1. SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR REGULATOR STRATEGIC PLAN, ANNUAL PERFORMANCE PLAN AND ESTIMATE OF NATIONAL EXPENDITURE 2017/18 – 2019/20

2. BACKGROUND ON SADPMR The Diamonds Industry (pre 2007)
The diamonds industry in South Africa was administered in terms of the Diamond Act,(Act No 56 of 1986), which established, South African Diamond Board, an authority to regulate the diamond Industry.
Objectives:
Ensure diamonds in South Africa are exploited in the best interest of the country.
To promote sound development of diamond undertakings in the Republic.
To regulate the trade of diamonds in the country
Unpolished diamonds attracted 15% export levy : the SADB was funded through the imposition of levies that members of the diamond industry paid for services rendered by the Board
The Diamonds Industry (post 2007)
Establishment of the South African Diamond and Precious Metals Regulator (SADPMR), through section 3 (1) of the Diamond Act, (Act No 29 of 2005), also governed by the PFMA, as amended.
Ensure the diamond resources are exploited in the best interest of people of South Africa
Promote equitable access to and local beneficiation of the Republics diamonds.
To ensure compliance with the Kimberley Process Certification Scheme (KPCS).
Adhere to the objectives of the broad based socio-economic empowerment as prescribed.
Establishment of the Diamond Exchange and Export Centre (DEEC), a state-owned diamond exchange centre, accessible to all diamond licence holders to facilitate the trade of diamonds.
The SADPMR is funded by monies appropriated by Parliament.

3. BACKGROUND ON SADPMR Precious Metals (pre 2007)
The precious metals industry, was administered in terms of the Mining Rights Act, 1967 (Act No 20 of 1967).
The South African Police (SAPS) in conjunction with the South African Revenue Services (SARS) and the Reserve Bank, issued and processed all licences/ permits applications from the precious metals industry.
Precious Metals industry (Post 2007)
The Precious Metals Act, 2005 (Act No 37 of 2005), repealed the Mining Rights Act, (Act No 20 of 1967).
The South African Diamond and Precious Metals Regulator was established as a “One-Stop Shop” for the issuing of precious metals licences/permits and certificates entitling holders to process, manufacture and export and import of precious metals.
Objectives:
Ensure that precious metal resources of the Republic are exploited and developed in the best interest of the people of South Africa.
Promote equitable access to, and local beneficiation of the Republic’s precious metals
Promote the sound development of precious metals enterprises in the Republic, and
Advance the objectives of the broad-based socio-economic empowerment as prescribed.

4. MANDATE OF THE SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR
SADPMR is a schedule 3A public entity in terms of Public Finance Management Act, 1999 (as amended)
The mandate of the South African Diamond and Precious Metals Regulator is to implement and enforce the provisions of the following legislation:
The Diamond Act, 1986 (Act No 56 of 1986)
Diamond Export Levy (Administration) Act, 2007
Diamond Export Levy Act, 2007
Precious Metals Act, 2005 (Act No. 32 of 2005)
Mining Charter in terms of section 100 of the Mineral Petroleum Resources Development Act, 2002 (Act no 28 of 2002).

5. ORGANIZATIONAL STRUCTURE
BOARD
COMPANY SECRETARY
CHIEF EXECUTIVE OFFICER
INTERNAL AUDIT
GENERAL MANAGER: REGULATORY COMPLIANCE
GENERAL MANAGER: SECURITY RISK MANAGEMENT
GENERAL MANAGER: LEGAL SERVICE
CHIEF FINANCIAL OFFICER
GENERAL MANAGER CORPORATE SERVICE
FINANCE MANAGEMENT
LICENSING
SECURITY RISK MANAGEMENT
LEGAL SERVICES
HUMAN RESOURCES MANAGEMENT
SUPPLY CHAIN MANAGEMENT
INFORMATION COMMUNICATION
TECHNOLOGY
DIAMOND INSPECTORATE
AUXILIARY SERVICES
COMMUNICATION
PRECIOUS METALS AND BENEFICIATIONS
DIAMOND EXPORT EXCHANGE CENTRE
GOVERNMENT DIAMOND VALUATION
TRANSFORMATION

6. HUMAN RESOURCES Organogram as by end of March 2017
Total: The SADPMR has a total of 121 employees by the end of February 2017.
Gender: Male : 50
Female: : 71
Race: African : 111
Coloured : 4
Indian : 4
white : 2

7. HUMAN RESOURCES Employment Equity statistics NUMBER OF MALES
NUMBER OF FEMALES
NUMBER OF PEOPLE WITH DISABILITIES
Senior Managers and Executive: 7
Senior Managers and Executive: 5
Senior Managers and Executive: 0
Professionals and skilled employees: 30
Professionals and skilled employees: 47
Professionals and skilled employees: 0
Semi-skilled employees: 10
Semi-skilled employees:14
Semi-skilled employees:1(Male)
Unskilled employees: 2
Unskilled employees: 5
Unskilled employees: 0
Total : 49 male employees
Total: 71 female employees
Total: 1

8. ANNUAL PERFORMANCE PLAN FOR THE 2017/18 FINANCIAL YEAR
The Annual Performance plan is informed and aligned to:
National Development Plan
Nine (9) Point Plan of Government
State of the Nation Address of the President of South Africa
Minister of Mineral Resources Budget Vote Speech

9. SADPMR: Strategic Objectives
To improve competitiveness, sustainable development and job creation in the diamond and precious metals industry;
To transform the diamond and precious metals sectors;
To promote equitable access to resources for local beneficiation;
To enforce compliance with the legislative requirements; and
To improve organizational capacity for maximum execution for excellence.

10. SADPMR STRATEGIC OBJECTIVES LINKED TO THE NATIONAL DEVELOPMENT PLAN
NDP priorities
NDP focus areas
To improve competitiveness, sustainable growth and job creation in the diamond and precious metals industries
Raising employment through faster economic growth
Support for small businesses through better coordination of relevant agencies, development finance institutions and private incubators
To promote equitable access to resources for local beneficiation
Provide a more efficient and competitive infrastructure to facilitate economic activity that is conducive to growth and job creation
To transform the diamond and precious metals sectors
Improving the quality of education, skills development
Expand skills base through better education and vocation training
To enforce compliance with the legislative requirements
Building capacity of the State to play a development and transformation role
Reduce cost of regulatory compliance especially for small and medium sized firms
To improve organizational capacity for maximum execution of excellence
Building the capacity of the State to play a development and transformation role

11. ALIGNMENT OF GOVERNMENT’S NINE (9) POINT PLAN TO THE SADPMR
Government 9 point plan
SADPMR Strategic objectives
Advancing beneficiation or adding value to our mineral wealth
To improve competitiveness, sustainable growth and job creation in the diamond and precious metals industries
Unlocking the potential of SMMEs, cooperatives, township and rural enterprises
To transform the diamond and precious metals sectors
Operation Phakisa aimed at growing the ocean economy and other sector
To transform the diamond and precious metals sectors;
To promote equitable access to resources for local beneficiation; and
To enforce compliance with the legislative requirements.
In his 2015 SONA, His Excellency Pres. JG Zuma announced 9 point to boost economic growth and fast track the creation of much-needed jobs in RSA.

12. SADPMR Strategic Objectives
(1)
KEY ACTIVITIES
BASELINE
2017/2018 TARGETS
Improve competitiveness, sustainable development and job creation in the diamond and precious metals industry
Issue licenses to enable diamond and precious metals trade
195
196
Assist new entrepreneurs in the diamond and precious metals industries 9
Facilitate skills development initiatives for the industries 5
Oversee the provision for issuing of beneficiation licenses 66 67

13. SADPMR Strategic Objectives
(2)
KEY ACTIVITIES
BASELINE
2017/2018 TARGETS
Transform the diamond and precious metals sectors
Promote participation of HDSAs in the diamond and precious metals industries through conducting workshops/information sessions 4
Verification of transformation commitments by licence holders as per BBSEEC (Mining Charter) 70
Engage inactive licensees to ascertain challenges and propose solutions 31 32

14. SADPMR Strategic Objectives
(3)
KEY ACTIVITIES
BASELINE
2017/2018 TARGETS
Improve equitable access to resources for local beneficiation
Increase the number of clients that access Diamond Exchange Export Centre (DEEC)
2860
3550
Increase the number of local beneficiators access Diamond Exchange Export Centre (DEEC) tenders
135
136

