Overview of South Africa's Economic Environment and Impacts

1. Department of Environmental Affairs 2016/17 Annual Performance Plan Overview PRIVATE AND CONFIDENTIAL

2. MACRO ECONOMIC ENVIRONMENT AND IMPACTS Global Economic environment is currently unfavourablefor the implementation of the National Development Plan (NDP): • Global economy grew by 3,4% in 2014, SA main trading partners experienced divergent growth, EU grew 0,9 %, while Japan shrunk by 0,1%;however • Sub-Saharan Africa grew by 5% and U.S. grew by a robust 2,4%; • China continues to slow down with growth moderating by a still impressive 7,4%; • Commodity prices of iron-ore, coal, platinum and oil are still well below their 2008 highs and continue to reflect slow growth; • Substantialdrop in international oil price has brought benefits for SA but will reduce growth in oil producing African countries, which are key destinations for SA manufactured exports; • Overall global outlook is still uncertain with GDP projections being revised downwards by IMF. Therefore SA cannot depend on global growth alone to catalyse domestic growth;

3. PERFORMANCE OF SA ECONOMY SA isamong lowest growth performers in the World; • SA economy grew by 1,5% in 2014, Agriculture grew 5,6%, Services by 2,1%, • Mining shrunk by 1,6%, and Manufacturing was flat Unemployment highest out of emerging markets ( Brazil 4,8%, Columbia 9,1%, Hungary 7,8%, Poland 9%), India 7,7% SA was projected to grow 2,2 - 2,5% in 2014 were it not for labour and electricity stoppages Government balance sheet has deteriorated: • Limited room for counter cyclical fiscal support • Government debt approaching R2 trillion • debt to GDP ratio expected to peak just below 45% ( from just under 25% in 2008) • debt was raised in responding to crisis is now falling due for repayment • R80 billion redemption a year on average in coming 5 years (less than1% growth) • food prices rising, serious drought, above inflation wage agreement in public sector

4. ENVIRONMENTAL CHALLENGES According to the 2006 South African Environment Outlook (SAEO) ; the 2012 SAEO and the 2013 Organisation for Economic Cooperation and Development (OECD) : South African Environmental Preformance review the overall condition of SA’s environment continues to deteriorate. • SA is one of the most energy- and carbon-intensive economies in the world. • An overreliance on natural resources. • Poorly regulated mining resulting in serious environmental damage. • High pressures on limited water resources. • Poor environmental quality and access to environmental services (Sanitation, waste collection and healthy housing) affecting health, especially children. • Increasing illegal poaching, wildlife trade and damage by invasive species • A slow down in growth following the global economic crisis, exharcibating unemployment challenges, inequality which is already among the highest in the world and life expectancy (two-thirds of OECD average)

5. RESPONSE TO CHALLENGES

6. RESPONSE TO CHALLENGES

7. RESPONSE TO CHALLENGES

8. RESPONSE TO CHALLENGES

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10. Current Drought & Related Impacts The El Nino phenomenon is the result of the heating of the pacific ocean. It induces above normal dry conditions in some parts of the world (Southern Africa & Australia) and above normal wet conditions in other parts (South America), likely to last for the summer season

11. MULTILATERALENGAGEMENTS - POSITIONING • Outcomes of United Nations General Assembly (UNGA): Sustainable Development Goals (SDGs) • link or relevance to other MEAs and national programs(management of data) • United Nations Convention to Combat Desertification (UNCCD)COP 12 (Ankara - Turkey) • United Nations Framework Convention on Climate Change (UNFCCC)COP 21( Paris) • Chemicals Protocol Meeting of the Parties (MOP)in Dubai • Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)COP 17, 2016 in SA • Convention on Biological Diversity (CBD)COP in Cancun - Mexico 2016

12. SUSTAINABLEDEVELOPMENT GOALS (SDGs) • The key elements: • (i) The 17 Goals with 169 targets on economic, social and environmental aspects. (From a developing country perspective the SDGs are pro-development focusing on ending poverty, achieving shared prosperity, protecting the planet) • (ii) A political commitment to end poverty and hunger everywhere; • (iii) build peaceful, just and inclusive societies; • (iv) protect human rights and promote gender equality and the empowerment of women and girls; and • (v) ensure the lasting protection of the planet and its natural resources. • These necessitate a reflection on implemantation opportunities and challenges (consider, existing policies, regulatory tools, available data and data requirements, indicators and evidence)

13. SDGsLINKED TO ENVIRONMENTAL MANAGEMENT • Poverty eradication remains the overarching objective of the Post 2015 development agenda. • Specifically Goals 12 to 15 are environment focused • Ensure sustainable consumption and production patterns; • Take urgent action to combat climate change and its impacts; • Conserve and sustainably use the oceans, seas and marine resources for sustainable development; • Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss • DEA is developing a SDG implementation plan for the environment sector, and is already consulting with civil society, business & private sector. (Data to be coparable, reliable, timely (to measure green growth and environmental integrity

