development (ECD); • Curriculum, Implementation and Quality Improvement in Further Education and Training (FET) and General Education and Training (GET); • Inclusive Education; and • Second Chance Matric Programme (SCMP).
3.5.3 Programme 3: Teachers, Education Human Resources and Institutional Development – The purpose of Programme 3 was to promote quality teaching and institutional performance through the effective supply, development and utilisation of human resources.

The Department detailed 12 Performance Indicators as follows: • Percentage of School Governing Bodies (SGBs) that meet the minimum criteria in terms of effectiveness: The planned target was set at 90 percent of 1 000 sampled schools.
The Department achieved 96 percent – a positive deviation of six (6) percent.

This was due to the experience of governors after 3-years in office.

13 55 • Percentage of schools producing the minimum set of management documents at a required standard: The planned target was set at 100 percent of 1 000 sampled schools.

The Department achieved this target with no deviations.
• Number of Funza Lushaka bursaries awarded to students enrolled for Initial Teacher Education: The planned target was set at 12 500 Annually.

The Department achieved a total of 13 085 – a positive deviation of 585.

This was due to tuition fees being less than what was projected resulting in more bursaries being awarded.
• Number of quarterly monitoring reports tracking the percentage of Funza Lushaka graduates placed within six months, upon confirmation that the bursar has completed studies: The planned target was set at four (4) reports.

The Department achieved this target with no deviation.

• Number of quarterly monitoring reports indicating the number and percentage of schools where allocated teaching posts are all filled: The planned target was set at four (4) reports.
The Department achieved this target with no deviation.

• An Annual Sector Report is produced on the number of qualified teachers aged 30 and below entering the public service as teachers: The planned target was for an approved Annual Sector Report on the number of qualified teachers aged 30 and below entering the public service as teachers.

Although the target was achieved the Department indicated that PED reports were not provided to substantiate the achievement.
Reported figures for Limpopo and the Eastern Cape were different from the Annual Sector Report.

The figures for Limpopo and the Eastern Cape have since been corrected.

• A National Report is produced on monitoring the functionality of Provincial Teacher Development Institutes and District Teacher Development Centres: The planned target was for an approved National Report on monitoring the functionality of Provincial Teacher Development Institutes and District Teacher Development Centres.
The Department achieved the target with no deviation.
• A National Report is produced on monitoring the implementation of Teacher Development Programmes by PEDs with special focus on English First Additional Language (EFAL), Mathematics, Physical Science and Accounting: The planned target was for an approved National Report on monitoring the implementation of Teacher Development Programmes by PEDs with special focus on English First Additional 14 56 Language (EFAL), Mathematics, Physical Science and Accounting.
The Department achieved the target with no deviation.

• Number of PEDs that had their post provisioning processes assessed for compliance with the post provisioning norms and standards: The planned target was set at nine (9).

The Department achieved this target with no deviation.
• An Annual Sector Report is produced on the number of Grade R practitioners with at least a National Qualification Framework (NQF) level 6 and above qualification: The planned target was for an approved Annual Sector Report on the number of Grade R practitioners with at least a National Qualification Framework (NQF) level 6 and above qualification.

The Department achieved the target with no deviation.
• Number of PEDs monitored on the Integrated Quality Management System (IQMS): The planned target was set at nine (9).

The Department achieved this target with no deviation.

• Number of PEDs monitored on the implementation of the Education Management Service: Performance Management and Development System (EMS: PMDS): The planned target was set at nine (9).

The Department achieved this target with no deviation.
The Department reported on further progress made in the key focus areas in Programme 3 in respect of the following: • Educator Performance Management and Development and Whole School Evaluation (WSE); • Education Human Resources Planning, Provisioning and Monitoring; • Placement of Funza Lushaka Graduates in 2020; • Education Labour Relations and Conditions of Service; • Education Management and Governance Development (EMGD); • Continuing Professional Teacher Development (CPTD); • Curriculum Research; and • Teacher Development Implementation (TDI).
3.5.4 Programme 4: Planning, Information and Assessment – The purpose of Programme 4 was to promote quality and effective service delivery in the basic education system 15 57 through planning, implementation and assessment.

The Department detailed 18 Performance Indicators as follows: • Number of new schools built and completed through ASIDI: The planned target was set at 24 Annually.

The Department was able to achieve a total of 32 – a positive deviation of eight (8).
COVID-19 proved to have had a positive impact on the ASIDI programme.

After the closure of construction sites for the hard lockdown, contractors came back and put additional resources to catch up on the construction progress so that they can make up for the lost revenue.

The introduction of MS Teams also introduced a platform where frequent meetings were organised.
The Director-General instituted weekly meetings with the Heads of Implementing Agents so as to track on progress of projects under construction.

For the last quarter of the financial year, the DBE Infrastructure Unit increased their site monitoring visits of projects under construction and this put pressure on the contractors and the implementing agents to finalise their construction.
The 5 Built Environment Experts appointed in the DBE Infrastructure Unit in 2019 also proved to be a valuable factor in the over-achievement of the APP target.

• Number of schools provided with sanitation facilities through ASIDI: The planned target was set at 600 Annually.

The Department was able to achieve only 298 – a negative deviation of 302.
More than 300 additional sanitation projects could not be completed due to the impact of the COVID-19 lockdown, disruption by Business Forums and poor- performing service providers.

An increased focus on Alternative Building Technology resulted in a legal challenge from role players in the industry, which caused a further delay in implementation.
Corrective actions included the following: o All sanitation projects have been allocated to Implementing Agents o Increased focus on Alternative Building Technology to speed up delivery o Simplified designs and specifications o Limited the number of schools allocated per Contractor o Intensified the monitoring of Implementing Agent performance on all levels: § Weekly visits to construction sites by the Programme Support Unit § Regular visits to construction sites by the DG § Weekly meetings with operational staff of Implementing Agents § Weekly meetings with Executive Management of Implementing Agents § Weekly progress reporting to the Office of the Minister 16 58 • Number of schools provided with water facilities through ASIDI: The planned target was set at 100 Annually.
The Department was able to achieve a total of 101 – a positive deviation of one (1).

The deviation of 1 (one) was due to pressure exerted on the IA’s to ensure that the targets are achieved and they complete as many of the projects as possible.

• Number of schools served with emergency water supply: The planned target was set at 3 000 Annually.

The Department was able to achieve a total of 3 216 – a positive deviation of 216.
The deviation of 216 (3216 –3000) was due to the additional need that was posed by provinces to Rand Water as a result of Covid-19 requirements.

• Number of schools served with emergency sanitation: The planned target was set at 1 300 Annually.

The Department was able to achieve a total of 1 303 – a positive deviation of three (3).

The deviation of 3 was due to the additional need that was posed by provinces as a result of Covid-19 requirements during the implementation of the programme.
• Number of General Education and Training (GET) test items developed in Language and Mathematics for Grades 3, 6 and 9: The planned target was set at 500.

The Department achieved the target with no deviation.

• Number of NSC reports produced: The planned target was set at four (4).

The Department achieved the target with no deviation.

• Number of question papers set for June and November examinations: The planned target was set at 292.
The Department was able to achieve only 145 – a negative deviation of 147.

The June 2020 SC/NSC examination was merged with the November 2020 NSC examinations.

A total of 145 question papers for the June 2020 examination were used for the merged examination in November 2020.

Given the merged, the targeted 147 question papers for November 2020 were not set.
• Percentage of public schools using the South African School Administration and Management System (SA-SAMS) for reporting: The planned target was set at 98 percent.

The Department was able to achieve 98.6 percent – a positive deviation of 0.6 percent.

The positive deviation was due to Advocacy and Provincial circulars supporting collection of data via SA-SAMS.
17 59 • A National Report is produced on the number of provinces monitored for implementation of Learner Unit Record Information and Tracking System (LURITS): The planned target was for an approved National Report on the number of provinces monitored for implementation of LURITS.

The Department achieved the target with no deviation.
• A National Report is produced on learning outcomes linked to the National Assessment Framework: The planned target was for an approved National Report on learning outcomes linked to the National Assessment Framework.

The Department achieved the target with no deviation.

• A National Report is produced on developing and operationalising a school readiness assessment system: The planned target was for an approved National Report on developing and operationalising a school readiness assessment system.
The Department achieved the target with no deviation.

• Number of officials from districts that achieved below the national benchmark in the NSC participating in a mentoring: The planned target was set at 33.

The Department was able to achieve a total of 37 – a positive deviation of four (4).

Mentees were supported on team building, leadership and analysis of results to enable them to make evidence-based decisions.
• Percentage of school principals rating the support services of districts as being satisfactory: The planned target was set at 75 percent.

The Department was able to achieve only 57.2 percent – a negative deviation of 17.8 percent.

The deviation was due to duplication of survey instrument; all survey questions not completed; data collected with 3 different google links and electronic survey instruments and hard copy survey instruments.
To address this challenge, SISCOs and officials completed forms during the School Readiness visits February 2021.

Not all schools were in the same geographical area as the identified school readiness schools.

To further address the low response rate, the google form, link and sample were sent to Circuit Managers.

• Percentage of District Directors that have undergone competency assessment prior to their appointment: The planned target was set at 95 percent.
The Department was able to 18 60 achieve 100 percent – a positive deviation of five (5) percent.

Administration of competency assessment for District Directors (SMS members) was now mandatory.

• Percentage of underperforming schools monitored at least twice a year by district officials for support purposes: The planned target was set at 75 percent.

The Department was able to achieve only 13.8 percent – a negative deviation of 61.2 percent.
Schools were visited, however some were visited during the first term of 2020 which falls outside the 2020/21 Financial Year.

Due to school closure as a result of COVID-19, primary schools were not visited.

Provinces that were hit hard by the pandemic, e.g.

EC, issued Instruction Notes that prohibited visits to schools so as to contain the virus.

The Technical Indicator Description (TID) will be revised to specify that visits will be done as per Academic year and not Financial Year.
Monitoring Plans will be discussed with district officials.

• Number of District Director forums held: The planned target was set at three (3).

The Department achieved the target with no deviation.

• Number of districts in which teacher development has been conducted as per district improvement plan: The planned target was set at 55.

The Department was able to achieve 61 – a positive deviation of six (6).
District Improvement plans were not signed by the District Directors and 14 did not indicate teacher development.
Most districts value teacher development support The Department reported on further progress made in the key focus areas in Programme 4 in respect of the following: • Public Examination; • National Assessment; • Donor Grant Management; • Educational Management Information Systems (EMIS); • District-Level Planning and Implementation Support; • School and District Incident Management and Support; and • National Education Evaluation and Development Unit (NEEDU).
3.5.5 Programme 5: Educational Enrichment Services – The purpose of Programme 4 was to develop policies and programmes to improve the quality of learning in schools.

promote quality and effective service delivery in the basic education system through 19 61 planning, implementation and assessment.

The Department detailed four (4) Performance Indicators as follows: • Number of schools monitored for the provision of nutritious meals: The planned target was set at 115 Quarterly.
The Department was able to achieve a total of 117 - a positive deviation of two (2) The target has been exceeded because monitoring was intensified in 2020 following the Gauteng North High Court judgement against the Minister and eight MECs "to feed qualifying learners whether attending school or not" during the COVID-19 lockdown.

• Number of PEDs with approved annual business plans for the HIV/AIDS Life Skills Education Programme: The planned target was set at nine (9) Annually.
The Department was able to achieve the target with no deviation.

• Number of districts monitored and supported in the implementation of the National School Safety Framework (NSSF), social cohesion, sport and enrichment programmes: The planned target was set at 43.

The Department was able to achieve the target with no deviation.

• Number of learners, educators, parents, SGBs and other educations stakeholders reached through social cohesion programmes: The planned target was set at 7 500.
The Department was able to achieve only 3 745 – a negative deviation of 3 755.

The matter of the deviation was as a result of TIDs not meeting the audit standards, which meant that the Department discards some of the data.

The Department has now strengthened the TIDs for 2021/22 in anticipation of this.
The Department reported on further progress made in the key focus areas in Programme 5 in respect of the following: • School Nutrition; • Health Promotion; • Safety in Schools; • School and Enrichment in Education; and • Social Cohesion and Gender Equity.
3.6 Overview and Assessment of Financial Performance 20 62 3.6.1 Allocation against Actual Final Expenditure Per Program for 2020/21 Financial Year Programmes Budget R’000 Expenditure R’000 Variances R’000 % Spent Administration Curriculum Policy, Support and Monitoring Teachers, Education Human Resources Development and Institutional Development Planning, Information and Assessment Educational Enrichment Services Total 23 394 972 22 900 625 494 347 7 922 067 7 902 118 19 949 99.7% 97.9% The budget allocation of the Department of Basic Education in 2020/21 was R23,39 billion which represents a decrease of R1,07 billion or 4.4% from the 2019/20.
The majority of the budget (83%, amounting to 19,4 billion) consisted of transfers and subsidies mainly to provinces and municipalities.

This means that the department had an available budget of R3,9 billion for compensation of employees, earmarked funds, office accommodation, departmental operations and other projects.

The actual expenditure in 2020/21 was R22,9 billion or 97,9% of the allocated budget compared to 97.5 % in 2019/20.
The unspent balance of R 494,35million or 2,1% at the end of 2021 was less than 2019/20 when R600,13 million was unspent.

Main contributors of the underspending in 2020/21 was program 2 that had spent 94,4 % or R102, 7 million and program 4, that had spent 97,1 % or R333,9million.

Program one spent 96,4% and program three and program 5 spent 98,6% and 99,7% respectively.
From the perspective of analysis, there is notably under expenditure in all 5 programs of DBE, which calls for room for improvement moving forward.
3.6.1.1 Reasons for Deviation in the above programs • Programme 1: Administration: The reasons for underspending was due to delays in filling vacant positions due to the moratorium that was placed on the filling of posts whilst the 21 63 organisational structure was being finalised, as well as less payments for the audit fees due to a lesser number of auditors sent to the Department due to COVID19 restrictions.
• Programme 2: Curriculum Policy, Support and Monitoring: Due to COVID-19 restrictions, physical monitoring of provinces could not take place as planned on a number of internal projects therefore this resulted in underspending.

The Department withheld the last transfer payment for Learners with Profound Disability Grant to KwaZulu-Natal province due to noncompliance regarding reporting on the expenditure and progress.
• Programme 3: Teachers, Education Human Resources and Institutional Development: Underspending results from UNESCO foreign transfer due to lower exchange rate on the date of transaction.

• Programme 4: Planning, Information and Assessment: Underspending was due to School Infrastructure Backlog as construction had stalled since the built industry was closed during hard lockdown Alert Levels 5 and 4 of COVID-19.
• Programme 5: Educational Enrichment Services: Under expenditure was due to compensation of employees as well as internal projects such as events like SASCE that could not take place as gatherings were not allowed for the events to continue.

The interprovincial monitoring in support of provinces could not take place as well due to the hard lockdown.
3.6.2 Final Economic Classification Expenditure 2021 ECONOMIC CLASSIFICATION Compensation of Employees Goods and Services Interest and rent on land Transfers and Subsidies Payment for Capital Assets Payment of Financial Assets BUDGET R’000 547 905 1 723 321 42 663 EXPENDITURE R’000 497 659 1 825 402 42 661 VARIANCES R’000 50 246 (102 081) 2 19 441 623 19 417 579 24 044 1 638 382 1 116 500 521 882 1 078 824 254 Total 23 394 972 22 900 625 494 347 3.6.2.1 Reasons for Deviations per Economic Classification 2020/ 2021 % SPENT 90.8% 105.9% 100.0% 99.9% 68.1% 76.4% 97.9% 22 64 • Compensation of Employees: the underspending is due to moratorium that was put in place due to structure change.
• Goods and Services: The overspending is on School Infrastructure on operational budget due to rental and hiring on mobile toilets for schools as a results of COVID-19.

• Transfers and Subsidies: due to non-compliance by the Learners with Profound Disability Grant in the KwaZulu-Natal province, the final transfer payment was withheld by the Department.
• Payments for Capital Assets: underspending was due to School Infrastructure Backlog as well as SAFE projects, as construction companies were not into operation due to COVID-19 restrictions.

• Payments for Financial Assets: the expenditure was due to theft and losses on write offs, no shows and accidents where officials were not found liable.
3.6.3 Preliminary Expenditure on Conditional Grants for March 2021 ECONOMIC CLASSIFICATION Learners with Profound Disability Grant Maths Science and Technology Grant Education Infrastructure Grant National School Nutrition Programme BUDGET R’000 242 864 EXPENDITURE R’000 225 761 VARIANCES R’000 17 103 332 862 332 862 9 414 967 9 414 967 7 665 887 7 665 887 - - - - HIV and Allocation Grants 187 095 187 095 Total 17 843 675 17 826 572 17 103 % SPENT 93.0% 100.0% 100.0% 100.0% 100.0% 99.9% From the table above, the conditional grant expenditure approximates to almost 100% with the exception of Learners with Profound Disability Grant, at 93, % expenditure.
• Reasons for Conditional Grants Expenditure for March 2021 - Learners with Profound Disability Grant: Underspending was due to withheld funds for KZNPED due to non- compliance on reporting.

Roll-over request will be submitted to National Treasury once the Province submits the supporting documentation.

23 65 4.
23 65 4.

Auditor-General Report 4.1 AGSA Presentation on Audit Outcomes for the Department of Basic Education and Entities 4.1.1 Introductory Remarks In the opening remarks, the vision and mission of AGSA as well as its mandate and that of the Portfolio Committees was defined.
As per Constitutional mandate, the role of AGSA is to reflect on the audit work performed to assist the portfolio committee in its oversight role of assessing the performance of entities, taking into consideration the committee’s objective to produce a Budgetary review and recommendations report (BRRR).

The Portfolio Committee was briefed on the various AGSA audit outcomes and what was examined.
AGSA also touched on the Basic Education auditees in respect of the Department of Basic Education (DBE), the Council for Quality Assurance in General and Further Education and Training (Umalusi) as well as the South African Council for Educators (SACE).

In respect of the audit outcomes of the education portfolio over two years, AGSA indicated that following: • The overall outcomes in the portfolio have improved when compared to the prior year.
The DBE outcome improved from qualified to unqualified with findings, the department has addressed the previously reported findings on irregular expenditure and commitments.

• AGSA commended Umalusi, as the entity has maintained its achievement of an unqualified with no findings audit outcome.

• SACE obtained an unqualified with findings on compliance and predetermined objectives opinion, similar to the prior year.
4.1.2 Report on the audit of the financial statements: The audit outcome for the Department of Basic Education was an Unqualified Audit Opinion.

4.1.2.1 Matters of Emphasis • Restatement of corresponding figures (note 36): The corresponding figures for 31 March 2020 were restated as a result of an error in the financial statements of the Department for the year ended, 31 March 2021.
• Irregular Expenditure: As disclosed in note 26.1 to the financial statements, the Department incurred Irregular expenditure of R3.209 billion.

R2.797 billion of this 24 66 amount relates to irregular expenditure identified in the current year relating to prior years.
4.1.2.2 Report on the audit of the annual performance report • Introduction and scope: The AGSA has evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for Programme2 -Curriculum Policy, Support and Monitoring in the Annual Report for the year ended 31 March 2021.
4.1.3 Quality of Submitted Financial Statements – Umalusi submitted financial statements that did not contain material misstatements and AGSA commended them.

The Department and SACE submitted financial statements that contained material misstatements, mainly affecting disclosure notes.
DBE misstatements were mainly on the immovable tangible capital assets, capital commitments, accruals and payables not yet recognized and irregular expenditure and related parties while SACE misstatements were identified for revenue and related parties.

The misstatements in the financial statements were due to inadequate review by the management.

Accounting officer/authority should implement stringent controls to enhance the review processes on the financial statements.
4.1.4 Quality of Performance Reporting - In the current year, there has been an improvement in the quality of performance information submitted for auditing in the portfolio.

The Department had no findings on the usefulness and reliability of reported performance information.

This was due to implementation of the action plans to address the prior year performance information control deficiencies.

SACE has regressed in terms of outcomes for performance reporting.
There were material findings identified for a number of indicators due to a lack of accurate and complete records.

Management did not ensure that sufficient controls were in place to prepare credible performance reports that are evidenced and supported by complete and accurate information.

Umalusi has maintained the quality of performance reporting from the prior year which had no findings reported on the usefulness and reliability of reported performance information.
In respect of the credible financial reporting, AGSA gave a detailed overview of the root causes analysis as well as recommendations.

The Portfolio Committee was further briefed on the movement in qualification areas for 2018/19 as well as 2019/20 25 67 4.1.5 Credible Performance Reporting – The performance indicators and targets of the Department DBE and Umalusi were found to be useful and the actual reported achievements in the annual performance report were reliably reported.
This provided a proper basis to facilitate oversight and decision making for both the entities and government.

These entities were encouraged to continue with ensuring that they sustain the culture of daily recording and the monitoring controls over performance reporting.

SACE needed to strengthen the processes relating to the preparation of the annual performance report by ensuring that reported targets were supported by credible underlying schedules and evidence.
The entity also needed to strengthen monthly and quarterly controls to facilitate regular performance reporting whilst ensuring in-depth reviews.

4.1.6 Compliance with Legislation – In the current year there had been a stagnation in the audit of compliance with legislation.

Two out of three auditees had material findings on compliance.
In most instances, the noncompliance identified was similar to what was reported in the prior year and the nature was as follows: • Annual financial statements: material misstatements in submitted AFS (DBE and SACE); • Procurement and contract management: o Declarations of interest not submitted; and o Some quotations awarded without tax clearance certificate (DBE) • Expenditure management: irregular, fruitless and wasteful expenditure not prevented (DBE) • Consequence management: Lack of sufficient appropriate evidence that disciplinary steps were taken against officials who had incurred irregular expenditure.
(DBE) These auditees did not implement effective action plans to address significant internal control deficiencies relating compliance with legislation.

4.1.7 Irregular Expenditure over two years – The irregular expenditure incurred by entities in the portfolio were as follows: • R 3 204 million (non-compliance in 2020/21); and • R 818 million (non-compliance on 2019/20).
26 68 The nature of the irregular expenditure was that the majority of irregular expenditure disclosed in the AFS, related to the ASIDI programme, which was as a results of non-compliances with SCM processes by the implementing agents for the contracts dating back to the 2012/13 financial period.

Out of the R3,2 billion, an amount of R2,7 billion related to prior years and R412 million related to the current year expenditure.
4.1.8 Fruitless and Wasteful Expenditure over two years - The fruitless and wasteful expenditure incurred by entities in the portfolio were as follows: • R 17 million (non-compliance in 2020/21); and • R 84 million (non-compliance on 2019/20).

The total fruitless and wasteful expenditure had decreased from the prior year.
The R17 million (100%) of the fruitless and wasteful expenditure related to the Department - this was mainly due to an advance payment made to an implementing agent for services not rendered.

Out of the R17 million, an amount of R16 million related to prior years, and R1 million related to the current year expenditure.

AGSA also touched on issues related to consequence management as well as supply chain management – with findings and possible recommendations.
4.1.9 Material Irregularities (MIs) • Learner material distributed to learners who did not qualify to be on the Kha Ri Gude programme as controls to verify learners registered for the program were ineffective: Fruitless and wasteful expenditure was incurred relating to learner materials that were distributed to volunteer educators who were not eligible to benefit as such from the Kha Ri Gude programme, as controls to verify learners registered for the programme were ineffective.
This was because the department did not maintain effective, efficient and transparent systems of financial and risk management and internal control, as required by section 38(1)(a)(i) of the PFMA.

The Department has not implemented a programme similar to Kha Ri Gude after the phasing out of this programme during 2016-17. o Status by the Department - An investigation into the matter by the Departmental investigation committee was concluded during the 2016-17 financial year.
The accounting officer instituted disciplinary processes against the officials responsible in October 2016 and recovered part of the losses during the 2017-18 financial year.

The matter was subsequently referred to the South African Police Service (SAPS) 27 69 in the 2017-18 to investigate and recover the remaining financial losses.

The SAPS reported to the Department that the investigation was continuing.
• Interest paid on payments not made within 30 days: The Department did not settle an invoices of a professional service provider within 30 days, as required by treasury regulation 8.2.3.

The service provider was appointed to provide professional services for the construction of 29 medium-to-large schools in the Eastern Cape as part of the accelerated schools Infrastructure delivery initiative (ASIDI) programme.

o Status by the Department - The Department was conducting an investigation into the matter.
The investigation was currently in progress and scheduled for completion in March 2022.

• Prepayment for goods not delivered: The Department paid a service provider an amount of R78 million for purchases of bulk materials on 31 March 2017 for which the Department did not receive equivalent value of materials (calculated as the difference between quantities paid by the Department to service provider and the quantities of the goods that were actually received).
The payment of R78 million by the Department was recognised as a prepayment made for goods which was not required by the contractual arrangement, this is in contravention of treasury regulation 15.10.1.2(c) o Status by the Department – The Department had since conducted a physical verification and noted that the actual delivered numbers of material differ from the invoiced materials.
The Department has so far recovered R 16 million of unsubstantiated pre-payment and committed to finalise the recovery of the full extent of the financial loss by the 31 March 2022.

Disciplinary steps will be taken against the person who caused the loss.

• Payments not made within 30 days resulting in the withdrawal of the contractor from site and the cancellation of the contractual arrangement: The Department failed to pay interim payment certificates within 30 days in contravention of Treasury 8.2.3.
The Department eventually made payment on 28 August 2018 and 25 September 2018.

However, this was after the contractor resorted to cancel the contract in terms of which cancellation was confirmed by order of the Court on 17 March 2019 o Status by the Department – The Department was conducting an investigation into the matter and pending the outcome of the investigation steps would be taken to recover the financial loss and steps taken against person who caused the financial loss.
28 70 4.1.10 Education Sector Outcomes • Annual Financial Statements (AFS) - The quality of financial statements submitted for auditing for most of the auditees in the sector was still poor.

