ALTERNATIVE FINANCING MECHANISM FOR DISASTER RISK MANAGEMENT IN SOUTH AFRICA

Transcription

1 ALTERNATIVE FINANCING MECHANISM FOR DISASTER RISK MANAGEMENT IN SOUTH AFRICA 7 June 2012 For an Equitable Sharing of National Revenue

2 INTRODUCTION This chapter provides an assessment of alternative funding mechanisms for disaster risk reduction and some salient features that need to be considered in refining the current model Often municipalities are faced with difficulties in implementing the DMA and the policy framework Lack of funding and understanding Often function labeled as an unfunded mandate No incentive or punitive measures in place 2

3 PROBLEM STATEMENT Severity and frequency of disasters are increasing Due to climate change, changing weather patterns, inefficient land use, growing population and assets in high risk areas Current funding model (public and private) not fully adequate/optimal in addressing events/cost incurred by provinces or municipalities Provinces and municipalities do not budget for disaster Disaster response mechanism mostly ex-post rather than exante Legislative, policy, institutional and funding frameworks not adhered to by spheres of government Lengthy bureaucratic process in declaring disasters and disbursing funds 3

4 RESEARCH OBJECTIVES Review and evaluate legislative, policy and institutional frameworks in South Africa Review and assess the current funding arrangements/funding model Give an overview of natural hazards, disaster risks and threats posed by climate change Evaluate relevance of alternative disaster risk management financing mechanisms and make policy proposals 4

5 LITERATURE REVIEW Severity and frequency of disasters is increasing Growing population and assets in high risk areas International trend has moved from funding a disaster once it has occurred to fund for disaster risk reduction Case studies reviewed indicate that for disaster risk management to work effectively a mix of interventions required Legislation, pool of funding from government and private risk financing and optimal risk financing (pre and post disaster) Some roles are best centralised while others need to be decentralised 5

6 KEY FINDINGS (1) Victims of disasters are mainly community members unable to cope up with consequences of disaster Focus on community social relief Several problems hamper timely release of disaster relief funds Legislative constraints Distribution of funds not streamlined lack of adequate disbursement systems Spending of disaster funds straddle financial years Politics also play a constraining role in the release of disaster risk management funds 6

7 KEY FINDINGS (2) Process of declaring and classifying disasters is problematic Blurred roles and duplications Not enough qualified engineers and other skilled professionals to deal with disasters Rehabilitation projects not monitored and evaluated Private sector involvement in disaster management activities within municipal areas is limited Community based funding is limited 7

8 RECOMMENDATIONS Minister for Cooperative Governance should streamline guidelines and gazette uniform standards governing and guiding the classification, declaration, assessment and response to disaster events in terms of the DMA and NDMF DCoG should, through the DMA, require the IDP s of municipalities, starting with the most vulnerable, to incorporate disaster risk reduction evaluations, strategies and measures including: Land use planning; building standards, engineering interventions and financing strategies 8

9 RECOMMENDATIONS Government should develop a policy framework for municipal disaster risk financing, that: Differentiates between municipalities Leverages private resources to fund long-term disaster risk management Encourages and incentivises the use of innovative marketbased financing National Treasury, in managing fiscal risks, should require environmental management and vulnerability objectives to be explicitly incorporated into the design of existing key municipal grant programmes 9

10 THANK YOU. Financial and Fiscal Commission Montrose Place (2 nd Floor), Bekker Street, Waterfall Park, Vorna Valley, Midrand, Private Bag X69, Halfway House Tel: Fax: