Socio-Economic Impact Assesment System: Department of Planning, Monitoring and Evaluation briefing

Meeting report

Opening remarks

The Chairperson welcomed the DPME delegation, and submitted to the members that its presence is part of stakeholder contributions towards the Red Tape Impact Assessment Bill

Consideration of outstanding minutes

The Chairperson tabled the minutes dated 15 February 2017 for consideration.

Members were satisfied with the document and adopted it without the amendments.

KwaZulu-Natal Oversight draft report

The Chairperson highlighted that upon her perusal of the report, she noted a few issues that we not captured well or correctly in the report and advised that it be redrafted. Those issues, amongst others, included: the purpose of the oversight visit was not correctly captured in the draft report, responding to the felt needs of the cooperatives by the DSBD, key issues raised by municipalities were not captured well/adequately in the report, and the silo mentality of the DSBD were not addressed adequaltely..

In her view, the report needs to go back and be re-written. Members need to go back and read the report, so that they can make inputs about the oversight before it is sent back to be re-drafted.

Mr H Kruger (DA) proposed that the Chairperson and the writer of the report get together to ensure that her thoughts are included in the report.

Members agreed with Mr Kruger’s proposal. They added that the input and comments from other members will be considered at the next meeting because they had not gone through the report as they had not received it, according to them.

The Chairperson then ruled that more input from members will be provided in the next meeting. She handed over to the DPME to submit its briefing.

Briefing by Department of Planning, Monitoring and Evaluation on the SEIAS

Ms Pulane Kule, Socio-Economic Impact Unit, DPME, stated that the National Development Plan (NDP), Medium-Term Strategic Framework (MTSF)and outcome four prioritises:

-A reduction in the burden placed on inclusive growth resulting from unintended consequences of government actions as well as inefficient and/or inappropriate regulations

-A need to improve compliance burden ,complexity of policy development, laws and regulations as well as removing unnecessary obstacles to growth and development such as :

§   Costs that exceed the hoped-for  benefits;

§  Protracted turnaround times to deliver services;

§  Excessive risks leading to implementation failure;

§  Policy proposals that require capacity that the state doesn’t have; and

§  Delays on implementation of laws and regulations due litigations or lack of buy in from affected stakeholders

-SEIAS was then introduced by Cabinet in February 2015, to replace RIA and to assess policies, laws and regulations in line with NDP priorities

-The primary objective of SEIAS is to assists departments to better formulate policies, legislation & regulations and ensure:

•       Alignment with national priorities in promoting inclusive growth, addressing inequality, spatial imbalances, and environmental degradation

•       Risks associated with the implementation of such laws are thereof mitigated, thus unintended consequences are minimised

•       Costs of implementing such prescripts are reduced while benefits by the deprived service recipients are optimised; and

•       Regulatory burden is reduced, thus a better and efficient administrative mechanisms of implementing the national priorities

-All new/ review/ amendment Policies, Legislations and Regulations –Cabinet/ Internally approved by Eas

SEIAS was implemented on 1 October 2015, it is fairly new and it is does not look at legislation or policies retrospectively but only those that have been enacted and promulgated effectively after its implementation.

Furthermore, SEIAS is a thought through process and not a compliance driven mechanism with another “tick-box” to complete, to look at the rationale behind policy/ legislation development or review. In addition, SEIAS looks at the socio-economic costs/benefits and risks and not only at quantifiable economic costs. If there is quantification then the level of quantification should be proportionate to the need for it.

Within policy and planning, SEAIS provides Strategic Plans which are tools to assist entities to prioritise and plan the progressive implementation of their legislative mandates, policies and programmes. It further prepares policy makers/law drafters to pro actively/anticipate/think upfront the implications and implementation in relation to the problems identified. Poor policy/law making results in poor programme design and other related interventions and thus persisting inequality, poverty, spatial imbalances and environmental degradation. The application includes two assessment stages, the Initial Impact Assessment and the Final Impact Assessment stage. The former focuses on the problem (that the policy/law seeks to address), and questions why it should be addressed, including what causes the problem, who’s behaviour must change as well as scoping available options dealing with the problem-benefits, implementation costs, risks and impact on national securities to come to a conclusion on which option is most desirable. The desirable option will then lead to the Final Impact Assessment, which then focuses on the summary of the policy/legislation in question, consultations, intended outcomes, risks and mitigation measures etc., it is important to note at this stage that given the length of the time lag between the two stages there are factors that may obliterate the final stage that may be outside the control of SEIAS and consequently change the outcome of the policy/legislation or rather render it unnecessary anymore. These factors may include the overall economic behaviour, the political climate in the country or other policies that are put in place that effectively address the problem or the root cause of the problem that the policy/legislation was aimed at addressing.

See slide number ten of the presentation to see the process map of policy/legislation development.

With regards to the implementation, the SEIAS unit was established within the DPME with the intention to look at capacity, coordination and quality assurance. The Cabinet Office signs off on SEIAS to ensure that all Policies/ Bills are accompanied by SEIAS reports, and act as a form of interdepartmental steering committee to provide support, guidance, training and facilitation. SEIAS champions coordination and ensure that all policies/ bills and regulations are subjected to SEIAS by initiating units, and provided training to 136 officials in 33 departments. As at 31 March 2016 there were 117 Prescripts subjected to SEIAS, 65 Bills, 16 Regulations, 25 policies and 11 plans/frameworks and 581 officials were exposed to inductions on actual application of SEIAS.

In conclusion, SEIAS allows for better coordination in policy and legislative development within and across departments where there are overlapping mandates, roles and responsibilities, unevenness in the quality of SEIAS reports. In some instances, challenges were on problem identification and the root causes i.e. the rationale behind developing/amending policies and legislations and strategic linkages to the NDP. There were unrealistic assumptions or mismatch between the objectives of the proposed policy/bill and identified problems and root causes, there were also lack of adequate identification and analysis of the risks that may impede implementation. And, alternative options were not thought through. So there is a need to strengthen communication and awareness of NDP priorities across different levels in departments by Management, Strategic Planning & M & E units, and better coordination on the implementation of the Legislative Programme to adhere to time-lines.

She thanked the Chairperson and the members for the opportunity.

Discussion

The Chairperson handed over to the members to provide clarity-seeking questions, and submit comments and queries.

Mr Kruger asked about the unit’s annual budget and how many staff members are working in the unit and from those members, how many are SMMEs experts. Secondly, of the 266 assessed regulatory measures, how many can influence SMMEs? Thirdly, how many socio-economic impact assessments were done on the Red Tape Bill by SEIAS, and does the unit do impact assessments on regulation. Lastly, is there impact assessment done on procedures?

Mr T Chance (DA) stated that it would be great if the DPME was running the show, because much of what is presented today is rational. If all regulations and legislations were processed based on the DPME’s principle, much of what comes out of Parliament would not see the light of day. He asked how the DPME and SEIAS system escape from the ivory tower and actually have a real impact. Looking at the policy framework to which the DPME is working within, it is not only informed by ANC policy which in some instances seems to be at odds with the NDP. So did the DPME analyse the regulation of the Private Security Industry Bill or the regulations related to the encryption of Set Top Boxes, because both of those seem to have a degree of irrationality. If they had gone through a socio-economic impact assessment they probably would not have appeared in the manner in which they appeared. So does the unit have the ability to put into practise the principles that it is working towards. Secondly, as pointed out by Ms Kule that SEIAS is not retrospective which in itself is problematic, and that is one of the major differences between SEIAS and the Red Tape Impact Assessment which is much focused on red tape, so has the Department read through the Bill, and if so, does it believe there is a significant open space within SEIAS for the Bill which seeks to address the issues of red tape that the Committee aims to resolve for SMMEs in particular, and how you think it can go significantly further than SEIAS to address red tape issues.

The Chairperson said the DPME does not necessarily have to answer the last question by Mr Chance regarding its view on the Red Tape Impact Assessment Bill. There will be time set aside in the near future when the Committee deliberates on the Bill for the relevant departments to share their views on it. That time is yet to come.

Mr N Capa (ANC) for a direct link between the socio-economic impact assessment and the red tape impact assessment, and provide the relationship between the two, if there is one. Further, do you see any areas where the interventions of the DPME seem to be impossible or are there any areas which show resistance in the DPME’s interventions? Lastly, is there any possible time frame or estimation that has been put in place in terms of seeing the impact of SEIAS reducing red tape?

Rev K Meshoe (ACDP) asked the DPME at what stage does SEIAS get involved in the formulation of policies, because if it waits for policies to be formulated first and then come in at a later stage to assess the socio-economic impact of the policy that is being formulated, and only then provide adjustments or changes that need to be made. In his view, this delays the whole process and contribute towards red tape. Secondly, SEIAS allows for better coordination in policy and ensure that across department there is no overlapping mandates, so does that mean that there is a comparison of mandates from different departments, and again at what stage are these comparisons done because if the process has already been concluded and SEIAS concludes that there is indeed overlap and the Department must now go back to the drawing board, so does that not delay the process even further?

Mr X Mabasa (ANC) asked how the SEIAS relate to the three spheres of government in as far as the overall mandate of government in principal areas, and how does it make sure that uniformity persists across the three spheres. One sphere could advance a certain aspect and another could be advancing in an opposite direction.

Ms Kule stated that with regards to the annual budget, it reflects that the goods and services have were less than R500 000. There were 5 people working in the SEIAS unit but they work with outcome facilitators who are subject matter experts in various fields making use of existing resources within the DPME. In terms of the template used with regards to influencing SMMEs, we first ask how the legislation or policy is going to benefit the marginalised, SMMEs, and people from rural areas and it is a matter of pulling together quantitative information in terms of policies and legislations that are biased towards SMMEs. One includes the Aqua Culture Bill, the PPPFA (Preferential Procurement Policy Framework Act) regulations that are being promulgated, and those are some of the areas that we can pull the information from. SEIAS does not work for self-regulatory bodies, and procedures can come in different forms, either through regulations, norms and standards or guidelines. We have tested some of the procedures from Environmental Affairs in terms of their impact and made proposals to streamline certain proposal and it is still in a limited extent. The DPME has no done a socio-economic impact assessment in relation to the Private Security Bill and the Set Top Boxes. The DPME has not done a lot in terms of red tape but there are certain elements that come when determining where there might be overlapping of mandates or areas and assist in coming up with synergy by advising the policy makers to consult with the affected departments. Some come in a form of duplication, and in those situations we offer advice and referral where the duplication or similarity is concerned, especially if it is in the purpose of the policy to encourage synergy.  There are a lot of legislations that are now coming together in terms of issues of alignment and streamlining, there was a Bill that was addressed which was about fund-raising and it is still going to be processed because of the social relief services that are contained in that Bill and if we streamline we can save about hundreds of millions for government. SEIAS remains autonomous in trying to assist government.

In terms of resistance, before Cabinet even approved the implementation date of 1 October 2015 there were already departments that started adopting SEIAS and implementing it to an extent that they nominated the staff on SEIAS who are doing the coordination of legislation and policies that are developed.. SEIAS is not testing what is being implemented, but it is more on policies that are going to be implemented in the future, so it is an area that we are not dealing with the existing ones and the existing ones are being monitored at different points through the annual performance plans, the outcomes and through Operation Phakisa and where we do evaluations in terms of the impact of programmes that come. SEIAS works with departments at the initial stages of the policy, it does not come in the end and begin to critique the policy but it assists to determine areas in which mechanisms can be strengthened and advise on other areas that can be looked at that address the particular issue, thorough assessments are carried out that justify or suggest alternatives that can address the particular problem that the policy or legislation seeks to address. So in terms of issues around the three spheres of government to ensure synergy, where there are concurrent functions departments have their own intergovernmental structures and technical working groups where you find it is a national department with a concurrent function in provinces and municipalities to discuss certain areas, but there are others that have inconsistencies. For instance, we dealt with another regulation where they are issuing permits for professional hunters, and you find that in one province the permits are issued at the age of 18 and in others they are issued at the age of 21, and we spoke to the national department to deal with these inconsistencies because they can create a tension in the society. Tomorrow we are meeting up with provinces to discuss the roll-out of SEIAS in provinces and municipalities and to understand what is happening in the provinces and what the provinces have already initiated and what can be a better model for the roll-out.

Mr Kruger asked if there was a SEIAS done on the Bill, and if so, can it be provided to the committee. 

Ms Kule said SEIAS was not done for the Bill. Furthermore, the initiator of a particular process make voluntary contact with SEIAS, and then SEIAS will facilitate and offer independent role of assessing. She said they can sit with the authors of the Bill, and go through the SEIAS and provide a report.

Mr Chance asked why the two bills referred to earlier have not been subjected to SEIAS. Secondly, if this is a voluntary process, where departments submit themselves to SEIAS and it is not mandatory which in itself is problematic, which is probably why so many bills that do not fit the prescripts of SEIAS are coming out.

Rev Meshoe asked who decides which bill must be subjected to SEIAS, and if SEIAS says the Bill is not viable what must happen then after an enormous amount of work that has been put into research and policy formulation of legislation?

Ms Kule said SEIAS is not voluntary. It is a Cabinet resolution and it is implemented in provinces. If a department tries to bypass SEIAS and take the Bill to Cabinet, the Cabinet office will not entertain the Bill it must go through SEIAS. She was uncertain when the two referred bills were developed, but SEIAS came into operation later and at that time there were certain bills that were already in Parliament for processing and so those bills could not be withdrawn and subjected to SEIAS. It came in while the sytem was running but all the bills that came after SEIAS needed to be subjected to SEIAS.

Mr Kruger asked how many of the staff members were actually experts on SMMEs and Cooperatives.

Ms Kule said in the unit there are two economists who are not necessarily experts of SMMEs, there are different specialists and they also taps into the outcome facilitators who are subject matter experts for all the 14 outcomes that are within the DPME. There was no need to appoint specialist when there are actually specialists in the DPME and in the same building that can be utilised for a particular subject matter, and how best the SEIAS can be implemented within the existing systems in the DPME. The departments can also provide their own specialists, but their inputs are scrutinised to ensure objectivity.

Mr Kruger advised that maybe SEIAS could add the subject matter experts on SMMEs in the DPME, as the sector is expected to contribute a huge role towards employment creation in the country as reflected in the NDP by 2030. They have a huge role to play in the economy and the biggest problem in their development is red tape, so this needs to be looked at.

Rev Meshoe asked for clarity if the staff number is actually five people, with that being said if departments must subject themselves to SEIAS when formulating policy or legislation, how long does it take to respond to issues with just only five members, does it not delay the process? Lastly, how much time do you need on average between the initial and final impact assessment stages?

Ms Kule said within the branch there are subject matter experts for different chapters of the NDP, and they also tap into that platform to make use of experts. The average turnaround time for all the submissions that SEIAS had for Q1 was 14, Q2 -16 and Q3 was 11 days. When you work with the department throughout the process you become familiar with the proposals that are presented and it becomes quicker when we work with them throughout instead of coming in the end. The time lag between the initial impact assessment and the final impact assessment on average time can take 1 to 3 to 5 years depending on the department and the complexity of the subject. The time lag also helps determine as time goes by whether the issue or problem that is aimed at being resolved is still relevant after a certain period of time because sometimes certain issues evolve or get resolved through external changes such as the political climate, economic policies etc. 

Mr T Khoza (ANC) said he is impressed about the turnaround time, and asked whether it is as a result of good planning and if so, can the SEIAS team extend its planning process for the DSBD to emulate.

The Chairperson informed the members if there are further questions for Ms Kule he will declared the meeting adjourned.

Meeting was adjourned.