There was still high reliance on the audit process to identify errors.

The main control deficiency that was dominant in the sector related to accounting of infrastructure assets due to inadequate project management as well as inadequate coordination of implementing agents.
The preventive and detective controls were not institutionalised.

For the Department the management of these implementing agents was currently driven by senior leadership i.e.

to ensure accountability and delivery on commitments.

This resulted in improvement of audit outcomes for the department.

It is vital for these newly established best practices to be shared within the sector.
• Pre-determined Objectives – Inadequate systems to collect, collate, verify and store performance information resulting in incomplete, in-accurate and insufficient supporting evidence to validate reported achievements.

Ineffective in-year monitoring and evaluation activities to validate reported performance achievements throughout the reporting period resulting in performance achievement reported not being reliable.
• Compliance - There was also inadequate consequence management across the sector as evidenced by the increased irregular expenditure that has not been dealt with.

There was a need to strengthen and improve on the monitoring of controls relating to compliance with legislation.

All instances of irregular expenditure should be investigated and transgressors acted upon decisively.

A summary of the three (3) root causes were as follows: 1.
Lack of adequate monitoring of procurement processes, specifically those performed by implementing agents; 2.

Management did not implement adequate and effective internal controls over the preparation and review of financial statements; and 3.

Preventative controls over the key business areas were not fully implemented, such as procurement and expenditure management.
4.1.11 AGSA Recommendations to Entities: 29 71 • AGSA was encouraged by the improved audit outcome of the Department who had since improved on the monitoring and managing infrastructure projects performed by implementing agents.

The good practice of managing the implementing agents needed to be shared across the sector.
• The interventions and monitoring by the senior leadership were noticeable and critical to ensure overall movement in audit outcomes with the support of governance and oversight structures.

• There was a need for the Department to: o Strengthen the processes relating to the preparation of the financial statements including supporting schedules as well as underlying evidence to facilitate credible reporting.
o Strengthen daily and monthly controls as well regular reconciliations whilst ensuring in-depth reviews.

The systems and processes of collecting financial information from implementing agents remains an area that needs close supervision.

o Improve on the monitoring and controls relating to compliance with legislation.

Noncompliance instances were still evident in a number of aspects.
Some of these instances of non-compliance resulted in financial losses and likely financial losses for the department as evidenced by material irregularities.

o Proactively address irregular and fruitless and wasteful expenditure and instances of such possible expenditure for ensuring accountability.

o Overall the Department would benefit greatly from the implementation of preventative controls throughout the value chain.
4.1.12 AGSA Recommendations to the Portfolio Committee: During the engagement, with the Portfolio Committee, AGSA recommended the following to improve the audit outcomes: • Monitoring and regular follow-up must be done with the executive authority and the accounting officer/authority on following: o Progress on audit action plans put in place by the Department to further strengthen the controls around the management of the implementing agents.
o Follow up with the Department to ensure that remedial actions as well as consequence management processes are implemented.

30 72 o Follow up on the commitments made by the accounting officer on addressing the material irregularities reported.

o Implementation of the preventative and detective controls.

• The culture of consequence management should be enforced in the portfolio.
4.2 Portfolio Committee Observations • Members noted with concern the continued disruptions with construction activity, especially in respect of sanitation – and queried the mitigations in this regard, as well as the demands of business forums who continue to disrupt construction progress.

• Members alluded to schools in Bushbuckridge that had been damaged/destroyed by storm and flooding.
Members noted that a year later, these schools had not been repaired or rebuilt; and queried whether the Department had not budgeted for such repairs.

• Members raised concern with the matrix used by the Department to set certain targets and queried what informed these targets set by the Department.

It was important to be able to verify the impact of these targets at ground-level.

• Members sought more data and reporting on the number of teachers aged 30 and below that had been absorbed in the system.
• There was an issue raised around the percentage of principals not satisfied with the support received from the Circuit and District in their area.

Members sought clarity on the location of these circuits and districts as well as reasons for the dissatisfaction of principals.

• In respect of Irregular Expenditure, Members queried whether the Department was able to implement consequence management against errand Implementing Agents as well as errand departmental officials.
• Members sought further detail on receiving and accessing the latest updated ASIDI reports from the Department.

• Members noted challenges with support to learners with disabilities and queried the type of support and assistance being given to such learners.

• In respect of the shortage of teachers, Members queried how the Department was addressing this challenge in collaboration with the Department of Higher Education and Training.
• Members also requested that the Department investigated possible misuse of Education Assistants (EAs) at certain school as this was a contravention of the purpose for the employ of EAs.

A Members singled out a specific school which she requested the Department to visit and interview educators on the matter.
31 73 • A Member also raised challenges being faced at specific schools in the Free State where graduate teachers were struggling to find placement due to perceived policy guidelines from the provincial department.

Members further queried the number of vacancies in the Free State and queries as to why these posts, if funded, could not be filled.

• Members noted with concern the poor monitoring of underperforming school by the Department.
It was important that the Department had focussed and priorities plans in place to ensure underperforming schools received as much oversight and monitoring visits as possible.

• Although funds were being earmarked for certain conditional grants, Members queried whether any funds were specifically allocated to address issues of learner/teenage pregnancies.
• Members noted that the Department was silent on the delays with the BELA Bill and Members queried the current status of the Bill and the timelines for its tabling and processing.

Members also queried the support from all relevant stakeholders.

The Department needed to ensure strengthening of its stakeholder engagement processes.
• Members also queried whether the Department was considering any further surveys/research on issues pertaining to bullying, drop-outs, learner pregnancy and online education – could these be prioritised for possible research.

• Members noted a donation from the Chinese Government of R 1 million for a water tank initiative.

Members queried the amount of water tanks that have been installed – and were these water tanks functional.
• Members were encouraged by the overachievement of the Department in building 32 school as opposed to the target of 24 schools.

Members hoped that this could be replicated in future.

• With underspending on vacancies, Members queried why post were not filled - as well as posts within the Department that were vacant.
• Members noted the withholding of transfer payments to KwaZulu-Natal due to non- compliance in respect of Learners with Profound Disability Grant – Members sought further clarity on reasons for such non-compliance.

• It was also noted that the Auditor-General had recommended that the Department put in place a team of professional accountants to prepare financial statements.

Members queried whether the Department was heeding the call from the AG.
• With many teachers lost to the system due to COVID-19 there was a shortage of teachers being experienced.

Members queried how the Department was addressing this matter to recruit and return teachers back into the system.

32 74 4.3 Responses from the Department of Basic Education 4.3.1 Infrastructure – The Department was proud of the overachievement in respect of schools built.

The Department alluded to the negative impact and constraints with the lockdown on small and medium contractors.
It was the larger, more established contractors who were able to weather the storm and breech financial challenges.

It was mentioned that the building industry had almost grind to a halt with severe shortages of building materials.

Most did not plan for the COVID-19 emergency water and sanitation plans that were in put in place.

The Department agreed that issues with business forums needed to be addressed urgently as there had been many threats on lives and intimidation.
There was a move to ensure a more transparent tender process going forward.

4.3.2 Irregular Expenditure - The matters pertaining to the Irregular Expenditure was further explained as a disclosure over a 10-year period.

The Department was looking to ensure focussed efforts on eradication of non-disclosure regarding procurement policies.

The Department was exploring new initiatives to expand into the SAFE Programme.

The Department was focussed on maintaining its Unqualified Audit Opinion.
In respect of the water tanks donation from the Chinese Government, the Department indicated that this initiative was located in the Northern Cape – the Department would submit a full report on the status of the installation of these water tanks.

The Department would follow-up and investigate issues raised in respect of storm-damaged schools in Bushbuckridge as well as the school reportedly built on a wetland area - and submit a detailed report to the Portfolio Committee.
The Department also regularly reported on the ASIDI Programme to various forums and agreed to submit an updated report on the ASIDI Programme to the Portfolio Committee 4.3.3 Consequence Management - The Department continued to monitor errant Implementing Agents who fall foul of policies and regulations.

The Department had received qualified audit opinion in the past due to failure to hold Implementing Agents accountable.
The Department employed the necessary professional staff who were able to prepare financial statements.

The Department had met with the Auditor-General who had commended them for moving to an Unqualified Audit Opinion during a difficult financial year.

The Department was unsure whether it was necessary for new team to be appointed for 33 75 preparing financial statements.

The Department continued to implement consequence management against errand departmental officials with disciplinary action.
Where Implementing Agents were errant, the Department ensured that no further projects were allocated to them.

4.3.4 Human Resources – The Department noted the issues of EAs being abused at certain schools as raised by Members.

The matter will surely be investigated.

The Department would further submit a written response in respect of the data on teachers younger than 30-years currently in the system.
The Department collaborated closely with the Department of Higher Education and Training in respect of any studies on teacher graduates.

Approximately 20 000 teacher graduates completed their studies on an annual basis.

With COVID-19, there were two adjusted budgets with cuts to Compensation of Employees which affected posts at provincial level.

The Department did not see the full impact of these cuts due to COVID-19 and staggered schooling.
The EAs were not employed to replace educators but to assist educators.

The Department was of the view that there be a session with the Committee to engage in more detail on issues of EA’s vacancies and filling of posts.

Regarding other vacant posts within the Department, the Department was in the process of filling them with posts having been advertised and some at interview stage while other already filled.
There were some posts that needed to be re- advertised but the Department was working to fill all vacant positions.

4.3.5 Withheld Transfer Payment to KwaZulu-Natal – The Department explained the rationale for the withholding of transfer payments to KwaZulu-Natal due to non- compliance.

The Department indicated that KwaZulu-Natal had applied for the roll-over of funds and subsequently there had been an improvement with KZN compliance.
The Department mentioned that funds were transferred on a quarterly basis and these funds were monitored for utilisation for its intended purpose.

Where there was non-compliance by provinces, the Department was empowered to withhold funds from the province concerned.

The Department would submit a written report detailing reasons for the withholding of the transfer payment and what the non-compliance entailed.
4.3.6 Dissatisfied Principals – The Department was able to gather the information provided by principals through its general surveys conducted.

The data could be shared with the Portfolio Committee to identify specific districts/circuits as well as reasons for principal dissatisfaction.

Currently, most of the dissatisfaction was based on the extent of support 34 76 provided to schools by circuit and district officials.

Officials were also not visiting schools on a regular basis or not at all.
It was important that the Department looked at alignment of boundaries to make school visits more manageable.

4.3.7 Underperforming Schools – The Department had produced a number of reports on the monitoring of underperforming schools by the Department during the year.

Results were analysed to identify poor performance in subjects per district.

The Department had put measures in place to support poor performing schools through mentorship programmes in specific districts.
Many mentors had been appointed in the Eastern Cape and Limpopo.

4.3.8 Research – The Department had different sources of research with reviews and refining of policies and programmes of the Department.

Further to this, the Department was able to evaluate and monitor specific units being run within certain programmes and across sector outcomes.

NEEDU unit also did research in respect of the value chain within the system which may affect quality teaching and learning.
The Department also relied on its partners with respect to research, evaluation and analysis.

4.3.9 Target Setting – The Department was able to address development targets of the country through sector plans.

These pointed to areas for achievement in respect of growth and growth possibilities.

Other targets needed to be dealt with in respect of needs as embodied in the sector outcomes.

The Department also looked to analyse previous targets and evaluate performance on these targets.
Dr Whittle indicated that the Department, through the Director-General, had sufficiently dealt with the issues around consultation with stakeholders at a previous meeting.

There were regular meetings with stakeholders as coordinated by the DG and the Ministry.

The Department also engaged with the Portfolio Committee in an earlier meeting around the issues pertaining to learner pregnancy as well as Gender Based Violence.
There was agreement that during the COVID-19 period, there had been an increase in learner pregnancy as well as Gender Based Violence.

It was important that the Department strive to ensure children are returned to school to create a normalised schooling environment for learners.
4.4 Portfolio Committee Recommendations 35 77 Based on the observations made from inputs received, the Portfolio Committee recommends that the Minister should ensure that the Department of Basic Education consider the following recommendations: • In collaboration with the relevant Provincial Education Department investigate the following: o Reasons for storm-damaged schools in Bushbuckridge not repaired/rebuild more than a year later, within three months after tabling of the BRRR report o Issues of possible miss-use of Education Assistants at specific schools within 2 months after tabling of the report.
o Challenges of graduate teachers not able to find placement due to perceived policy guidelines from the provincial department • Ensure that there is suitable consequence management implemented against any errand Implementing Agents and official from the Department • Ensure that learners with disabilities receive the necessary resources, support and assistance to ensure quality teaching and learning • In collaboration with the PEDs, address the filling of vacant teacher posts – and also take steps to fill vacant posts within the Department as a matter of urgency.
• Focus on and prioritise the oversight and monitoring of underperforming schools with a view to support and assist these schools to better achieve on a quarterly basis.

• As per recommendation from the AG, that the department needs to attend to filling of vacancies to capacitate the financial unit which will address the misstatement as well as non-compliance as identified, within six months from tabling of the report.
• Submit written responses within two months pertaining to the following: o An update of the current status of the BELA Bill.

o A report on the status of installation and functionality of water tank in the Northern Cape from the Chinese Government donation of R1 million.

o Reasons for withholding transfer payments to KwaZulu-Natal due to non- compliance.

o A report on the number of teachers aged 30 and below that had been absorbed in the system.

o A latest updated ASIDI reports from the Department.
o A report on the specific districts and circuits where there were dissatisfied principals – as well as reasons for their dissatisfaction.

36 78 4.5 DBE Progress report on the implementation of the Action Plan to address the AGSA audit findings Issues and Questions Raised Progress Made Functionality of the water tankers in Ncape RESPONSE FROM Ms JACA IS ATTACHED donated for R1million donated by Chinese 1) How many tankers were installed with the funding?

2) Are these water tanks working?


Storm damaged schools in Mpumalanga a) The MDoE has indicated that their 1.

Why are these schools not being implementing agent experienced procurement repaired?

delays and this led to delays in implementing 2. Who is responsible for storm damaged the programme.

Subsequently, the DoE schools?

.


requested permission from EXCO to implement the projects in-house, which was recently granted and an accelerated implementation programme to rehabilitate the schools is being rolled out.

b) Provincial Departments of Education are responsible, either on their own or through implementing agents for the rehabilitation of storm damaged schools.

Access to ASIDI report a) An updated report can be accessed via the 1.

Where can an updated ASIDI Report be EFMS.


Access to EFMS can be requested and accessed?

provided on certain conditions.

A name list of 2.

Can an updated report be forwarded to PC members will have to be obtained.

the PC?

b) An updated report can be provided and forwarded to the PC on a monthly basis to the PC by DBE.

37 79 Progress report to Portfolio Committee 16 Nov 2021.pptx Educator Assistants The Department have requested the Province to 1.
Investigate Bothlabatsati Primary School investigate and provide a written response.

The DBE in Mamelodi, Luthuli Combined School is awaiting the response from GDE.

in Limpopo where EAs are utilized for cleaning and washing of principal’s cars.

2.

Why are EAs not paired with teachers only used as cleaners and screeners?

Teachers 1.

Report of how many teachers younger than 30 years have been absorbed into the system.

2.

What plans are in place to address major shortage of teachers in system?

3.
3.

Is there a report on the shortage of teachers in the system?

4.

What has DBE done to recover from vacancies caused by COVID?

Educator Appointments in Free State a) Policy requires that all provinces consider 1.

Why is the Free State province not teachers qualified through the PGCE for employing teachers who have a PGCE employment, including the Free State.

qualification?

However, applicants must meet all the 2.

How many vacant Foundation Phase requirements.

posts are there in the Free State?


b) The minimum entry qualification into a PGCE is an approved undergraduate Bachelor’s degree (NQF Level 7 or 8), which includes appropriate and sufficient subject content knowledge to teach school subjects for a particular phase of schooling.
c) During consideration of an application for employment the province must determine if the undergraduate Bachelor’s degree submitted for entry into the PGCE include appropriate 38 80 and sufficient subject content knowledge to teach school subjects for a particular phase of schooling.

If evidence of sufficient subject content knowledge to teach school subjects for a particular phase of schooling is not adequate, then an appointment cannot be made.
Report on the reasons for the non-payment of the The non-payment of the last tranche was based on the fourth tranche to KZN on the LPSID grant.

following grounds: Free State vacancies.docx a) Delays in the appointment of Transversal Itinerant Outreach Team members on a permanent basis as per 2018/19 Grant Framework.

This has had a negative impact on the stability and continuity in the provision of services due to high turnover.

The high turnover exacerbated under-expenditure.


b) Appointment of social workers instead of psychologists.

This has had a negative impact on the provision of services to learners in the targeted special care centres and schools.

Among these is the delay in assessing learners’ psycho-educational functioning that have resulted in learners not being directed to relevant support programmes.

Support for Principals by district offices a) There is a national survey report produced on 1.
Is there a report on where dissatisfied the school principals’ satisfaction level of the principals are located?

support they received from district offices.

The 2.

The reasons why they are dissatisfied survey is conducted using a random sample of with the support received?

schools selected from among the schools in each province.

The findings are therefore not targeting respondents but are generalizable to all the schools in a province.
Areas of 39 81 dissatisfaction are spread across the sampled schools on Curriculum and Assessment; Management and Governance; Learner Health and Welfare; and COVID-19.

b) Reasons for dissatisfaction range mainly from support for a) learner health and welfare; to b) implementation of ICTs in education; and c) overall adjustments for Covid-19.

5.
5.

Statutory Bodies and Other Entities 5.1 Financial and Fiscal Commission (FFC) The role and function of the FFC, is to look at the infrastructure and educational outcomes as well as the policy and service delivery context.

5.1.1 Infrastructure and Educational Outcomes: FCC puts emphasis that the quality of school infrastructure, especially in respect of the physical conditions of school buildings could influence attendance and drop-out rates.
Good school infrastructure could also impact teacher motivation.

Generally, in South Africa, social infrastructure such as schools, hospitals, housing were funded mainly by the government through different conditional grants.

In the education sector, the Education Infrastructure Grant and the School Infrastructure Backlogs Grant were the key intergovernmental tools that fund basic education infrastructure.
5.1.2 Minimum Norms and Standards for School Infrastructure The norms and standards stipulate the basic level of infrastructure that every school must meet in order to function properly.

The norms and standards provide timeframes within which school infrastructure backlogs must be met.

The regulations require the Provincial MEC to report annually to the Minister of Basic Education on plans to address backlogs at district level in the province and thereafter to report on its implementation.
The regulations also specify that these provincial plans should include short, medium and long term plans with targets to reduce backlogs and the proper costing thereof.

Based on the essential role that school infrastructure plays in addressing issues related to access and educational quality, the Commission’s view is 40 82 that regulations on norms and standards for school infrastructure will go a long way in enhancing teaching effectiveness and improving student learner outcomes.
5.1.3 Infrastructure Expenditure Trends – In respect of the policy and service delivery context, in November 2013, the Minister of Basic Education published legally binding regulations on minimum norms and standards for school infrastructure.

These norms and standards stipulated the basic level of infrastructure that every school had to meet in order to function properly.

The norms and standards provided timeframes within which school infrastructure backlogs had to be met.
The regulations required the Provincial MEC to report annually to the Minister of Basic Education on plans to address backlogs at district level in the province and thereafter to report on planned implementation.

The regulations also specified that these provincial plans should include short, medium and long term plans with targets to reduce backlogs and the proper costing thereof.
Based on the essential role that school infrastructure plays in addressing issues related to access and educational quality, the Commission’s view was that the regulations on norms and standards for school infrastructure would go a long way in enhancing teaching effectiveness and improving student learner outcomes.
5.1.4 Targets in respect of School Infrastructure • Implementation timeframe envisaged and the anticipated date per infrastructure type Dimension of Infrastructure Implementation Timeframe Anticipated Date for Achievement of Milestone All schools built entirely from mud or asbestos or metal or wood All schools that do not have access to any form of power supply, water supply or sanitation 3 years from date of publication (end 2013) Availability of classrooms, electricity, water, sanitation, electronic connectivity, perimeter security 7 years from date of publications (end 2013) Libraries and laboratories for science, technology and life sciences 10 years from date of publication (end 2013) Compliance with all other norms and standards before 31st December 2030 (end 2013) 2016 2020 2023 41 83 5.1.5 Progress in Respect of Targets on Infrastructure – In terms of access to basic infrastructure such as water, sanitation, electricity, improvements were noted.
Whereas in 2018, the NIEMS reported 37 schools in the Eastern Cape had no sanitation facilities – since 2019 there were no schools without some form of sanitation.

Quality of basic infrastructure required attention – 16 percent of schools in SA record pit latrines as their only source of ablution facility, although this had declined to 13.6 percent as at 2020.

A majority of schools did not have laboratory and library facilities and to a lesser extent sports facilities.
Continued neglect in the provision of this type of infrastructure would impact other outcomes e.g.

promotion of healthy lifestyles, improving literacy levels and building of the skills required for the knowledge economy.
The extent to which schools lack these facilities varies by province: • In terms of sports facilities: 64 percent of schools in Eastern Cape and 54 percent of schools in KZN did not have any sports facilities • In terms of laboratory facilities: 94 percent of schools in Limpopo and 93 percent of schools in Eastern Cape did not have laboratory facilities • In terms of library facilities: 92 percent of schools in Eastern Cape, 92 percent of schools in Limpopo did not have library facilities 5.1.6 Accelerated Schools Infrastructure Delivery Initiative (ASIDI) – ASIDI was introduced in 2011/12 and aimed at: • Eradicating inadequate, unsafe and poor physical infrastructure by using allocated funds properly; • Eliminating backlogs in school infrastructure; and • Upgrading schools to meet the standards prescribed by the Norms and Standards for School Infrastructure.
Funding for ASIDI flowed to the Department through the School Infrastructure Backlog Grant (SIBG) allocations which was established to be a high impact, temporary intervention.

The SIBG was scheduled to end in 2017/18 and in 2018/19 to be merged with the Education Infrastructure Grant.

However, the SIBG had been extended in order to complete projects underway/in the pipeline.

The Grant was characterised by a complex delivery chain involving, DBE, PEDs, DBSA and contractors.
42 84 Since inception, R16.2 billion had been allocated in respect of SIBG which was used to fund the ASIDI programme – on average 76 percent (R14.6 billion) of the allocated amount had been spent.

5.1.7 Challenges related to ASIDI – The SIBG was an indirect grant, i.e.

it is spent by the National Department of Basic Education on behalf of Provincial Education Departments (PEDs).
The Development Bank of Southern Africa (DBSA) and Eskom were the appointed implementing agents for the management of ASIDI projects.

DBSA in turn utilised subcontractors, who in turn rely on numerous small, medium and micro enterprises (SMMEs) to roll out the school building project – this arrangement complicated and weakened the accountability chain and thus strong oversight was required.
Some of the challenges arising due to the nature of indirect grants include: • Poor joint planning, communication and sharing of information, disincentives related to implementing agents not being the owner of a project.

• Longer and more complex supply chain management processes, increase the risk for irregularity.
• Considering the poor performance of this grant alongside the money being invested to establish the requisite built environment skills within PEDs, it was time to reconsider this delivery model which relied heavily on Implementing Agents (IAs) 5.1.8 Education Infrastructure Grant (EIG) – The Education Infrastructure Grant (EIG) was introduced to: • Accelerate the construction, maintenance, upgrading and rehabilitation of new and existing infrastructure in education; • Enhance capacity to deliver infrastructure in education; • Address damaged education infrastructure; and • Assist in ensuring that targets set out in the minimum norms and standards for school infrastructure were met.
The EIG was a Schedule 4 conditional grant to provinces and was meant to supplement provincial allocations.

Over the past few years the allocations to EIG had been cut due to fiscal consolidation efforts.

Alongside this and due to a constrained education budgets, provincial allocations had also come under pressure - with the result that provinces were generally relying 43 85 solely on the EIG and not allocating towards this item from their own revenue.
As at the end of 2019/20, data showed that, of the total provincial education infrastructure spending, 86 percent came from EIG whilst 14 percent came from provincial contributions.

The Eastern Cape allocated zero percent its PES, Limpopo and North West allocated 0.2 percent from PES and Northern Cape and Free State allocated 1.2 and 1.9 percent from PES respectively.
At the other end of the spectrum, the Western Cape allocated 36.9 percent and Gauteng 24.4 percent of PES towards total infrastructure spending.

A total of R87.5 billion was allocated to EIG between 2011/12 and 2020/21.

Relative to general spending performance of infrastructure conditional grants, EIG had performed well with actual spending averaging 95.7 percent over the period 2011/12 and 2020/21.
There should be alignment between financial and non-financial performance, but there were unobservable idiosyncrasies e.g.

North West with zero progress but over 100 percent spending.

Reasons for underspending include: • Capacity constraints in terms of project implementation, difficulties recruiting; • Procurement delays; • Poor planning and late payments to contractors; • Delayed delivery due to poor contractor performance; • Insufficient budgets to meet backlogs; and • Vandalism.
Vandalism hampered the infrastructure grant delivery targets.

A total of 397 schools were vandalised in 2021.

Mpumalanga had the highest number of vandalised schools while Free State had the least.

This called for improved security at schools.


5.1.9 Challenges with Existing Infrastructure Delivery Mode - The status quo for delivering most provincial infrastructure projects separated the planning, budgeting and implementation functions between sector departments and implementing agents, thus distorting incentives and weakening the accountability chain.

Multiple planning and implementing agents complicates the delivery chain.
Budget and time overruns were frequent because provincial departments of public works and other implementing agents appointed consultants to design and oversee infrastructure projects, but were not incentivized to properly manage them as the Auditor General does not hold implementing agents accountable for infrastructure spending.

