1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS Briefing by the Department of Public Works on the governance and transformation challenges of the CBE and 6 BEPCs 1

2. 2 1.Purpose 2.Introduction and Background 3.DPW oversight on its public entities 4.Governance challenges in the CBE 5.Review of BEP legislation and transformation of the BE 6.Conclusion 7.Recommendation

3. 3 To brief the Portfolio Committee on Public Works on the governance and transformation challenges in the CBE and six Built Environment Professional Councils (BEPCs)

4. 4 2. INTRODUCTION AND BACKGROUND

5. 5 The Department of Public Works (DPW) is mandated to carry out the following: Provision of office accommodation and expert built environment services to client departments at the national government level. Coordinate and provide strategic leadership in job creation initiatives through, among others, the implementation of the Expanded Public Works Programme. Regulate the construction and property industries. To facilitate the execution of its mandate, the Department has established the following public entities which serve as its implementing agents: Construction Industry Development Board (CIDB) Council for the Built Environment (CBE) Independent Development Trust (IDT) Agrément South Africa (ASA)

6. 6 The main reason for the establishment of the CBE is to assist the Department in overseeing the following BEPCs which were established in terms of their respective Acts: Engineering Council of South Africa (ECSA) SA Council for the Project and Construction Management Professions (SACPCMP) SA Council for the Quantity Surveying Profession (SACQSP) SA Council for the Property Valuers Profession (SACPVP) SA Council for the Architectural Profession (SACAP) SA Council for the Landscape Architectural Profession (SACLAP)

7. 7 In terms of Section 5(2) of the Council for the Built Environment Act, 2000 (Act No. 43 of 2000), the composition of the Council is as follows: CategoryNumber Section 5(2)(a): Representative of the Department of Public Works1 Section 5(2)(b): Representatives of the infrastructure departments3 Section 5(2)(c): Representatives of the built environment professional councils 12 Section 5(2)(d): Representatives of the public4 Total20

8. 8 3. DPW OVERSIGHT ON ITS PUBLIC ENTITIES

9. 9  The Department is implementing an approved policy framework that guides oversight on the DPW public entities.  Areas such as, among others, board appointments, vetting of board members, induction of new board members, planning and performance reviews of the entities are covered in the policy framework.

10. 10  The legislation for each of the DPW public entities requires that the appointment of all Board / Council members be approved by the Minister of Public Works.  A transparent process, governed by the applicable legislation for each entity, is followed by the Department when appointing the Board / Council members, which includes the following: -Appointment of the Selection Panel by the Minister -Publishing of the Call for Nominations in the appropriate media -Short-listing and interviews conducted by the Selection Panel -Recommendations of suitable candidates to the Minister for approval -Security screening of the recommended candidates  Newly appointed Board members undergo a well structured induction programme overseen by the Department

11. 11  To ensure that there is synergy between the strategic planning of the Department and that of its entities, the CEOs of DPW public entities attend the Annual DPW Strategic Planning session (Lekgotla).  These annual strategic planning sessions serve as the platform for the Minister to provide the strategic direction to the entire DPW Family (which includes the Department and its entities).  The Minister’s Policy Statement delivered as the key note address at these sessions serves as the base for all the DPW entities when they conduct their individual strategic planning sessions.  To ensure that public entities planning processes are aligned to the Minister’s Policy Statement and policy priorities of government, DPW Planning Unit participate in the individual strategic planning session of DPW entities.  The draft strategic plans of the entities are thoroughly reviewed by the Department prior to being approved by the Minister. Once approved by the Minister the strategic plans of the entities are tabled in Parliament.

12. 12  In terms of the PFMA and Treasury Regulations, the shareholder’s compact is a requirement for public entities listed in Schedule 2, 3B and 3D of the PFMA. IDT is the only DPW public entity affected by this requirement because it is listed in Schedule 2.  In order to strengthen the relationship between the Department and its entities and improve corporate governance, the Minister decided to implement the shareholder compact in the other three entities (CIDB, CBE and ASA) which are listed in Schedule 3A.  In terms of the shareholder compacts the Minister is required to meet, at least, twice a year, with the Boards (represented by their Chairpersons) with the purpose of nurturing relations and maintaining regular contact to ensure that the Executive Authority is fully informed on the activities of DPW public entities at all relevant stages.  It is a reflection of the expectations of each party, expressed in terms of outcomes and outputs that need to be achieved.  Both the Accounting Authority (represented by the Chairperson) and the Shareholder (represented by the Minister) make binding undertakings in the compact that support effective and efficient functioning of the DPW public entities.

13. 13  In line with the PFMA and Treasury Regulations(TR 29.3), public entities are required to submit their quarterly performance reports to the Department, as part of their accountability requirement.  These reports are analyzed by the Policy Branch and the Monitoring and Evaluation Unit within the Department in preparation for the Quarterly Performance Review meetings between the DG of DPW and CEOs of entities.  At the meetings referred to above, the CEOs present their respective entities performance reports and where targets have not been met, they account and provide corrective measures.  As committed in the shareholder compact, the Minister is scheduled to meet with the Chairpersons of the DPW entities, at least twice a year, to review the performance of entities and address and discuss governance matters related to the entities.  The quarterly performance reports of the entities culminate into their annual reports which, as soon as approved by the Minister, are tabled in Parliament.

