1. For an Equitable Sharing of National Revenue
Briefing to the Portfolio Committee on Cooperative Governance and Traditional Affairs on the Disaster Management Amendment Bill
13 May 2015
For an Equitable Sharing of National Revenue

2. Context
In terms of Section 9 of the Municipal Systems Act, the Financial and Fiscal Commission (FFC) must be consulted when any assignment of a function or a power to any category of municipality is being considered by way of national legislation
The Cabinet member, Deputy Minister or MEC initiating the national or provincial legislation must request the FFC to make an assessment of the financial implications of the legislation
On 14 August 2013, the then Minister of Cooperative Governance and Traditional Affairs wrote to the Chairperson of the FFC requesting comments/advice on the proposed amendments to the Disaster Management Act, 2002

3. Context [cont.]
FFC submitted a response to the Minister’s request on 13 October 2013
The FFC welcomed amendments to the Bill
Incorporation of risk assessments into disaster management plans
Mapping of risks and communities vulnerable to disasters

4. Specific Comments on the Bill
The Commission welcomed inclusion of Clause 1 seeking to institutionalise disaster risk management strategies (mitigation/adaptation/vulnerability) by municipalities
The Commission further suggested that the National Disaster Management Centre (NDMC) develops a municipal vulnerability index and risk modelling tool to assist municipalities
In 2014 FFC released a household vulnerability report
In Section 11 the Commission raised the potential for creating duplication when various spheres are required to assess risks individually
NDMC as national authority must carry out national disaster risk assessment
Requirements for municipalities to conduct risk assessments must be phased in – and accompanied by technical and financial support

5. Specific comments on the Bill [cont.]
Section 13 of the Bill, which requires a municipality to build capacity for managing, coordinating and implementing the disaster management function/plans and the establishment of disaster management centres, must acknowledge the constitutional obligation for national and provincial government to provide capacity building assistance
Disaster management is a concurrent function with each sphere having a role to play
Clarify roles for the other spheres in this regard

6. Specific comments on the Bill [cont.]
The Commission welcomed insertion of Clause 23 which calls for escalation of responsibility to upper sphere where municipalities lack capacity
The Bill needs to clarify roles, responsibilities and procedures that need to be followed during escalation – especially where there is no assurance of expenditure reimbursement
Clause 10 (5) on disaster expenditure reporting requirements must be aligned to the Municipal Finance Management Act (MFMA)

7. Previous FFC Recommendations
Recommendations as Per FFC Annual Submission for the Division of Revenue 2013/14 and Response as Per Annexure W1 of Budget Review 2013
Government should develop a policy framework for municipal disaster risk financing, that:
Differentiates between municipalities
Leverages private resources to fund long-term disaster risk management
Encourages and incentivises the use of  innovative market-based financing
NO RESPONSE
National Treasury, in managing fiscal risks, should require environmental management and vulnerability objectives to be explicitly incorporated into the design of existing key municipal grant programmes
RESPONSE: Government has developed a planning toolkit for climate-change response to help municipalities incorporate mitigation, adaptation and response strategies into their IDPs and other planning processes. In the horizontal division of available resources, several factors are considered to promote equity, including the fiscal capacity/efficiency of municipalities. Vulnerability to climate change impacts does not necessarily translate into a lack of fiscal capacity.

8. Previous FFC Recommendations [cont.]
Recommendations as Per FFC Annual Submission for the Division of Revenue 2013/14
Minister for Cooperative Governance should streamline guidelines and gazette uniform standards governing and guiding the classification, declaration, assessment and response to disaster events in terms of the DMA and NDMF
NO RESPONSE
DCoG should, through the DMA, require the IDP’s of municipalities, starting with the most vulnerable, to incorporate disaster risk reduction evaluations, strategies and measures – including:
Land use planning; building standards, engineering interventions and financing strategies

9. Key Points
FFC submitted a response to the Minister’s request for comments on 2013 Bill on 13 October 2013
To date, no response to the input has been received
In respect of 2015 Disaster Management Amendment Bill, the FFC has not been requested to make comments
Neither has the Bill been shared for any comment
There are recommendations FFC has made in the context of the Division of Revenue with a bearing on the 2015 Bill that have not yet been responded to

10. Thank You. Financial and Fiscal Commission
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