44 86 Accounting treatment runs contrary to what happened in practice – should be further considered by National Treasury and Accounting Standards Board.
The analysis of the infrastructure value-chain revealed that a lack of oversight at key delivery points were increasing incentives to engage in fiscal misappropriation.

The Commission noted the disconnect between using implementing agents, alongside financial investments to develop internal built environment skills in education departments (in line with the Infrastructure Delivery Management System).
5.1.10 Infrastructure Funding and Allocation Reforms – The slow pace of infrastructure grants implementation was slowly being overtaken by growing demographic shifts.

The phenomenon of learner migration and subsequent school closures and merging left many of the refurbished ASIDI schools under-utilised.

The Department needed to revise the list of targeted ASIDI to ensure alignment to demographic shifts.
In 2016 the FFC recommended that both the National Treasury and DBE ensured that the Framework for Infrastructure Grants incorporates provincial spatial demographic patterns and forecasts when decisions to build, expand or maintain schools were made.

SBIG needed to be incorporated into the EIG as per announcement made in 2017/18.
5.1.11 Expenditure Patterns in respect of Non-Infrastructure Conditional Grants – The largest conditional grant was the National School Nutrition Programme Grant which was allocated just over R7.7 billion in 2020/21.

The smallest grant was the Learners with Profound Intellectual Disabilities Grant which was allocated R255.8 million in 2020/21.

The Maths, Science and Technology Grant saw significant underspending in 2019/20 as 80 percent of schools did not have access to laboratory facilities.
This grants thus played an important role in terms of providing support/resources to embed the use of ICT across the curriculum and grow maths, science and technology.

Reasons for the underspending needed to be addressed.

There was an improvement in spending with respect to Learners with Profound Intellectual Disabilities Grant which demonstrated teething problems over the past two years.
The dampened spending recorded for 2020/21 should be seen in the context of the Covid-19 pandemic and its impact on the sector.

5.1.12 Equity in Education - Equity in education could be two dimensional i.e.

• Equal treatment, fairness, social justice; and • Equal opportunity, achievement – access to basic minimum standard of education 45 87 South Africa had achieved equality through no fee school and open school choice policies.
Attaining equity remained a challenge because education policies and the funding framework did not fully address barriers to education potential.

The South African Schools Act (SASA) required government to fund schools adequately and equitably.

The National Norms and Standards for School Funding (NNSSF) intended to reduce resource disparities between affluent and less affluent schools.
Poor schools continued to experience structural systemic challenges and some provinces were unable to augment NNSSF funding to support the under- resourced schools.

5.1.13 National Norms and Standards for School Funding – Through the National Norms and Standards for School Funding, a quintile-based funding approach had been implemented.
A five-tiered system was used with Quintile 1 including the neediest schools whilst Quintile 5, the most affluent – learners in quintiles 1, 2 and 3 did not pay school fees.

The approach aimed to achieve redress and equity through directing greater funding to needier learners.

Each year the Department set the target per learner amount for each quintile, which PEDs had to adhere to.

The 2020 threshold amounts for schools were retained/ unchanged in 2021.
KwaZulu-Natal had been funding all quintiles at a level below the national threshold amount since 2014 while Mpumalanga was funding all quintiles below the national threshold level since 2016.

The Northern Cape was funding Quintiles 1 to 3 below the national threshold level since 2015 and the Eastern Cape was displaying this below threshold level funding in 2021.

There were disparities in meeting the target NSSFF learner allocations across provinces, within districts and schools.
Disparities were exacerbated by the faster growth in compensation of employees spending, the phenomenon of learner mobility and fiscal mismanagement.

Small schools were adversely affected as NNSSF allocations was insufficient to meet total school operational costs.

There were questions about the adequacy of the set target learner allocations as the set amount did not meet CAPS curriculum requirements.
5.1.14 Equity in the Distribution of other Education Resources – There was no comprehensive and holistic framework for resourcing poor schools and improving equity.

Teachers were allocated to schools on the basis of the Post Provisioning model, not poverty.

Funding for infrastructure was allocated differently from learners’ subsidies and educators and this disproportionately benefited richer provinces.

There was disregard for peculiar constraints affecting poor schools/learners (i.e.
child headed households) and may jeopardise equity 46 88 aspirations.

There was a need for greater emphasis on completion rate and better attainment for learner with poor socio-economic backgrounds.

5.1.15 Implications of the MTBPS 2021 - Learning and culture was allocated on average 20 percent of the total consolidated expenditure – the largest allocations relative to other functional groups (health, peace and security, social development etc.).
Over the 2022 MTEF period budgets of Basic Education, PSET and Arts, Culture, Sport and Recreation would again be under significant pressure – particularly in 2022/23 and 2023/24.

One needed to ask how would departments manage, and which aspects of service delivery would be affected.
Departments would have to inform Parliament about how they would deal with this challenge 5.1.16 FCC Recommendations Non Infrastructure Grants: • The Department of Basic Education and National Treasury looked to consider adjusting the allocation criteria for HIV/AIDS (Life Skills Education) grant from relying on PES education component shares - to available performance information as per expected outputs.
• The Department of Basic Education and National Treasury should consider incorporating the HIV/AIDS (Life Skills Education) grant into the Provincial Equitable Share and aligning planning and implementation with the community outreach component of the HIV/AIDS, TB, Malaria grant.
• The Department of Basic Education and National Treasury should streamline the reporting process for the Learners with Profound Intellectual Disability Grant, by reducing the number of expected outputs and improve the linkage between the expected outputs and overall grant objectives (outcomes).

• The Department should consider revising the allocation criteria for HIV/AIDS life skills and incorporating into the provincial equitable share.
• With respect to equity, the per learner funding below national threshold amounts which persisted in some provinces, Provincial budgets needs to be adjusted to bring the per learner funding in line with national threshold amounts especially in the case of learners in quintile 1 to 3 schools.

• Equity in education also requires a holistic approach to deal with learning constraints in totality – hunger, language, family, health etc.
Infrastructure Grants 47 89 • With respect to infrastructure conditional grants, effective oversight is recommended over basic education conditional grants, especially in the case of infrastructure projects.

• The delivery model of the ASIDI programme should be reviewed within 9 months timeframe from date of tabling of this report.
• Ensure to meet implementation timeframes, as not meeting timeframes has a direct bearing on the division of revenue – as such outstanding targets should be quantified and further considered by the Education sector together with national and provincial treasuries.

• The reform must incorporate demographic shifts as overriding factors to determine targeting of schools.

• SIBG must be incorporated into EIG as per announcement.
• The department has to attend to performance challenges and uneven access to school infrastructure and other educational inputs • The department should address the wide disparities in educational outcomes between rural and urban provinces, and between less affluent and more affluent schools as a priority for 2022/23 financial year.
5.2 Council for Quality Assurance in General and Further Education and Training (Umalusi) 5.2.1 Background and Mandate The mandate of Umalusi was determined by Chapter 2 of the Constitution and the GENFETQA Act assigning Umalusi the responsibility for quality assurance of general and further education and training.

The Council was responsible for qualifications registered on the general and further education and training qualifications sub-framework (GFETQSF) of the National Qualifications Framework (NQF).
The Quality Council ensured that the providers of education and training have the capacity to deliver and assess qualifications and learning programmes and that they do so to expected standards of quality.

5.2.2 Reflections on 2020/21 - Implementation of the first Annual Performance Plan (APP) of the current five-year strategic plan was disrupted by the COVID-19 pandemic.

Umalusi revised the APP and the Minister re-tabled it in Parliament in July 2020, as a result, not all 2020/21 targets were achieved.
The presentation was based on the re-tabled targets.

Despite the COVID- 19 challenges, Umalusi managed to remain focused on their five-year strategic priorities.

5.2.3 Strategic Priorities – The Umalusi strategic priorities could be summarised as follows: 48 90 • Reviewing the quality assurance of assessment approach so as to accommodate new qualifications • Evaluating and appraising new qualifications – e.g.

General Education Certificate (GEC).


• Amending the founding Acts to accommodate new qualifications and desired extensions in the mandate of quality assurance.

• Intensify research on educational developments to innovate and advise the Ministers of Education.

• Intensify advocacy on qualifications within the sub-framework.

• Seeking an alternative funding model to increase revenue.
5.2.4 Audit Report – The report of the External Auditor (RAiN Chartered Accountants Incorporated) indicated that Umalusi achieved its second Unqualified Audit Opinion with no material findings (Clean Audit).

This was possible because of the maintenance and improvement of Umalusi systems and controls.

5.2.5 Performance Information for 2020/21 – The overall Annual Performance stood at 94 percent achieved and only six percent not achieved.
The status of achievement per programme indicated 100 percent for Programme 2 and Programme 3 and 75 percent for Programme 1.

5.2.5.1 Programme 1: Administration - Programme 1 covered the following sub- programmes: • Strategy and Governance (S&G); • Public Relations and Communications (PR&COMMS); • Information Communication Technology (ICT); • Human Resource Management and Development (HRM&D); and • Finance and Supply Chain Management (F&SCM).
Programme 1 Performance Performance Indicator Annual Target Annual Output 1.1.1: Number of advocacy exhibitions conducted 1.1.2: Number of advocacy webinars conducted 1.2.1: ICT Network health score maintained at ≥95% 1.3.1: Vacancy rate maintained at ≤10% 0 4 ≥95% ≤10% N/A This indicator was given zero targets for the rest of the year because no exhibitions could be held 4 98% 5% 49 91 1.4.1: Percentage of valid invoices of creditors and suppliers paid within 30 days 99% 92% 5.2.5.2 Programme 2: Qualifications and Research - Programme 2 covered the following sub-programmes: Qualifications, Curriculum and Certification • Ensuring and enhancing the status and quality of qualifications on the sub- framework, which Umalusi develops, manages and reviews; • Evaluating curricula to ensure that these are of acceptable quality; • The certification of candidate performance for all qualifications on the GFETQSF; and • Verifying all qualifications Umalusi and its predecessor, SAFCERT, have issued since 1992.
Statistical Information and Research • Conduct research that is informed by the emerging needs of the education system so as to engage stakeholders towards innovative thinking; • Report on the key indicators of quality and standards in general and further education and training; Establish and maintain databases; and Lead research and analysis and provide statistical support and information • • across Umalusi.
Programme 2 Performance Performance Indicator Annual Target Annual Output 2.1.1 Number of reports produced on the management of qualifications in the sub- framework 2.2.1 Percentage of error-free learner records for which a certificate is printed 2.3.1 Percentage of verification requests received that are completed in terms of the service Level agreement: two working days 1 100 % 90 % 1 100 % 92.1 % 50 92 2.4.1 Number of research reports completed in various formats 4 4 5.2.5.3 Programme 3: Quality Assurance and Monitoring - Programme 3 covered the following sub-programmes: Quality Assurance of Assessment - This function entails the following: • External moderation of question papers; • External moderation of internal assessment; • Verification of monitoring of the assessment system; • Monitoring of the conduct, administration and management of assessment and examinations processes; • Management of concessions, assessment and examination irregularities; and • External moderation of marking processes.
Evaluation and Accreditation - Quality assurance of provision and assessment through evaluation and accreditation of private education institutions and private assessment bodies.
This entails ensuring that: • Standards of provision are determined, maintained and strengthened; • Systems are in place to quality assure the capacity of the private education and training institutions seeking accreditation to implement qualifications registered on the GFETQSF through an accreditation and monitoring process; • Systems are in place to quality assure the capacity of private assessment bodies seeking accreditation to assess qualifications registered on the GFETQSF.
Programme 3 Performance Performance Indicator Annual Target Annual Output 3.1.1 Number of quality assurance of assessment reports published for qualifications registered on the GFETQSF 3.2.1 Percentage of question papers approved per qualification 3.3.1 Number of assessment bodies audited for their state of readiness to conduct examinations 3.4.1 Number of subjects for which verification of marking is conducted 8 100% 12 70 8 100% 13 85 51 93 3.5.1 Number of subjects for which moderation of internal assessment is conducted 3.6.1: Percentage of accreditation outcomes for private education institutions finalized within 12 months of the site visit 3.7.1: Percentage of identified private education institutions monitored after being granted accreditation 85 82% 70% 180 94.8% 87.4% • Reasons for Under-Performance - The negative effect of COVID-19 on payments in the first quarter affected the overall performance.
Umalusi will ensure that payments to service providers would be approved and processed electronically if hard lockdown was introduced due to the pandemic.

5.2.6 Human Capital Management (HCM) - The Council gave a detailed breakdown of the following: • Employment and Vacancies: o 2019/20 number of employees – 136; o 2019/20 approved posts – 141; o 2020/21 approved posts – 143; o 2020/21 number of employees – 135; and o 2020/21 vacancies – 8 (percentage of vacancies was 6 percent).
• Employment Changes: o Employment at the beginning of the period – 133; o Appointments – 7; o Terminations – 5; and o Employment at the end of the period – 135.
• Equity in Employment: o Total Staff – African: 84 percent, Coloured: 2 percent, Indian: 5 percent and White: 9 percent o Males and Females: African Male: 45 percent, African Female: 40 percent, White Male: 4 percent, White Female: 5 percent, Indian Male: 1 percent, Indian Female: 3 percent, Coloured Male: 0 percent and Coloured Female: 2 percent.
o Total Male: 47 percent and Total Female: 53 percent 52 94 5.2.6 Financial Information 5.2.6.1External Audit Report (RAiN) - External private auditors were appointed with consent of the Auditor General of South Africa (AGSA) – RAiN Chartered Accountants Incorporate.

The Audit was conducted in accordance with the international Standards on Auditing (ISAs).

The final audit opinion for Umalusi was a Clean Audit (Unqualified Audit Report with no material findings).
The financial statements compiled in GRAP present fairly, in all material respects, the financial position of Umalusi as at 31 March 2021, and its financial performance and cash flows.

Umalusi submitted financial statements free from material misstatements and did not have any unadjusted audit differences for the 31 March 2021 final audit.

There were also no instances of material non-compliance with requirements of applicable legislation.

Overall the financial viability was assessed as good.
Officials of the entity had the required skills and competencies.
5.2.6.2 Statement of Financial Position Table 1: Statement of Financial Position (1) As at 31 March 2021 Figures in Rands Assets Current Assets Receivables from exchange transactions Pre-payments Cash and cash equivalents Non-Current Assets Property, plant and equipment Intangible assets Total Assets Table 2: Statement of Financial Position (2) As at 31 March 2021 Figures in Rands Liabilities 2021 R 2020 R R 2020 R 53 95 Current Liabilities Payables from exchange transactions Non-Current Liabilities Operating lease liability Employee benefit obligation Total Liabilities Net Assets Table 3: Statement of Financial Position (3) As at 31 March 2021 Figures in Rands Reserves Revaluation reserve Accumulated surplus Total Net Assets Table 4: Statement of Financial Performance (1) Figures in Rands Revenue Revenue from exchange transactions Accreditation fees Certification fees Verification fees Rental income Sundry income Interest received – investment Gain on disposal of assets Total revenue from exchange transactions Revenue from non-exchange transactions Government grant & subsidies Total Revenue Table 5: Statement of Financial Performance (2) Figures in Rands Expenditure Actuarial losses R 2020 R 34 804 310 46 063 718 80 868
271 2021 R 2020 R 34 804 310 46 063 718 80 868 028 34 804 310 53 084 961 87 889 271 2021 R 2020 R R 2020 R 112 000 2 467 000 54 96 Depreciation and amortisation Employee cost Other operating expenses Moderator and verifier costs Travel and accommodation Certificate expenses Printing and stationery Bad debt written off Communication expenses Consulting and professional fees Covid-19 (PPE expenditure) Total Expenditure Cash Surplus – In respect of committed funds, Umalusi approved a tender amounting to R40 million for the renovations of 41 Van Reyneveld Street – Thuto-Mfundo Building, adjacent to the current building.
The Department assisted with the request to retain the cash surplus to be utilised as set out above and this has been granted by National Treasury.

5.2.7 Portfolio Committee Observations Members engaged Umalusi on their respective presentation and, welcomed the quality of report and commended the entity for considerable work in improved performance.
The Committee raised the following observations: • Members requested that Umalusi intervened in a case where a learners was having difficulty with receiving her certification – and applications being rejected due to her not having the necessary certification.

• With a decrease in Umalusi’s budget allocation, Members queried how the Council was able to cope with the budget cuts and how realistic the projections were with such limited resources.

It was noted that there had been no decrease in targets.
• In respect of vacancies, Members queried whether the Council had been able to fill all vacant posts, if not, what were the challenges with filling these posts.

• Members sought clarity on the type of improvements made by Umalusi, the costs of such improvements as well as the timeline for the implementation of the improvements.

Similarly, with respect to ICT improvements.


• Regarding certification backlogs, Members queried what the status of the backlogs were and whether there were challenges with managing the backlogs.

• With the high unemployment rate in the country, Members queried whether the Council was considering the National Senior Certificate for Adults as a qualification in the near 55 97 future.

What was the progress and current status with this new qualification – and how soon would it be implemented.
• Regarding the deregistration of many Independent School, Members queried how many had deregistered and closed down.

Members also sought a report on the number of Independent Schools that have applied for registration with Umalusi – and the timeline for processing such registrations.

• In respect of rebates to school with less than 30 learners, Members queried how many rebates had been applied for and how many had been granted by Umalusi.
• In respect of the Earl Childhood Development (ECD) migration, Members queried the role and involvement of Umalusi in the process – and whether ECD’s needed to be registered with Umalusi.

• Regarding programmes for Learners with Special Education Needs, Members queried the number of special programmes approved/registered with Umalusi.

• Members sought clarity on the research projects being planned by Umalusi in respect of the impact of COVID-19.
Members also queried the type of resources required by Umalusi for such planned research activities.

5.2.8 Responses The Council thanked Member for the commendations with the clean audit and promised to work hard not to regress.

Although examinations were running smoothly, it was the Department that needed to be commended for the security of question papers – Umalusi only played a monitoring role.
Umalusi would look into the matter of the specific student struggling with certification and try to resolve the matter speedily.

The budget had decreases and Umalusi also struggled as an entity.

The scope was not adequate due to the budget constraints and wished the scope could be expanded for Umalusi to pronounce with confidence.

Umalusi indicated that, in fact, some of the performance indicators and targets had to be adjusted due to budget cuts.
They had also found alternative and innovative ways to reduce running costs and adapt accordingly.

Issues of ICT was critical and required additional funding and resources to ensure an adequate security network.

Umalusi had to freeze some posts during the pandemic and had not created any new positions.

However, Umalusi would approach Council for additional new post in the new year.
Umalusi was appreciative of the extra R 20 million made available by National Treasury through the efforts and engagements of the Department and Portfolio Committee.

The Council also gave a detailed explanation regarding some of the output values of indicators and the adjusted re- 56 98 tabling of the Annual Report.

Output values on indicators were adjusted after the re-tabling of the Annual Report.
Umalusi tried to keep staff motivated to do better and senior managers also signed pledges to ensure a clean audit.

Staff needed to always adhere to policies and work in an ethical manner.

Executive managers had monthly meetings to ensure accountability for targets agreed to and set.

The Portfolio Committee was further briefed on the issues of certification backlogs with regular meetings on the topic.
Since the last engagement with DHET, it was established that the backlogs had been reduced to around one percent.

Umalusi and DHET was planning to implement the National Senior Certificate for Adults in June 2022.

There were some delays with outstanding documents pertaining to the Curriculum and Assessment.

In respect of ECD migration, Umalusi has yet to receive information from the Department on the role and involvement of Umalusi in the process.
The only special programme for LSEN learners was the introduction of South African Sign Language to the Curriculum.

Other than this, learners continued to also use Braille.
Umalusi also alluded to some of the research studies commissioned and completed – all research reports could be accessed from the Umalusi website 5.2.9 Portfolio Committee Recommendations Based on the observations made from inputs received by Umalusi the Portfolio Committee recommends that the Minister should ensure that the Department of Basic Education consider the following recommendations: • Ensure that Umalusi resolves a case brought to the attention of the Council in respect of certification challenges experienced within two months of tabling this report.
• Ensure that Umalusi was able to fill vacant posts within the Entity – depending on the budget availability.

• Ensure that the Council was able to manage and finalise all certification backlogs , in a timeframe of 6 months after the tabling of the BRRR report .

• Ensure that Umalusi was able to finalise, introduce and implement the National Senior Certificate for Adults as a qualification by end of 2022/23 financial year.
• Ensure that Umalusi in collaboration with the Department decided on the role and involvement of Umalusi in the ECD migration processes two months prior the migration takes place.

• Ensure that Umalusi prepare and submitt written responses within three months after tabling this report , to the following: 57 99 o Umalusi Improvements: type of improvements, costs of improvements and timeline for the implementation of the improvements.

Similarly, with respect to ICT improvements.


o Independent School: Number of deregistration Independent School, number of Independent Schools closed down, how many applied for registration and the timeline for processing such registrations.

o Rebates: How many schools applied for rebates, how many rebates had been granted.
5.3 South African Council for Educators (SACE) 5.3.1 Background and Mandate The South African Council for Educators (SACE) is a Schedule 3A public entity, established in terms of Act No.

31 of 2000, as amended, to enhance the status of the teaching profession.

The Basic Education Laws Amendment Act (2011) has amended the South African Council for Educators Act No.
31 of 2000 to enable the Council to manage the Continuing Professional Teacher Development System, and to allow the Council to request for additional funding from the public fiscus when necessary.
The South African Council for Educators is accountable to the Department of Basic Education (DBE) and fits into the Minister of Basic Education’s Delivery Agreement and Action Plan towards schooling 2030, which speaks to “improving the quality of teaching and learning” through the improvement of teacher capacity and practices.
The key business of SACE is to promote professionalism, empowering educators through development and ensuring that educators are committed to the teaching profession such that they adhere to the ethos as enshrined in the Constitution of the Republic of South Africa.

5.3.2 Annual Performance Plan 2020/21 The Annual Performance Plan 2020/21 summarised the priorities of SACE as outlined in the Strategic Plan 2020-2025.
The activities of SACE have been structured into five programmes as follows: • Programme 1: Administration; 58 100 • Programme 2: Registration; • Programme 3: Ethics • Programme 4: Continuing Professional Teacher Development Management (System); and • Programme 5: Professional Standards.

5.3.3 Overview of the Service Delivery Environment and Context This Annual report signalled the first year of implementing Council’s 2020 – 2025 strategic plan.
It was also the last Annual Report for the outgone 2017-2021 Accounting Authority.

The period under review experienced unprecedented COVID-19 pandemic and steep learning curve in navigating and understanding the dynamics and complexities of regulating the teaching profession under the pandemic.

Council had been able to service its members, although under limited conditions.
Therefore, it acknowledged that some of the service and performance standards affected by the entity’s inadequate systems and oversight during the national lockdown periods, may not be at the desired levels as reflected in the AGSA presentation to the Portfolio Committee and APP programmes.

Consequently, poor performance has been observed in programmes such as, the Professional Development and Ethical Standards, for some internal reasons and those that were beyond Council’s control.
Through the developed remedial action plan and oversight processes, Council was committed to draw lessons from the period under review and improve its services to the teaching profession and business operations systems for the better.

An additional 4 (15%) indicators out of 27 were partially achieved at 90% level and above and 9 (33%) out of 27 indicators were not achieved during the period under review.
The 2020/21 performance decline of 12% as compared to 2019/2020, could be attributed to the effect of COVID-19 pandemic disruptions in the schooling sector that had the ripple effect on Programme 3 (Ethical Standards) and Programme 4 (Professional Development) in particular, along with some of the internal systems and processes that were not adequate to mitigate the situation.
Overall, 60 285 registration transactions of provisionally registered student teachers, newly qualified educators updating from provisional to full registration status and other categories of registration, were conducted as compared to 79 084 in 2019/2020.

While professional registration of educators, student teachers and college lecturers were 59 101 achieved, the situation was not the same for Programme 3 (ethical standards) and Programme 4 (professional development).
These two programmes experienced the lowest performance of their time in areas where schools, teachers and learners were required to achieve the targets.

The situation was particularly aggravated by the negative audit findings in Programme 4, which were being addressed and monitored closely through Council, Internal Audit and Risk Committee and Department of Basic Education.

Council received an unqualified audit report; however, the audit was not clean.
The misstatements identified in the audit report and reflected in the AGSA presentation were being addressed through the Council-approved remedial action plan and close Council oversight process.
Some of the key remedial actions include the following: • Organisational reflective and planning session to: o Review the overall organisational performance and learn from the audit findings o Use the lessons to review the APP 2021/2022 and develop the 2022/2023 APP o Develop the remedial action plan o Heighten systems and processes for credible and reliable performance information in line with the DPME / National Treasury Frameworks • Orientation and Re-orientation of the 2021 – 2025 Council and Council Committees members on their oversight role in September / October 2021 • Reviewed 2021/2022 APP to address some of the issues that led to the audit findings in terms of the wording of targets and Technical Indicator Descriptors in the 2020/2021 APP.
• The revised APP has been submitted to the DBE on the 31st October 2021, with relevant amendment Addendums, for the Minister’s approval.

• Dedicated and focused extended management quarterly report review sessions in line with the performance information framework and external audit standards.