14. 14  The primary responsibility of the CBE is to oversee the performance of the six BEPCs on behalf of the DPW. CBE is therefore required to provide guidance to the BEPCs on matters related to the alignment of their strategic plans with the Policy Statement of the Minister and the policy priorities of government in general.  Oversight on the implementation of the strategic plans of BEPCs is also conducted by the CBE. The quarterly performance reports that the CBE presents at the Quarterly Performance Review meetings between the DG and the CEO of CBE incorporate the performance of the BEPCs.  One of the concerns the Department has registered regarding the oversight of the BEPCs is that their respective Acts do not require their strategic plans to be approved by the Minister and to be tabled in Parliament. It is only their annual reports that are required to be tabled in Parliament. This is a policy gap which the Department is addressing in order to strengthen oversight on BEPCs.

15. 15 4. GOVERNANCE CHALLENGES IN THE CBE

16. 16 The CBE has experienced governance challenges over several years. The Minister and DPW senior officials have actively engaged with these challenges. The interventions included, among others, ensuring that Council members receive effective induction at the beginning of their term of office. While the challenges manifest themselves as strains between the Board and senior administrative staff, DPW believes that the root of the problem may well be systemic. Hence the proposal to review the Built Environment Professions legislation (covered in this presentation).

17. 17 5. REVIEW OF BEP LEGISLATION AND TRANSFORMATION OF THE BUILT ENVIRONMENT

18. 18 In 1994 the Department Commenced the process to align the regulation of the Built Environment Professionals (BEP) of Architects, Landscape Architect, Engineers, Property Valuers, Quantity Surveyors, and Construction Management by reviewing the merits and demerits of existing regulation and introducing new regulations. This Process, culminated in the promulgation of seven pieces of legislation, six Acts each regulating the Built Environment Professions through the establishment of Statutory Councils, while the seventh established the Council for the Built Environment as an overarching body. The Department will now review the CBE Act to address the various challenges within the regulatory environment that have been experienced within the built environment over the past few years. The review of the Act seeks: i.To assess whether the Minister’s responsibilities to regulate the BE professions is most effectively addressed through the current legal framework and institutional arrangement; ii.Ensure accountability and good governance of the BEPCs;

19. 19 iii.Improve a lignment between the responsibilities and priorities of the Department and the BEPCs; iv.Ensure BEPCs are empowered by legislation to generate income (through applications, registrations and services offered); v.Ensure compulsory registration of professionals and adherence to legislative requirements; vi.Enable the introduction of new innovations by BEPCs to address impediments encountered by previously disadvantaged individuals to register as professionals; and vii.Empower the investigation and resolution of all complaints relating to professional misconduct as submitted by the public.

20. 20 The following policy frameworks were recently approved by the Minister to regulate the Built Environment Profession: a)Accreditation of Built Environment programmes, b)Professional Registration, c)International Agreement, d)Code of conduct for Built Environment Professionals. e)The Recognition of New Professions, f)Appeals and Tribunals, and g)Competency standards for professionals The following draft policy frameworks are under consideration by the department in consultation with CBE: h) Continuing Professional Development, i) Recognition of Voluntary Associations, and j) Recognition of Prior Learning.

21. 21 On 27 October 2015, a workshop on the two approved policy frameworks being, Professional Registration and Accreditation of Built Environment Programmes was provided to the BEPCs by CBE and DPW. During this workshop, some gaps were identified; Consultative workshops are planned for the remainder of approved policies with the BEPCs to avert what transpired during the workshop. The policies were forwarded to CBE on 04 November 2015, for further sending to the BEPCs for their comment. The policy frameworks on Identification of Work and the Determination and Review of Guideline Professional Fees were referred to the Competition Commission by the Council for the Built Environment (CBE). The Standard Generating Bodies policy framework was referred to CBE for further consultation.

22. 22 6 CONCLUSION

23. 23  Roles and responsibilities of the departmental representatives in the boards of entities need to be reviewed to ensure their meaningful participation Closer monitoring of fees charged by BEPCs for membership of registered professionals and candidates to ensure that they remain affordable. To this effect, the Minister should be consulted prior to publishing these fees. Domination of the BEPCs in the Board of the CBE which renders the CBE ineffective. The BEPCs Acts require the annual reports of the Councils to be tabled in Parliament and not their strategic plans. Alignment of BEPCs planning processes to the policy priorities of Government not yet achieved. BEPCs not yet fully compliant to the PFMA. Transformation of the BEPCs moving at a slow pace.

24. 24 It is recommended that the Portfolio Committee: Note the information provided on the governance and transformation challenges in the CBE and six Built Environment Professional Councils.

25. 25 THANK YOU