2008/9 MLRF Annual Report
Presentation to Portfolio Committee
10 November 2009
Mandate Related Objectives
GOAL• To promote the conservation and sustainable use of marine
and coastal resources.
AIM• To manage the development, sustainable use and orderly
exploitation of marine and coastal resources.
• To protect the integrity and quality of marine and coastal ecosystems.
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Functionality Related Objectives
• Enhance Service Delivery and Systems Improvement.
• Promote Equitable and Sound Corporate and Cooperative Governance.
• Enhancement of Reputation and Collective Ownership of the Sectors.
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Equitable & Sustainable use of natural resources
Target Report
Subsistence & small scale fisheries policy published.
Target not achieved due to a range of challenges. According to the Equality Court ruling of November 2008, the Policy must be finalized & approved by 31 July 2009
A second Draft Policy was gazetted on 12 December 2008.
Public Participation meetings were held in January , fishers to submit their comments by March 2009.
Declining Fish Stocks
Lack of consensus on the content of the Policy.
Request to include WCRL & Traditional Linefish subject to current court challenges.
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Equitable & Sustainable use of natural resources
Target Report
Finalized policy for allocation of BBWW & WSCD rights.
Target achieved
BBWW and WSCD policies approved & gazette notice published.
Performance review for 40% commercial fishery sector.
Target has not been met but process is well underway with new target set:70% of commercial fisheries will have had performance reviewed by cluster by 31/03/2010
Service provider appointed.
Project Plan finalized.
Cluster workshop held in February 2009.
Review documents & instruments, KPIs drafted.
Tight time frames/complexity
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Equitable & Sustainable use of natural resources
Target Report
Finalize policy on commercial rights transfer and application process.
Target achieved
Minister approved the final transfer policy with amendments.
Implementation will commence in 2009/10 financial year.
Delays in finalization of policy
National Plan of Action for Seabirds and Sharks finalized.
Target partially achieved. A new target date for NPOA for sharks set for December 2009.
NPOA for Seabirds finalized.
Draft NPOA for Sharks in place.
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Build a sound scientific base for effective management of marine & coastal resources
Target Report
Research on catch and or effort limit for 21 fishery sectors.
Target achieved
All survey & stock assessments have been completed.
All TAC/TAE recommendations completed in 21 fishery sector.
Research on optimal non-consumptive use of 3 resources.
Target achieved
Great white shark population status investigated.
Tagging experiment on turtles .
Research information on humpback whales analyzed.
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Rebuild depleted fish stockTarget Report
Strategy for hake & abalone in respect of research management & compliance finalized & implementation strategy initiated.
Target achieved but it should be noted that this is a 5 year strategic priority and will be in 2009 - 2014 Strategic Plan & targets.
Hake and Abalone Strategy being implemented.
All surveys completed including abalone although fishery is closed.
20 hour coverage maintained & tonnage of poached abalone reduced from 64 to 43 in 2009.
Arrests increased by 194% from 185 to 514.
Funds for Hake research limited to stock assessment surveys.
Lack of sophisticated surveillance equipment to monitor abalone poaching.
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Compliance with marine and coastal legislationTarget Report
30% of landings in 3 key fishery sectors (WCRL; Hake LL & Pelagics) monitored.
Target achieved or met and exceeded
100% monitoring of landings in pelagic, hake long line, SCRL, WCRL & 30% in deep sea trawl & Tuna.
Vehicles, slipways, FPEs & restaurants inspected.
Cooperative initiatives with Organized crime Intelligence (SAPS)
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Feasibility of new fisheriesTarget Report
Feasibility assessment of 2 fisheries.
Target achieved but department is not able to pronounce on the viability of Natal deep water rock lobster.
The Octopus fishery was re-launched.
Feasibility study on Deep Water Natal rock lobster completed.
Targeted stakeholders lack the capacity & resources to invest in octopus fishery.
Experiments were conducted but the department is not able to pronounce on sustainability of fisheries.
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Enabling environment for growth & development of marine aquaculture.
Target Report
Research into 3 species and 2 pilot projects launched.
Target achieved
Feed experiments completed for Silver Kob
Research report completed on reproductive cycle of scallops
Research initiated on gonad enhancement of sea urchins.
Finalized Marine Aquaculture policy and implementation plan.
Development of Ranching guidelines completed.
Recommendations made to SRPP on biological feasibility of pilot projects.
.
Final report for joint aquaculture research Frontier programme with DST completed
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Conserve and mitigate threats to biodiversityTarget Report
Declare 1 MPA & 80% management capacity in place for declare MPAs.
Target achieved
Stillbaai MPA declared in Oct 2008
Now 20 Declared MPAs:•12 MPAs with contracts & workplans by Provincial agencies•6 MPAs managed by SANParks (draft contracts).•1 managed by MCM• managed by Cape Town City.
Bill promulgated and draft implementation framework developed.
Target achieved
ICM Bill was signed by President (Act No.24 of 2008).
Marine & Coastal Climate change variables identified.
Target achieved
Bi-annual State of the Ocean Reports produced.
NPOA (for land-based sources of marine pollution) identified climate change variables
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International multilateral & bilateral marine and fisheries agreements
Target Report
Review & develop a co-ordination strategy for international engagements
Target achieved
Review of Marine & fisheries International obligations conducted.
SA ratified SEAFO
CCAMLR and ICCAT attended & outcomes implemented.
Maintain annual engagements with at least 2 regional &/or sub regional organisations.
Target achieved
Participation in BCC activities (science & management)
Participation in ASCLME, ACEP & SWIOFP workplans development.
