Waste Management Bureau: legal opinion; SAWS Board interface with senior management: legal advice; Chemicals & Waste Management

Meeting report

The Chairperson reminded the members that the Committee had previously requested for a presentation on the Waste Bureau. However, the Committee was unable to finalise the discussion as Ms Nosipho Ngcaba, Department of Environmental Affairs (DEA) Director – General was not present at that meeting.

Meeting Report

Establishment of Waste Bureau: DEA Briefing

Ms Nosipho Ngcaba, Director General (DG), Department of Environmental Affairs (DEA) explained that her non-attendance at the previous engagement with the Portfolio Committee had because it dealt with legal matters, which did not require her to directly respond to. She gave a breakdown of the content of the briefing, which would cover the legal opinion and provide clarity on the establishment of the Waste Bureau.

Ms Linda Garlipp, Chief Director: Law Reform and Appeals, DEA, presented on the legal nature of the Waste Management Bureau, its relationship with the Department, and the DG’s role and relationship with the Bureau. This included the statutory obligations of the DG as the interim acting Chief Executive Officer (CEO) of the Bureau, as well as the perceived conflict in the dual roles of the DG of the Department.

Ms Garlipp said the Committee had previously received the presentation on the legal opinion, and the Department had gone back to the records to understand why Parliament had created a specific provision in the Waste Amendment Act relating to the appointment of a Chief Executive Officer.  On 13 March 2018, the Committee had raised a concern regarding the Director-General of the Department acting as a Chief Executive Officer of the Bureau in the absence of a functional bureau.

 Ms Garlipp addressed the concerns by clarifying that it was an Act of Parliament that placed a legal obligation on the DG to act temporarily as CEO until a CEO was appointed, and the DG could not delegate this function or appoint an acting CEO. If the DG did not act as the CEO, she would be in non-compliance with an Act of Parliament. Secondly, the appointment of the DG as CEO was a temporary arrangement provided by Parliament, in anticipation of the challenges which were going to arise with the setting up of the new Waste Bureau.

The presentation also focused on the following:

Legislative Context

Section 24 of our Constitution, 1996 provides for an environmental right in the Bill of Rights that is not harmful to health or well-being and to have the environment protected for the benefit of present and future generations through reasonable legislative and other measures. Against this backdrop, the National Environmental Management: Waste Act, 2008(Act No. 59 of 2008) (NEMWA), was passed to reform the laws regulating waste management in accordance with our new constitutional dispensation.

In May 2012, a Waste Management Strategy was published, which is now under implementation.

The Waste Management Legal Framework is influenced and informed by and based on the key components of the waste management hierarchy, which dictates the overall strategic approach for waste management, based on the principles of reduce, reuse, recycle and recovery of waste

Challenges in the Waste Sector

Unfortunately, since the adoption of the waste hierarchy policy, in 2009, and the DEA’s best efforts, increasing quantities of waste, poor waste management and lack of access to waste services, have increasingly led to increased pollution, with associated negative environmental impacts and environmental degradation.

The levels of recycling and re-use are very low, and waste is not necessarily seen or considered as a resource with socio-economic potential. In this regard, these challenges had to be addressed in order to unleash South Africa’s waste sector economic potential and at the same time to attain the maximum environmental protection and benefits.

The Waste Management Sector has been identified as having an estimated potential turnover of approximately R50 billion per annum. To unlock the socio-economic potential in the waste sector, the Minister in 2013 tabled the National Environmental Management: Waste Management Amendment Bill, B32 of 2013 (see document). The Bill made provision for the establishment of a Waste Management Agency, which was proposed to be a fully-fledged public entity. The proposed functions of the Waste Management Agency were to facilitate the development of and coordination of the implementation of industry waste management plans, and to facilitate disbursements to the industry waste management plans.

