Presentation to the Parliamentary Portfolio Committee on Energy

ANNUAL REPORT OF

THE NATIONAL NUCLEAR REGULATOR FOR THE 2008-09 FINANCIAL YEAR

G A CLAPISSONACTING CHIEF EXECUTIVE OFFICER

27 OCTOBER 2009

PRESENTATION OUTLINE

1. INTRODUCTION

2. MANDATE OF THE NNR /ORGANISATIONAL STRUCTURE

3. OVERVIEW OF FACILITIES REGULATED BY THE NNR

4. STATUS OF EMPLOYEMENT EQUITY

5. HIGHLIGHTS

6. NNR SCORECARDS

7. FINANCIAL PERFORMANCE

8. CHALLENGES

9. CONCLUSION

INTRODUCTION

This annual report presentation outlines the following:

The NNR mandate, regulatory process and regulated facilities by the NNR.

Overview of the safety of the regulated facilities. Key highlights achieved within the Regulatory Programmes and

Support Services. Performance against strategic measurable objectives. Summary of the financial performance of the NNR for 2008/2009

financial year. Challenges experienced and progress made against mitigation

actions taken.

The strategic objectives outlined on the scorecard section of this presentation were informed by the NNR’s strategic plan and budget for the 2008 – 2011 planning cycle, as approved by the NNR Board and former Minister of Minerals and Energy.

THE NNR MANDATEProvide for the protection of persons, property and the environment against nuclear damage by establishing safety standards and regulatory practices;

The objects of the Regulator are:

a) Exercise regulatory control related to safety over-i. the siting, design, construction, operation, manufacture of component parts,

and decontamination, decommissioning and closure of nuclear installations; and

ii. vessels propelled by nuclear power or having radioactive material on board which is capable of causing nuclear damage.

b) Exercise regulatory control over other actions, to which this Act applies, through the granting of nuclear authorizations;

c) Provide assurance of compliance with the conditions of nuclear authorisations through the implementation of a system of compliance inspections;

d) Fulfill national obligations in respect of international legal instruments concerning nuclear safety; and

e) Ensure that provisions for nuclear emergency planning are in place

A. Koeberg Nuclear Power Station

B. Necsa, Pelindaba site

C. Necsa, Vaalputs National Radioactive Waste Repository

D. Pebble Bed Modular Reactor

E. Mining and mineral processing radioactive minerals

F. Nuclear Vessels

FACILITIES REGULATED BY THE NNR

EMPLOYMENT EQUITY

MALE FEMALE

WHITE BLACK WHITE BLACK

Senior Managers 25% 25% 0% 50%

Departmental Management 10% 70% 10% 10%

Professionals 27% 51% 4% 18%

Admin/Support staff 10% 19% 33% 38%

Composition of Staff by Race 21% 45% 11% 23%

Composition of Staff by Gender 61% 39%

HIGHLIGHTS (1/2)

There is overall satisfaction with regulatory oversight on all nuclear facilities, however mining has shown a recurring trend of non-compliance. The NNR is taking serious steps to follow up and address this challenge. Satisfactory compliance with the NNR’s safety standards and regulatory requirements by authoristion holders such as Koeberg Nuclear Power Station, Necsa’s nuclear installations and the Vaalputs radioactive waste disposal site as well as various mining and minerals processing facilities.

Two nuclear vessel licenses granted

In the past financial year (2008) the NNR received a qualified audit. We have managed to implement an enhanced governance system that resulted in an unqualified audit for the2008/2009 period

NNR successfully licensed the conversion of High Enrichment Uranium to Low Enrichment Uranium at the NECSA Research Reactor

Publication of updated regulation on the appointment of chairperson and deputy chairperson to serve on Public Safety Information forums

Hosted an IAEA Technical Cooperation Project on promotion of self assessment of regulatory infrastructures for safety

HIGHLIGHTS (2/2)

Launch of the Forum of Nuclear Regulatory Bodies in Africa (FNRBA)

Coordination of the compilation of the South African Report to the IAEA Joint Convention on the Management of Radioactive Waste

Presentation of the South African National Report to the IAEA Convention on Nuclear Safety

International IAEA Conference on Regulatory Effectiveness to be hosted by the NNR in December 2009

Embarking on programme to optimize our regulatory and legislative framework to position ourselves for the envisaged nuclear expansion programme as stated in the Countries National Energy Policy and Strategy published in 2008

NNR SCORECARDS

The NNR has adopted the balanced scorecard methodology to measure its performance

Four key strategic focus areas have been identified to ensure achievement of the mandate of the National Nuclear Regulator.

Within each strategic focus area, key strategic objectives, supporting goals and initiatives have been identified.

The four focus areas are: Safety and Regulation Scorecard Stakeholder Management Scorecard Internal Business Processes Human Resources

The NNR balanced score cards uses both lagging and leading indicators to measure performance

NNR PERFORMANCE AGAINST OBJECTIVES FOR FY 2008/2009

Strategic Objective Strategic Initiatives

ACHIEVED NOT ACHIEVED

NOT APPLICABLE

A Develop, Review and Implement an Appropriate Regulatory Philosophy and Framework (including standards policies, practices and effective compliance monitoring) that provide for the protection of persons, property and the Environment against nuclear damage

24 10 8 6

B Build Stakeholder confidence in South Africa’s Nuclear Regulatory System

13 4 8 1

C Improve and strengthen internal business processes, aligned to Best practices and responsive to environmental dynamics

15 11 2 2

D Attract, develop and retain staff 9 7 0 2

FINANCIAL PERFORMANCE

FINANCIAL PERFORMANCE

2009R’000

2008R’000

OPERATING INCOME 85,804 72,276

OPERATING EXPENSES 93,803 (72,343)

OPERATING DEFICIT (7,999) (1,066)

FINANCE INCOME 8,717 6,645

FINANCE CHARGE (274) (158)

NET SURPLUS FOR THE YEAR 444 5,420

FINANCIAL PERFORMANCE

Revenue: The NNR’s total operating revenue for the year was R85,8 m (2008: R71,3 m) mainly from:

R64,5 m authorisations fees R20,3 m Direct Government grant

Expenditure: The NNR’s total operating expenditure for the year was R93,8 m (2008: R72,3 m) mainly due to:

R58,2 m – Employee expenses R9,0 m – Service fees

BALANCE SHEET

2009(R’000)

2008(R’000)

ASSETS 87,650 87,878

Non-current assets 5,504 5,164

Current assets 82,147 82,714

EQUITY AND LIAIBILITIES 87,650 87,878

Reserves 29,827 29,383

Non-current liabilities 30,322 29,128

Current liabilities 27,501 29,367

CHALLENGES

The main challenges experienced by the NNR during the 2009 financial year:

Retention and attraction of skilled personnel.

Recurring non-compliance of mines

Regulating Developments around Nuclear Installations such as Koeberg

NNR is in the process of establishing a capability for oversight over Nuclear Security Management

Stakeholder relationship management

THANK YOU