1 successful SADC patrol conducted in March 2009 - Mozambique, Tanzania & Kenya
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Increased marine & coastal economic opportunities
Target Report
Fishing Harbours Feasibility study recommendations adopted & short term recommendations adopted.
Target largely achieved but implementation will be a long term project
Feasibility study completed
Technical Task Team appointed to explore implementation of study recommendations.
Policies finalized and access provided as per policy objectives (Large pelagics; Performance Reviews and Subsistence/small scale fisheries policy).
Target achieved
Large Pelagics Policy finalised.
Service Provider appointed for Performance Reviews & criteria/KPIs developed.
Subsistence/small-scale policy delayed.
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FINANCIAL PERFORMANCE OF THE MLRF
2008/09
GENERAL OVERVIEW
Auditor-General expressed an unqualified audit opinion.
What does it mean?
The 2008/2009 annual financial statements present fairly, in all material respects, the financial position of the MLRF as at 31 March 2009 and its financial performance and cash flows for the year.
No negative key governance responsibilities reported.
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Year 05/06 Year 06/07 Year 07/08 Year 08/09
20 Qualifications = R247m misstated (Disclaimed opinion)
7 Qualifications = R26m misstated
0 Qualifications (Unqualified
opinion)
0 Qualifications (Unqualified opinion)
(Qualified opinion)
STATEMENT OF FINANCIAL POSITION
ASSETS
Plant & Equipment• Increased by 96% over the prior year• Additions of R17 million in 2008/09• Excludes vessels funded by government grants
Intangible assets• Computer software• Additions of R785 000 during the current year
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STATEMENT OF FINANCIAL POSITION (continued)
ASSETS
Inventory Confiscated abalone and shark fins on hand. Include samples and unprocessed stock in MCM stores
as well as at the processors.
Trade and other receivables Value of debtors at year-end. Decreased by 56% over prior year. Improved debtors management system and more
aggressive debt collection.
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STATEMENT OF FINANCIAL POSITION (continued)
LIABILITIES
Total liabilities of R62.4 million. 12.6% decrease over the prior year. Consist of:
Increased skilled capacity in accounts payable section. Improved processes and internal control environment.
R’000
Deferred income 13 901
Donor funds 13 002
Trade and other payables 35 526
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STATEMENT OF FINANCIAL PERFORMANCE
• Total revenue of R337.8 million.
• Total expenditure of R312.1 million .
• Net surplus of R25.7 million.
• Prior year net surplus of R43.3 million.
• 40.6% decrease in net surplus over the prior year.
• 22% increase in total expenditure.
• 12.9% increase in total revenue.
• Obtained approval from National Treasury - section 53(3) - to retain
the accumulated surplus (for current & future commitments).
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STATEMENT OF FINANCIAL PERFORMANCE (continued)
REVENUE
• Increase of 12.9% in total revenue.• Operating revenue decreased by 11%.• Reduced income from levies and chartering of vessels.• Result of decrease in TAC and less chartering of
vessels.• Other income increased by 31.2%o Grant for VOC increased by 85%o Confiscated Fish & fish products (mainly abalone) = 6.5% of total
2008/09 revenue budget
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STATEMENT OF FINANCIAL PERFORMANCE (continued)
EXPENDITURE• 22% increase in expenditure over the prior year• Mainly due to increase in transportation costs and other
operational costs.• Major expenditure items included in other operational
costs are:R’000
Audit fees 1 497
Confiscation expenses 5 216
Consultancy and outsourced services 50 444
Legal services 3 047
Vessel operating costs 154 859
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STATEMENT OF FINANCIAL PERFORMANCE (continued)
EXPENDITURE (continued)
Transportation costs• Increased by 31.3%.• Consist of staff travelling of R12.9 million and the use of
GG vehicles of R14.3 million.• Increase due to increase in fuel price and mileage.• Additional work done by MCM officials, i.e.
investigations, surveillance, coastal management and research.
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STATEMENT OF FINANCIAL PERFORMANCE (continued)
EXPENDITURE (continued)
Consultancy and outsourced services:
7% increase over the prior year. Consultants provide advisory services to the MLRF. Total expenditure of R5.4 million for consultants. Main consultants were:1.Ernst & Young: Harbour Feasibility Study2.Resolve Group: Fisheries Performance Reviews
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STATEMENT OF FINANCIAL PERFORMANCE (continued)
EXPENDITURE (continued)
• Outsourced services utilised in areas where there is no in-house capacity.
• Main suppliers of outsourced services were:
Ingwane Consulting andAnchor Environmental Consultants
Observers for Ship Board Scientific Observer Programme
Nosipho Marine Services and SAB&T
Monitor commercial fish landings
Sheltam Aviation Aerial surveillance for oil pollution
SITA IT services
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NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Note 24: Fruitless and wasteful expenditure
• Interest of R2862 paid due to late payment of a supplier – approval obtained that costs incurred were irrecoverable.
• Fully reported and investigated by the Accounting Authority as required by section 51(1)(b)(ii) of the PFMA.
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FINANCIAL MANAGEMENT OF THE MLRF
• All key governance responsibilities were met in 2008/09.
• This includes:
1. No significant deficiencies in the design and implementation of internal controls relating to financial and risk management and compliance with applicable laws and regulations.
2. Appropriate information systems.
3. Clear trail of supporting documentation that is easily available.
4. High quality annual financial statements.
5. Effective Audit committee.
6. Documented fraud prevention plan.
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THANK YOU
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