While considering the Bill, the Portfolio Committee at the time was mindful of the failures of Buyisa-e-Bag and the Recycling and Economic Development Initiative of SA (Redisa), and concluded that there was a need to develop a new institutional model to regulate waste stream management. The new institutional model had the following features:

• An implementing agency had to be established, headed by a Chief Executive Officer;
• No board of directors, and not a non-profit company;
• The Minister sets the policy framework within which it must operate;
• Operationally being accountable to the DG, whilst operating within the legal framework of the Public Finance Management Act (PFMA), with the DG being the accounting officer;
• Staff component and specialists to be appointed by the CEO.

2017 Amendments on Bureau

The National Environmental Management Laws Amendment Bill [B14-2017] currently before Parliament proposes changes to the current model of the Waste Management Bureau. Once the Bill is passed by Parliament, signed into law and promulgated, the challenges experienced and criticism against the current model would have been addressed. The Bureau will then be able to function as a fully-fledged public entity with a board of directors. However, until such time as the Bill is passed by Parliament, the Department has to implement the current model of the Bureau

Ms Ngcaba referred the Committee Members to a letter addressed by the Minister of Environmental Affairs to the Minister of Finance on 9 June 2018, to operationalise the Waste Bureau. She said that the Treasury had interacted with the Department on a business case to establish the Waste Bureau. However, they had indicated that they would wait for the finalisation of the amendments to the National Environmental Management Act.

Functions of Bureau in terms of National Environmental Management Waste Act (NEMWA)

Mr Andile Mvinjelwa, Senior Executive Manager, Waste Bureau, presented on the Establishment of the Waste Bureau, and emphasised that the Bureau must:

• Implement the disbursement of incentives and funds derived from waste management charges.
• Identify and promote best practices in the minimisation, re-use, recycling or recovery of waste.
• Progressively build capacity of the Bureau to support municipalities in the development and implementation of integrated waste management plans and capacity building programmes.
• Support and advise on the development of industry waste management plans, integrated waste management plans and other tools, instruments, processes and systems, including specialist support for the development of norms or standards for the minimisation, re-use, recycling or recovery of waste and the building of municipal waste management capacity.
• Monitor the implementation of industry waste management plans.
• Monitor and evaluate the impact of incentives and disincentives.
• Perform any other task or function that the Minister may assign or delegate to the Bureau in relation to the implementation of this Act.

Discussion

The Chairperson asked about the legal opinion that had been presented on 17 April 2018, as he was under the impression that the previous legal opinion would be presented to the Committee, but it had not been included in the documents.

Ms Garlipp responded that the current legal opinion did not deviate from the previous one, but it provided more information on the provision from Parliament relating to the appointment of the CEO.

The Chairperson said the idea had been to have the same legal opinion presented, as one of the reasons the Committee had decided to schedule the presentation was due to contradictions between the legal opinion that was previously presented and what was currently happening in the Department.

Ms Ngcaba said the Minister had not signed the previous legal opinion, as she had wanted to know the questions that had been asked by the Committee about it. The Department was under the impression that they needed to give clarity on the position of the Director-General.

The Chairperson asked if the previous legal opinion was not signed by the Minister.

Ms Ngcaba responded that the Minister was not aware that she had needed to provide a legal opinion at the previous meeting held with the Committee.

Ms Garlipp explained that the legal opinion had been submitted to the Minister, but the Minister at that time had not had sight of it. She admitted that there were differences in the legal opinion, especially with regard to the establishment of the Waste Bureau. She explained that there were differences when it came to the functions of the DG when using the SA Auto Repair and Salvage Association (SAASA) model, or the Waste Bureau.  However, the functions of the Bureau were the same as the one in the Act, which stated that the DG was designated as the accounting authority of the Bureau.

The Chairperson said at the time of the production of the legal opinion, the Waste Management Amendment Bill had already been passed. He asked about the contracts Mr Mvinjelwa had been referring to in the presentation on the establishment of the Waste Bureau.

Mr Mvinjelwa said the contracts were for the operations of the Waste Tyre services and existing Redisa operators who were registered on Waste Bureau database.The Treasury had given the Department approval to establish contracts with those contractors that were operating under Redisa, and this was an interim arrangement for a year for the Department to continue with the operations. The contracts expired in September 2018, and as of October 2018 the Department was expected to enter into new contracts through government tenders.

