STATUS QUO OF CMAs

Presentation to project management group

31 May 2012

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.

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

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

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

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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

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 CMAsPublic 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

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.

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

ESTABLISHMENT OF CATCHMENT MANAGEMENT AGENCIES

The national water resource strategy (NWRS) 2004• 19 Catchment Management Agencies (CMA) one per Water

Management Areas (WMA).o six CMAs gazetted for establishment o two 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)

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

performance4. 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

6. Institutions are financially viable and sustainable7. 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

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

Establishment of catchment management agencies

The nine WMA are • Limpopo; •Olifans; • Inkomati- Usuthu; •Pongola- Mzimkulu; •Vaal; •Orange; •Mzimvubu- Tsitsikama;• Breede-Gouritz and •Berg- Olifans

Proposed new water management areas

Project governance structure

NATIONAL STEERING COMMITTEE

MR. NEPFUMBADA

NATIONAL STEERING COMMITTEE

MR. NEPFUMBADA

RSCORANGE

RSCORANGE

PORTFOLIO COMMITTEE ON WATER AND

ENVIRONMENTAL AFFAIRS

PORTFOLIO COMMITTEE ON WATER AND

ENVIRONMENTAL AFFAIRS

PROJECT MANAGEMENT

OFFICE

PROJECT MANAGEMENT

OFFICE

INSTITUTIONAL OVERSIGHT

INSTITUTIONAL OVERSIGHT

DIRECTOR GENERALDIRECTOR GENERAL

RSC LIMPOPO

RSC LIMPOPO

RSCOLIFANTS

RSCOLIFANTS

RSCINKOMATI TO USUTU

RSCINKOMATI TO USUTU

RSCVAAL RSC

VAAL

RSCBERG OLIFANTS

RSCBERG OLIFANTS

RSC MZIMVUBU-TSITSIKAMMA

RSC MZIMVUBU-TSITSIKAMMA

RSCBREEDE-GOURITS

RSCBREEDE-GOURITS

DEPUTY DIRECTOR GENERAL

DEPUTY DIRECTOR GENERAL

MINISTERMINISTER

PROJECT MANAGEMENT

GROUP

PROJECT MANAGEMENT

GROUP

RSCPONGOLA MZIKULU

RSCPONGOLA MZIKULU

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

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

Phased establishment plan for nine CMAs

The implementation will be in phases:Phase 1• Inkomati – Usuthu• Breede Gouritz• Pongola-UmzimkuluPhase 2• Berg-Olifants-Doorn• Vaal• Olifants • Limpopo Phase 3• Orange • Mzimvubu-Keiskamma

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

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

Implementation Actions & TimeframesProcess Key Milestones Actions Considerations Timeframes

Institutional establishmentFinalise WMA boundaries and institutional route map

Gazetting of the NWRS

Understand institutional and legal implicationsDevelop priorities and route map

Differences between water management areas because of previous progress

Publish for comment: January – April 2012Revise 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 alignmentDevelop and submit business caseList 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 commentTake comments on BoardGazette for establishment

Stakeholder awareness of processes critical

September 2012

Implementation Actions & TimeframesProcess Key Milestones Actions Considerations

Timeframes

Organisational developmentAppoint Governing Board

Inaugural meeting of the Governing Board heldBoard Committees established

Appoint Advisory CommitteeAdvisory Committee submits recommendation to MinisterMinisterial approval of Board structureCall for nominations in parallel with Advisory Committee workMinister appoints Governing BoardInaugural meeting of the BoardInitial Governing Board trainingBoard charter developed, based on generic Board charterBoard 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 2012Ministerial approval of Board structure: Oct 2012Minister appoints Governing Board: Dec 2012Initial Board Training and Inaugural Meeting: Jan/Feb 2012Board Charter developed: March 2012

Establish initial systems

Initial internal systems including financial, procurement and HR

Purchase initial financial systemApply for permission to AG for permission to open accountAccount openedPro-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 2012Apply to AG for permission to open account: March 2012Account opened: July 2012Financial system purchased: July 2012

Appoint CEO CEO appointed

Job description finalised and post advertisedObtain 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 2012Post advertised: July 2012Interview candidates: Sept/Oct 2012Appoint candidate: Oct 2012

Thank you