NEWS & ANALYSIS

Understanding water issues and challenges (I)

Michelle Toxopeüs outlines some of the DWS's most formidable challenges

Understanding water issues and challenges (I): Department of Water and Sanitation

6 February 2019

INTRODUCTION

The Department of Water and Sanitation is commissioned to ensure that the country’s water resources are managed sustainably and equitably for everyone’s benefit. But it faces severe institutional and governance challenges that compromise its ability to function. In 2009, the newly elected Cabinet, under former President Jacob Zuma, reorganised several government departments, one of which was restructuring the Department of Water Affairs and Forestry into the Department of Water and Environmental Affairs. Following the 2013 general election, the water-related department was once again restructured, this time inheriting the sanitation function from Human Settlements. Within this context, the Department has been in a constant state of flux, contributing to instability of governance.

POOR FINANCIAL MANAGEMENT

Very poor financial management remains one of the biggest features in the Department and its Water Trading Entity.[1] In 2017/18, the Department reported an overdraft of R119 million, cumulative unauthorised spending of R933 million, irregular expenditure of R6.1 billion, R16 million of fruitless and wasteful expenditure and accruals and payables to the value of just over R2 billion. The Water Trading Entity is in an even worse financial position. It reported an overdraft of R1.4 billion, fruitless and wasteful expenditure of R1 billion, accruals and payments to the value of R1.4 billion and a deficit of R573 million.

Both the Department and the Water Trading Entity received qualified audit opinions from the Auditor-General. He noted substantive deviations from procurement and supply chain management (SCM) regulations. The Department failed to take effective and appropriate steps to prevent unauthorised, irregular or fruitless and wasteful expenditure, as prescribed by the Public Finance Management Act[2] (PFMA). A large part of the Department’s irregular expenditure was caused by it contracting out to implementing agents, like water boards, without following correct procurement processes. This alone amounted to R1.9 billion.

INSTABILITY IN LEADERSHIP STRUCTURES

The Department has consistently experienced instability in its leadership. Over the past nine years, it has had eight different directors-general (DG), fulfilling the position on ten different occasions and mostly occupied in an acting capacity.[3] Although the Department only has nine approved deputy directors-general (DDG) positions, 11 people have simultaneously occupied DDG positions in the past.

Suspensions within leadership streams have also become common practice, placing additional challenges on the already strained structures within the Department. In 2017, the DG, the chief financial officer (CFO) of the Water Trading Entity and three DDGs were all placed on suspension. When the DG was suspended, the Department’s CFO was called upon to act as DG in the interim, which created further instability in the crucial role of the Department’s finance office. Some suspended employees have since returned to their position, while others have been transferred to other departments or are still awaiting the conclusion of their disciplinary processes.

The instability in leadership structures cultivates an environment that disregards internal controls and leads to deteriorated financial management. Those placed in leadership positions are ultimately responsible for implementing plans and projects. When there is a continuous shuffle between divisions within the water Department, there is no continuity and little accountability and control over implementation.

HUMAN RESOURCE MANAGEMENT

Apart from the leadership crisis, the Department also faces considerable challenges in securing qualified staff over a consistent period of time. It has high staff turnover and vacancy rates, an ageing workforce and a shortage of skilled engineers.[4] The Department has conceded that many senior officials are without relevant qualifications because they received promotions based on length of service and not the expertise necessary to fulfil their functions.[5] In some cases, the Department has failed to take disciplinary steps against officials who have incurred or permitted irregular expenditure or those who have committed confirmed cases of financial misconduct, as prescribed by the PFMA.[6] The Department has also not conducted a skills audit in the last 15 years.[7]

FAILURE TO DECENTRALISE WATER RESOURCE MANAGEMENT

Since the enactment of the National Water Act, the Department has only established two catchment management agencies (CMAs) – the Breede-Gouritz CMA falling within the Western and Eastern Cape provinces, and the Inkomati-Usuthu CMA largely situated within Mpumalanga. The Act envisages that water resource management is delegated to regional levels, through CMAs, to address specific issues relevant to the area and its people. The rationale for establishing CMAs relates to the proximity they share to the local communities and knowledge base. Decision-making, implementation and monitoring are improved because CMAs have easier access to information. They also lighten the Department’s work load in ensuring efficient water resource management at a localised level and are able to engage local municipalities on issues affecting their water resources.

It is difficult to understand why, after two decades, the Department has failed to establish functioning CMAs in all nine water management areas. Some have attributed it to a fear or uncertainty of the impact that empowering CMAs will have on the Department’s control over national water resource management. Others, like the Department, have ascribed the delay to lack of resources and capacity.

WATER USE AUTHORISATIONS: UNSUSTAINABLE PRACTICES

A crucial part of managing water resources effectively is ensuring water is used and controlled sustainably, and allocated equitably.[8] This requires an efficient licensing system. The Department is tasked with considering applications, issuing water use authorisations and monitoring compliance, but it is facing several challenges relating to water use authorisations. First, there has been an extensive backlog in issuing licences in the past, and the delays persist. The Minister has recently announced the Department’s intention to establish an institution to address the delays and accelerate the process,[9] but it is unclear how this will be set up or implemented. Secondly, the Department has issued a number of water use licences in protected areas, with stringent conditions. Companies are often unable to comply with these conditions, and request amendments. This has far-reaching implications on the health and sustainability of water resources.

Third, a water use licence is by law automatically suspended pending an appeal to the Water Tribunal.[10] The suspension may be lifted at the discretion of the Minister. This practice happens more often than it should. When asked in a parliamentary question what factors the Minister takes into account when deciding whether or not to uplift a suspension, none of the factors listed related to the water resource.[11]

DETERIORATING INFRASTRUCTURE

Infrastructure is key to achieving increased levels of economic growth and social upliftment. But South Africa’s water infrastructure is at risk of failure.[12] The consistently poor performance of water and sanitation infrastructure is attributed to poor governance in national and local departments, poor asset management and insufficient maintenance, lack of technical skills within key planning and operational divisions in both the Department and municipalities, poor enforcement of policies, theft and vandalism of infrastructure, financial mismanagement and funding shortfalls.

There has been a proposal on the table for well over a decade to establish a national water resource infrastructure agency to ensure South Africa’s long-term water security by undertaking the development and management of national water resource infrastructure. A Bill was introduced to Parliament in 2008 but no progress was made and it later lapsed.[13] The proposal was also included in the National Development Plan, but there seems to be no political will to develop the proposal further. Subsequent allegations of corruption within the Department, particularly relating to tenders for infrastructure, may provide insights into why it continues to be stalled, but it remains an important proposal to significantly reform the sector.

WATER CONSERVATION AND DEMAND MANAGEMENT

Population growth has increased water demand and placed pressure on available supplies. South Africa’s recent drought has also emphasised the need to conserve water more effectively and change consumer behaviour. In order to meet South Africa’s future water needs, water conservation and water demand management has been identified as a core strategy in the Department’s National Water Resource Strategy (NWRS II). The Department cannot develop or authorise new infrastructure to deal with demand unless effective water conservation and demand management interventions have been implemented. But this does not seem to be the case in practice. South Africa’s average water loss, defined as non-revenue water, through physical leakages or commercial losses by billing errors and theft is estimated to be at 37% of water used.[14] While non-revenue water is largely a municipal issue, effective water demand management and conservation requires decisive leadership by the Department and cooperative governance with local government actors.

WATER RESOURCE QUALITY

Owing largely to the poor conditions of waste water treatment facilities, excessive amounts of raw sewage is contaminating water sources and severely affecting the quality of water. Added to this is the threat that acid mine drainage poses to water resources, particularly as one of the biggest risks to water security in the Vaal River System. The increase in pollutants means that water will need to be treated at even higher standards. But the state of South Africa’s water treatment facilities is dismal. And the Department’s intervention in eliminating pollution, particularly in strategic water resources like the Vaal River, has been slow. Treasury has recently stepped in by calling on the military to assist with engineering and other expertise to try resolve the problem.

ENVIRONMENTAL THREATS

The reality of climate change is already posing significant social, economic and environmental threats and challenges. One sector most affected by it is water. Several studies across southern Africa have concluded that temperatures in the region are increasing, with minimum temperatures rising faster than maximum temperatures.[15] In effect, Africa’s southern regions are experiencing an increase in warm extremes and a decrease in cold extremes. Temperature increases in turn influence the rate at which water evaporates and may lead to changing rainfall patterns. It also affects the soil moisture and the amount of runoff flowing into rivers and groundwater resource. Appropriate mitigation and adaptation measures need to be put in place by the Department to effectively manage the effects on changing weather patterns on water resources.