The Chairperson said he was confused by the approval letter from Treasury which allowed for deviations in the contract. He was aware that there was a new policy that allowed the contracts to be held for a period of three years, and he would like clarity on the relationship between the new policy and the current processes in the procurement plan.

Ms Ngcaba responded that in terms of Treasury procurement processes, the Minister required the Department to indicate through a procurement plan as early as April if the Department was going to outsource certain functions such as tenders, and that was published in the website of the Treasury.

The Chairperson asked about the position of the Waste Bureau, and what had happened to the acting CEO who had been introduced by the Director General.

The DEA delegate explained that the Act was simple -- the Bureau had been established but was in the process of being operationalised. It was operating according to the legal arrangements that were existing within the Department.

Ms Ngcaba corrected the Chairperson, by saying she never introduced an “acting CEO,” but had introduced a “specialist advisor.”

The Chairperson said that he remembered a member of the Department being introduced as the acting CEO at the previous meeting with the Minister. He would have to go back to the records to confirm this.

Mr T Hadebe (DA) asked to have the names and positions of the employees who were hired by the Waste Bureau in October 2014.

Mr S Makhubele (ANC) asked about Section A34 (3) of the amendment bill.

The Chairperson said Section A34 (3) reads as follows: “In the event of an absence of a functional Bureau or the Chief Executive Officer, the powers and duties of the Bureau will revert to the Director-General of the Department contemplated in Section G34 (1), who in such a case exercises the powers and performs those duties until a Bureau is functional or a Chief Executive Officer is appointed.”

Mr Makhubele said the presentations on the legal opinion seemed to be contradictory, and it was difficult to know which one of the legal opinions should be discussed with the Department. The initial opinion had been withdrawn, as it was not signed by the Minister. The Committee would have preferred the Minister to communicate directly with them on the withdrawal of the initial legal opinion. Secondly, the there was the issue with the establishment of the Waste Bureau within the Department, where the Bureau was said to be a juristic entity, which required the amendment for the Bureau to be listed to operate normally. The Department needed to list the Waste Bureau as envisioned for it to be established. It was difficult to talk about the Waste Bureau if it had not been listed, as it would seem as if the Department was talking about something that did not exist.

Ms J Steenkamp (DA) asked for more information on what had been done to prepare for the appointment of the CEO within the Department, and how long the process took in Parliament to advertise for the CEO position. Secondly, on the Waste Bureau, how would the Department catch up on the current missed targets, considering that it also needed to catch up on the current backlog? The DEA had said the capacity was unevenly distributed across the country, so how would it ensure that the capacity was evenly distributed? Lastly, had the Waste Bureau bought any processing equipment since its establishment last year? How many jobs had been created at the depots, and at which depots? Did the salary scale include the position of the Specialist Advisor, and was the position a permanent one?

Mr R Purdon (DA) asked the Department to give clarity on the tools of trade, the costs and which budget they were from.

The Chairperson asked Ms Nolwazi Tetyana, Executive Programme Manager, Waste Bureau, to clarify on her role as the specialist advisor.

Ms Ngcaba responded that the four people who were appointed in October were the specialist for Transport Logistics, the Micro Collector, Micro Depot Specialist and the Waste Information Officer. The Department would revert to the Minister relating to the legal opinion. It would put this in writing and present it to the Minister to table the legal opinion.

The Chairperson said if the Minister says the legal opinion does not have standing, then she must provide a formal communication to the Committee.

Ms Ngcaba said she would try and get the information from the Minister.

On the Bureau, the Department had not anticipated stopping with the processing of the Waste Bureau, due to the Redisa plan. The Waste Bureau was not meant for tyres only. The CEO could be put in place within the three months.

The Chairperson asked what was stopping the Department from appointing a CEO.

Ms Ngcaba responded that the Minister said she would not appoint a CEO. She had outlined in the previous meetings her reasons for not appointing a CEO.

