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Briefing on the Assessment of the Committee and 1st quarterly expenditure report of the DMR
Martin Nicol: Researcher, Portfolio Committee on Mineral Resources (PCMR) 02 September 2015 Template from:
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Presentation based on 2 written reports
Nicol, M. (2015) Analysis of the 2015/16 First Quarter Expenditure Report: Vote 29: Department of Mineral Resources. Research Unit, Parliament. 24 August. [0207] Nicol, M. (2015) Effectiveness of the Portfolio Committee on Mineral Resources (PCMR) since Research Unit, Parliament. 13 August. [0202] The expenditure brief is a standard analysis prepared every quarter by the Research Unit. The effectiveness brief was prepared at the request of the Chairperson. Analysis of the 2015/16 First Quarter Expenditure Report: Vote 29: Department of Mineral Resources. Effectiveness of the Portfolio Committee on Mineral Resources (PCMR) since 2014.
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Analysis of the 2015/16 First Quarter Expenditure Report: Vote 29- Department of Mineral Resources.
Quarterly reports on the expenditure of departments are prepared for Parliament by the National Treasury. This is required by section 32 of the Public Finance Management Act, No.1 of 1999. Until now, it has not been the practice of the PCMR to consider the quarterly reports in a committee meeting (with the exception of the 4th report which is considered in detail as the Annual Report of the DMR). The Research Unit prepares an analysis of each of the quarterly reports, which is sent to the Chairperson and the commitee Secretary. National Treasury (2015f) Standing Committee on Appropriations. 1st Quarter Expenditure Report 2015/16 Financial year.
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Treasury Report Full report: 204 pages Vote 29: 4 pages
National Treasury (2015f) Standing Committee on Appropriations. 1st Quarter Expenditure Report 2015/16 Financial year. Full report: 204 pages Vote 29: 4 pages
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Function of the quarterly reports
The quarterly window into expenditure trends of Departments can allow the Portfolio Committee to identify problems at an early stage. The trend analysis may provide a basis for questioning department officials on the progress of programmes for which Parliament has voted funds.
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Vote 29 – First Quarterly Report 2015/16
As in the past, no ‘red flags’ are visible when considering the expenditure report for the first quarter. The DMR appears to be largely ‘on track’ with its expenditure plans for 2015/16. End of June 2015, 28.5% of budget spent. This compares with 28.3% at the end of the first quarter of the previous year, a year in which the Department successfully spent 100% of its adjusted budget by its end.
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6% “lag” in planned spending
R30.9 million not spent – 6% of the R493m planned for the quarter. Main reasons: Delays in paying out transfers to support small-scale mining to the IDC (Programme 4). If approved, the transfers will go through in the second quarter personnel issues - delays in filling of vacant posts as well as salary increases for Senior Management Service (SMS) members that have not yet been implemented.
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Effectiveness of the Portfolio Committee on Mineral Resources (PCMR) since 2014
Report requested by the Chairperson A working document Reference point is the formal reports made by the Committee to the National Assembly [ATC] Effectiveness is very hard to judge There has been a lot of activity 34 committee meetings 2 days in conferences 3 days in a strategic planning session 6 Provinces covered in oversight visits
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Criteria for effectiveness of Committees
Member view Concrete outcomes Constitution “providing a national forum for public consideration of issues”; “passing legislation”; and “scrutinizing and overseeing executive action”. Constitution (1996) Chapter 4: Parliament.
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Portfolio Committee on Mineral Resources (PCMR) -Fifth Parliament
Inaugural meeting 25 June 2014. Decided to interact with main stakeholders to understand the different viewpoints on the challenges in the mining sector. August 2014 attended Mining Lekgotla and hosted PC meeting with labour stakeholders and the mining houses (Chamber and SAMDA) Several engagements with traditional leaders Stakeholders still to be covered: Communities affected by mining; Agriculture; Environmental NGOs; petroleum sector.
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PCMR - Planning Framed a strategic plan based on the issues raised in initial engagements with stakeholders, including the DMR and the entities (who attended the breakaway). Plan covers “Programmed Activities” – standard items on the budget, annual reports and BRRR. Key issues raised by stakeholders (in 2014 and also in the 2013 comments on the MPRDA Bill) 2014 plan has been used to plan the Committee agenda, with flexibility for urgent issues.
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PCMR – passing legislation
PCMR has not been able to attend effectively to legislation amending to the MPRDA. January 2015: President referred Mineral and Petroleum Resources Development Amendment Bill [B15B-2013] back to Parliament because of constitutional concerns. Committee considered legal advice and deliberated on the issue in February 2015. Committee noted the President’s concerns on procedural matters. Hence it instructed the Chairperson to write to the JTM, which was done accordingly in March 2015. The Rules of Parliament have proved incapable of speedily resolving the complex legal and procedural issues.