5.3.4 Programme and Sub-Programme Plans For the 2020/21 pre-determined objectives, SACE had a total of 27 indicators of which 14 were achieved (52 percent).
The performance indicators not reached were as follows: Performance Indicator Annual Target Annual Output Difference 60 102 Number of research reports produced Percentage of employees assessed through performance development system 3 2 -1 100% 52% -48% Number of research-based seminars/ 1 0 -1 conferences conducted Percentage of employees assessed through performance development system 100% 52% -48% Percentage of invoices paid within 30 100% 90,9% -6,8% days Percentage of educators applying 50% 17% -33% through the online system for professional certification (12 500) (10 096/60 285 (2 404) x100) Percentage of investigations on new 50% 0.9% (4 finalised out -49.1 cases finalised of 443 cases received) Percentage of investigations on roll- 50% 13.1% (60 cases -36.9 over cases finalised finalised out of 456 rolled-over cases) Percentage of disciplinary hearings 30% 0.6% (3 cases -29.4 on new cases finalised finalised out of 443) Percentage of disciplinary hearings on roll-over cases finalised 40% 11% (52 roll-over -29 cases finalised out of 456 cases) Number of analysis reports produced 2 1 -1 on sanctioned educators Percentage of selected practicing signed-up educators verified for the continuing professional development uptake 40% 7.36% -32.64% (1626/22 104 X100) Number of educators supported on 50 000 - - professional matters 61 103 5.3.4.1 Programme 1: Administration – This was a new Programme for the 2020 – 2025 strategic plan and Council was reporting on it for the first time.
The purpose of the Programme was to implement and manage the policy directives and priorities of the Council to ensure the functional proficiency of SACE through appropriate support services.

Sub-Programmes for Programme 1 included the following: • Executive and Governance; • Planning, Monitoring & Evaluation Reporting and Research; • Corporate Services; • Financial Management; • Communication and Stakeholder Relations; and • Information and Communication Technology.
Within this programme, SACE had 8 performance indicators as follows: Planned Target (2020/21), Actual Achievement (2020/21 and Deviation • Number of Council and EXCO meetings - The planned target was set at 10 meetings and the SACE actual achievement was 14 – a positive deviation of four (4) meetings.

• Number of quarterly performance reports submitted to DBE - The planned target was set at four (4) reports.

The SACE actual achievement was four (4) reports with no deviation.
• Number of research reports produced - The planned target was set at three (3) reports.

The SACE actual achievement was on two (2) reports – a negative deviation of one (1) report.

• Number of research-based seminars/ conferences conducted - The planned target was set at one (1) seminar/conference.

The SACE actual achievement was zero (0) seminar/conferences – a negative deviation of one (1).
• Percentage of employees assessed through performance development system - The planned target was set at 100 percent but the SACE actual achievement only stood at 52 percent – a negative deviation of 48 percent.

62 104 • Communication strategy developed and monitored - The planned target was set at one (1) and this was achieved with no deviations.
• Percentage of invoices paid within 30 days - The planned target was set at 100 percent but the SACE actual achievement only stood at 90.9 percent – a negative deviation of 6.8 percent.

• Approved ICT policy - The planned target was set at one (1) and this was achieved with no deviations.

Actual Achievement (2019/20), Actual Achievement (2020/21) and Comments • Number of Council and EXCO Meetings – For the 2020/21 FY the actual achievement stood at 14.
• Number of quarterly performance reports submitted to DBE - For the 2020/21 FY the actual achievement stood at two (2).

• Number of research reports produced - For both the 2019/20 and 2020/21 FY the actual achievement stood at two (2).

• Number of research-based seminars/ conferences conducted - For the 2019/20 FY, the actual achievement was nine (9) and the 2020/21 FY the actual achievement was zero (0) – a decrease of nine (9).
• Percentage of employees assessed through performance development system - For 2020/21 FY the actual achievement stood at 52 percent.

• Communication strategy developed and monitored - For 2020/21 FY the actual achievement was one (1).

• Percentage of invoices paid within 30 days - For 2020/21 FY the actual achievement was 90.9 percent.

• Approved ICT policy - For 2020/21 FY the actual achievement was one (1).
5.3.4.2 Programme 2: Registration – The purpose of this programme was to register qualified educators and create sub registers for special categories; maintain and update educator database; and enhance the quality of the registration of teachers by introducing standards.

Sub-Programmes for Programme 2 included: • Sub-programme 2.1: Registration of Educators and Lecturers; and • Sub-programme 2.2: Data Management.
Within this programme, SACE had three (3) performance indicators as follows: 63 105 Planned Target (2020/21), Actual Achievement (2020/21) and Deviation • Number of educators registered - The planned target was set at 25 000 and the SACE actual achievement was 60 285 – a positive deviation of 35 285.
• Percentage of educators applying through the online system for professional certification - The planned target was set at 50 percent (12 500) and the SACE actual achievement was only 17 percent – a negative deviation of 33 percent (2 404).

• Number of statistical reports produced on the status of the profession - The planned target was set at two (2) reports and this was achieved with no deviation.
Actual Achievement (2019/20), Actual Achievement (2020/21) and Deviation • Number of educators registered - For the 2019/20 FY the actual achievement stood at 79 084 while for 2020/21 FY the actual achievement was 60 285 – a decrease of 18 799 (23.22 percent).

• Percentage of educators applying through the online system for professional certification - For the 2020/21 FY the actual achievement stood at 17 percent (10 096 / 60 285).
• Number of statistical reports produced on the status of the profession - For the 2020/21 FY the actual achievement stood at two (2) reports.

SACE presented on some of the Programme 2 highlights and challenges in respect of the following: • Programme 2 ensured that all the 60 285 registrants were fit-to-practice into the profession through the screening and vetting process – SAPS police clearance and Department of Constitutional Development’s National Register of Sexual Offences.
• Only 13 applicants were found to have criminal records in terms of the following areas: • assault, murder, theft / fraud, substance abuse, shoplifting, drunken driving, and others.

• While pandemic challenges decreased the number of registration by 18 799 (23.22%) as compared to 79 084 in 2019/2020, Council managed to exceed its target by 35 285.
64 106 • Upon reflection, there has been under-targeting of the indicator due to the historical figures, as well as inconsistent and fluctuating teacher education graduate outputs, particularly due to the initial teacher education distance mode which accounts to 60% of the country’s output.
SACE experienced slow turn around turn in cases where: • The office was unavoidably closed on different occasions due to national lock down; • Applications submitted through private agencies who fail to fulfil their promises to educators; • Incomplete documents on the online application system • Educators preferring to apply through the SACE offices walk-in centres over the online registration system • Higher Education Institutions academic year that ended on the 31st of March 2021 and delays in graduations • Slow postal services; and • Delays in the issuing of the police clearance certificates by the SAPS Strategic collaborations with the following institutions assisted in facilitating the registration processes: • South African Police services gazetted providers; • Department of Justice and Constitutional Development; • Department of Home Affairs; • Umalusi; and • Higher education institutions.
5.3.4.3 Programme 3 – Professional Ethics - The purpose of this programme was to promote and maintain ethical standards in the profession.
Sub-Programmes for Programme 3 included the following: • Investigations; • Disciplinary Hearings; and • Sanctions Within this programme, SACE had five (5) performance indicators as follows: Planned Target (2020/21), Actual Achievement (2020/21) and Deviation 65 107 • Percentage of investigations on new cases finalised - The planned target was set at 50 percent but the SACE actual achievement was only 0.9 percent (4 finalised out of 443 cases received).

A negative deviation of 49.1 percent.


• Percentage of investigations on roll-over cases finalised - The planned target was set at 50 percent but the SACE actual achievement was only 13.1 percent (60 cases finalised out of 456 tolled-over cases).

A negative deviation of 36.9 percent.

• Percentage of disciplinary hearings on new cases finalised - The planned target was set at 30 percent but the SACE actual achievement was only 0.6 percent (3 cases finalised out of 443).
A negative deviation of 29.4 percent.

• Percentage of disciplinary hearings on roll-over cases finalised - The planned target was set at 40 percent but the SACE actual achievement was only 11percent (52 roll-over cases finalised out of 456).

A negative deviation of 29 percent.

• Number of analysis reports produced on sanctioned educators - The planned target was set at two (2) reports but the SACE actual achievement was only one (1) report.

A negative deviation of one (1) report.


Actual Achievement (2019/20), Actual Achievement (2020/21) and Deviation • Percentage of investigations on new cases finalised - For the 2020/21 FY the actual achievement stood at 0.9 percent (4 finalised out of 443 cases received).

• Percentage of investigations on roll-over cases finalised – For the 2020/21 FY the actual achievement stood at 13.1 percent (60 cases finalised out of 456 tolled-over cases).
• Percentage of disciplinary hearings on new cases finalised - For the 2020/21 FY the actual achievement stood at 0.6 percent (3 cases finalised out of 443).

• Percentage of disciplinary hearings on roll-over cases finalised – For the 2020/21 FY the actual achievement was only 11 percent (52 roll-over cases out of 456 cases.

• Number of analysis reports produced on sanctioned educators – For the 2020/21 FY the actual achievement was one (1) report.
SACE presented on some of the Programme 3 highlights in respect of the following: 66 108 • Generally, Programme 3 performed poorly, due to disruptions in the schooling system and lack of access to the children as witnesses in the main.

• This denied justice to the same children and escalated the number of roll-over cases into the new financial year by 440.
• Council received 443 cases of misconduct against educators divided as follows: • Quarter 1 – 42 cases; • Quarter 2 – 106 cases; • Quarter 3 – 40 cases; and • Quarter 4 – 255 cases.

• As reflected, 56% (255 out of the 443) cases of the educator misconduct cases were received at the end of February 2021 (Case dumping).
• Just like in 2019/2020, the top three categories of cases of professional and unethical misconduct against educators during the period under review are – • Corporal Punishment and Assault; • Sexual misconduct, rape, indecent assault, sexual assault and sexual harassment; and • Verbal abuse or use of improper language, victimization, harassment, defamation and others.
5.3.4.4 Programme 4: Continuing Professional Teacher Development (CPTD) System The purpose of this programme was to ensure that educators engage in life-long learning to improve their professional competence.

Sub-Programmes within Programme 4 included the following: • Continuing Professional Teacher Development Management System; • Member Support; and • Quality Management.
Within this programme, SACE had six (6) performance indicators as follows: Planned Target (2020/21), Actual Achievement (2020/21) and Deviation • Percentage of selected practicing signed-up educators verified for the continuing professional development uptake - The planned target was set at 40 percent but the SACE actual achievement was only 7.36 percent.

A negative deviation of 32.64 percent.


67 109 • Percentage of signed up final year initial teacher education students - The planned target was set at 65 percent but the SACE actual achievement was only 25.7 percent.

A negative deviation of 39.3 percent.

• Number of educators supported on professional matters - The planned target was set at 50 000.

There was no actual achievement on this target.


• Percentage of professional development providers approved - The planned target was set at 70 percent and the SACE actual achievement was 100 percent.

A positive deviation of 30 percent.

• Percentage of professional development activities endorsed - The planned target was set at 80 percent and the SACE actual achievement was 100 percent.

A positive deviation of 20 percent.


• Percentage of endorsed activities monitored - The planned target was set at 60 percent.

There was no actual achievement on this target.

Actual Achievement (2019/20), Actual Achievement (2020/21) and Deviation • Number of educators supported on professional matters - For the 2019/20 FY the actual achievement stood at 10 000 with the 2020/21 FY not achieved – decreased by 10 000.
This programme also performed poorly, particularly, in areas performance indicators that deal with educators, mainly due to their unavailability and their focus on curriculum recovery with the little time that they had.

Student teachers who studied online throughout the academic year, could not be accessed easily for the orientation on and sign-up for participation in the CPTD-System upon graduation.
The challenges with the programme performance was escalated by the audit findings against this programme’s outputs.

While some work has been done, the challenges around unclean data, inadequate record keeping and evidence, and activities that cut across two financial years.

The remedial action plan referred to earlier on, covers Programme 4 extensively.
Equally, the trend of underspending on this programme has been taken seriously by Council and measures to monitor quarterly spending on the programme have been heightened.

The last two quarters of 2021/2022 have seen some reasonable improvement in terms of overachieving some of the indicator targets and aligning with the performance information framework.
5.3.4.5 Programme 5: Professional Standards - The purpose of this programme was to 68 110 improve and maintain the status and image of the teaching profession and ensure the quality of initial teacher education and ongoing professional development through quality assurance mechanisms and standards.
Sub-Programmes within Programme 5 included the following: • Initial Teacher Education; • Newly Qualified Educators; and • Practising Educators Within this programme, SACE had six (6) performance indicators as follows: Planned Target (2020/21), Actual Achievement (2020/21) and Deviation • Development of the teacher professionalization policy - The planned target was a draft policy produced.

This target was achieved with no deviation.


• Policy framework registering student educators from year 1 - The planned target was for development and consultation of the policy framework.

This was achieved with a Draft Policy framework for registering student teachers from year one being available.

• Development of the Professional Certification Framework and Policy for educators registering with Council - The planned target was an approved Research Report on Professional Certification.
This was achieved with no deviation.

• Development of the teacher designation - The planned target was for an approved teacher designation.

This target was achieved with no deviation.

• Development of re-certification framework - The planned target was a draft framework developed.

This target was achieved with no deviation.
5.3.5 Annual Financial Statements Table 1: Statement of Financial Position Assets Current Assets Receivables from exchange transactions Receivables from non-exchange transactions Cash and cash equivalents 2021 2020 996 568 588 216 354 159 374 441 105 626 344 107 894 193 69 111 Non-Current Assets Property, plant and equipment Intangible assets Total Assets Liabilities Current Liabilities Payables from exchange transactions Unspent CPTD Grant Total Liabilities Net Assets Accumulated surplus Notes: Financial Position: • Total assets increased by 7.3% (property, plant and equipment and cash equivalents); from R174 530 654, during 2019/20 to R187 274 134 in 2020/21, there is increase of total assets by 7.3% % from 2019/20.
• Non-current assets increased by 22% (due to acquisition of Limpopo and KZN offices); • Current liabilities, there is 18,5% decrease, whilst in 2019/20 there was an increase of 28,1 % increase.

(Decrease of Accrued expenses 31.03.2021); • Accumulated surplus increase of 10% of accumulative surplus compared to 2019/20 • 3,4% increase of the surplus.

The biggest increase compared to previous year is 2020/21.
(Unspent CPTD grant and Unspent operating expenses due to covid-19 interruptions); • Financial position of SACE is favourable Table 2: Statement of Financial Performance 2021 2020 Revenue Revenue from exchange transactions 70 112 Registration and reprints Recoveries Other income Interest received 9 195 207 9 971 198 19 755 9 318 - 41 956 2 003 222 4 629 426 Gain on disposal of property, plant and equipment - 4 785 Total revenue from exchange transactions 11 227 502 14 647 365 Transfer revenue Government Grants Membership Fees Fines 12 951 193 18 832 932 79 464717 77 730 525 640 616 798 000 Total revenue from non-exchange transactions 93 056 526 97 361 457 Total revenue 104 284 028 112 008 822 Expenditure Employee benefit costs Depreciation and amortisation Lease rentals on operating lease Debt Impairment Loss on disposal of assets and liabilities Operating Expenses Total expenditure Surplus for the year (58 435 915) (56 223 424) (3 077 915) (2 765 423) (1 462 524) (1 262 496) (584 983) (2 119 421) (862) - (24 667 938) (44 453 940) (88 230 137) (106 824 704) 16 053 891 5 184 118 5.3.5.2 Notes: Financial Performance: • Revenue from Operating Transactions decreased by 23.3%.
as compared to 83.7% in 2019/20 • Low interest generation on the purchase of assets.

• There was a decrease of 31.2% on CPTD subsidy spending.

There was less physical contact with educators due to Covid–19 disruptions.

• There was a Total Revenue decrease of 6.9% due to CPTD spending and a decrease of collection of subscription; registration fees and interest.

• Personnel Expenditure increased by 3.9% - an inflation related increase.
• Operating Expenditure decreased by 44.5% due to the adjustment of business operation and cost-cutting measures.

71 113 • There was a Total Expenditure decreased by 17.4% due to a decrease in operating costs as compared to 2019/20 33,8% increase • SACE operated within its collected revenue of 104 million.

• A surplus of R16 million was realised and approval has been obtained to retain surplus for contingency and improving operating infrastructure.
Table 3: Statement of Changes in Net Assets Balance at 01 April 2019 Changes in net assets Surplus for the year Total changes Balance at 01 April 2020 Changes in net assets Surplus for the year Total Changes Accumulated Surplus Total Net Assets Balance at 31 March 2021 172 710 251 172 710 251 5.3.5.3 Notes: Changes in Assets: • Total Net Assets increased by 10.2 percent due to retained surplus for the year Table 4: Statement of Cash Flow Figures in Rand Cash flows from operating activities Receipts 2021 2020 Membership, registration, reprints and other receipts 88 862 509 88 541 418 Grants Interest received Payments Employee costs Payment suppliers and others 12 878 000 20 000 000 2 003 222 4 629 426 103 743 731 113 170 844 (56 671 907) (56 223 424) (31 637 627) (43 185 276) 72 114 Net cash flows from operating activities Cash flows from investing activities (88 309 534) (99 408 700) 15 434 197 13 762 144 Purchase of property, plant and equipment (16 629 261) (2 673 335) Proceeds from sale of property, plant and equipment Purchase of other intangible assets - (1 072 781) 19 144 (83 141) Net Cash flows used in investing activities (17 702 042) (2 737 332) Net Increase in cash and cash equivalents (2 267 845) 11 024 812 Cash and cash equivalents at the beginning of the year 107 894 193 96 869 381 Cash and cash equivalents at the end of the year 105 626 348 107 894 193 5.3.5.4 Notes:
 Cash Flow • The cash inflow into SACE decreased by 8.3% due to a decrease in CPTD subsidy spending as well as a decrease of collection of subscription; registration fees and interest • The net cash flows from operations increased by 12.1% due to a decrease in operating cost(outflow).
• Cash and Cash equivalents on the 31st March 2021 was R105.6 million and the necessary approval has been obtained.

5.3.6 Auditors Report A few misstatements of information were identified and corrected.

Emphasis of matter was raised on reported performance information regarding professional development in respect of the alignment of APP and performance reporting as well as insufficient performance records.

Remedial actions were being implemented.

SACE received an Unqualified Audit opinion for 2020/21.
5.3.7 Portfolio Committee Observations 73 115 • Members noted that the COVID-19 pandemic had negatively impacted on the work of Entities and queried how SACE managed to address challenges in respect of the Ethics Committee pertaining to disciplinary hearings and summonsing of witnesses • Regarding financial underspending, it was noted that SACE had not spent sections of the budget and this could constitute financial irregularities.
Members queried reasons for the underspending and how was SACE looking to attend to the matter.

• Members noted the approved remedial action to be implemented against the AG findings but queried the content and scope of the remedial action plan to be explained in more detail.

Members noted there were similar findings in the past.

• In respect of the Audit Findings and remedial action, Members also queried whether there was any consequence management for errand officials.
How was management ensuring there were sufficient controls in place and what interventions were being considered to rectify the situation?

• With cases not finalised by SACE, Members sought a detailed report on the number of cases not finalised, the category of cases, costs of investigation and reasons why these cases could not be finalised.

• Where targets were not being met, Members queried whether officials were being held accountable.
• Members queried when and how educators needed to be registered with SACE – was this a once off registration or annual process.

How often did educators have to register?

• There were many reports of serious abuse of learners by educators and a perception that sexual predators was not being kept out of the schooling system.

Members queried the plans in place by SACE to mitigate these challenges.
• What research had been conducted by SACE regarding the abuse of learners by educators – and how was SACE managing to do the necessary forecasts on such matters.

• Regarding the AG findings, Members noted the approved remedial action to be taken by SACE, but Members were of the view that SACE was lacking in its cooperation and focus on genuine actions to mitigate the findings.

SACE seemingly did not take this matter seriously.


• There was a need to ensure that educators received value-for-money from the work of SACE.

• Members queried issues pertaining to the assets in two provinces (KZN and Limpopo) – and queried whether these were SACE own property.

Members queried whether SACE could afford to have its own property rather than utilise government buildings or other alternatives.
74 116 • Members also queried figures in respect of depreciation and whether SACE had been able to prepare educators adequately for the 4th Industrial Revolution.

• The SACE salary bill was around 60 percent and Members were of the view that SACE employed too much personnel.

It was noted that SACE had no persons with disabilities employed and Members queried reasons for this.
5.3.8 Responses SACE welcomed the Committee holding it accountable and reassured the Committee the inputs of the Portfolio Committee were taken very seriously.

SACE was engaged with the findings of the AG and was being addresses through the approved remedial actions.

SACE was implementing a zero-tolerance approach to holding staff accountable for submitting reports.
The remedial actions were in place and was being implemented with regular meetings of the Exco and Council with quarterly reports to be submitted.

SACE was also engaging with Umalusi to learn some of their best-practices toward a clean audit outcome.

SACE was also strengthening its Planning, Monitoring and Oversight unit with assistance and support from the Department of Basic Education to address findings.

SACE was looking to assess and explore virtual processes and engagements going forward.
The Council would ensure a written response on the specifics pertaining to the remedial plan of action.

Further to this, the Council would ensure a detailed breakdown of the cases not finalised as requested by Members.

Regarding staff with disabilities, SACE ensured that with all posts being advertised, there was an indication that all persons with disabilities were free to apply.

Educator registration was a once-off process.


However, there were instances were educators applied for promotional posts and needed to request registration certificates again.

It was agreed that issues of educator misconduct were on the rise.

SACE was looking to commission some research in respect of profiling of abusers as well as interventions to deal with issues of sexual misconduct.

Findings of the research study would be made available to the Portfolio Committee.
SACE was working within the new normal and digitisation processes in respect of the 4th Industrial Revolution.

ICT was considering new strategies to assist in this regard.

SACE had regular webinars with educators across the country.

Regarding the acquisition of the assets in two provinces, it was mentioned that SACE was looking to coming closer to teachers by opening offices in these provinces.

As renting property was not sustainable, Council acquired its own properties and thus saving on rentals.
As with all assets, these do depreciate as the years go by and assets do get written off.

SACE had a 3-yearly review 75 117 of its funding to make a determination regarding levies to be paid.

Further to this, SACE also needed to fund its non-negotiable commitments.

SACE was considering addressing issues of the status of funding salaries on an annual basis.
SACE also gave a detailed explanation to issues pertaining to the surplus accumulated as well as the remedial plans in place by SACE to address AG findings as follows: • Technical Indicator descriptions; • Policies; • IT improvements • Cut-off Procedures; and • Internal controls Regarding the matter of the learner who had committed suicide, SACE indicated that they had been on the ground in the Eastern Cape doing its investigations in collaboration with the Eastern Cape Provincial Education Department.
From the preliminary investigations, the matter has been there since 2019 and the SGB had never been informed.

The investigation remained ongoing and SACE would submit a report to the Portfolio Committee once the investigations had been concluded.
5.3.9 Portfolio Committee Recommendations Based on the observations made from inputs received by SACE, the Portfolio Committee recommends that the Minister should ensure that the Department of Basic Education consider the following recommendations: o Ensure stricter implementation of consequence management against errand officials and management to ensure there is sufficient controls in place.

Officials need to be held accountable with immediate effect.
o Ensure that educators found guilty of sexual misconduct are kept out of the schooling system to mitigate educator abuse against learners.

o Ensure that the remedial action in respect of the AG findings be implemented through proper cooperation and a focus on genuine actions to mitigate the findings within two months of tabling of this report.

o Engage with SACE in identifying best-practice in pursuit of a clean audit.
o Strengthen its Planning, Monitoring and Oversight unit with assistance and support from the Department of Basic Education to address findings within one month of the tabling of the BRRR report.

76 118 o Commission research in respect of profiling of abusers as well as interventions to deal with issues of sexual misconduct – findings of such research be made available to the Portfolio Committee by the end of the 2021/22 financial year.
o Reconsider the property ownership in two provinces and look at alternate methods of acquiring office space to save costs e.g.

utilisation of government buildings.

o Ensure that people with disabilities are attracted to employment at SACE with immediate effect.

o In respect of the learner suicide case, all educators implicated be suspended with immediate effect from tabling of the report.
o Ensure that SACE prepares and submits written responses within a month of the tabling of the BRRR report on the following: ü SACE Remedial Plan: A detailed report on the remedial action plan to be implemented against the AG findings (content and scope).

ü SACE Cases not Finalised: Number of cases not finalised, category of cases, costs of investigation and reasons why these cases could not be finalised.
ü Case of Learner Committing Suicide – A report on the outcomes of the investigation The Economic Freedom Fighters rejects the report.

Report to be considered 77 119 National Council of Provinces 1.
REPORT OF THE SELECT COMMITTEE ON TRADE AND INDUSTRY, ECONOMIC DEVELOPMENT, SMALL BUSINESS DEVELOPMENT, TOURISM, EMPLOYMENT AND LABOUR, JOINTLY WITH SELECT COMMITTEE ON TRANSPORT, PUBLIC SERVICE AND ADMINISTRATION, PUBLIC WORKS AND INFRASTRUCTURE AT THE CITY OF CAPE TOWN AND THE WEST COAST DISTRICT IN WESTERN CAPE PROVINCE, DATED 7 DECEMBER 2021 The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, jointly with Select Committee on Transport, Public Service and Administration, Public Works and Infrastructure, having undertaken an oversight visit to the City of Cape Town and West Coast District Municipality in Western Cape Province, from the 17 - 20 August 2021, reports as follows: 1.
Introduction One of the core challenges of the South African economy is the disparity between provincial economies, and within provinces, regions, cities and towns.

Larger cities and towns are growing faster than small regions and towns.

The key is to reduce the disparities between larger cities and towns.

These inequalities were also clearly demonstrated during the oversight visit in the City of Cape Town and the West Coast District Municipality.
Over the medium term government has set key objectives to address unemployment, poverty and inequality across the country.

This requires that government interventions balance private sector activities and the demands to lift economic growth and development.

What is more concerning, is the continuing inequality in the economic performance of the regions, despite government economic development interventions.
1 120 The delegation expressed the need to find sustainable solutions to improve economic governance at a local level, to address imbalances between regions and within regions.

Partnerships between government at all levels with the private sector should be strengthened to drive regional economic development.

Coordination at all spheres of government (including development agencies) in partnership with the private sector in implementing economic development initiatives should be supported, and cemented.
2.

Purpose of the visit The purpose of the visit by the joint Select Committees was to receive economic growth and development performance reports from the City of Cape Town and West Coast District Municipality.

The presentations covered achievements and implementation plans in relation to the local economic development programmes covering investments in areas such as Transport, Tourism, Special Economic Zones (SEZs) and the status report on the taxi violence in the City of Cape Town.
The delegation also visited projects implemented by the Department of Public Works and Infrastructure Development (Integrated Facilities Management – South African Police Service (SAPS) Forensic Science Laboratory), Department of Transport (Public Transport Interchange – DuNoon), Department of Small Business and Development (Honest Chocolate), Department of Employment and Labour (Bellville Labour Centre) and Department of Trade and Industry and Competition (Sigma International, Blue Sapphire Pearls), and the Department of Tourism ( West Coast National Park).
Further, the delegation visited the Saldanha Bay Industrial Development Zone SOC Ltd (SBIDZ).

3.
3.

Delegation The following members form part of the delegation: - Mr MI Rayi (ANC): Chairperson of the SC on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour; - Mr K Mmoiemang (ANC): Chairperson of the SC on Transport, Public Service and Administration and Public Works and Infrastructure; - Ms ML Moshodi (ANC); - Ms ML Mamaregane (ANC); - Mr T Brauteseth (DA); and 2 121 - Ms HS Boshoff (DA).
The delegation was accompanied by the following officials: Ms M Koff and Mr H Mtileni (Committee Secretaries); Mr Z Ngxishe, Mr A Ganief and Mr T Makhanye (Committee Researchers); Mr L Sishuba (Content Advisor); Mr Johnny Van Der Westhuizen (Committee Assistant).

4.

Building an inclusive economic growth: Growing the economy and creating jobs The City of Cape Town is the main driver of the provincial economy and a valuable source of economic growth for the country.
Cape Town is the third largest contributor to national gross domestic product (GDP), accounting for 9,8 per cent of output in 2018, whilst its contribution accounts for 71,0 per cent of the Western Cape province’s economic output.

Largely the economic activity in Cape Town (and the Western Cape) mirrors national trends, although in most instances outperforming the national average annual GDP growth rate.
The Cape Metro area spans approximately 2 446.4 square kilometres and is bordered by the West Coast, Cape Winelands and Overberg Districts.

The metropolitan area is not only the commercial hub of the Western Cape Province, and the second biggest economy following City of Johannesburg.

It also a valuable national port and tourist destination.
Cape Town’s economic performance, as measured by GDP-R (value), is driven by the finance, community services and trade sectors, followed closely by the manufacturing sector.

Between 2014 and 2018, average annual growth remained fairly stable across the broad sectors, with the exception of agriculture, electricity and mining.

The informal sector has often been an overlooked part of South African economy including Cape Town’s economy.
The importance of the informal economy is now gaining more attention as a strategic sector that could support South Africa including provincial and local economies to become more inclusive.

Consistent with vulnerability (including poverty and unemployment), limited access to healthcare, and population density, the following areas are most vulnerable: Gugulethu, 3 122 Khayelitsha, Mitchells Plain, Macassar and DuNoon.

These areas are most in need of economic opportunities.
The population group with the highest percentage of people living in poverty is the African population group with a total of 61.4 people living in poverty, using the upper poverty line definition.

The proportion of the African population group, living in poverty, decreased by 7.16 percentage points, from 61.40 in 2008 to 54.24 in 2018.

In 2018 0.92 per cent of the White population group lived in poverty, as compared to the 0.89 per cent in 2008.
The Coloured and the Asian population group saw a decrease in the percentage of people living in poverty, with a decrease of 5.54 and 3.09 percentage points respectively.

Unemployment remains one of the highest risks in South Africa.

South Africa unemployment rate reached 34.4 per cent in the second quarter from 32.6 per cent in the first quarter.

This unemployment rate is characterised by the StatsSA as the highest since the institution introduced the quarterly labour force survey in 2008.
The expanded unemployment rate, which includes people who are discouraged from seeking work, sits at 44.4 per cent from 43.2 per cent in the first quarter.

The City of Cape Town is the second largest contributor to national employment.

Although unemployment rate in the City of Cape Town remains lower than the Country’s average.

Employment creation initiatives need to be accelerated.
Global evidence continues to point to the direction that more equal economy generates stronger and more stable growth, lower social costs and greater wellbeing.

Prosperity and economic justice are no longer seen to be in conflict to each other.

The global financial crisis during 2008 and 2009 had a severe impact on the economy of South Africa, which also affected the Cape Metro’s economy.
Since Covid-19 reached Cape Town and South Africa, the economic effects of the pandemic and the resulting lockdown are still being felt, particularly by the most vulnerable groups.

Many people still live in poverty, and are with-out jobs.

Inequality is worsening.

The economy is not growing as expected.


4 123 The Western Cape Provincial Department of Economic Development and Tourism submitted that in order to gauge the impact of Alert Level 4 lockdown on the hospitality sector it conducted an industry poll (as from 8 July 2021).
The findings of this poll was as follows: • Over 400 businesses completed the survey with most responders belonging to the accommodation and restaurant subsectors (other subsectors were reflected as well) • Lockdown prevented almost a third of responders from legally operating • Roughly 40 per cent of responding businesses were closed temporarily due the lockdown • Five per cent of responders have had to permanently close their businesses • Approximately two thirds of businesses that completed the survey say that will lose between 75- 100 per cent of their expected revenue for July/ August 2021 • Almost a third of responders have had to retrench staff Programmes of the Western Cape Provincial Department of Economic Development and Tourism to create jobs and mass employment include the Artisan Development Programme which seeks to assist youth and school leavers with on the job training, the funding allocated to this programme is R65 million.
The Department has partnered with Sectoral Education and Training Authorities (SETA) which have co-funded the programme.

To date 4153 youths have been placed at host companies.

To rebuild the economy, and to create much needed jobs, the City of Cape Town submitted that it has a developed an inclusive economic growth strategy, and economic recovery plan.

The strategic documents aim for the City of Cape Town to improve and enhance coordinated action between all sectors of society and spheres of government.
The City of Cape further aims to build a business-friendly environment that will enable firms to grow and create jobs, whilst adapting to market changes, and will empower individuals to be economically active and socially mobile.

In a bold move recognising unemployment, poverty and inequality as key risks to an inclusive economic growth agenda.

The City of Cape Town submitted that it will ensure it plays its role in creating more shared and greater prosperity.
The City further indicated 5 124 that it will focus on programmes that will place the City as one of the global competitive cities with a strong business climate to attractive investment.

It will further focus on promoting and supporting business opportunities, and in partnership with the private sector invest in infrastructure including maintaining physical assets to create economic opportunities.
There is a need not only to create a conducive business environment to ensure that businesses grow, but also to ensure that the economy is much fairer to the people.

Covid- 19 pandemic has exacerbated the conditions that many small businesses including informal enterprises are operating, and affected many livelihoods of many households.
Whilst the Western Cape Province did not suffer economic inactivity as a result of violent unrest that crippled Gauteng and KwaZulu-Natal provinces’ economic and business activity, it has suffered due to violent taxi conflict that happened in the City of Cape Town.

The taxi violence has hampered some of the businesses’ operations, and put jobs of many people, particular from vulnerable groups at risk.
In an attempt to restore and rebuild the economy, and revive formal and informal business industry, the City of Cape Town has created economic and financial incentives covering: • Prioritising single-point investment facilitation; • Fast tracking building plan and land use applications; including building plan application fee waiver and land use application fee waiver; • Fast tracking occupancy certificates; • Development contribution deferral and write off up to R1 million; • Special electricity tariffs for a period of two years; • Engaged with some 247 companies and organisations, resulting in breaking ground on investment projects valued close to R15 billion; • Realised the expansion of the Atlantis Investment Facilitation Office which will focus on broadening investment opportunities in and around the area.
Further stimulating greentech industry; • Roll-out the Business Retention and Expansion (BR&E) programme; • Accelerate Covid-19 Industrial Action Plan.

6 125 The City of Cape Town has set key priority initiatives to develop the right conditions for SMMEs to start, grow and thrive.
In a drive to grow businesses and create jobs, the City will focus on the following areas: • Reducing regulatory barriers by ensuring that laws and policies promote a business friendly environment; • Drive reforms that prioritise an ease of doing business environment and improve the overall business climate by addressing any systemic constraints holding back growth of enterprises; • Provide an SMME One Stop service that; • Ensures that entrepreneurs and small business owners have access to in-demand information, tools and resources through the Business Hub, to enable economic recovery post Covid-19; • Prioritises red tape reduction; • Support retention and expansion of small businesses; Facilitate enterprise and supplier development; • Facilitate access to employment opportunities (Workforce Development) by linking employers to skilled pools of talent they require to grow their operations as well as facilitating partnerships to support skills for the economy; and • Promote economic inclusion.
Programmes of the Western Cape Provincial Department of Economic Development and Tourism to assist Small Medium and Micro Enterprises (SMME’s) include the Transversal SMME Support Programme.

Projects under this programme include the SMME Booster Project which seeks to support SMME’s seeking to increase or improve capacity.

In addition, this project sees to the provision of trading spaces for SMME’s.
Funding allocated to the project assisting SMME’s amount to R26.3 million and to date 370 SMME’s have been supported.

In an effort to grow the economy by creating a positive and enabling environment to do business, develop skills and promote trade and investment, the City of Cape Town fund identified Strategic Business Partners (SBPs) to deliver sector projects (The Catalytic 7 126 Development Projects) facilitate investment, create jobs, skills development opportunities.
The Catalytic sectors contributes to the following: • Facilitating investment and trade in identified sectors; • Defining and facilitating programs that promotes skills development training and business development in priority sectors; • Monitoring the implementation of sector development strategies and programmes; • Stakeholder management and relationship building; and • Strengthening priority sectors through collaborations with key partners on research and industry events/initiatives.
The City of Cape Town in partnership with the Western Cape Government and private sector will put plans to unlock the value of the following priorities: • Attracting investment in Cape Town's catalytic growth sectors, namely Oil and gas; • Agro-processing, financial services, corporate head offices, medical technology; • Green industries, tourism and events and business process outsourcing; • Promoting Cape Town-based businesses in South Africa and abroad; • Attracting visitors and recruiting talent, particularly scarce skills; • Attracting large strategic events to promote tourism and investment.
The Western Cape Government Provincial Department of Economic Development and Tourism reported it will support and promote growth of the pharmaceutical industry.

It supports the national initiative invest on the growth and of Biovac in Western Cape.

The City of Cape Town reported that in 2020/21 it has supported identified sector projects with an amount of R R55 million, facilitated investments to the value of R9,7 billion.
The initiative has created 10 194 jobs, and through various training initiatives, 3405 people were trained in industries IT, call centre, greentech, craft and design, and clothing and textile.

The Western Cape Provincial Department of Economic Development and Tourism reported that it has facilitated 17 investment projects closed to the value of R4,37 billion, against a target of R2,77 billion.

This resulted in the creation of 1 830 jobs.


With regard to export promotion, the Western Cape Provincial Department of Economic Development and Tourism indicated submitted that 66 business agreements were signed, with an estimated economic value of R4,66 billion, resulting in 357 jobs.

8 127 The Film industry is one of the essential industries that is seen an important industry in terms of employment.
It was reported by the Western Cape Provincial Department of Economic Development and Tourism that it has facilitated 7 declarations to the value of R612 million, which were signed, resulting in the facilitation of 413 full-time equivalent (FTE) jobs.

The City further reported that through the investment facilitation it has forged collaborative initiatives with key stakeholders and partners.
The investment facilitation initiative has yielded the following: • Supports development processes for investments exceeding R20 million or deemed strategically important; • Identifies systemic bottlenecks in City processes that need to be addressed in order to make it easier for all investors; • Manages the Atlantis Investment Facilitation Office (AIFO); • Manages the City’s investment incentives programme; • Supports the Atlantis Special Economic Zone for Green Technologies; • Provides aftercare and business retention services to investors; • Supports special economic infrastructure related initiatives port, airport, Bellville innovation district; • Focuses on productive investment in the real economy i.e.
manufacturing; Provides support to domestic and foreign investment with respect to City mandates; • Provides links to governmental and non-governmental actors in the rest of the investment support ecosystem.

Marketing initiative remains the key priority for the City.

The City of Cape Town further indicated that it will continue to invest in marketing initiatives to promote the City as a premier destination to visit, live, work, study, play and invest.
Current, the City reported that it is aggressively lobbing the Department of Home Affairs to consider granting Remote Work visa.

Long-stay visitors (Remote Workers) hold significant potential for Cape Town’s economy, positively impacting several key sectors.

9 128 Tourism is one the strategic and important industries in terms of employment creation and contribution to economic growth.

It one of the industries that was severely affected by Covid-19 pandemic.
The City reported that it will continue to support tourism industry, and through the implementation of the Tourism Development Framework 2019 2024 it as expecting to implement the following: • Covid 19 Standard Operating Procedures throughout industry; • Building Destination Confidence; • Community Readiness to exploit tourism opportunities; • Schools programme; • Responsible Tourism Ambassador programme; • Tourism Law Enforcement Unit; • Deployment of Tourism Monitors (NDT) • Air Access Initiative; • Support and promotion of cruise liners.
Further, the City submitted that it has developed a ten-point tourism strategy, which aims to breathe life back into the tourism industry.

In the main is to boost economic recovery.

Investor and business confidence in the South Africa is low.

This has the potential to affect investments in other critical strategic sectors identified having a potential to drive an inclusive economic growth agenda.
This view was also highlighted by the Western Cape Government’s Department of Economic Development and Tourism.

It was emphasised that both the City of Cape Town, and the Western Cape Government will continue to support initiates that promote investment in strategic sectors.

Investment will be deployed to boost skills in the Western Cape to support strategic catalytic economic projects.
Further to strengthen partnerships with higher education institutions including research institutes, and invest in Research and Development to support science and innovation.

City Western Cape Government including the City of Cape Town in partnership with private sectors would boost investment in infrastructure (transport, energy, water and sanitation).

10 129 Further support and promote investment in ICT and creative industries.

Investment in the ocean and green economy would be prioritised.
There are various initiatives that have been formed to support the ocean and green economy.

The Western Cape Government in partnership with the City of Cape Town have established and operationalise the GreenTech Special Economic Zone in Atlantis.

There are development initiatives focusing on Oil, Gas and Marine services in the Industrial Development Zone that can result in investment recruitment and job creation in Saldanha Bay.
Further, it was reported by both the City and Western Cape Government that there are plans in place to position the Western Cape as renewable energy hub to support economic growth and jobs creation initiative.

Building trust across communities remains a challenge.

The City of Cape Town would need to work closer with all communities to bridge the trust gap, particular with African communities.
Further, the City of Cape Town would need to work closer with all the three spheres of government, communities and the private sector to implement an inclusive economic recovery plan.

For the City to succeed it should see prosperity being realised by all communities, particular the vulnerable groups, women, youth and people with disabilities.

Observations: • Before the Covid-19 pandemic, the economy was experiencing a period of protracted economic weakness.
The Western Cape economy grew by only 0.8 per cent in 2018 and this declined to a projected 0.2 per cent in 2019, by the time lockdown happened, South Africa was already in a technical recession.

The impact of the pandemic and the resultant lockdown was widespread, hardest hit sectors in the Western Cape are tourism, informal sector, construction, trade and manufacturing.
Despite these prevailing conditions, provincial employment rebounded stronger than expected, the Fourth Quarter of 2020 the Western Cape’s employment growth was 5.5 per cent.

This growth is attributed to agriculture, agri-export, retail trade and construction.
The Western Cape Provincial Department of Economic Development and Tourism recovery area is to create an enabling environment for job creation focussing on the following themes, namely: Accelerate Ease of Doing Business; Boost investment and 11 130 exports; Boost infrastructure; Scale up work opportunities and skills for people without jobs and Economic Resilience.
• In alignment with the National Economic Reconstruction and Recovery Plan, which identifies priorities for the economic recovery from the socio-economic consequences of the pandemic, the Western Cape Recovery Plan shares numerous priority interventions with the national plan, including infrastructure development, export promotion, energy security and the green economy, tourism recovery and growth, mass employment interventions and increasing food security.
In respect of economic recovery, the Western Cape Recovery Plan will focus on the underlying reasons for lack of growth.

The province has taken into account the increase in unemployment, reduction is economic provincial economic activity and lack of investment and has developed a plan to help the economy “bounce back” and “bounce up”.

These relate to immediate and medium term interventions which seek to revive and stimulate demand and sort out binding constraints and core fundamentals.
In terms of immediate interventions, the plan to help the Western Cape economy “bounce back” has involved the provision of immediate public sector support to provide capital and jobs for the economy and to boost business and consumer confidence.

In the medium term, the aim is to help the economy “bounce up” by fast tracking private and public sector infrastructure projects and addressing some of the fundamentals and constraining economic growth and job creation.
Due to educational gaps owing to school closures and loss of revenue and earning capacity, a critical component of the recovery strategy is to address these gaps.

• The City of Cape Town reported that initiatives are in place to provide the necessary support to businesses to mitigate the worst of the economic crisis as a result of the Covid-19 pandemic.
Relief measures provided by the City of Cape Town to assist in economic recovery include initiatives such as the Investment Facilitation Unit and its incentives policies which help potential investors navigate municipal processes.

This unit furthermore provides financial and non-financial incentives and are working towards making policies more inclusive, allowing more diverse businesses to grow.
Incentives include prioritising single point investment facilitation; fast tracking building plan, occupancy certificates and land use application fee waivers.

Additional incentives include special electricity tariffs for a period of two years.

The Metro has instituted lease deferment to those businesses leasing from it; provided industry 12 131 support through strategic business partners.
These strategic business partners helped bring R9.7 billion is direct investments into Cape Town, directly creating 10 194 jobs and contributing to the training of a further 3405 people in various skills suitable for sectors of information technology, call centre agencies, greentech, craft design, clothing and textile sectors.

Furthermore, the Metro has regrouped special purpose vehicles (i.e., repurposing clothing factories to produce Public Protective Equipment).
• In terms of support to the township economy, the City of Cape Town reported that it is running three incubator programmes in township communities to assist individuals in accessing new employment opportunities and growing their own businesses.

Programmes include the Small Business Incubation and Development Programme, which provides local business incubators with funding, facilities and business development workshops.
The nature of the training provided by these incubators empower entrepreneurs in townships with knowledge that enables them to sustain their businesses.

Incubators furthermore enable participants to understand the requirements of tendering to the City’s supplier development and smart procurement workshops which are also now being held virtually.
• In terms of urban management, it was noted that the pavement economy of informal traders will be assisted through easing the application process, easing regulations, digitisation of permits.

The City of Cape Town is working towards ensuring that informal traders have the infrastructure needed to form a key part of the City of Cape Town economic growth plan.
• Of key concern to the Committee was how resources were distributed particularly with regard to spatial framework to close the gap between communities and address the structural constraints in advancing communities.

• The spatial mismatch, with disconnections between people, skills, jobs and investment, is a persisting legacy of apartheid and inadequate coordination of development planning policies, resulting in transport inefficiencies, long travel distances and high travel costs for the poor.
The City recognise this challenge.

The City submitted that it has developed plans and interventions that seek to tackle spatial inequalities, including social and economic inequalities.

Further, it was reported that the City of Cape Town has developed strategies and interventions towards the creation of economic opportunities within townships, and making investment (transport, water and sanitation and energy) in these areas to attract investors and businesses.
13 132 4.1 Public Transport Planning and Investment City of Cape Town has approximately 4,6 million citizens.

49 per cent of morning travelling is made up of public transport.

Further, 95 per cent of low to lower middle income use public transport.

51 per cent of travelling is composed of high to middle income communities.

The transport system is faced with capacity constraints that need to be tackled.

The rail infrastructure is declining, and the road transport is experiencing congestion.
Rail transport is experiencing overcrowding, late arrival of trains, cancellation of services, vandalism, crime and security.

Although the City of Cape Town is not an exception to other cities around the world in terms of congestion of road transport, a need for general public transport investment.

But the situation in the City need urgent attention.

As it has the potential to compromise the realisation of the inclusive economic growth agenda.
The City acknowledged that roads are getting more congested as the city’s economy grows and more people choose to live and work in Cape Town or visit as tourists.

However, there is a need to address the spatial planning in the City.

It was reported that there is a poor spatial relationship between jobs and residents, and that results in inefficient and unsustainable travel demand.
The City of Cape Town submitted that it has developed infrastructure investment plans to improve road infrastructure to reduce bottlenecks, build missing links and extend cycling and walking paths.

The deterioration of the rail transport has caused a significant increase in the usage of mini-bus taxis.

The decline of the rail services need to be urgently addressed.

This pose a risk that could compromise the City’s economic growth potential.
Good public transport is needed to address inequality, and building an inclusive economy and society.

Lower income, and lower middle income households depend on public transport.
It is important for the City to tackle the following challenges: • There is a need to improve spatial planning, and tackle the disjuncture between transport and land use; 14 133 • The deterioration of the rail service in Cape Town, which has caused an increase in the usage of road transport; • Poor households are experiencing high cost of transport, and thus make transport unaffordable and increase costs of searching for work opportunities; Hence it is important to investment in initiatives to improve public transport.
The City acknowledged that rail is the backbone of public transport, and it will continue to engage other spheres of government to address constraints faced by rail transport system.

The City highlighted that public transport is characterised by fragmented governance.
It is difficult for the City to achieve interoperability and multi-modalism when it only has complete control over the operation and implementation of two modes even though it is responsible for the long term strategic planning of all public transport.

Rail service is not managed by the City, it is managed by MetroRail, a division of the Passenger Rail Agency of South Africa (PRASA), which is a National Government responsibility.
There is a need to improve coordination to accelerate investment in public transport to accommodate growth, and to further meet environmental and social policy considerations.

There is a need to devolve public rail transport (allow concessions to operate rail transport) to the cities to improve effectiveness, and efficiency of the rail transport, and to improve safety and security, this is the policy area that the City of Cape Town supports.
Over the medium term, the City of Cape Town submitted that it will undertake the following initiative to improve transport system, and boost efforts to realise an inclusive growth agenda: • Review of the Integrated Public Transport Network Plan with a focus on demand responsive public transport provision at the appropriate time; • Developing a framework for our new 5 year CITP; • Review of the Cycling and NMT Strategies; • Review of the Freight Management Strategy; • Development of our Transport Operating Company model to promote formalisation of the MBT industry over time; • Continued focus on the travel demand management initiatives such as the flexible working programme and future of work initiatives; 15 134 • Continue collaboration and engagement with a wide range of transport stakeholders through the Land Transport Advisory Board and Intermodal Planning Committee and associated sub committees; • It will further continue with the NMT roll out programmes of building cycle lanes and pedestrian facilities including universal access; • Using the pavement management and bridge management systems and to continue to maintain road network (nearly 12 000km); • Continue to engage and push the City’s transport department to address the fundamental built form disparities that result in transport inefficiencies and to embed these principles in the IDP; • Engage with national government for policy and grant reform relating to the need for a paradigm shift in Public Transport planning, funding, provision and management.
4.2 Status update on the taxi violence in Cape Town The delegation received a status update on the work around bring peace on the taxi violence from the Western Cape Government Department of Transport and Public Works.

The report covered three areas, namely statistics on the related taxi violence crimes, integrated interventions, and update on development after the closure of ranks.
Integrated interventions The integrated interventions to stop taxi violence involved the invoking of the Notice in terms of section 91 of the National Land Transport Act.

The Notice of intention was published on 9 July 2021.

This provides for the areas in respect of which the Member of the Executive Council (MEC) of Transport is required, when the needs arise to can take the extraordinary measures.
This includes the closure of routes and ranks in consultation with the South African Police and the Planning Authorities.

The National Department of Transport, Legal Advisory Services procured services of an external legal counsel who verified the content and the legality of both the notice and actions that may follow.

The affected parties were informed that they can make their representation not later than 16 July 2021 and the two representations were received and considered.
The regulation was published on 23 July 2021.

16 135 On 23 July 2021 MEC of Transport in the Western Cape, Mr Mitchell published Regulations for the closure of ranks and routes after having considered the two received representations.

On the same day, 23 July 2021 Transport Contingency Plan was finalized, it was presented to the South African Police Services (SAPS) and other enforcement authorities.
The SAPS and Transport Priority Committee prepared the Transport Contingency Plan and was signed by the stakeholders which included deployment plans for SAPS, South African National Defense Force (SANDF), Law Enforcement and Traffic departments.

On 24 – 25 July 2021 a separate meeting was initiated by the trade union, the South African Federation of Trade Unions (SAFTU) and the political party United Democratic Movement (UDM).
The meeting was both attended by Cape Amalgamated Taxi Association (Cata) and Congress of Democratic Taxi Association Codeta.

On 25 July 2021 the security cluster ministers were briefed by SAPS and the Western Cape Department of Transport on the situation around the taxi violence and the deployment of the SANDF to taxi hotspots was confirmed.
On 26 July 2021 the MEC Mitchell was briefed in relation to the draft unsigned peace agreement by Mr Vavi and Mr Holomisa representing SAFTU and UDM respectively in the presence of Cata and Codeta leaders.

On 26 July 2021, the ranks were closed and the deployment plan operationalized.

With regard to the interventions after ranks and the routes closures, on 27 July the B97 Arbitration started after a one-day delay due to the unavailability interpreter.
Codeta formally informed stakeholders that their affiliates would resume services on 29 July 2021 on routes that were not affected by Section 91 closures.

