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Briefing on the Assessment of the Committee and 1st quarterly expenditure report of the DMR

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. Presentation based on 2 written reports.

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Briefing on the Assessment of the Committee and 1st quarterly expenditure report of the DMR

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  1. 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

  2. Presentation based on 2 written reports 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.

  3. 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).

  4. Treasury Report Full report: 204 pages Vote 29: 4 pages

  5. 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.

  6. 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.

  7. 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.

  8. 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

  9. 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”.

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. Areas of concern 1

  15. Areas of concern 2

  16. 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.

  17. Areas of concern 3

  18. Areas of concern 4

  19. 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 …

  20. 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.

  21. 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 2014. Research Unit, Parliament. 13 August. [0202]

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