15. SADPMR Strategic Objectives
(4)
KEY ACTIVITIES
BASELINE
2017/2018 TARGETS
Enforce compliance with the legislative requirements
100% of diamond valuation services conducted
100%
2% reduction in disputes regarding fair market value on diamond valuation services conducted 2%
Conduct inspection services within the diamond and precious metals sectors
1478
1479
Conduct BBSEEC compliance audits on licensees
408
409
100% administration of Kimberley Process Certification Scheme requirements
Comply with legislation, policies and procedures to reduce audit findings
< 5 repeat audit findings

16. SADPMR Strategic Objectives
(5)
KEY ACTIVITIES
BASELINE
2017/2018 TARGETS
Improve organizational capacity for maximum execution for excellence
Implement the approved Human Resources plan (HRP) pillars
5 pillars
Implement the approved SADPMR communication policy through engagements with external and internal stakeholders 12
Implement risk mitigation measures relating to physical security 3
Implement the Master System Plan (MSP) programmes
Provide legal support to the Regulator
100%
100% of Contracts and SLA’s vetted

17. Transformation Agenda
Implementation of Mining Charter in terms of section 100 of the Mineral Petroleum Resources Development Act, 2002 (Act No 28 of 2002).
The board approved the transformation plan which is implemented by Transformation team to monitor progress on the following:
(a) Ownership
(b) Human Resource Development
(c) Procurement
(d) Employment Equity
Current Status
The Transformation Team is ensuring compliance to the commitments and undertakings companies made while applying for their respective licences/permits. Licence/Permit holders commitments are monitored to ensure adherence to their undertakings and correct any infringements.
HDSA’s are now being considered and included in the management, operations and decision making processes of the diamond and precious metal companies.

18. ESTIMATES OF NATIONAL EXPENDITURE 2017

19. Revenue by economic classification
SOURCE
2017/18
R’000
2018/19
2019/20
TRANSFER PAYMENT (ENE ALLOCATION)
55,865
59,105
62,415
REVENUE - EXCHANGE TRANSACTIONS (Projections)
46,068
48,786
51,518
TOTAL REVENUE BUDGET
101,933
107, 891
113,933
TOTAL EXPENDITURE
98,768
104,595
110,453
SURPLUS
3,165
3, 296
3, 480

20. Allocation v/s expenditure

21. Estimate of National Expenditure: Expenditure Trends
Will focus on improving regulation and transformation in the diamond and precious metals industry.
Expenditure Item
2017/18
R’000
2018/19
2019/20
Staff Remuneration
75,918
80,398
84,900
Office Lease
3,700
3,919
4,138
Audit Fees
2,500
2,648
2,796
Telecommunication
1,808
1,915
2,022
Insurance
1,557
1,649
1,741
Board
1,614
1,342
1,417
Kimberley Process
1,126
1,192
1,259
Other Expenses
10,545
11,532
12,180
Total
98,768
104,595
110,453

22. Estimate of National Expenditure: Expenditure Trends
Details of the other expenses
Expenditure Item
2017/18
R’000
2018/19
2019/20
Administration
114
120
Advertising
757
802
847
Domestic and international travel
1 121
1 543
1 640
Inventory
766
811
856
Inspection cost
576
610
644
Software licences
900
953
1 006
Repairs and maintenance
516
547
578
Security
878
930
982
Training and development
600
635
671
CSR programmes 15 16

23. Estimate of National Expenditure: Expenditure Trends
Details of the other expenses cont…
Expenditure Item
2017/18
R’000
2018/19
2019/20
Hiring 34 36 38
Hospitality 12 13 14
Medical- Retired staff
135
143
151
Postage and courier 23 25 26
Recruitment and selection
101
107
113
Staff recognition and wellness
440
466
492
Subscription and membership fees 60 64 67
System support
200
212
224
Venue, facilities and warehousing
206
218
230
Non-cash
3091
3282
3465
Total Other Expenses
10 545
11 532
12 180

24. Legislative challenges that impede implementation of transformation;
Conclusion
The global economic downturn has up to now continued to have an adverse impact on the industry and it is yet to recover;
Legislative challenges that impede implementation of transformation;
Less revenue compared to the spending on core expenditures, and
Declining manufacturing of diamonds and precious metals.

25. THANK YOU
DISCUSSION