On 27 July 2021 Santaco national office abandoned plans to host talks with Cata and Codeta after Codeta withdrew following a shooting incident.
On Friday 30 July 2021, the Western Cape Department of Transport and Public Works officials met with Cata leadership at PRE offices to assess the ‘Bridging Agreement’ option in context of Arbitration submissions and legal opinions.

On 31 July 2021 the Western Cape Department of Transport and Public Works officials met with Codeta leadership at their office in Khayelitsha.
Sunday 1 August 2021, the Minister of Transport , Mr Mbalula and Mr Mitchell met with parties in Cape Town for Final Facilitated Talks to find a ‘Bridging Agreement.

17 136 Monday 2 August 2021 Minister Mbalula and MEC Mitchell instructed officials to prepare an Agreement on Cease Fire and Resumption of Services.

An unfortunate incident happened on 4 August 2021 at which taxi driver belonging to Codeta was shot.
However, the spokesperson of Codeta immediately addressed the media to confirm that peace agreement still intact.

On 6 August 2021 MEC Mitchell published ‘Amendment of Notice of Extraordinary Measures.

On 12 August 2021 SANTACO national executive committee met with Cata, Codeta and the Eastern Cape affiliated taxi associations.

Consequently, on 14 August 2021, B97 Arbitration resumed.

5.
5.

Development Projects Visited 5.1 Du Noon Public Transport Interchange (PTI) The Du Noon PTI upgrade involves the construction of a new multiple level building, new covered waiting area for commuters and public open spaces.

The project budget is R37 million and the delegation was informed that the project encountered numerous challenges.
Having encountered numerous challenges, the project managed to progress to a point where the Contractor has completed the construction works for Phase 1 and is in the process of completing the construction works for Phase 2.

The inclusion of feeding back into the community by ways of participation goals of 2% target value for targeted enterprises and targeted labour was set out in this contract with the Contractor meeting and exceeding these values.
5.2 Integrated Facilities Management – South African Police Service (SAPS) Forensic Science Laboratory The delegation received a short briefing and tour of the facility.

It was explained to the delegation that the project seeks to deliver Integrated Facilities Management Services (“IFM”) to the strategic and critically important Forensic Science Laboratory, the facility is based in Parow, Western Cape.
The five year IFM service commenced in November 2017 and is in month 44 of 60 months, being 73 per cent complete, with expenditure of 72 per cent certified to date and the contract value sit at approximately R52 million.

In terms of the contract, the IFM Contractor (Bidvest Facilities Management Pty Ltd) is providing ongoing operational 18 137 services, attending to all reactive maintenance and selected soft services.
The helpdesk system is operational, which SAPS and the DPWI Service Manager (“SM”) are logging both technical maintenance and contractual deliverables against.

Bidvest’s performance is being audited and reviewed monthly by the Service Manager.

5.3 Bellville Labour Centre Bellville is part of northern suburbs in the City of Cape Town and the Bellville Labour Centre is situated within the Bellville Middestad shopping mall.
Industrial areas around Bellville include; Stikland Triangle Park, Sacks Circle, Bellville South and Oakdale.

Bellville South is an industrial zone of Bellville producing paper and food products, bricks, tiles and fertilizers.

Bellville is the centre of automobile retailing and is located on the main railway from Cape Town to Johannesburg.

Bellville South has the largest Marshalling yard in the Western Cape.
The Stikland Industrial Park is home to many companies including Beekman Canopies, Absolute Logistics, Consol Glass, Sun Couriers, Brights Hardware, Delta Steam Systems, CJ Distribution Warehouse, SK Technologies, Sofaplanet, Envirochem, McM Blasting & Coating, Hose Manufactures of South Africa, Elco Plastics, Tanker Services and South African Breweries (SAB).
Access Park has many factory shopping outlets including; Cape King Foods, Nike Factory Store, The Biltong Company, Lee Cooper, New Balance, Wire World, Hertex Fabrics, Levi’s Factory Outlet and Aristea Dairy Farm.

Brackenfell in the north is the Head Office of Shoprite/Checkers and houses Pick’nPay Hypermarket.

Bellville area also consist of rich and diverse area economy with many shopping malls within its perimeter.
Among others are Climor Shopping Mall in Stikland, but other shopping malls nearby are Bellville Mall, Noble Park, Tygervalley Shopping Centre and Cape Gate.

Sanlam and Metropolitan Life head offices are also based in Bellville.

A sizeable number of employees from the above mentioned companies use Bellville Labour Centre to deal with labour issues encountered at various workplaces.
The Labour Centre render the following frontline client services to the public: • Attend to walk-ins for all core business; 19 138 • Council for Conciliation Mediation and Arbitration (CCMA) referrals; • South African Social Security Agency (SASSA) referrals; • Labour related complaints; • Work-seeker Registration; • Injury on Duty Reporting; 5.3.1 Unemployment Insurance Fund (UIF) The UIF contributes to the alleviation of poverty in South Africa by providing short-term unemployment insurance to all workers who qualify for unemployment related benefits.
The benefit types further include: • Unemployment benefits (service terminations, contracts expired, retrenchments); • In-service benefits (maternity, illness, parental, commissioning and adoptions); • Deceased benefits (spouse, dependent, nominees); 5.3.2.
Inspection and Enforcement Services (IES) Inspection and Enforcement Services registers incidents relating to Labour Relations and Occupational Health and Safety matters, as reported by members of the public, and communicates these to the relevant structures within the Compliance, Monitoring and Enforcement sub programme for investigation.
Inspection and enforcement services also ensure that employers and employees comply with labour legislation through regular inspections and following up on reported incidents.

On the other hand, Occupational Health and Safety promotes health and safety in the workplace by regulating dangerous activities and the use of plant and machinery.
The IES structure comprise of the following: • Employer services (Basic Conditions of Employment Act - BCEA inspectors); • Occupation, Health and Safety – OHS inspectors; • IES back-up support (Administrators for Inspectors); 20 139 The key service delivery indicators in terms of inspection and enforcement include: • Employers inspected to determine compliance; • Non-compliant employers served with notices; • Non-compliant employers who failed to comply after notices served, referred for prosecution; 5.3.3 Public Employment Services (PES) The public employment services division assist companies and workers to adjust to changing labour market conditions and to regulate private employment agencies.
PES registers job vacancies and other work opportunities, facilitate placing of work seekers with employers or in other work opportunities and provides the counselling of registered work-seekers.
The following are key service delivery indicators for public employment services: • Work-seeker registration at client services frontline • Work and learning opportunities registered • Registered work-seekers provided with employment counselling • Registered work and learning opportunities filled by registered work-seekers 5.3.4 Compensation Fund (CF) The Compensation Fund provides compensation for disability, illness and death resulting from occupational injuries and diseases.
The structure of CF comprises of: • Medical adjudication; • Pension administration; • Claims processing; • Client service; Service delivery indicators for Compensation Fund include: • Registered Workmen’s Compensation Act (WCA) claims adjudicated 21 140 • Compensation benefits authorised • Medical invoices paid • Pre-authorisation for specialised medical interventions 5.3.5 Management and Support Services This division manages delegated administrative and financial responsibilities, coordinates all planning, monitoring and evaluation functions, security and office support.
The following are some of the challenges facing the Management and Support Services: • Labour Centre location in the Middestad Mall • • Information Technology (IT) system down time and poor signal Imbalance between the Support Structure and Core Business Structure • Lack of sufficient tools of trade to adjust to the new working conditions (e.g.

working from home) owing to the Covid -19 pandemic.
Observations • The Bellville Labour Centre is the second biggest in the Western Cape Province following the Cape Town Central Labour Centre; • The centre is very busy and highly accessible due to its geographic positioning and proximity to multimodal transport corridor consisting of bus terminus, taxi rank and train station; • The Covid – 19 pandemic has reduced the capacity of staff complement by more than half and hard lockdown have resulted to plummeting of lay-offs and by implication rising UIF claims and Temporary Employee Relief Scheme (TERS); • The centre has staff establishment of 122 employees with a vacancy rate of 5 percent with 42 of these officials deployed at frontline services.
The Centre has about 30 Occupational Health and Safety (OHS) officers; • In a month the labour centre deals with 5000 people and there are no case backlogs encountered albeit the ever increasing applications for rendered services.
This defines the level of efficiency in achieving short turnaround times; • On referrals dealing with fund adjudication and analysis of compensation benefits and medical reports the Compensation Fund programme is achieving a commendable 100 percent performance rating; 22 141 • On management support services, the structure has grown by 9 percent over the period of two years while the support structure remains constant; • The location of the Labour Centre within the Middestad Mall is proving to be a challenge as the shopping centre regulations compels the use of one entrance resulting to long queues with adverse effect to the client service experience particularly during extreme weather conditions; • The official business of the centre resumes at 07h30 and closes 16h00 whilst the Mall closes at 21h00; • About 13 000 UIF claims pertaining to retrenchments and non-renewal of contracts were reported as settled during the oversight visit; • The Department of Employment and Labour reported that the sectors of manufacturing, services, hospitality, wholesale, retail and security services were the most affected during the height of Covid – 19 hard lockdowns; • The DEL have entered into ‘working from home agreements’ with the workers and progress monitoring is done on a daily basis to enhance service delivery; • The statutory service outcomes on prosecution of referrals and declaratory orders pertaining to non – compliance in implementation of labour legislative framework by delinquent employer organisations is a prerogative of the justice system and the courts of the Republic of South Africa (RSA); • The defrauding of the state by unscrupulous companies in administering the payment of TERS is diligently monitored by risk management teams which then escalate cases of fraud to the head office of the UIF.
The employers were able to defraud the state because the UIF and the TERS systems were not aligned; • An amount of R30 million was reported as recouped by Special Investigating Unit (SIU) from the implicated officials and defrauding companies during the administering of TERS following the hard lockdowns emanating from the Covid – 19 pandemic; • In respect ICT glitches such as poor signal and downtime, calls are logged and cases escalated to the head office for amicable solution with short lead times; • The Provincial Department of Employment and Labour together with the Labour Centre are content with the proximity of the office to the multimodal transport node.
However, the office should be moved away from Middestad Mall to another available building within the equidistance; • The Western Cape Province was allocated 30 inspectors from the 500 employed by the Department of Employment and Labour in year 2020; 23 142 5.4 Sigma business process outsourcing company Sigma is affiliated to DigiCall Group and is based in Diepriver in City of Cape Town.
This is a call centre business which started its business operations in 2011 and is now reported a key player in youth employment services within the City of Cape Town.

The company received financial support from the Department of Trade Industry and Competition as part of the industrial development and promotion of Foreign Direct Investment (FDI) towards advancing the implementation of the country’s growth and development strategy in lieu of National Development Plan.
Sigma is servicing clients from afar field as United States of America (USA) and the United Kingdom (UK) with a particular focus on energy supply industry (electricity bills) and pharmaceutical industries responsible for Covid 19 vaccine production and administering.

The BPO sector companies are concentrated in large cities finding more prominence in the City of Cape Town metropole and eThekwini metropole commonly known as Durban city.
The BPO sector is highly contested sector in terms of foreign direct investment hosting and South Africa is competing with countries such as India, Egypt, Philippines and Kenya to mention just a few.

According to Sigma company, the BPO sector is considered an aspirational job largely for first time workers from the youth ranks.

This sector offers growth opportunities and employees are able to carve a progressive career path from call centre agents to team leaders and ultimately management echelons.
However, other employees regard this sector as a stepping stone which enables them to transcend to other industries after acquiring requisite work experience.

In South Africa, the BPO sector have an estimated contribution of about 70 000 jobs while in Philippines 1.5 million jobs are ascribed to the industry.
India and Philippines are highly competitive in terms of labour unit price while the comparative advantage of South Africa is relative stability with fewer divestments by foreign companies compared to its competitors.

Sigma is servicing wide range of clients predominantly from UK and USA namely; Eon Scottish power, Vanquis, SES Water, the Kennel Club, Corona Energy, South African collections and government vaccine pure planet (arranging appointments for vaccination).
24 143 Sigma reported that, the employees in their establishment are earning a decent income and are able to support their families.

The success of the BPO sector in terms of employment creation within the City of Cape Town is testament to the implementation of the District Development Model and formidable partnership between the Department of Trade Industry and Competition (DTIC), Provincial Department of Economic Development and Tourism (DEDAT) and the City of Cape Town.
Observations • The inter racial representation of the youth employees in the sector within the City of Cape Town is not clear.

• Call centres are predominantly based in the Central Business District (CBD) areas of the FDI hosting cities, however efforts are underway to bring such job opportunities closer to where the majority of the people reside particularly in the townships.
• International companies are using skills development incubators to train local members of the youth in areas like Athlone, Cape Town CBD and Diepriver.

In selecting an area to house an incubation centre the foreign companies consider issues such as accessibility of public transport, crime levels and available skills set in the area.

• Sigma recruit youth from ages 18 to 35 with a split of 80 to 20 percent between women and men respectively.
• Sigma uses the database from Expanded Public Works Programme (EPWP) and other private sector databases as pool for selecting trainees.

The reality is that black townships are still lagging behind in respect of awareness for such opportunities.

• Cape Town attract investment from foreign companies better than Eastern Europe.

5.5 Honest Chocolate The Honest Chocolate factory is situated at Woodstock Exchange, 7 Barron Street, Woodstock.

It is a small artisanal chocolate company in Cape Town.
The company believe in keeping things hand-crafted using old school methods, using quality organically produced ingredients and making a pure chocolate that has a deliciously distinct feel and taste.

25 144 Honest Chocolate is a 100 per cent South African owned company doing their bit to positively impact chocolate production on the African continent.

The business is owned by Anthony Gird and Michael de Klerk.

All the products are vegan and contain no dairy, preservatives or additives.
The journey of the company.

It all started from a bit of experimentation with raw cacao.

Anthony made a few simple chocolates from raw cacao powder as a healthy treat for himself and friends.

When they were polished off in seconds, with demands for more, he knew he was onto something.

Over the next few months he taught himself more about the art and science of chocolate making, an endeavour that eventually developed into Honest Chocolate.
Meanwhile Michael was also experimenting with raw chocolate in London, with similar results.

So on his return to Cape Town, when the opportunity came to join Anthony on his chocolate adventure, the decision wasn’t all that difficult.

The attraction was the diversity of making chocolate and being involved in something that continually changes, something both fun and rewarding.
The first years of Honest Chocolate were spent working with raw cacao from Ecuador, but with the chain of positivity in mind our, the slabs are now made with organically produced Tanzanian cacao beans which, the company roast, grind, and temper in the Woodstock production kitchen.

It took three-years for the company to find and build a relationship with Kokoa Kamili, who supply it the Tanzanian beans.

The has created Bean to Bar ethical chocolate with a smaller footprint on the environment.
Honest Chocolate also owns a café, which is situated at 64A Wale Street, Cape Town CBD, South Africa.

It located between the bustling streets of Loop and Bree, the café has a relaxed atmosphere.

Settle down in the sunny outside courtyard, which is part of the original building, or in the cosy inner café.

The café offers coffees, teas and hot chocolates, as well as a selection of chocolate truffles, tarts and cakes.
A large portion of the treats are vegan friendly, with the choice of dairy free ice cream from Sorbetiere.

It also offers soya milk, or silky nut milk made by the Almond Creamery.

The specialties of the café are dairy-free milkshakes, and the trademark ‘coconut 26 145 dream’ drink which ranked as the trademark of the café, and the banana bread bunny chow.

In the evenings, the Secret Gin Bar opens up behind the Café in the courtyard.
Honest Chocolate can be found in the following stores: • Pick ‘n Pay; • Checkers; • Spar; • Wellness Warehouse, and • Independent stores.

It was reported that Seda is supporting the company to fully acquire the Food Safety System Certification (FSSC) 22000.

As a Pick ‘n Pay supplier, Honest Chocolate was required to get the FSSC, and to be fully recognised by the Global Food Safety Initiative (GFSI) which is based on existing ISO Standards.
The FSSC 22000 is used as an instrument to effectively manage the organisation's food safety responsibilities.

It is also a prerequisite in order to export to certain countries.

Through the Covid-19 Business Relief Fund, Honest Chocolate received R157 642 from the Western Cape Government’s Department of Economic Development and Tourism (DEDAT) as part of the assistance of the provincial government to support SMMEs hard hit by the Covid- 19 pandemic.
Further, the company is set to receive funding from the Seda’s Technology Transfer Assistance, if it meets the requirements.

The funds would help the Honest Chocolate to scale-up its production capacity, and boost its revenue.

Observations • The enterprise imports cocoa from Tanzania by means of sharing a shipping container and this adds 30 percent to the production cost function.
The business prefers to import cocoa from Uganda, however filling a shipping container without sharing it with someone else is expensive and would drive up production costs and rendering business unsustainable.

• The business premises were converted from a motorbike mechanic workshop to a chocolate factory.

This company owns a subsidiary called Honest Coffee with a separate PTY which is essentially a tourism driven business.

27 146 • The business employs youth comprising 6 women and one man.
• The production equipment is old traditional technique.

The company is engaging SEDA for technology transfer and registration of Intellectual Property (IP) rights for this old school equipment.
West Coast District: Fastest Growing Regional Economy with Potential to Accelerate Inclusive Economic Growth in the Western Cape Province The Delegation received submissions and presentations from the following stakeholders: West Coast District Municipality (District); Department of Trade, Industry, Competition, National Ports Authority, and Saldanha Bay Industrial Development Zone SOC Ltd (SBIDZ).
The District is one of the coastal districts in the Western Cape Province, and its headquarters are in Mooreesburg.

The District is composed of five local municipalities namely: Matzikama; Cederberg; Bergrivier; Saldanha Bay; and Swartland.
It was further reported that agriculture, forestry and fishing sector contributed the most jobs to the area in 2017 (69 316; 38.5 per cent), followed by the wholesale and retail trade, catering and accommodation sector (30 051; 16.7 per cent) and the community, social and personal services (19 962;11.1 per cent) sector.

Combined, these three sectors contributed 119 329 or 66.3 per cent of the 180 050 jobs in 2017.
It was highlighted that several industries experienced net job losses over the years between 2014 and 2018, with the agriculture, forestry and fishing sector shedding the many jobs especially in 2014, 2016 and 2017.

It should be highlighted that drought has affected the economy of the District in those particular years with effect to the agricultural industry.
It is reported that in 2019, there were 224 000 people living in poverty, using the upper poverty line definition, across District- this is 44.05 per cent higher than the 156 000 in 2009.

The percentage of people living in poverty has increased from 42.65 per cent in 2009 to 47.40 per cent in 2019, which indicates an increase of -4.76 percentage.

The District’s Gini’s coefficient has been on the rise and is 0.60 and the Human Development Index (HDI) is above 0.7.
28 147 The population figures are rising., and thus posing an increase in demand for services.

Like the rest of the Country, unemployment remains a key challenge for the District.

Investment in skills development, including economic infrastructure and boosting economic activity and investing in strategic industries would boost economic development.

It is expected that West Coast District Municipality will grow at an average annual rate of 1.24 per cent from 2018 to 2023.
According to the 2020 Municipal Economic Review and Overview (MERO), the District in 2018, contributed 5.2 per cent to the provincial economy.

The District experienced an average annual growth rate of 1.5 per cent between 2014 and 2018, which was marginally higher than that of the provincial economy, which grew at 1.4 per cent over the same period.

The District ranked the fourth largest contributor compared to the other regional economies.
MERO indicates that in the District, the two municipal areas that contributed the most to GDPR in 2018 were the Saldanha Bay (30.7 per cent) and Swartland (27.3 per cent) municipal areas.

The economies of the Matzikama and Bergrivier municipal areas are similar in size, contributing 14.5 per cent and 14.7 per cent respectively to the economy of the WCD.

The smallest contributor to the GDPR of the WCD was the Cederberg municipal area (12.8 per cent).
The estimates for 2019 indicate a decline in the growth rates for all municipal areas in the District.

The economy of the District is already constrained, and the Covid-19 pandemic has caused further contraction.

The national lockdown has restricted trade and business activities in an effort to curb the spread of the COVID-19 pandemic.

The economy of the WCD is expected to recover somewhat in 2021, with most sectors rebounding after the severe contractions experienced in 2020.
As economic conditions improve globally, and at the national and provincial level, the economy of the District is expected to recover over the medium to long term.

In terms of the main economic value chains, it was highlighted that that the District is endowed with cultural and natural resources, and it offers wild floral beauty.

Thus tourism is one of the major contributors to the GDPR and employment.
It was reported that West Coast National 29 148 Park is the closest spot outside Cape Town where tourists can experience the spring flower season.

The West Coast Fossil Park, which lies just next door to the West Coast National Park, has uncovered 200 different kinds of animals, many of them new to science.

Tourism value chain was adding to the growth of the accommodation facilities, tourist attractions, events and local tour operators.
The District reported on the infrastructure spending and explained that a review and analysis of the infrastructure spending within the District was a priority, taking into account the economic spin-offs in terms of attracting investment and enhancing development.

The was informed that the development of the Special Economic Zone or IDZ (SBIDZ) in the District is expected to have a direct and continuous impact on the transport in the District.
It will have an impact on the road network and the capacity thereof.

Freight transport via road and rail will also play a major role in supporting the development of the IDZ.

The N7 as well as the R27 are two major corridors in the West Coast and they are major distributors of people, goods and services from the District to other municipalities within the Western Cape, to other provinces as well as cross borders (N7 is the only Cape to Namibia route).
The employment in all municipal areas is predominantly in the agriculture, forestry and fishing industry.

Since the agriculture, forestry and fishing industries are valuable source of employment for the rural municipal areas, there is a need for support from government institutions to protect existing jobs, and for the creation of new jobs.

Weak economic growth, and inadequate investment in energy, water resources and the impact of Covid-19 could contribute to an increase in poverty in the District.
It was further reported that the steel industry is of importance in the Saldanha Bay municipal area, since it is a significant employer in the municipal area and provides key inputs in terms of raw materials to other sectors such as construction and transport, storage and communication.

The possible closure of the possible closure of the ArcelorMittal South Africa plant in Saldanha Bay would have severe impact to economic growth and employment the District.
Coordinated approach by all spheres of government in partnership with the private sector will be needed to save the industry and related jobs.

Current, the local investor in 30 149 partnership with the SBIDZ and the SEZ Fund in the SEZ Programme will yield an expansion of the operations of the West Coast Corrosion Protection, and news jobs will be created.

As the SBIDZ expands, the construction industry is expected to benefit.

The SBIDZ remains a critical strategic development partner for the District.
Some of the essential physical assets have been developed such as the new improved road networks, the Access Complex and the serviced port land.

The SBIDZ has to date signed 11 lease agreements with an investment value of more than R3.0 billion.

It was reported that SBIDZ is expecting new investments in pipeline 60 investors.

The operation and expansion of the SBIDZ is anticipated that to create much needed jobs, and boost the regional economy.
The SBIDZ has established the skills programmes that focus on enterprise and contractor development, and so far the programme has created a total of 2 199 individual training opportunities, with 88 per cent of learners having already graduated.
The agriculture, forestry and fishing sector has also experienced noteworthy investments, with the Western Cape Agribusiness Investment Unit securing several agribusiness investment deals worth R350 million and this is expected to create 525 direct jobs for the Western Cape economy.
Further, investments in the pipeline such as the new Saldanha Bay crude oil terminal that has been commissioned will be equipped to blend crude oil and be connected to an existing jetty that can handle very large crude carriers.

The crude oil terminal is a joint venture between Oiltanking GmbH, MOGS (Pty) Ltd and Industrial Development Corporation of South Africa Ltd (IDC), is expected to add new economic opportunities in the District.
It was reported that the municipalities will focus on accelerating implementation of basic services and infrastructure in line with economic infrastructure plans, and to attract private sector participation.

Further, it was highlighted that investment growth is expected from sectors such as dairy, agro-processing, transport, logistics, retail, services and construction sectors.
SBIDZ in development partnership with the private sector and the Transnet National Ports 31 150 Authority could see the expansion of ship repair and maintenance facilities.

Transnet National Ports Authority (TNPA) has plans to further develop both the Port and Saldanha back-of-port site within the zone, to substantially increase the competitiveness of both the port and the zone.

Further, expansion of oyster and mussel farming initiatives is expected to grow the District economy, and create jobs.
Investment in digital connectivity, water, energy, waste and green infrastructure would support the transition to an inclusive economy.

It was reported that investment plans of municipalities are aligned with the municipal development plans, which are aligned with the provincial priorities and National Development Plan (NDP) and other sector strategies.

Growth, and support of SMMEs including informal businesses, was reported as one of the key priorities of municipalities in the Districts.
Creating an enabling environment would add more impetus to the growth of municipalities.

Partnerships with development support agencies such as Sefa, Seda and NEF including with the private sector is seen as a critical priority by all municipalities in the District.

Further, collaboration with the Department of Employment and Labour would assist employees affected by weak economic climate, which has been exacerbated by the Covid-19 pandemic.
It was reported that the investment plans of the municipalities will yield growth of entrepreneurship and innovation.

People will be supported in partnership with other spheres of government and private sector to develop their skills.

As reported in this report, support of start-ups, small and medium-sized businesses, and attracting international investment would be key for the growth and development of the District.
For instance, Saldanha Bay Municipality provide Special Rebates as an incentive in areas such as the Saldanha Bay Industrial Development Zone; the Langebaan Light Industrial area; the Saldanha Waterfront, and the Vredenburg Light Industrial to support growth of businesses and also promote investment.
Briefing by the Saldanha Bay IDZ Licencing Company SOC Ltd 32 151 The SBIDZ was officially designated as South Africa’s fifth SEZ on the 31st October 2013, with the Saldanha Bay IDZ Licencing SOC Ltd (SBIDZ-LC) as the official public entity licence holder and operator of the zone in the Port.

The SBIDZ is the first zone to be designated in a South African port.

SBIDZ is a public entity reporting to the Western Cape Government- Department of Economic Development and Tourism (DEDT).
The SBIDZ has been established as South Africa’s first sector-specific zone in support of the upstream oil and gas services; marine repair and engineering sector.

The vision of the vision is to become Africa’s premier oil, gas and maritime services centre implies world-class engineering, fabrication, logistics and a competitive port environment with due tax and SEZ incentives.
Some of the main functions of the SBIDZ include the promotion, management and marketing of the zone domestically and internationally.

Furthermore, the SBIDZ-LC provide internal infrastructure in the IDZ to suit investor requirements, the leasing of land to investors, and the facilitation of an ease of doing business model for investors.

It was reported that the SBIDZ has establish skills development programme with strong community upliftment element.
The initiative is to create a link and forge partnership between the community of Saldanha and SBIDZ.

In the main it is to ensure that local individuals are equipped with necessary skills to enable them to take future opportunities presented by the developments in the SBIDZ.

As reported in this report the possible closure of the ArcelorMittal South Africa plant in Saldanha Bay would have severe impact to economic growth and employment the District.

It would also affect skills development initiatives.
The delegation was also briefed about the progressed achieved with regard to the iThemba Skills Programme.

The programme was initiated by the SBIDZ-LC and funded by the MerSETA and the Department of Trade, Industry and Competition with the aim to train 674 candidates in foundational welding, fabrication, rigging, electrical, bricklaying, plumbing and carpentry skills.
Further, SBIDZ has establish an innovation hub in partnership with in partnership with higher education institutions such as University of Stellenbosch, and Witwatersrand University and the private sector.

The Saldanha Bay Innovation Campus aims to be a vibrant, inclusive and 33 152 globally competitive innovative ecosystem in the South African marine and energy sectors.

The purpose is to connect, drive and support sustainable research, development and innovation.
As reported elsewhere in this report, SMMEs within the District are set to benefit through the supplier development programme administered by the SBIDZ.

The IDZ Business Forum was established to build an inclusive partnership with local business chambers and forums to maximise business opportunities, and enhance local supply opportunities.

The business forums would open opportunities for local businesses to take advantage of business opportunities in an oil and gas and marine repairs.
The success of the SBIDZ, and potential opportunities for SMMEs largely depend on public-private partnership, with a valuable role that could be played by Transnet and Transnet National Ports Authority.
The SBIDZ reported that it has establish an Ease of Doing Business Unit, which seeks to offer investor responsive and proactive approach by: • Offering a One Stop Shop service to our customers and investors; • Developing systemic and sustainable service models with key partners; • Providing efficient and effective interventions on behalf of our investors; • Making it easy to access information and services.
Other programmes are including; Business Development; Transaction and Investor Support; Infrastructure & Environment Development; Development Programmes and Stakeholder Management.

The business model is set to provide an attractive value proposition to both local and global markets.

The SBIDZ further reported that it offers a Free Port environment, which is a universal benchmark for ports and zones.
The Free Port business model offers range of services and incentives ranging from fiscal instruments such as reduced corporate tax, direct vat waivers, direct duty waivers, access to development funds from Department of Trade, Industry, and Competition, simplified process including Visas processing.

The business model offers operational efficiencies such as storage of goods without time limitations.
Further, investors are benefit through improve their cash flow (no upfront 15 per cent VAT payment on parts and equipment coming in for repairs and maintenance), and also not incurring import and or export duty on goods imported, value added and re-exported from the zone, and thus ensure cost savings to the benefit to the investor located in the SBIDZ.
34 153 It was reported that one of the challenges facing the entity is to re-energising and re-purposing of the South African maritime industry, the growth of the zone is largely depending on it.

This should include modernising its infrastructure and operational model to be competitive in an international sense, to bring new business and opportunities into our ports and to enhance our trading potential.
The SBIDZ could only succeed if it continues to cement relationships with key strategic partners such as the Western Cape Department of Economic Development and Tourism (DEDAT), the Department of Trade, Industry, and Competition, TNPA, Saldanha Bay Municipality, local businesses and the community.
Other key strategic partners are Western Cape Government such as the Departments of Transport and Public Works, Environmental Affairs and Development Planning, and Health, National Government departments such as National Treasury and the Department of Labour, organised labour, SARS, financial development institutions (including IDC, DBSA), and commercial banks, industry associations.

The SBIDZ operations are mostly funded by the Western Cape Provincial Government (WCG).
The WCG also previously funded the purchase of the Saldok land from the IDC.

To date, the Department of Trade, Industry, and Competition has funded an amount of R200 million as the capital expenditure to the SBIDZ.

It is one of the critical strategic partners.

There are various inventors already tenants and prospective investors in varied industries such as manufacturing, oil and gas, renewables, including shipping services.
The SBIDZ intends in the next phase to be an agent of sustainable economic transformation, whereby it will: • • Invest in additional infrastructure, equipment and facilities to support sectoral growth; Invest in different, efficient processes with the role-players paramount to business’s enabling environment to ensure they are operational sooner; • Conclude the outstanding matters with TNPA and DEA&DP to secure the entity’s natural capital; • Progress on sector-led supply chain programmes; 35 154 • Progress with the Innovation Campus facility, inclusive of a human development programme targeted towards youth and education.
It was reported that the main issues require finalisation, i.e.

signing of the two remaining leases with TNPA and, with the Department of Environmental Affairs and Development Planning (DEA&DP), finding a long-term, mutually satisfactory arrangement on a range of environmental issues that could seriously impair the commercial potential of the zone.

The Port of Saldanha is align to the strategic focus of the SBIDZ.
Its aim is to be the premier Dry Bulk Port and Southern Africa’s Oil and Gas Service Hub operating with reliable logistics connectivity and excellent efficiency.

The strategic objective is to: • Grow diversify existing commodities; • Become an Energy Supply Services Port; • Position the port as a gateway to the Southern African (and Sub Saharan Africa).
In the short term, the Port of Saldanha intends to invest in the following projects: • Increase Dry Bulk handling capacity (Iron Ore)-storage land area and new berth capacity increase to total port = 75 MTPA; • Liquid Bulk: Storage potential LNG.

Diversifying cargo handling to include white fuels; • Break Bulk Terminal berth capacity increased to accommodate other bulk cargo and potential Maritime Engineering.
These to consider increased demand and changes vessel forecast; • The relocation of port entrances; • Widening of main logistics corridor within the port to accommodate increased traffic and bulk services routes; • Maritime Engineering: New berth facilities introduced in the western precinct to support industry (incl.

Oil and Gas).
In the medium to long term, investment will focus on the following: • Dry Bulk: Additional berth structure on the Langebaan side of the finger jetty for accommodation potential increased demand; 36 155 • Liquid Bulk: Berth 104 lengthening and re-configuration to accommodate changes vessel forecast; • Liquid Bulk: Off shore supply base facility upgrade to accommodate OPC facilities; • Maritime Engineering: Additional berth facilities as per increased demand in the western precinct (Mossgas) and Break Bulk Terminal area; • Tourism: potential cruise landing facility within the Small Craft Harbour precinct.
• Re configuration of western side berths along the causeway and jetty structure to consider demand and vessel size forecast to be accommodated in terminal areas; • Deepening and widening of navigation channels and berth pockets to consider vessel size forecast changes.

As highlighted in this report, the success of the SBIDZ, and potential opportunities for SMMEs largely depend on public-private partnership, with a valuable role that could be played by Transnet and Transnet National Ports Authority.
Further, it was reported that SBIDZ to sustain its operations, and build capacity and capability it will need financial and policy capital to deliver on its mandate.

This would require the SBIDZ to enhance collaborative initiatives with all the spheres of government including development finance institutions and private sector to fully realise its strategic priorities.
Development Projects visited: The delegation conducted a site visit to the SIBDZ Project Leasing Facility, which offers 10 hectares of prime laydown and storage area within the Port of Saldanha Bay.

It is available for daily and monthly leasing and can be utilised for project purposes of equipment storage, maintenance, repair and assembly activities.

It is secure and fully services and includes water and electricity connections with easy access to provincial and national roads.
The delegation further engaged with a tenant at the SIBDZ, ALL HVAC Maintenance (Pty) Ltd, trading as AHM Piping Specialists.

The tenant relocated to the West Coast Saldanha Bay from Gauteng as an investor and a strategic job provider.

This company provides heating, 37 156 ventilation and air conditioning services.

The Covid-19 pandemic has resulted in project delays, wasted production and loss of revenue.
The planned date for start of operations was the 1st April 2021, in the interim, machinery, equipment and raw material costs have doubled in cost.

The company is currently applying for funding for machinery and equipment through various government funded initiatives including the Black Industrialists Programme of the Department of Trade, Industry and Competition for the second phase as the top structure funding was approved in 2019.
Applications have also been made to the Small Enterprise Finance Agency (SEFA).

The company is therefore dependant on the approval of these funding applications in order to continue.

Blue Sapphire Pearls CC Blue Sapphire Pearls CC, is a B-BBEE Level 4 company funded by the Department of Trade, Industry and Competition.

It is primarily based on the aquaculture industry and farms oysters and mussels.
It was approved for funding by the Department of Trade, Industry and Competition in December 2018 for an incentive amount of R1.7 million for an expansion of the project.

It planned to invest R4.3 million into Leased land improvements, commercial vehicle and workboats, bulk infrastructure, and Machinery and equipment.
To date the project has been paid R1.4 million, while investing R3.7 million to improve its leased land and purchase commercial vehicles and workboats, bulk infrastructure, and machinery and equipment.

The project supported 18 jobs; of which 16 is black and 7 is female.

According to the latest claim inspection report (August 2020), the project is exporting oysters with an approximate value of R75 000 per month to Hong Kong and China, and Mussels with a total value of R324 000 per month to the USA.
It also has a monthly local sales of oysters of approximately R2.2 million, and mussels amounting to R11 000 per month.

The project has reported that through ADEP support, it has improved the handling of stock and sped up the growth process for oysters.

Observations: 38 157 • In terms of levels of education, it was noted that the West Coast District has a disproportionately high level of school drop outs.

This is due to limited educational facilities such as high schools.
At present there are no high schools in Langebaan and the exorbitant transport costs for learners, as well as additional costs incurred for food and accommodation has resulted in high drop-out rates.

In addition, there are no universities and any students wanting to pursue tertiary education need to travel to Cape Town in order to do so.
It was noted by the Saldanha Bay Industrial Development Zone (SIBDZ) that in order to mitigate against high school drop outs, it initiated the High School Development Programme with the Western Cape Education Department and the universities of Stellenbosch and Wits.

• The winding down operations of the Arcelor Mittal Saldanha Steel Plant towards eventual closure is having a negative impact on the economy of the West Coast district.

The closure of the steel plant was announced by Arcelor Mittal in 2019.
Despite numerous efforts to save the steel plant the company announced that it was closing and that re-opening in the medium term would be unlikely.

One of the reasons attributed to the closure was excess global capacity.

The steel plant was a critical economic driver across the West Coast with around 600 permanent employees and 500 sub-contractors.
• The Covid-19 pandemic has had a severe impact on plans for the SIBZ, the revenue outlook for 2020/21 was revised downwards and decreased by 40 per cent as a result of the pandemic.

This is due to increasing market uncertainty and low investor confidence.

The economic environment is different to what it was pre-pandemic and investors have requested more time before committing due to the prevailing economic conditions.
• In order to assist Small Micro and Medium Enterprises (SMME’s) to access SMME Covid- 19 business relief resources online, the SIBDZ indicated that the SMME Co-Lab Centre was re-opened.

The Co-Lab was done in partnership with the Saldanha Bay Local Municipality.

6.

West Coast National Park It is reported elsewhere in this report that the wholesale and retail trade, catering and accommodation sector was affected by the Covid-19 pandemic.
The initial restrictions with regard to business activities, the expected reduction in household spending owing to job losses 39 158 and a decline in tourism are expected to have a significant negative impact on the sector.

Hence it is important for all spheres of government in partnership with the private sector to invest in initiatives that would re-boot the tourism industry.
Infrastructure investment both public and private would be critical in ‘building back better’ the tourism industry, and boost jobs.

The delegation received briefing from the West Coast National Park.

It was established in 1985 with the aim of conserving the Langebaan Lagoon and surrounding landscapes, including the islands in Saldanha Bay.
It was reported that the key conservation areas of West Coast National Park are the Langebaan Lagoon and the offshore islands in Saldanha Bay, which together form the Langebaan Ramsar site, a wetland of international importance.

The lagoon has a rich diversity of marine invertebrates and seaweeds and supports approximately 10 per cent of the coastal wader population in South Africa.

The offshore islands provide important nesting areas for several red-listed seabird species.
Geelbek Restaurant provides a safe haven for the West Coast and South African heritage.

The restaurant is situated on the lagoon in the Geelbek main house.

This Cape Dutch building is a National Monument and was renovated three times since it was built in 1744.

The park falls within the West Coast District Municipality and in the Saldanha Bay Local Municipality, while it adjoins the Swartland Local Municipality in the south.
The park forms the northern core of the Cape West Coast Biosphere Reserve, and it is fully integrated in the various integrated development plans (IDPs) and spatial development frameworks (SDFs) of the municipalities.
Key attributes include: • A large unique marine lagoon system; • The park is a globally important centre of biodiversity due its variety of diverse habitats; • As an open ecological system, the park is dependent on successful conservation measures outside of the park at local, regional, national and international levels; • The park hosts a number of altered landscapes; • A rich cultural and natural heritage merges within the park; The park has a high level of protected conservation status; • The park is experiencing a growth in tourism demand due to its proximity to the country’s major tourist hub of Cape Town.
; • It also supports a diverse local community with a range of skills, knowledge and culture; The park is centrally situated and has facilities for the implementation of vibrant eco- education programmes in the Cape west coast region.
40 159 The park offers the following tourism features: • Open access, limited income generation (via boat permits) water based recreational activity on the Lagoon; • Self-drive sightseeing tourism (views and bird hides); • Recreation at the day visitor sites in the controlled access portion of the park and limited over-night accommodation facilities.
These facilities are: Abrahamskraal – a six-bed (two star grading) self-catering unit at the Abrahamskraal waterhole which has been upgraded; Joanne’s Beach Cottage – an eight-bed selfcatering unit (three star grading); The concessionaire managed 44 bed Duinepos rest camp; Two houseboats based at Kraalbaai managed by a concessionaire.
• The historical Geelbek homestead is managed by a concessionaire as a restaurant and curio shop; • Park information centre at Geelbek; • A limited hiking and mountain biking network in the park; • The Postberg contractual area which is currently open for wild flower viewing during August and September only; • Kraalbaai and the adjoining Preekstoel are popular day visitor sites during summer and public holidays drawing crowds from the communities surrounding the park; The delegation was briefed that the Park consists of number of old farm homesteads which have been converted to accommodation unit, offices and a restaurant.
In the previous oversight visit to the Park it was highlighted that the Park has challenges that need to be tackled to boost tourism: • Limited access to important recreational areas; • Need to ensure continued safety and security of visitors to the park; • Need to build strong relations with local tourism industry; • Park products and pricing; • A limited budget for maintenance in the face of theft, removal and general deterioration of the physical heritage resources.
41 160 It was reported that various initiatives have be undertaken to address some of the challenges.

Over the medium term, the Park intends to invest on infrastructure covering offices buildings, accommodation facilities, roads including bulk infrastructure.

Infrastructure investment in the Cape Region has benefited 6 SMMEs, and there are 66 participants employed in various projects.

There are 35 women participating as employees in the development projects, and the number of youth benefiting is 33.
The number of people with disabilities employed as beneficiaries in the development project is 3.

The Park employs various people in projects such as Working For Water and Umoya projects The key tourism infrastructure focus of park management over the long term is firstly to unlock the tourism potential through a Public Private Partnership (PPP).
The MERO report that the District in terms of tourism, is ranked as the strongest driver for travel, with about 80.2 per cent of visitors primarily travelling for leisure.

It is reported that the District offers a diverse tourism offering that include nature, wildlife, adventure and entertainment.

The District should exploit these product offering to growing tourism.

It was emphsised that investment in infrastructure should be prioritised for the provision of tourism amenities, roads and tourism signage.
Upgrading and maintenance of public tourist facilities would enhance visitor’s tourism experience.

Further, it was reported that tourists are increasingly choosing to visit and support destinations that adopt eco-friendly and sustainable approaches to tourism development.

There is a need to enhance support awareness of environmental protection and conservation and to minimise its carbon footprint.
The West Coast parks intends to enhance initiatives that would ensure that tourism products harmonise with the environment.

Further support and promotes the conservation of assets and educating people in surrounding communities on the importance of promoting conservation.

In addition, developing guided educational tours on the fauna and flora of the area/providing information on protected areas, animal species.
What is also key is to ensure that the Park remains accessible to local communities, particular low income communities.

Recommendations 42 161 The oversight visit was mounted on the theme: Resetting the Economy to Boost Economic Growth, Attract Investments and Create Jobs in regional and local economies.

The Select Committees took the following recommendations: 1.
Over the 2021 medium term the Minister of Transport, the provincial Minister responsible for transport, and the City of Cape Town should develop detailed plans to tackle current challenges on the public transport, especially rail.

The deterioration of the rail service in City of Cape Town, with its resultant sharp increase in road usage needs to be addressed.

The most pressing challenge facing the City of Cape Town’s transport network and by extension its economic growth potential, is the decline of rail.
2.

Minister of Transport, and the provincial Minister responsible for transport together with City of Cape Town should improve coordination in terms of regulating the taxi industry.

Evidence shows that most South Africans use a taxi to travel to school and work.

Modernisation of the taxi industry should be accelerated.

3.
3.

Over the 2021 medium term, national, provincial and local government should scale-up coherency for land development and planning, as spatial mismatch with disconnections between people, skills, jobs and investment hold back social and economic progress.

4.

Over the 2021 medium term, both the City of Cape Town and the West Coast District Municipality should accelerate the implementation of the township economy strategies.

5.
5.

Shared working spaces for entrepreneurs, and small enterprises, including small traders, remain an essential priority.

The Minister of Small Business Development and the Minister of Public Works and Infrastructure, including provincial ministers responsible for Enterprise Development and Public Works, the City of Cape Town and the West Coast District Municipality in partnership with the private sector should establish shared working spaces to support growth and expansion of SMMEs and small traders.

6.
6.

The City of Cape Town and the West Coast District Municipality should, over the 2021 medium term, devise strategies and plans to tackle regulatory constraints that are hindering the operations and expansion of small traders.

7.
7.

The Minister of Trade, Industry and Competition and the Minister of Small Business Development through their development agencies such as Seda, Sefa and NEF should work in a coordinated manner with SASRIA to intensify financial literacy and empowerment campaigns targeting small businesses and informal traders.

Such programmes should find expression in the expenditure plans of the respective departments and development 43 162 agencies including expenditure plans of SASRIA.
The financial literacy and empowerment initiative should get the necessary support from National Treasury.

8.

The City of Cape Town and the West Coast District Municipality should through their enterprise development agencies or business components design outreach campaigns to encourage small businesses, including informal enterprises, to take-up business insurance cover.

9.

There is a need for SASRIA to accelerate the rollout of insurance products that would cover the underserviced communities.
Hence the Minister of Finance should ensure that SASRIA designs implementation plans that would enable the underserviced communities to take insurance cover.

10.
10.

Over the 2021 medium term, the Minister of Employment and Labour, the City of Cape Town and the West Coast District Municipality in partnership with the institutions of higher education and training and industry players should establish and solidify job placement opportunity initiatives, including skills and training initiatives to tackle unemployment and to close the skills gap.

11.
11.

Over the 2021 medium term, the Minister of Tourism and the Minister of Finance in partnership with the provincial and local governments (including development agencies) and in partnership with the private sector (Banks) should develop innovative financing mechanisms that would meaningfully support the recovery and growth of the tourism industry.

12.
12.

Over the 2021 medium term, the Minister of Finance should reconsider the re-introduction of the 12J Venture Capital incentive to broaden the base of capital as an alternative instrument to finance SMMEs.

The tourism industry has been severely affected by Covid- 19.

Many jobs and businesses have been lost in the economy.

Innovative solutions in terms of financing businesses, both formal and informal, should be found.

13.
13.

Crime remains one of the risks that deters the growth and expansion of the tourism industry.

The City of Cape Town, including the West Coast District Municipality, working closer with the South African Police Service and local communities, should devise measures to tackle crime.

14.
14.

The Minister of Tourism and the Minister of Environment, Forestry and Fisheries should continue to work in a collaborative manner with the provincial government, the City of Cape Town and the West Coast District Municipality to improve public infrastructure and attract private investment to support growth of tourism, and enhance the alignment of 44 163 environment tourism products.

Access to tourism platforms for local communities should be prioritised.

15.
The West Coast District Municipality together with the Western Cape Department of Agriculture, including the national departments of Agriculture, Land Reform and Rural Development; Forestry, Fisheries and the Environment; as well as development finance agencies (such as the Land Bank) need to form development initiatives in collaboration with industry players to restore investment and business confidence in the agricultural industry, and further support growth of SMMEs in the industries such as agriculture and fisheries.
16.

The West Coast District Municipality is one of the fastest growing economic regions in the Western Cape.

As such higher levels of economic activity, which would result in an increase in business and job opportunities would certainly cause a growth in the population and increased pressure on the provision of physical, social, economic and environmental infrastructure.
To this end, over the 2021 medium term the national and provincial ministries responsible for spatial and development planning should support the District to improve spatial and development planning to improve alignment in terms of investment in infrastructure in areas such as transport, energy, water and sanitation, environment including housing.

17.
The SBIDZ could only succeed if it continues to cement relations with key strategic partners such as the Western Cape Department of Economic Development and Tourism (DEDAT), the Ministry of Trade, Industry, and Competition, the Ministry of Public Enterprises (Transnet, TNPA), Small Business Development, including Ministry of Higher Education, Training and Innovation, Saldanha Bay Municipality, local businesses and the community including the Western Cape Government’s departments of Transport and Public Works, Environmental Affairs and Development Planning, and Health, national Ministry of Finance (including SARS), Employment and Labour, and financial development institutions (such as IDC, DBSA).
Over the 2021 medium term, the strategic partners mentioned in this section should support SBIDZ to sustain its operations, and build capacity and capability by unlocking barriers so that the SBIDZ gain much needed financial and policy capital in order to realise its strategic priorities.

Report to be considered.

45 164 2.


Report of the Select Committee on Land Reform, Environment, Mineral Resources and Energy on the National Environmental Management Laws Amendment Bill [B14D - 2017] (National Assembly – Section 76), dated 7 December 2021.

The Department of Environment, Forestry and Fisheries briefed the committee and all 9 Provincial Legislatures on 09 June 2021 on the National Environmental Management Laws Amendment Bill [B14D - 2017].
The Bill was initially referred to the committee on 27 November 2018 during the 5th Parliament but revived by the Council on 17 Oct 2019 in the 6th Parliament.

The Committee called for written comments on the Bill.

Public hearings were held by provincial legislatures, followed by negotiating mandate meetings by the committee together with provincial legislatures on the 15, 22, 29, 30 June 2021, 17, 24, 31 August 2021 and 7 September 2021.
Deliberations on the E list of amendments proposed by the committee and effected by the legal advisors was adopted by the committee on 16 November 2021.

The Select Committee on Land Reform, Mineral Resources and Energy, having deliberated on and considered the subject of the National Environmental Management Laws Amendment Bill [B14D - 2017] (National Assembly – sec 76), referred to it and classified by the JTM as a section 76 Bill, reports that it has agreed to an amended Bill [B14F – 2017].
AMENDMENTS AGREED TO CLAUSE 1 1.

On page 5, in line 10, after ‘‘audit’’ to insert ‘‘when used in sections 24P and 24PA,’’.

2.

On page 5, from lines 12 to 15, to omit ‘‘undertaking progressive rehabilitation, decommissioning, closure and post closure activities for listed and specified activities, including the pumping and treatment of extraneous and polluted water, where relevant’’ and to substitute ‘‘financial provision, as prescribed’’.

3.
On page 5, from line 27, to omit the definition of ‘environmental management instrument’ and to substitute the following definition: ‘‘ ‘environmental management instrument’ means— (i) environmental management framework; 165 (ii) strategic environmental assessment; (iii) spatial tool; (iv) environmental management programme; (v) environmental risk assessment; (vi) environmental feasibility assessment; (vii) norm or standard; (viii) minimum information requirements; or (ix) any other relevant environmental management instrument, as may be developed in time;’’.
4.
On page 5, from line 45, to omit the definition of ‘‘financial provision’’ and to substitute the following definition: ‘‘ ‘financial provision’ means the amount which is to be provided in terms of this Act by a holder, holder of an old order right or applicant, guaranteeing the availability of funds to fulfil the obligation to undertake progressive rehabilitation, decommissioning, closure and post-closure activities including the pumping and treatment of polluted or extraneous water to ensure that the State does not become liable for those costs which should be covered by a holder, holder of an old order right or applicant;’’.
5.

On page 5, after line 52, to insert the following paragraph: ‘‘(g) by the insertion after the definition of ‘‘holder of an old order right’’ of the following definition: ‘‘ ‘indigenous knowledge practitioner’ has the meaning assigned to it in section 1 of the Protection, Promotion, Development and Management of Indigenous Knowledge Act, 2019 (Act No.

6 of 2019);’’.

2 6.


On page 6, from line 3, to omit the definition of ‘‘latent environmental impacts’’ and to substitute with the following definition: ‘‘ ‘latent environmental impacts’ when used in sections 24P and 24PA, means impacts which are existing and defined, but not yet developed and will manifest post-closure;’’.

7.
7.