Invasive plants that are not indigenous to South Africa – like black wattle and pine – are also threats to water resources. They invade landscapes, reducing the natural biodiversity in the area and, crucially, using more water than indigenous vegetation. A report compiled by the South African Biodiversity Institute estimates that South Africa loses almost 2 500 million cubic metres of water flowing into resources because of alien plants.[16]The provinces most affected are the Western Cape, Eastern Cape and KwaZulu Natal.

South Africa’s water sources are also unevenly distributed with only 8% of land surface area covering South Africa, Lesotho and Swaziland providing more than half (51%) of South Africa’s water supply.[17] These areas are defined as strategic water source areas. Water from the 22 strategic water source areas identified support 64% of South Africa’s economy and 70% of its irrigated agriculture. Despite this, only 13% of all strategic water source areas is formally protected by legislation.

DEPARTMENT UNDER INVESTIGATION

Since 2008, the Special Investigative Unit (SIU) has been directed to investigate allegations at Mhlatuze Water, various allegations at the Department, the awarding of contracts relating to the Giyani water project and the purchasing of SAP licences for more than R500 million without a needs analysis or consulting the State Information Technology Agency.[18] These investigations have revealed serious maladministration and malpractice within the Department and at water boards. The Department is also subject to a parliamentary inquiry, conducted the Standing Committee on Public Accounts (SCOPA). The investigations conducted by the SIU may lead to litigation to declare various contracts invalid and recoup some irregular payments. At this stage, it is unclear what SCOPA’s inquiry will yield.

This brief forms part of a research project into water in South Africa, financed by the Friedrich Naumann Foundation.

By Michelle Toxopeüs, Legal Researcher, 6 February 2019

[1] See the DWS’s Annual Report 2017/2018 accessed at https://www.gov.za/sites/default/files/Water%20and%20Sanitation%20Annual%20Report.pdf.

[2] 1 of 1999.

[3] AGSA, Report of the auditor-general to the joint committee of inquiry into the functioning of the Department of Water and Sanitation, 2018, at p 10, accessed at http://pmg-assets.s3-website-eu-west-1.amazonaws.com/180327AGSA-Challenges_Water_Sanitation.pdf.

[4] AGSA report, above n 3, at p 13.

[5] Water and Sanitation portfolio committee meeting of 25 April 2018, accessed at https://pmg.org.za/committee-meeting/26228/.

[6] DWS Annual Report 2017/2018, above n 1, at p 194.

[7] AGSA report, above n 3, at p 13.

[8] Chapter 4 of the National Water Act 36 of 1998 (NWA).

[9] See http://www.infrastructurene.ws/2018/11/12/no-more-delays-for-water-use-licences/.

[10] Section 148(2)(b) of the NWA.

[11] See written reply to National Assembly Question 2305 in Internal Question Paper of 14 August 2017, accessed at http://www.dwa.gov.za/communications/Q&A/2017/NA%202305.pdf.

[12] SAICE, 2017 Infrastructure Report Card for South Africa, accessed at http://saice.org.za/wp-content/uploads/2017/09/SAICE-IRC-2017.pdf.

[13] For a draft of the National Water Resources Infrastructure Agency Limited Bill see https://www.gov.za/documents/south-african-national-water-resources-infrastructure-agency-limited-bill-draft.

[14]Mckenzie et al, 2012, The State of Non-Revenue Water in South Africa, accessed at http://www.wrc.org.za/wp-content/uploads/mdocs/TT%20522-12.pdf.

[15] CSIR, Impacts of Climate Change on Water Resources in Southern Africa: A Review, 2013, at p 4, accessed at https://researchspace.csir.co.za/dspace/handle/10204/7382.

[16] SANBI, The Status of Biological Invasions and their Management in South Africa, 2017, at p 71, accessed at https://www.sanbi.org/wp-content/uploads/2018/11/National-Status-Report-web-6MB.pdf.

[17]Nel et al, “Strategic water source areas for urban water security: Making the connection between protecting ecosystems and benefiting from their services” (2017) Ecosystem Services p 251-9.

[18] SCOPA portfolio committee meeting of 27 November 2018, accessed at https://pmg.org.za/committee-meeting/27686/.