The Chairperson said there was no legal basis for the Department not to appoint a CEO

Ms Ngcaba asked the Chairperson to ask the Minister directly

She agreed with Ms Steenkamp that the benchmark for the performance of the Waste Bureau was not a good one. The pay scale was above level 16, which was above the pay scale of a Director General.

The Chairperson asked if the Specialist Advisor was paid at the level of the CEO.

Ms Ngcaba said yes.

The Chairperson reiterated that the Specialist Advisor was paid at the salary scale of the CEO, but the Specialist Advisor was not the CEO

Ms Ngcaba said the CEO could not be appointed in that fashion. In terms of the public service regulation, section 26, the DG can appoint someone from the private sector. This provision was used and approved.

The Chairperson said in terms of Section K34 (4), the acting CEO was appointed by the Director General in consultation with the Minister.

Ms Tetyana responded that her role was to assist the implementation and support for the establishment of the Bureau.

The Chairperson asked if she was addressed as the “acting CEO” when she presents.

Ms Tetyana said no.

The Chairperson asked the Department to answer the fundamental question -- whether the Waste Bureau was established. If the Waste Bureau was operational, then it must exist on its own and there was no legal basis for anyone to appoint the staff members, since it would be an entity that was operational. If the Waste Bureau was operational, then the CEO must report to the Director General. The problem now lies in the fact that the Director-General is the Accounting Officer, and also exercises the role of being the CEO of the Waste Bureau. The Committee’s reading of the act says that if the Waste Bureau is operational, then it must exist as a separate entity.

The Committee did not have some of the answers as to why the Minister had not appointed the CEO, and a follow-up meeting would need to be scheduled where the Minister would be present.

The Chairperson said he was uncomfortable with the delay in the selection of an Industry Management Plan, because the Department was proceeding with the appointment of the service providers.

 

South African Weather Service (SAWS)

Chairperson’s opening remarks

The Chairperson said he would like the Minister to be present at the next presentation because there were too many outstanding questions that needed to be answered or required clarity.

The Committee had held several meetings with the previous board members. The former chairperson of the board had been Ms Ntsoaki Mngomezulu. The other members were no longer part of the current board. The Committee had had several unpleasant interactions with the board. It would have been ideal if the Minister had been at the meeting today due to issues that were arising from the previous meeting with the former board members. Similarly, it would have been ideal to have SAWS former board members at this meeting, because there were a lot of outstanding matters that were supposed to have been answered by the previous board.

Before going for recess, the Committee had requested the Minister to come and account, but in the process it had received a letter of rejection from the Minister. In her letter of objection, she had stated that the SAWS board was not supposed to come to the Committee -- it accounted to Parliament through her office. The Committee had insisted that there must be interaction and the board must come here. It had stressed that any entity of the government must account directly to Parliament, not to the office of the minister. The Committee had raised the issue and indicated that even in the past the SAWS board was always reporting to Parliament.

The chairperson reminded the new SAWS board members about the decision that the Committee had taken with regard to the allegation of irregularity at the SAWS board. The board had decided that it would not pay the expenditure that had accrued in the appointment of the previous chairperson of the board. The Committee had engaged the board and agreed that the R2 million must be accounted as fruitless and wasteful expenditure, and the Committee must report the matter to the National Assembly. As a result, it had recommended to Parliament to resolve that individual members of the board must be held accountable, and it was waiting on feedback from Parliament. The delay was caused by the action of the Minister in threatening the Committee with legal action should that matter be placed on the agenda. Parliament would be litigated against, so the Committee had not heard any response from the Speaker of Parliament. The Committee was now waiting to engage the Speaker.

Nevertheless, that was not the matter of today’s meeting. The time for the Committee and the SAWS board to engage on that matter would come, but currently the Committee’s recommendation was that the Minister must fire all the SAWS board members who were part of the previous board.

