2. STATUS QUO OF CMAs Presentation to project management group 31 May 2012

3. POLICY AND CONTEXT  The Department of Water Affairs (DWA) is the custodian of National water resources, is responsible for policy and regulation of the sector.  Has a mandate to establish Water Management Institutions (WMI) for the development and management of water resources.  The Chief Directorate: Institutional Oversight (IO) is responsible for overseeing the establishment and development of these institutions through the Department’s Regional Offices, ensuring that they are viable and sustainable.  In the absence of established CMA’s, DWA undertakes these functions.

4. LEGISLATIVE MANDATE  CMAs are established in terms of section 78(1) of the National Water Act, 1998 (Act No 36 of 1998).  Statutory bodies established in terms of Chapter 7 of the National Water Act and listed as schedule 3a entity under the PFMA-service delivery Public entity

5. MANDATE  The purpose of the CMA is to delegate water resource management to the catchment level and to involve local communities in the decision-making processes.  The intention is for water resource management to: meet the basic human needs of present and future generations; promote equitable access to water; redress the results of past racial and gender discrimination and; facilitate social and economic development

6. Evolution of the CMA The principles guiding reform and transformation in resource management:  The legal requirements of decentralisation and subsidiarity.  This process moves the responsibility for resource management from DWA to the CMA  This is done in a progressive manner

7. . :-.  The first stage following the establishment of the CMA is about creating legitimacy within the WMA,  Second phase of consolidation is entered during which the CMA is focused on building capacity and strengthening the organisation  The final phase during the evolution of the CMA is the progression to a fully functional CMA and the delegation of responsible authority functions

8. Corporate Form The Policy Framework for the Governance and Administration of Public Sector Institutions (October 2005) sets out corporate forms for public institutions: Legal nature of CMAs Public Service including: National Government Agencies Provincial Government Agencies Public Entities including: Stewardship and Research Entities Service Delivery Entities Regulatory and Statutory Advisory Entities Government Enterprises including: Statutory Corporations and Financial Intermediaries State Owned Companies Subsidiary Companies of public entities State Interest Companies Public Interest Institutions including: Education, Welfare, Recreation Institutions and Professional Bodies

9. Corporate Form The appropriate corporate form must be informed by the purpose the risks, powers and functions of the CMA. A distinction should be drawn between delegation of functions within DWA, and agentising the functions. Agentising is an integral part of strengthening and improving governance, by assigning responsibility and accountability to the institution best placed to ensure efficient use of resources and effective service delivery.

10. A case for devolution Stakeholder participation Required by policy and legislation Participation is necessary to find appropriate solutions Ring-fence risk Allows for a coherent, integrated approach to managing risk through tight controls and good governance….one key risks to manage is financial risk associated tariff setting, billing and collection. Access to professional, specialist skills important for operational management –requires moving outside the government remuneration structures. Public confidence in decision-making

11. ESTABLISHMENT OF CATCHMENT MANAGEMENT AGENCIES  The national water resource strategy (NWRS) 2004 19 Catchment Management Agencies (CMA) one per Water Management Areas (WMA). osix CMAs gazetted for establishment otwo CMAs currently functional: the Inkomati and Breede- Overberg.  The process of establishing CMAs was put on hold Appropriate number of institutions was investigated through project “Institutional Reform and Realignment” (IRR)

12. 1.There is a clear legislative mandate for each institution. 2.The allocation of roles and responsibilities is clear, with minimum overlap and without gaps. 3.The institutional design embeds for effective and efficient performance 4.Sound governance separation of policy-making, regulation and operational roles, clear accountability for performance, absence of conflicts of interest, and appropriate application of skills to the governance function. 5.There is an alignment between the legislative mandates for functions and the funding of these functions. PRINCIPLES INFORMING SOUND INSTITUTIONAL DESIGN

13. 6.Institutions are financially viable and sustainable 7.Institutions are able to attract and retain management, technical and other skills to operate effectively and efficiently. 8.There is transparency in the reporting of performance, and there are consequences for poor performance. 9.The benefits of economies of scale are realised where these are significant, balanced with the principle of subsidiary management is devolved to the lowest appropriate level to enhance local accountability PRINCIPLES INFORMING SOUND INSTITUTIONAL DESIGN

14. Business plan Catchment management strategy Data acquisition Data storage and management Assessment & evaluation Information generation & dissemination Support for knowledge products WCDM projects WR rehabilitation Build capacity Audit within WMA Coordinate activities Participatory bodies Intervene Flood & drought management Authorize water use* Dam safety* Billing & collection Enforce compliance RDM* Provide technical support Registration Physical implementation Water use regulation Institutional support Information management CMA Functional Analysis

15. CMA 3 CMA 2 Water resources regulation DWA retains water resources regulation functions of national strategic significance and devolves all other water resources regulatory functions to CMAs DWA retains water resources regulation functions of national strategic significance and devolves all other water resources regulatory functions to CMAs CMAs are regional water resource regulators CMA 9 CMA 8 … CMAs are governed by expertise-based boards and operate in a way to enroll stakeholder participation. The benefits of this model are greater accountability and responsiveness to users at a local level, and improved regulation to achieve equity outcomes in line with government’s policy goals. The boards are appointed by the Minister, who exercises institutional oversight and ensures the government’s equity objectives are met in the water allocations process. Status of recommendations: Accepted by Minister

16. NWR I WB 3 WB 3 WB 2 WB 2 Relationships between institutions (Institutional oversight) CM A 9 CMA 2 CMA 1 Water board 1 TCT A Minister DWA Institutional oversight DWA Institutional oversight Parliament Public institutions report to the public and Parliament through Annual Reports and Annual Financial Statements and to the Department with quarterly performance reports WR C Minister appoints boards; approves shareholder compact Portfolio Committee reviews reports and plans (hearings, visits) (1) Oversee institutional establishment ; (2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact ; (4) Oversee business plans, quarterly performance reports and financial statements etc. (1) Oversee institutional establishment ; (2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact ; (4) Oversee business plans, quarterly performance reports and financial statements etc.

17. Establishment of catchment management agencies  19 March 2012, the Minister pronounced the establishment of nine CMAs.....submission signed on 23 April 2012, announced at the Budget Vote, communicated via newspapers.  Gazetting of 9 WMA for public comment as a component of NWRS was signed on 21 May 2012.  Gazette notices will need to be publicised within the next two weeks…. in all 9 languages  At National level it will be communicated via Newspapers, through the DG’s office to all other Departments, national forums.  At Regional level must be communicated via Regional offices, through existing forums and other existing platforms..all comments must be submitted to CD: IO - a sixty days

18. Establishment of catchment management agencies  The nine WMA are Limpopo; Olifans; Inkomati- Usuthu; Pongola- Mzimkulu; Vaal; Orange; Mzimvubu- Tsitsikama; Breede-Gouritz and Berg- Olifans

19. Proposed new water management areas

20. Project governance structure NATIONAL STEERING COMMITTEE MR. NEPFUMBADA NATIONAL STEERING COMMITTEE MR. NEPFUMBADA RSC ORANGE RSC ORANGE PORTFOLIO COMMITTEE ON WATER AND ENVIRONMENTAL AFFAIRS PROJECT MANAGEMENT OFFICE INSTITUTIONAL OVERSIGHT DIRECTOR GENERAL RSC LIMPOPO RSC OLIFANTS RSC OLIFANTS RSC INKOMATI TO USUTU RSC INKOMATI TO USUTU RSC VAAL RSC VAAL RSC BERG OLIFANTS RSC BERG OLIFANTS RSC MZIMVUBU- TSITSIKAMMA RSC MZIMVUBU- TSITSIKAMMA RSC BREEDE- GOURITS RSC BREEDE- GOURITS DEPUTY DIRECTOR GENERAL MINISTER PROJECT MANAGEMENT GROUP RSC PONGOLA MZIKULU RSC PONGOLA MZIKULU

21. THE ROLE OF GOVERNANCE STRUCTURES  The National Steering Committee NSC senior managers within DWA chaired by acting DDG Water Resource Management Planning. provide strategic guidance and vision at high level e.g. Agree on policy decisions proposed by the PMG and RSC  Project Management group Institutional Directors from all Regions and chaired by CD: Institutional Oversight, Creates enabling environment, discusses and recommends policy issues, ensures consistency, homogenous establishment and monitoring compliance, capturing lessons learnt, raises governance and operational issues  The Regional Steering Committees  9 RSC chaired by the Regional Head (Institutional Director) at the Regional office. Director Institutional Establishment in the Regions to focus only establishment of CMAS for the next three years.

22. Five critical actions required to fast track the establishment of CMAs  Fast track development of business cases....we have 8 from previous process.  Updated two business cases through IRR project  Busy with Limpopo, Olifants and KZN existing contracts  Require to develop Vaal, Orange, Eastern Cape require support  Expedite engagement with National Treasury to ensure that the approval of the business cases is fast tracked Submit the financial viability of CMAs to National Treasury by middle of June  Single advisory committee is required to advise the Minister on the structure and composition of all governing boards  Submission to appoint the single advisory committee has been drafted  AC to convene by middle July

23. Five critical actions required to fast track the establishment of CMAs  DDG Regions to make recommendation on who leads the  Vaal: lead Gauteng supported by Free state  Limpopo: Lead Limpopo and supported North West  Olifants: Lead by Mpumalanga and supported by Limpopo  Northern Cape: Free State and Northern Cape to support  Provision of initial governance support to the newly established agencies and governing boards  CMA starter pack that provides generic policies and systems to enable quicker functionality as well as provide a level of consonance in approach

24. Phased establishment plan for nine CMAs The implementation will be in phases: Phase 1 Inkomati – Usuthu Breede Gouritz Pongola-Umzimkulu Phase 2 Berg-Olifants-Doorn Vaal Olifants Limpopo Phase 3 Orange Mzimvubu-Keiskamma

25.  Ensure that staff transfers take place timeously,  Make funding available timeously and ensure 3 year revenue projections are provided to CMA so that they know what funding will be available for each of the three financial years  Ensure that the CMA has access to WARMS from phase 1 so that they can use it to identify water users and can work on updating and improving the data DWA OBLIGATIONS

26.  Develop data and information protocols for CMAs to ensure that water resources data and information is compatible with DWA requirements.  Identify any current monitoring infrastructure that does not make up part of the national monitoring system and transfer it, with the associated budget, to the CMA for WMA level monitoring. DWA OBLIGATIONS

27. Implementation Actions & Timeframes ProcessKey MilestonesActionsConsiderationsTimeframes Institutional establishment Finalise WMA boundaries and institutional route map Gazetting of the NWRS Understand institutional and legal implications Develop priorities and route map Differences between water management areas because of previous progress Publish for comment: January – April 2012 Revise according to comments received: May 2012; Publish in Government Gazette: June 2012 Amend boundaries and name of CMA (S78(4)) Gazetting of amendment of boundaries and name Amend boundaries and name of CMA (S78(4)) by publishing such in the Government Gazette June 2012 Ring-fencing of WRMC revenue per WMA Revenue ring- fenced Ring-fence revenue per WMA in the Water Trading Entity and ensure systems are in place for easy transfer of funds to CMA Timely transfer of funds to the CMA is critical for its effective functioning. January 2012 – July 2012 Develop business case for CMA Approval of business case by NT/DPSA JEP Initial meetings with NT/DPSA towards alignment Develop and submit business case List as Public Entity Need to ensure close working relationship with NT/DPSA November 2011 – July 2012 Stakeholder engagement Engagement with stakeholders on the changes to the WMA boundaries and the establishment of the Breede-Gouritz CMA Careful management of stakeholder engagement in the Gouritz area is required to ensure that they do not feel marginalised by the more advanced processes in the Breede-Overberg area February – April 2012 Establishment of CMA Establishment of CMA via Govt Gazette Gazette for public comment Take comments on Board Gazette for establishment Stakeholder awareness of processes critical September 2012

28. Implementation Actions & Timeframes ProcessKey MilestonesActionsConsiderationsTimeframes Organisational development Appoint Governing Board Inaugural meeting of the Governing Board held Board Committees established Appoint Advisory Committee Advisory Committee submits recommendation to Minister Ministerial approval of Board structure Call for nominations in parallel with Advisory Committee work Minister appoints Governing Board Inaugural meeting of the Board Initial Governing Board training Board charter developed, based on generic Board charter Board Committees established Need to create strong sense of good governance and therefore, look towards stronger governance model than previous Boards that had a strong emphasis on participation Advisory Committee appointed: June 2012; Advisory Committee makes recommendations to Minister: Sept 2012 Ministerial approval of Board structure: Oct 2012 Minister appoints Governing Board: Dec 2012 Initial Board Training and Inaugural Meeting: Jan/Feb 2012 Board Charter developed: March 2012 Establish initial systems Initial internal systems including financial, procurement and HR Purchase initial financial system Apply for permission to AG for permission to open account Account opened Pro-forma internal systems presented to the Board Must ensure there are financial controls in place prior to opening of account and any funds transferred Financial procedures and controls developed: March 2012; approved by Board by May 2012 Apply to AG for permission to open account: March 2012 Account opened: July 2012 Financial system purchased: July 2012 Appoint CEOCEO appointed Job description finalised and post advertised Obtain approval of CEO salary (DPSA and Minister: DWA) Interview candidates and appoint Consider getting blanket approval for CEO posts against a range of packages for large, medium and small CMAs Approval of CEO salary June 2012 Post advertised: July 2012 Interview candidates: Sept/Oct 2012 Appoint candidate: Oct 2012

29. Budget Requirements

30. Thank you