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Areas of concern from Committee reports - how they have been dealt with
Concerns have been grouped under headings They are not raised in any order of priority here. The headings try to convey the issues raised by Members in the reports to the NA. The comments on the right are summary assessments from the Research Unit, not from members.
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Areas of concern 1 Research and Development to strengthen the mining sector Progress on co-ordination is evident: follow-up meeting held on 12 August. Funding remains an issue, however. Monitoring transformation in the mining sector (Mining Charter and SLPs). Matter not adequately dealt with. Briefing held on 5 August. Information outstanding. Improvements in DMR inspection capacity: Health and Safety and the Environment Ongoing concern Measures to enforce compliance with laws and agreements and uplift mining communities
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Areas of concern 2 General DMR staffing and capacity issues Ongoing concern Communities and mining: problems for communities, provinces and traditional leaders Need for attention to be devoted to skills in the mining sector No progress on this issue Need for an improved regulatory framework and transparency in issuing rights to minerals Ongoing concern – questions not fully answered
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Eg: Committee question on applications made on SAMRAD
The DG said that DMR had received some 16,000 applications between 2011, when the SAMRAD was introduced, and 2015. On 4 March, Members requested statistics by 1 April: How many mining operations are owned by the person/company who made the original application? No response received to date. Wednesday, 04 March :00 – 13: Briefing by Department of Mineral Resources on the SA Mineral Resources Administration Database (SAMRAD) and the challenges it is experiencing. Minutes of the Portfolio Committee on Mineral Resources, 4 March 2015 Applications accepted (ie applications that were or became compliant with the law) Members requested statistics that would show what had happened with these applications, including an indication of what proportion of applications granted were for SA companies/individuals and which were awarded to foreign/multinational companies The Committee resolved that: The department should send information on the statistics related to SAMRAD that would show what had happened with the applications (for prospecting rights, mining rights and mining permits) since the new system came into effect in How many of each were received, how many were accepted for adjudication, how many were granted? The DMR should indicate what proportion of applications granted were for SA companies/individuals and which were awarded to foreigners/multinationals. Also, what proportion of rights were granted to the person or entity that lodged the original application. The information should be submitted to the Committee by 01 April 2015.
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Areas of concern 3 Measures to combat Illegal mining
Progress is slow and not in accordance with forecasts made in 2014 The need for the Committee to follow up on issues raised by members in meetings Ongoing concern The need for the Committee to schedule joint meetings with other Portfolio Committees on matters of overlapping interest Meetings held with Standing Committee on Finance and PC on Trade and industry on transfer pricing. Other joint meetings with Labour, Water, Environment, etc are still needed The need for a holistic policy to deal with the closure of mines – this has environmental, human, economic and criminal aspects No progress evident, despite the urgency (Aurora and Blyvooruitzicht liquidations)
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Areas of concern 4 Dealing with the aftermath of Marikana
Joint initiative with PC on Labour needed Strategic Plans and Annual Performance Plans tabled in 2015 need to be amended to comply with the PFMA No response The “Women in Mining Strategy” Briefing scheduled for 9 September 2015
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Limitations of this assessment
An interpretation by the Research Unit – still to be considered by the Committee Covers only reports tabled in the NA. Does not reflect resolutions from the minutes of PC meetings, unless these are in the above reports (as many are). Including resolutions from the minutes would provide additional issues, such as The crisis of retrenchments The developments in the Aurora fraud case Silicosis and the ex-mineworkers Environmental law enforcement around mining and fracking …
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Summary scorecard: effectiveness of the PC on Mineral Resources
Concrete outcomes Very hard to judge “providing a national forum for public consideration of issues”; Effective: meeting and oversight agenda driven both by strategic plan and by matters of urgency. “passing legislation”; Not effective: Committee stymied by rules of Parliament. “scrutinizing and overseeing executive action”. Partly effective: hampered by requested information not being provided by DMR, and not being followed up.
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References Minutes of the Portfolio Committee on Mineral Resources, 4 March 2015. National Treasury (2015) Standing Committee on Appropriations. 1st Quarter Expenditure Report 2015/16 Financial year. Nicol, M. (2015) Analysis of the 2015/16 First Quarter Expenditure Report: Vote 29: Department of Mineral Resources. Research Unit, Parliament. 24 August. [0207] Nicol, M. (2015) Effectiveness of the Portfolio Committee on Mineral Resources (PCMR) since Research Unit, Parliament. 13 August. [0202]
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