On page 6, after line 4, to insert the following paragraph: 166 ‘‘(i) by the insertion after the definition of ‘Mineral and Petroleum Resources Development Act, 2002’ of the following definition: ‘‘ ‘mining activity’ means an activity which requires a permission, right, permit or consent in terms of the Mineral and Petroleum Resources Development Act, 2002, including hydraulic fracturing and reclamation;’’.

8.

On page 6, in line 18, after ‘‘mitigate’’ to insert ‘‘when used in sections 24P and 24PA,’’.
9.

On page 6, in line 20, after ‘‘rehabilitate’’ to insert ‘‘when used in sections24P and 24PA,’’.

10.

On page 6, from line 21, to omit the definitions of ‘‘remediate’’ and ‘‘residual environmental impacts’’.

CLAUSE 2 1.
CLAUSE 2 1.

On page 6, from line 30, to omit paragraph (qA) and to substitute the following paragraph: ‘‘(qA) The full participation of previously disadvantaged professionals, with specific emphasis on black professionals and indigenous knowledge practitioners, in the environmental management sector must be recognised and their participation in the sector promoted.’’.

CLAUSE 3 1.
On page 6, from line 38, to omit paragraph (a) and to substitute the following paragraph: ‘‘(a) by the substitution in subsection (2) for paragraphs (b) and (c) of the following paragraphs: ‘‘(b) geographical areas based on environmental attributes, and as specified in [spatial development tools] an environmental management instrument, adopted in the prescribed manner by the Minister or an MEC, with the concurrence of the Minister, in which specified activities may not commence without an environmental authorisation from the competent authority; (c) geographical areas based on environmental attributes, and specified in [spatial tools or] an environmental management [instruments] instrument, adopted in the prescribed manner by the Minister or an MEC, with the concurrence of the Minister, in which [specified] activities contemplated in paragraphs (a) and (b) may be 167 excluded from the requirement to obtain an environmental authorisation from the competent authority, but which must comply with the requirements set in such environmental management instrument, if any;’’.
2.
On page 7, from line 1, to omit paragraph (c) and to substitute the following paragraph: ‘‘(c) by the substitution in subsection (5) for paragraph (bA) of the following paragraph: ‘‘(bA) laying down the procedure to be followed for the preparation, evaluation, adoption and review of [prescribed] environmental management instruments, including any conditions set out in such instrument, if any condition applies[, including— (i) environmental management frameworks; (ii) strategic environmental assessments; (iii) environmental impact assessments; (iv) environmental management programmes; (v) environmental risk assessments; (vi) environmental feasibility assessments; (vii) norms or standards; (viii) spatial development tools; (viiiA) minimum information requirements; or (ix) any other relevant environmental management instrument that may be developed in time];’’.
CLAUSE 4 1.
On page 7, from line 16, to omit paragraph (a) and to substitute the following paragraph: ‘‘(a) by the substitution for subsection (2A) of the following subsection: ‘‘(2A) The Minister responsible for mineral resources must be identified as the competent authority in terms of subsection (1) where the listed or specified activity is [directly related to— (a) prospecting or exploration of a mineral or petroleum resource; or 168 (b) extraction and primary processing of a mineral or petroleum resource] a mining activity.’’; 2.
On page 7, from line 30, to omit paragraph (c) and to substitute the following paragraph: ‘‘(c) by the substitution for subsection (3) of the following subsection: ‘‘(3) The Minister, the Minister responsible for mineral resources and an MEC may agree that applications for environmental authorisations with regard to any activity or class of activities— (a) contemplated in [subsection] subsections (2) and (2B) may be dealt with by the MEC or the Minister responsible for mineral resources; (b) in respect of which the MEC is identified as the competent authority may be dealt with by the Minister or the Minister responsible for mineral resources.’’.
3.

On page 7, from line 41, to omit subsection (12) and to substitute the following subsection: ‘‘(12)A person who wishes to apply for a mining activity which also involves an activity that requires a licence, permit or authorisation in terms of any of the specific environmental management Acts, must simultaneously apply for an environmental authorisation after the acceptance, where such acceptance is applicable, of the application in terms of the Mineral and Petroleum Resources Development Act, 2002.’’.
CLAUSE 5 1.

On page 8, from line 5, to omit paragraphs (a) and (b) and to substitute the following paragraphs: ‘‘(a) by the substitution in subsection (1) for paragraph (b) of the following paragraphs: ‘‘(b) has commenced, undertaken or conducted a waste management activity without a waste management licence in terms of section 20(b) of the National Environmental Management: Waste Act, 2008 (Act No.
59 of 2008)[,]; (c) is in control of, or successor in title to, land on which a person— 169 (i) has commenced with a listed or specified activity without an environmental authorisation in contravention of section 24F(1); or (ii) has commenced with, undertaken or conducted a waste management activity in contravention of, section 20(b) of the National Environmental Management: Waste Act, 2008 (Act No.
59 of 2008), the Minister, Minister responsible for mineral resources or MEC concerned, as the case may be[,]— (aa) [may] must direct the applicant to— [(i)] (A) immediately cease the activity pending a decision on the application submitted in terms of this subsection, except if there are reasonable grounds to believe the cessation will result in serious harm to the environment; [(ii)] (B) investigate, evaluate and assess the impact of the activity on the environment; [(iii)] (C) remedy any adverse effects of the activity on the environment; [(iv)] (D) cease, modify or control any act, activity, process or omission causing pollution or environmental degradation; [(v)] (E) contain or prevent the movement of pollution or degradation of the environment; [(vi)] (F) eliminate any source of pollution or degradation; (G) undertake public participation which is appropriate to bring the unlawful commencement, undertaking or conducting of a listed, specified or waste management activity to the attention of interested and affected parties, and to provide them with a reasonable opportunity to comment on the application in accordance with relevant elements of public participation as prescribed in terms of this Act; and [(vii)] (H) compile a report containing— [(aa)] (AA) a description of the need and desirability 170 of the activity; [(bb)] (BB) an assessment of the nature, extent, duration and significance of the consequences for, or impacts on, the environment of the activity, including the cumulative effects and the manner in which the geographical, physical, biological, social, economic and cultural aspects of the environment may be affected by the proposed activity; [(cc)] (CC) a description of mitigation measures undertaken or to be undertaken in respect of the consequences for, or impacts on, the environment of the activity; and [(dd)] (DD) a description of the public participation process followed during the course of compiling the report, including all comments received from interested and affected parties and an
 indication of how the issues raised have been addressed, if applicable; [(ee) compile an environmental management programme; or] and [(viii)] (bb) may direct the applicant to compile an environmental management programme or to provide such other information or undertake such further studies as the Minister, Minister responsible for mineral resources or MEC, as the case may be, may deem necessary.’’; (b) by the substitution for subsection (4) of the following subsection: ‘‘(4) A person contemplated in subsection (1) must pay an administrative fine, which may not exceed [R5] R10 million and which must be determined by the competent authority, before the Minister, Minister responsible for mineral resources or MEC concerned may act in terms of subsection (2)(a) or (b).’’; and 171 (c) by the substitution in subsection (6) for paragraph (a) of the following paragraph: ‘‘(a) the environmental management inspector’s, environmental mineral and petroleum inspector’s or the South African Police Services’ authority to investigate any transgression in terms of this Act or any specific environmental management Act;’’.
CLAUSE 7 1.
On page 10, from line 1, to omit paragraph (b), and to substitute the following paragraph: ‘‘(b) by the substitution for subsection (2) of the following subsection: ‘‘(2) The Minister, the Minister responsible for mineral resources [or], an MEC or an environmental assessment practitioner must consult with every [State department] organ of state that administers a law relating to a matter affecting the environment when such Minister, the Minister responsible for mineral resources or an MEC considers an application for an environmental authorisation.’’.
2.

On page 10, in line 7, to omit ‘‘and’’.

3.

On page 10, in line 8, to substitute full stop with ‘‘;and’’.

4.
4.

On page 10, after line 8, to insert the following paragraph: ‘‘(d) by the substitution of subsection (3) of the following subsection: ‘‘(3) [A State department] An organ of state consulted in terms of subsection (2) must submit comment within 30 days from the date on which the Minister, Minister responsible for mineral resources, [or] MEC[,] or environmental assessment practitioner requests such [State department] organ of state in writing to submit comment.’’.

CLAUSE 8 1.
CLAUSE 8 1.

On page 10, from line 17, to omit ‘‘determined and provided for listed or specified activities’’ and to substitute ‘‘set aside’’.

2.
On page 10, from line 24, to omit subsection (4) and to substitute the following subsection: 172 ‘‘(4) Where prescribed, the applicant, holder of an environmental authorisation, holder or holder of an old order right must provide financial provision for progressive rehabilitation, mitigation, decommissioning, closure and post-closure activities, including the pumping and treatment of extraneous and polluted water where relevant, to ensure the mitigation and rehabilitation of adverse environmental impacts, including latent environmental impacts.’’.
CLAUSE 9 1.
On page 11, from line 21, to omit subsection (1) and to substitute the following subsection: ‘‘(1) A holder of an environmental authorisation for a mining activity, holder or holder of an old order right must— (a) maintain and retain a financial provision until a closure certificate is issued by the Minister responsible for mineral resources in terms of the Mineral and Petroleum Resources Development Act, 2002; (b) review and adjust the environmental liability, as prescribed; (c) at the intervals as prescribed, subject the financial provision and the basis of the calculations to an independent audit; (d) at the intervals as prescribed, submit to the Minister responsible for mineral resources, an audit report; (e) publish, at the intervals as prescribed, the review decision in a provincial newspaper as well as a newspaper distributed within the municipal area within which the mining operation is located, and indicate where the review can be obtained; and (f) annually undertake the mitigation and rehabilitation measures, as prescribed.’’.
2.

On page 12, from line 1, to omit subsection (5) and to substitute the following subsection: ‘‘(5) If any person contemplated in subsection (1) fails to mitigate and rehabilitate environmental impacts as prescribed, the Minister responsible for mineral resources or the Minister responsible for water affairs may, upon written notice to such person, use all or part of the financial provision contemplated in this section to rehabilitate or manage the environmental impact in question.’’.

CLAUSE 10 1.
On page 12, from line 12, to omit subsection (1) and to substitute the following subsection: 173 ‘‘(1) Every holder, holder of an environmental authorisation for a mining activity, holder of an old order right and owner of works remain responsible for any environmental liability, pollution or ecological degradation, the pumping and treatment of polluted or extraneous water, the management and sustainable closure thereof notwithstanding the issuing of a closure certificate by the Minister responsible for mineral resources in terms of the Mineral and Petroleum Resources Development Act, 2002, to the holder or owner concerned.’’; 2.
On page 12, from line 25, to omit subsection (3) and to substitute the following subsection: ‘‘(3) Every holder, holder of an environmental authorisation for a mining activity, holder of an old order right or owner of works must plan, manage and implement such procedures and requirements in respect of the closure of a mine as may be prescribed.’’.

CLAUSE 17 1.
CLAUSE 17 1.

On page 15, after line 6, to insert the following paragraph: ‘‘(2A) The Minister responsible for mineral resources may designate a person as an environmental mineral [resource] and petroleum inspector for the compliance monitoring and enforcement of the provisions of this Act or a specific environmental management Act in respect of which powers are conferred on him or her.’’.

CLAUSE 20 1.
On page 16, after line 19, to insert the following paragraphs: ‘‘(c) by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or an environmental mineral and petroleum inspector—’’; and (d) by the substitution in subsection (2)(a) for subparagraph (i) of the following subparagraph: ‘‘(i) in accordance with any instructions issued by the Minister, Minster responsible for mineral resources, Minister responsible for water affairs or MEC, as the case may be ’’.
174 CLAUSE 21 1.

On page 16, after line 23, to insert the following paragraph: ‘‘(a) by the substitution in subsection (1) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector, within his or her mandate in terms of section 31D, may—;‘‘ 2.
On page 17, after line 11, to insert the following paragraphs: ‘‘(i) by substitution in subsection (4) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector must—’’; and (j) by the substitution in subsection (5) for the words preceding paragraph (a) of the following words: ‘‘In addition to the powers set out in this Part, an environmental management inspector or environmental mineral and petroleum inspector must be regarded as being a peace officer and may exercise all the powers assigned to a peace officer, or to a police official who is not a commissioned officer, in terms of Chapters 2, 5, 7 and 8 of the Criminal Procedure Act, 1977 (Act 51 of 1977)’’.
CLAUSE 22 1.

On page 17, in line 18, after ‘‘inspector’’ to insert ‘‘or environmental mineral and petroleum inspector’’.

2.

On page 17, in line 21, to omit the word ‘‘and’’.

3.
3.

On page 17, after line 21, to insert the following paragraph: ‘‘(b) by the substitution for subsection (3) of the following subsection: ‘‘(3) In order to safeguard a vehicle, vessel or aircraft that has been seized, the environmental management 175 inspector or environmental mineral and petroleum inspector may immobolise it by removing a part.’’; and’’.

CLAUSE 23 1.

Clause rejected.

NEW CLAUSE 1.


That the following be a new clause: ‘‘Amendment of section 31J of Act 107 of 1998, as amended by section 15 of Act 30 of 2013 23.
Section 31J of the National Environmental Management Act, 1998, is hereby amended— (a) by the substitution in subsection (1) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector, within his or her mandate in terms of section 31D, may, without a warrant, enter and search any vehicle, vessel or aircraft, or search any pack-animal or any other mechanism of transport, on reasonable suspicion that that vehicle, vessel, aircraft, pack animal or other mechanism of transport—’’; (b) by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector may, without a warrant, seize a vehicle, vessel, aircraft, pack-animal or any other mechanism of transport or anything contained in or on any vehicle, vessel, aircraft, pack-animal or other mechanism of transport—’’; (c) by the substitution in subsection (2) for the words following paragraph (d) of the following words: 176 ‘‘in terms of this Act [or], a specific environmental management Act or a provincial Act that substantively deals with environmental management.’’; (d) by the substitution in subsection (4) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector may for the purpose of implementing subsection (1), at any time, and without a warrant—’’; (e) by the
 substitution for subsection (5) of the following subsection: ‘‘(5) An environmental management inspector or environmental mineral and petroleum inspector may exercise on or in respect of such vehicle, vessel or aircraft any of the power mentioned in section 31H.’’; and (f) by the substitution for subsection (6) of the following subsection: ‘‘(6) An environmental management inspector or environmental mineral and petroleum inspector may apply to the National or Provincial Commissioner of Police for written authorisation in terms of section 13 (8) of the South African Police Service Act, 1995 (Act 68 of 1995), to establish a roadblock or a checkpoint.’’.
CLAUSE 24 1.
On page 17, after line 54, to insert the following paragraph: ‘‘(b) by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector, within his or her mandate in terms of section 31D, may, with a warrant obtained in terms of subsection (3), but subject to subsection 177 (4), enter and inspect any residential premises for the purposes of ascertaining compliance with—’’; 2.
On page 18, in line 5, to omit the word ‘‘and’’.

3.

On page 18, after line 5, to insert the following paragraph: ‘‘(d) by the substitution in subsection (4) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector may in terms of subsection (2) enter and inspect any residential premises without a warrant, but only if—;’’ 4.

On page 18, after line 28, to substitute the full stop with ‘‘;and’’.

5.
5.

On page 18, after line 28, to insert the following paragraph: ‘‘(f) by the substitution for subsection (7) of the following subsection: ‘‘(7) An environmental management inspector or environmental mineral and petroleum inspector may exercise on such building, land, premises, vessel, aircraft, pack animals, container, bag, box, item and the like any of the powers mentioned in section 31H.’’.

CLAUSE 25 1.

Clause rejected.

NEW CLAUSE 1.


That the following be a new clause: ‘‘Amendment of section 31L of Act 107 of 1998, as inserted by section 4 of Act 46 of 2003 25.
Section 31L of the National Environmental Management Act, 1998, is hereby amended— 178 (a) by the substitution in subsection (1) for the words preceding paragraph (a) of the following words: ‘‘An environmental management inspector or environmental mineral and petroleum inspector, within his or her mandate in terms of section 31D, may issue a compliance notice [in] which must correspond substantially with the prescribed form and following a prescribed procedure if there are reasonable grounds for believing that a person has not complied—’’; (b) by the substitution in subsection (2) of paragraph (d) of the following paragraph: ‘‘(d) the procedure to be followed in lodging an objection to the compliance notice with the Minister, Minister responsible for mineral resources, Minister responsible for water affairs, [or] MEC, or municipal council, as the case may be.’’; (c) by the substitution for subsection (3) of the following subsection: ‘‘(3) An environmental management inspector or environmental mineral and petroleum inspector may, on good cause shown, vary a compliance notice and extend the period within which the person must comply with the notice.’’; and (d) by the substitution for subsections (4) and (5) of the following subsections, respectively: ‘‘(4) A person who receives a compliance notice must comply with that notice within the time period stated in the notice unless the Minister, Minister responsible for mineral resources, Minister responsible for water affairs [or], MEC or a municipal council has agreed to suspend the operation of the compliance notice in terms of subsection (5).
(5) A person who receives a compliance notice and who wishes to lodge an objection in terms of section 31M may make representations to the Minister, Minister 179 responsible for mineral resources, Minister responsible for water affairs [or], MEC or a municipal council, as the case may be, to suspend the operation of the compliance notice pending finalisation of the objection.’.’’ NEW CLAUSE 1.
That the following be a new clause: ‘‘Amendment of section 31N of Act 107 of 1998, as amended by section 7 of Act 44 of 2008 and section 20 of Act 46 of 2003 27.
Section 31N of the National Environmental Management Act, 1998, is hereby amended by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: ‘‘If a person fails to comply with a compliance notice, the environmental management inspector or an environmental mineral and petroleum inspector must report the noncompliance to the Minister, Minster responsible for mineral resources, Minister responsible for water affairs, [or] MEC or municipal council, as the case may be, and they [Minister or MEC] may—’’.
CLAUSE 27 1.

Clause rejected.

NEW CLAUSE 1.

That the following be a new clause ‘‘Amendment of section 31O of Act 107 of 1998, as inserted by section 4 of Act 46 of 2003 28.
Section 31O of the National Environmental Management Act, 1998, is hereby amended— (a) by the substitution for subsection (1) of the following subsection: 180 ‘‘(1) A member of the South African Police Service has, in respect of an offence in terms of this Act [or], a specific environmental management Act or a provincial Act that substantively deals with environmental management, all the powers of an environmental management inspector or environmental mineral and petroleum inspector in terms of this Part, excluding the power to conduct routine inspections in terms of section 31K and the power to issue and enforce compliance notices in terms of sections 31L to 31O.’’; and (b) by the substitution for subsection (2) of the following subsection: ‘‘(2) Notwithstanding subsection (1), the Minister, Minister responsible for mineral resources, Minister responsible for water affairs or MEC as the case may be, may, with the concurrence of the Minister responsible for safety and security, by written notice to a member of the South African Police Service, assign to that member all the powers contemplated in sections 31K to 31O.’’.
NEW CLAUSE 1.

That the following be a new clause: ‘‘Amendment of section 50A of Act 107 of 1998 as inserted by section 17 of Act 25 of 2014 38.
Section 50A of the National Environmental Management Act, 1998, is hereby amended— (a) by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: ‘‘An agreement for the purpose of subsection (1) means the Agreement reached between the Minister, the Minister responsible for water affairs and the Minister responsible for mineral resources titled the One Envi- 181 ronmental System for the country with respect to prospecting, exploration, mining or production, which entails—’’; and (b) by the substitution in subsection (2) for paragraphs (b) and (c) of the following paragraphs: ‘‘(b) that the Minister sets the regulatory framework and norms and standards, and that the Minister responsible for mineral resources will implement the provisions of the principal Act and the subordinate legislation as far as it relates to prospecting, exploration, mining or production operations; (c) that the Minister responsible for mineral resources will issue environmental authorisations in terms of the principal Act for prospecting, exploration, mining or production operations, and that the Minister will be the appeal authority for these authorisations; and’’.
CLAUSE 41 1.

On page 25, from line 7, to omit the definition of ‘‘well-being’’ and to substitute the following definition: ‘‘‘well-being’ means the holistic circumstances and conditions of an animal, which are conducive to its physical, physiological and mental health and quality of life, including the ability to cope with its environment.’’.

CLAUSE 42 1.

Clause rejected.

NEW CLAUSE 1.

That the following be a new clause: ‘‘Amendment of section 2 of Act 10 of 2004 182 44.
Section 2 of the National Environmental Management: Biodiversity Act, 2004, is hereby amended— (a) by the deletion in paragraph (a) of the word ‘‘and’’ at the end of subparagraph (ii); and (b) by the insertion in paragraph (a) after subparagraph (ii) of the following paragraph: ‘‘(iiA) the consideration of the well-being of animals in the management, conservation and sustainable use thereof; and’’.

CLAUSE 44 1.
CLAUSE 44 1.

On page 25, from line 29, to omit the words ‘‘a faunal biological resource’’ and to substitute ‘‘an animal’’.

CLAUSE 48 1.

On page 26, in line 25, to omit the words ‘‘a faunal biological resource’’ and to substitute ‘‘an animal’’.

1.
On page 26, from lines 34 to 44, to omit paragraphs (b) and (c) and to substitute with the following CLAUSE 49 paragraph: ‘‘(b) by the insertion after subsection (2) of the following subsection: ‘(2A) The MEC must, before exercising a power in terms of subsection (1)— (a) consult all Cabinet members, Members of the Provincial Executive Council and organs of state, whose areas of responsibility may be affected by the exercise of the power in the province (b) consult the Minister, in accordance with the principles of cooperative governance set out in Chapter 3 of the Constitution and (c) allow public participation in the process in accordance with section 100.’.
183 NEW CLAUSE 1.

That the following be a new clause: ‘‘Amendment of section 101 of Act 10 of 2004 53.

Section 101 of the National Environmental Management: Biodiversity Act, 2004, is hereby amended by the insertion, in paragraph (b) of subsection (1), of the words ‘‘9A or’’ after the words ‘‘in terms of section’’.

CLAUSE 53 1.
CLAUSE 53 1.

On page 28, from lines 46 to 50, to omit subsection (2A) and to substitute the following: ‘‘(2A) A provincial organ of state must be regarded as the licensing authority if a listed activity falls within the boundaries of— (a) more than one metropolitan municipality; (b) more than one district municipality; or (c) both a metropolitan and district municipality.’’.

CLAUSE 58 1.
CLAUSE 58 1.

On page 30, after line 15, to insert the following paragraph: ‘‘(c) by the insertion after the definition of ‘commence’ of the following definition’’: ‘‘ ‘commercial value’ means the retail value a thing would have if it were offered for sale;’’.

2.

On page 30, from line 54 to 64, to omit paragraph (i).

3.
On page 31, from line 1, to omit paragraphs (j), (k) and (l) and to substitute the following paragraphs: ‘‘(i) by the insertion after the definition of ‘this Act’ of the following definition: ‘‘ ‘trade in’ means buying, selling or bartering;’’; and 184 ‘‘(j) by the substitution for the definition of ‘‘waste’’ of the following definition: ‘waste’ means— (a) any substance, material or object— (i) that the generator of that substance, material or object has no further use for within its own processes, whether or not it has any commercial value for the generator, but which can be re-used, recycled, recovered or traded in by any person; or (ii) that is rejected, abandoned, discarded or disposed of, either temporary or permanently, or is intended to be discarded or disposed of by the holder of that substance, material or object, regardless of whether or not that substance, material or object has any commercial value for the holder or can be re-used, recycled, recovered or traded in by any person; or (b) any other substance, material or object that may be defined as a waste by the Minister by notice in the Gazette; but any waste or portion of waste, referred to in paragraphs (a) and (b), ceases to be a waste— (i) once it is re-used, recycled or recovered or traded in by the holder of that waste or portion of waste in accordance with a condition stipulated in a valid waste management licence, where applicable, or in accordance with an applicable norm or standard made in terms of this Act; or (ii) where the Minister has, in the prescribed manner, excluded the holder of any waste stream or a portion of a waste stream from the definition of waste, enabling the holder thereof to trade in the excluded waste stream or portion of the excluded waste stream, provided that the holder has satisfied the requirements of proving the environmentally 185 safe use of the waste stream or portion of waste stream by it or any other person and committed to provide the Minister with annual reports of the use thereof;’’.
CLAUSE 64 1.

On page 37, in line 29, to omit ‘‘significantly’’ and to substitute [significantly]’’.

1.

On page 38, from line 43, to omit paragraph (a) and to substitute the following paragraph: ‘‘(a) by the substitution for subsection (1A) of the following subsection: CLAUSE 68 ‘(1A) The Minister responsible for mineral resources is the licensing authority where the waste management activity is a mining activity as defined in the National Environmental Management Act.’ ’’.

2.
2.

On page 38, from line 48, to delete paragraph (b).

NEW CLAUSE 1.

That the following be a new clause: ‘‘Transitional provision due to amendment of definition of ‘‘waste’’ 88.
(1) Any substance, material or object, which is ‘‘waste’’ in terms of the amended definition of ‘‘waste’’, but was not regarded as such prior to the commencement of the amended definition must be regarded as waste from the date of the commencement of the amended provision, unless it is excluded in terms of section 4 from the scope of the National Environmental Management: Waste Act, 2008.
(2) A person in control of the substance, material or object must within 60 days from the date of the commencement of the amended definition of ‘‘waste’’, either— 186 (a) apply for a waste management licence, if the person conducts an activity, which is listed in terms of section 19(1) of the principal Act; (b) comply with a norm or standard, if the person conducts an activity, which is listed in terms of section 19(3) of the Act, if applicable; or (c) apply for the exclusion of the substance, material or object from the definition of waste in the prescribed manner.’’.
Report to be considered 187