The Chairperson welcomed the new board members, and asked them to introduce themselves. The new board members introduced themselves as follows: Dr Phillip Dexter, deputy chairperson of the board, Dr Mphekgo Maila, board member, Sali Mudibuthi, board member, Prof Elizabeth Mokotong member of the board, Ms Judy Beaumont, board member, Mr Jerry Lengoasa, CEO, Ms Sally Mudly-Padayachie, board member, Mr Derick Lefutso, board member, Lohila Geza, head of Human Resources, Lulama Kumeng, acting CFO, and Stephen Foster, industrial psychologist.

The Chairperson observed that the first time the Committee had met the entire SAWS board had been when it had called the board to state why Parliament should not take the decision that would make every board member to pay individually for what it considered to be fruitless and wasteful expenditure, which was a result of the premature termination of the former CEO.

Today the Committee had specific questions with regard to the performance, and how the board interacts with the management. Subsequently, it would discuss the appointment of one staff member that was on the board. He invited Dr Dexter to take the Committee through the report of the board.     

Briefing by SAWS Board

Dr Dexter stressed that the board was pleased to get the opportunity to speak to the Committee. It took this meeting seriously because some of its members have been Members of Parliament before, and therefore appreciated the interaction and was looking forward to engaging with the Committee again in the future. The board respected this institution and the constitution of the country.

As indicated in the report, some of the matters fall outside of the board’s mandate because of legal processes, but it was waiting for those matters to be tabled and resolved here. He emphasised that the board was taking this opportunity very seriously, and therefore was ready to have a cordial relationship with the Committee. He was certain that the board would deliver to the Committee’s expectations, since its members had received very good inductions. He apologised for sending the report to Committee so late, but this had been because the board wanted to ensure that it covered everything.

 

Dr P Dexter referred to a few legislative mandates that the board was responsible for:

• The Board must ensure the financial viability and development of the commercial services;
• The Board must ensure an efficient, cost effective and high quality weather service;
• The Board must set policy, standards and objectives within the framework issued by the Minister and ensure that the executive management implements these policies, standards and objectives;
• The Board must facilitate succession and give guidance in the appointment of senior managers;
• The Board must ensure that the Weather Service has adequate systems of internal control, both operational and financial.

 

He continued to emphasise what the board was supposed to focus on. He admitted that he was very impressed with the level of engagements with the senior management that had taken place, and with a number of robust interactions. The engagements had not been hostile, but very open. The assistance of the sub-committees on audit and risk, human resources and remuneration had made things much easier.

The other side of the board was regulated by charters. The board played an oversight role when presenting the budget proposal to the Minister for her approval. It set the training policy, the policy on the transformation of the Weather Service, and approved the business plan annually, and ensured the majority of citizens were benefiting.

The issue of salary, which had been discussed previously, was attended to in the board’s annual report, in line with the policy guideline. The development had led to SAWS implementing the DEA’s remuneration framework and new pay scales in November 2017. The remuneration framework’s intention was to address challenges around grading, pay levels and parity. In the process, for the salaries of 253 employees on salary levels 1 to 12, the midpoint of the scale was adjusted. R1.8m had been spent on salary parity adjustments for 2017/18.

Concerning the salary of management of human capital, an official had been appointed on a five-year fixed term contract as the General Manager: Human Capital Management, effective 6 December 2016. After approval and implementation of realignment of the SAWS executive and senior management structure, the executive salariesy of Corporate Services and Regulatory Services were adjusted. The executives are on level 15 and the CEO is on level 16 of the salary structure. The official in question was appointed at a salary of R1.3m per annum. The official’s salary was reviewed and approved shortly after joining SAWS, leading to her package being increased to R1.5m per annum. When the annual salary negotiations for employees were finalised -- which is effective in April each year -- she had received a 7% salary adjustment, which was effected to all employees in line with the board resolution for salary adjustments for 2017/18 financial year.

The Chairperson asked the meeting to be adjourned for lunch. However, before adjourning the meeting, he told the SAWS board members that the Committee was not pleased with the content of the report, since there were things that were missing. Another matter that was coming to the attention of the Committee from the presentation was the interface between the board and the management, so the Committee hoped the Minister would be able to come to Parliament and account, because these were the matters that the Committee had anticipated the report discussing and had been looking forward to engaging with.

Dr Dexter responded by indicating that the Minister of Environmental Affairs was responsible for the assessment of the performance of the board. Therefore, a report relating to the matter could be provided only by the shareholder, as the executive authority of SAWS. However, he acknowledged that the board had received an unqualified audit report from the Auditor-General (AG). The board’s finding of the last three years, 2015/2016/2017, received an unqualified report. The board had engaged the AG’s office on when the audit would be realised. He stressed that entity would not face the same challenge it faced in 2015, when employees had boycotted because of unresolved salary issues.

Concerning to the early release of the former CEO, Dr Dexter said that the SAWS board was waiting for the report from the Public Protector on the alleged allegation of corruption against him. He also mentioned that SAWS was in the process of moving its offices to Centurion, with some errors incurred on both sides -- on the side of entity that was procuring, and on the lease agreement that was dealt with by the AG. The full account would be released in the final report of the AG. If there was any issue of maladministration that arose, then the board would putthat on the agenda and the Chairperson would hear from the board again when dealing with such matters at the financial year-end meeting. The board was working on finding ways to make SAWS a viable commercial entity.

The Chairperson said when the meeting resumed, they would deal with the issue of the appointment of the chairperson. The key issue that the Committee have raised had not been responded to. Since the Minister still had to do the assessment of the SAWS board, the Committee might want to request her to come and present the outcome of the assessment here. In the letter, the Minister still insists that she is the only one that is supposed to do an assessment.  It did not take the power of anybody away if the board was to indicate its current position on performance, as the board could have noted things that had been done so far. This increased the need for the Minister to come and account, because the missing part is what the Committee expected to get from the report, considering the misconduct of the previous board members. Similarly, the interface of the board and the management was not well addressed in the report, which was something that the Committee had anticipated because it perceived that the board was interfering a lot with the management, with the board doing something that was supposed to be done by the management. The Committee needed all these outstanding matters to be clarified when it returned from lunch.

Discussion

Mr Makhubele said he appreciated the presentation, but agreed with the Chairperson that it was not responding to certain issues that had been raised earlier. After the Minister had appointed new board members, there was no need to go back to the old board members, because it would be unfair if the Committee expected them to answer to a lot of things that had been raised earlier. Initially the Committee had been interested in seeing the board, which had been was asked to appear because of it misconduct. It was more about the performance and the tension that was happening within the board, causing delays in reporting, so one hopes the Minister will come to account. The Committee was not dealing with a normal situation, but dealing with issues that require all parties to find a solution on how to move forward. Therefore, the matter under discussion should be closed properly, even if the Committee might have been overtaken by events, and the new team must close that chapter properly.

The Committee had asked the board to keep its house in order on three occasions, and now it hopes that things are fine. Initially, the Committee wanted to meet the board because of how it was conducting itself. Some of the issues that could have been discussed would not even have come to the Committee, such as the issues of salaries. There were things that were not working as intended, especially when looking at the relationship between the board and management. One of the things of interest was in the presentation, where it spoke about the audit findings for the last three years.

The chairperson told the SAWS deputy chairperson that it was not customary to have the whole board to come and account, but the board had been called in its totality because the Committee had needed to get clear picture of what was happening at the entity. This time around, the Committee wanted to engage with all the board members because it wanted to ask each board member a question, but now there were new members so things had changed. The Committee could see a new attitude in how the board was engaging with Members of Parliament, but it was still going to ask the Minister to come account. The Committee was not pleased with how the board was running, as one of the very important entities of the nation. The weather service was very important to the aviation industry and to every South African, so the Committee was worried about what the board was doing. It could not allow people sitting in public office to undermine the authority of Parliament, creating unnecessary contention between the board and the CEO.

Mr Hadebe asked the SAWS board to clarify an employment process that had taken place recently at the board. There had been an advertisement about a new position and the requirement had been that the candidate must be a PhD holder. Did the new appointee hold a PhD degree?

 He added that Mr Makhubele had asked exactly what he had wanted to say by indicating the things that the Committee wanted to convey to the board. Therefore, he was in support of the idea of convening a meeting with the Minister to address outstanding matters. The Committee could not allow corruption to thrive in the entity, and have board members at the entity who did not want to account to the Committee. He hoped that by then a lot of other issues would have been cleared up so that maybe the Committee could plan the way forward. The disappointing part was seeing an entity that was using cash from public purse and running away from accounting to Parliament. Nonetheless, most of the issues would be resolved in time.

Mr Purdon asked the board to explain the lifespan of the new computer facilities, since there had been no proper explanation on the subject of commercial revenue.  Was this is going to be a continuing trend, and what was the indication for commercial revenue going forward? There was a lot of money being spent -- R36 million on a high performance computer system -- yet there was no budget for the next three years. Regarding the meteorological and air quality equipment, could someone from the board explain the figure in simple terms?

Mr Makhubele stressed that it was not really the practice of the Committee to bring the entire board to come and account, but it was a result of where the Committee was coming from. The SAWS deputy chairperson could be assured that most of time it was the chairperson or another senior board member who would come and present the report and account on behalf of the board.

The Chairperson agreed, and added that on this occasion the Committee wanted to engage with each board member. It wanted to ask each and every member of the board to give reasons why they should still be on the board. However, things had changed now, with new members, new attitudes, and new ways of seeing things and interacting with Parliament, but it would still engage with the Minister. The previous board had been doing unpleasant things, and the Committee was not going to sit down and close it arms and allow the board to run a very important national asset like the South African Weather Services to the ground. The board had not right to behave as if it was a bull in a china shop. It had to act as a very important board that is key to the aviation sector and to ordinary South Africans. Additionally, the Committee was aware that there was contention between the board and the CEO, and the board was now engaging the management on the battlefront. Could the board explain about the lease agreement? Was there an employee by the name of Ms Miriam Machoele on the board?

SAWS’s response

Dr Dexter said SAWS appreciated that the Committee was dealing with the issues that had been raised, and the board understood its responsibility to account to Parliament and ultimately to the people of South Africa. SAWS saw the importance of the weather service beyond the aircraft, to those who wanted information about the weather in commerce, industry, farmers or the general public. The weather was very critical, considering the issue of climate change.

There are three issues that needed to be highlighted. Firstly, there had been some changes in the composition of the board, so a lot of issues were related to the past, although of course those issues were on the record. Secondly, when the board presented the new strategic plan to the Committee, which the CEO was busy preparing, it would notice that all outstanding matters were addressed. All parties wanted the performance issue to be addressed and put on record. Thirdly, the term of office of some board members was coming to an end, and the Minister had to advertise those positions.

Concerning the relationship between the board and the management, the CEO would speak about it, as it was better to hear it from “the horse’s mouth.” Regarding the issue of the board interfering with the management, the CEO could better explain how things were now between the board and the management. In terms of the audit finding for 2017/2018, the AG had just presented the issues that needed the board’s attention. The management would respond to those things. Regarding the unqualified audit report, the management had referred that to the board. At the moment, the board was waiting for the complete audit report.

The Chairperson asked when the AG would finalise the report, because the Minister was supposed to table it by the end of September.

Dr Dexter replied that the board had finished with the annual general meeting (AGM) in July, and was busy working on the report, which would come to Parliament before the end of September.

Regarding the current good working relationship with management, the credit should go to all the board members. The CEO was better positioned to speak about finance revenue, but once again, it was something that was covered in the report. The CEO would also address the matter of meteorological equipment.

The board understands the Committee’s position regarding bringing the entire board here, and is aware that it is not normally a good idea, but any time that the Committee needs to see the entire board, it will come. The lease matter is actually a legal issue at the moment, and the board was waiting on it to be finalised by the legal department.

The board had indicated that commercial revenue was down in the context of the aviation industry as main clients. Regarding the model that is used, the regulatory committee was here to explain it to the Committee. One of the key variables was number of landings and take-offs that are recorded. The numbers were down because the aviation demand was down. When the demand increased up, the entity may recover. Instead of focusing on one source of income, the entity was developing a marine master plan which would assist the sector and assist Operation Phakisa. The marine sector was just being used as an example, and the board had asked the private sector to help determine how the entity could move forward, and was having robust discussions, so it was looking forward.

Mr Jerry Lengoasa, CEO, SAWS, said that the high performance computer that was purchased two years ago had been bought at a cost of about R50 million. The computer had reached its full capacity in a very short time. This had happened because of moving a lot of data into new computer, as well the computer generating a lot of data on a daily basis. A year ago, the super computer had been running at less than 95%, which was a very low performance, so the board had approved an increase in funding to increase its capacity. It had also entered in agreement with the centre for high performance computers, based in Cape Town, to provide the entity with storage space. In addition, the board decided that the entity must purchase a small server so that researchers could run some jobs without putting pressure on the high performance computer. The computer had run for three years without any other expenditure, so what had been spent was on the purchase, and that was all. The centre for high performance computers was serving as the back up, since the entity did not have one. Ideally, a centre which was running 24 hours a day needed a “mirror” computer that was sitting somewhere, to create redundancy. Up to today, SAWS did not have such facilities.

The Chairperson asked the CEO to address the question regarding the employment of Ms Miriam Machoele.

Mr Lesoane replied that the entity had an employee by the name of Miriam, who had joined the organisation at the beginning of July as the compliance officer.

The Chairperson asked the CEO to confirm that he was aware of allegations against the said employee being reported in the media. He also asked whether the employee was from the SA Express.

The CEO responded yes to all the questions.

The Chairperson asked whether the Board had done research before the appointment

Mr Lesoane asserted categorically that the board had done a background check on the employee.

The Chairperson asked what the board had found.

The CEO replied that it was still waiting on the finding the entity had requested, since the board had been informed that there was a forensic investigation going on around the employee in question.

The Chairperson said there was an allegation that Ms Machoele was involved in a corruption scandal involving a contract worth R2.4 billion for procuring fuel, and the investigation was under way, so it would have been wise to keep the employment process on hold until the matter under investigation was concluded.

Mr Lesoane replied that the board is aware of that, but the employee had already beenappointed when the matter had come to its attention, so it had decided to wait on the findings.

The Chairperson requested the CEO to alert the Committee on the matter as soon as the issue was concluded. The way forward would be to wait for the Minister to send the report. What was needed now was to engage the minister on the matters.

Of course, the Committee still had to engage the board and the Minister to finalise the issue of the former board members repaying the R2 million that had been paid to the former CEO, because the Committee felt there was no formal justification for that expenditure. On that matter, the Committee wanted the board to proceed speedily. Any further engagement or issue would be completely new issues, and would be dealt with as such. The Committee also thinks the deputy chairperson of SAWS should deal with the issue of the lease, but senses that the board might feel it is using this issue to deal with the new CEO, but he wanted to make it clear that that was not the case -- the Committee did not have an issue with any new board member. The Committee wanted the CEO to do his job because it believed that the board had appointed a strong candidate. Also, it did not wish to see fighting among the team, as fighting did weaken the institution. The Committee wished deputy chairperson and the board members you good luck! He urged the board to work together to advance the nation’s interest.

Mr Hadebe wanted clarity from the CEO about the position that had been advertised and the requirement was that the candidate must be a PhD holder.

The CEO replied that the candidate appointed did not have a PhD, but was in the process of starting to work toward his PhD. The reason why the board had employed him was because the country did not have enough people with the kind of skills for which the entity was looking.

Mr Hadebe asked whether, in the pool of all the candidates that applied for the position, there was nobody who met the requirement.

The CEO responded that there was no another qualified candidate.

The meeting was adjourned.