14. Addressing challenges around scarcity of natural resources, environmental degradation, pollution, invasive species and climate change while ensuring socio-economic benefits for communities. • attitudes, behaviors and investment decisions in relation to water use • Water efficient devices (when purchasing), & water conservation campaign • rain water harvesting & recycling waste water • Determinants of Waste generation, separation of recyclables and waste prevention behaviors (pay as you throw waste charge, linked to materials separation) • waste charge combined with separation requires door to door / localised collections for all separated materials ( focus on recyclables away from mixed waste stream)yet understood to be most expensive to implement • separation rates to be studied - to confirm achievement of objectives • socio economic factors & waste generation (income &household size) • drivers of waste prevention - composting, reusable shopping bags,

15. THE DEPARTMENTAL STRATEGY MAP The departmental Strategic direction seeks to respond to the identified pressures and commitments taking into consideration the following existing opportunities: • Rich Biodiversity and exceptional ecosystems and habitats • Abundant non-renewable energy and mineral resources • The fastest growing renewable energy market in the G20 and the 9th leading destination of clean energy investment • Green growth opportunities from wildlife game farming, ecotourism, energy efficiency measures and innovation • A comprehensive policy and regulatory framework for protecting the environment and managing natural resources PRIVATE AND CONFIDENTIAL

16. The Outcome-based DEA Map Transition to society and economy which is internationally competitive, sustainable and equitable Vision A prosperous and equitable society living in harmony with our natural resources SOCIALLY TRANSFORMED & TRANSITIONED COMMUNITIES ENVIRONMENTAL ECONOMIC CONTRIBUTION OPTIMISED ECOLOGICAL/ENVIRONMENTAL INTEGRITY SAFEGUARDED & ENHANCE D Improved access, fair and equitable sharing of benefits Ecosystems conserved managed and sustainably used Growth in industries that depend on environmental services Key DEA outcomes Negative impacts on health & wellbeing minimized F7 Threats to environmental quality & integrity managed Improved socio-economic benefits GLOBAL AGENDA INFLUENCED & GLOBAL/LOCAL OBLIGATIONS MET Enhanced international cooperation supportive of SA environmental /SD priorities Develop and set the environmental agenda Coordinate & monitor Economy wide implementation Build a culture of sustainability Strengthened knowledge, science and policy interface Effective partnerships,cooperative governance and local government support Improved profile, support and capacity building for environmental sector Coherent and aligned multi-sector regulatory system & decision support across government Internal Strategic Objectives Effective knowledge and information management for the sector Improved Compliance with environmental legislation Value focused funding and resourcing (leveraged public & private sector investments) Enhanced sector monitoring and evaluation Achieve synergies, efficiencies and effectiveness Efficient and effective information technology systems Secure harmonious and conducive working environment People & Infrastructure Capability Equitable and sound corporate governance Adequate, approppriately skilled, transformed and diverse workforce

17. DEA 2016/17 PRIORITIES PER PROGRAMME PROGRAMME 1 : ADMINISTRATION • Implementation of the Local Government Support Strategy • Outcome 10 Implementation/Monitoring (2016/17 progress reports) • Implementation of 2016/17 draft environmental key days and conference calendar PROGRAMME 2 : LEGAL AUTHORISATION & COMPLIANCE ENFORCEMENT • Environmental Management Inspectors (EMI) Capacity – including local authorities • Wildlife Crime – particular focus on rhino, cycads, predators, wildlife trafficking (collaboration with other law enforcement institutions) • Compliance & Enforcement information management – development / integration of systems • Consideration of legislation submitted in terms of the Legislative Programme 2016/2017 PRIVATE AND CONFIDENTIAL

18. DEA 2016/17 PRIORITIES PER PROGRAMME PROGRAMME 3 :OCEANS AND COAST • Development of Estuaries Management Plans & Water Pollution monitoring • Draft Coastal Waters discharge Regulations developed • Draft regulations pertaining to reclamation of land from Coastal waters developed PROGRAMME 4 : CLIMATE CHANGE & AIR QUALITY • National Framework for climate services established • Drought measures and adaptation strategies • Climate Change adaptation strategies • Functional climate change research network in place by 2019 • Strategy to Address Air Pollution in Dense Low-income communities • SA Atmospheric Emissions Licensing and Inventory Portal (SAAELIP) functional and producing status reports to enable transparency in service delivery • Monitoring implementation of the Air Quality Sector Performance Measures PRIVATE AND CONFIDENTIAL

19. DEA 2016/17 PRIORITIES PER PROGRAMME PROGRAMME 5 : BIODIVERSITY AND CONSERVATION • Expansion & Effective Management of the Conservation Estate • Enhancement of management effectiveness • Sustainable Use of Ecosystems and Species • Implementation of Biodiversity Economy Strategy • Mitigation of Threats to Biodiversity and Ecosystems • Legislative and other tools for species and ecosystem protection/management PRIVATE AND CONFIDENTIAL

20. DEA 2016/17 PRIORITIES PER PROGRAMME PROGRAMME 6 : ENVIRONMENTAL PROGRAMMES • Strengthen Expanded Public Works Programme (EPWP) Environment & Culture Sector Coordination and performance • National Green jobs index • No of derelict and ownerless mines rehabilitated and closed in line with environmental best practice • Coordinated, Integrated Permitting System (CIPS) and Screening tool • Rationalisation &harmonisation of environmental regulatory system • Derelict & ownerless mines rehabilitated and closed in line with environmental best practice • Mining Phakisa PROGRAMME 7: CHEMICALS AND WASTE MANAGEMENT • Recycling enterprise development program • Industry Waste Management plan PRIVATE AND CONFIDENTIAL