LEPELLE NORTHERN WATER & LEBALELO WATER USER ASSOCIATION. INTEGRATION RISK REGISTER (DRAFT) 24 November 2016

Transcription

1 LEPELLE NORTHERN WATER & LEBALELO WATER USER ASSOCIATION INTEGRATION RISK REGISTER (DRAFT) 24 November

2 INTEGRATION RISK REGISTER: OPERATIONS No. s Consequences 1. Unavailability of critical spares: This could arise due to different procurement processes and inventory holding norms 2. Relationship with mines: Lebalelo has strong relationships with the mines and have been able to quickly access critical resources in the past. Lepelle currently has no relationship with the mines to support them and may struggle in a crisis 3. Access to mine property: Lepelle staff may be refused access where SHEQ compliance requirements of the mines have not been met Breakdowns may impact service delivery to users Delays in recovering from a breakdown could impact service delivery to users This could result in delays in accessing mine sites Lepelle Lepelle/ Lebalelo Lepelle Identification of critical and insurance spares and defining inventory norms based on Lepelle policy In the long term, evaluate the standardisation of equipment Lebalelo to assist Lepelle in building strong relationships with the mines as part of the overall stakeholder management and communication plan WSA to help regulate the relationship Relevant employees to be identified to undergo the required training in a timely manner Identify key mine personnel to liaise with to facilitate the training processes 2

3 INTEGRATION RISK REGISTER: OPERATIONS No. Consequences 4. Revenue collection: Municipalities have historically been poor payers for services despite Government paying for water supplied to indigents. Commercial users are also under financial pressure given low commodity prices 5. Operating of plant: Lebalelo artisans will be required to operate the section of the Steelpoort pump station that links to the Lebalelo infrastructure (2C tie-in) until ownership transfers. The operation of the plant and related protocols may be different to that currently operated by Lebalelo. In future both Lepelle and Lebalelo artisans may be required to operate different plant across the overall scheme which may be damaged or lead to other operational and safety risks if training not done on a timely basis Poor recovery of revenue could impact the ability of Lepelle to operate and provide water to users Lepelle Potential safety incidents and / or disruption in effective delivery of services Lebalelo/ Lepelle Clear collection and response policies need to be timely established and communicated with users Management forums need to be established with Municipalities / Commercial Users to manage issues on a timely basis Lebalelo and Lepelle artisans to be trained on the new Steelpoort plant before commissioning Skill gaps to be identified and training and safety plans reviewed and implemented around key operating plant 3

4 INTEGRATION RISK REGISTER: OPERATIONS No. Consequences 6. Different maintenance philosophies: These may be different given differing operating parameters and life of assets 7. Transfer of data: Key information and data may not be maintained and transferred to Lepelle Confusion in the adoption of asset maintenance practices. Plant reliability, safety and efficiency may deteriorate Loss of valuable information could impact service delivery in the future (eg. plant specifications, contracts, etc.) Payroll data not migrated may impact Lepelle s ability to remunerate Lebalelo employees on transfer Lepelle/ Lebalelo Lepelle Analysis of asset management differences and adoption of best practices for Asset Management Review and refine policies, strategies, processes and procedures Maintenance management training for employees Analyse impact on budget forecasting to ensure timely funding of asset maintenance plans Identify information and data needed in data migration plan Review and refine IT Disaster Recovery procedures 4

5 INTEGRATION RISK REGISTER: OPERATIONS No. Consequences 8. Ability to fund short term expansion requirements: There is every likelihood of there being increasing demand to supply services to users in the near term given increasing population density in the area 9. Key dependency: There is a dependency at Lebalelo on a specific employee who manages the current communication system Inability to service increasing community needs which may result in protests and civil unrest In the event of resignation, all existing knowledge of the system could be lost Lepelle Lepelle Lepelle to work closely with SDM to identify future requirements and develop a funding plan with DWS Skills training for other employees to mitigate this dependency 5

6 INTEGRATION RISK REGISTER: PEOPLE No. s Consequences 1. Loss of key Lebalelo employees: There are a number of potential issues that could result in the loss of key personnel. These include: unwillingness to relocate, wanting access to Provident Fund proceeds or concerns over Government Pension Fund, uncertainty over future career prospects, culturally not fitting in, insecurity over possible changes in job descriptions and employment terms and conditions Potential disruption in effective delivery of services Loss of institutional knowledge Lepelle /Lebalelo Identify key personnel and develop a talent retention strategy Regular and clear communication to employees of the migration process and any changes. This would form part of the overall stakeholder management and communication plan Identify critical roles and train Lepelle staff in these roles 2. Non-compliance with Labour Law: Lebalelo employees are required in terms of Section 197 to be transferred to Lepelle on either the same or better employment terms and conditions. Potential legal action instituted by Lebalelo employees Financial loss to the organisation Lepelle Analysis of key differences between Lebalelo and Lepelle Development of a migration approach within the parameters of Labour Law 6

7 INTEGRATION RISK REGISTER: PEOPLE No. Consequences 3. Loss of key Lepelle employees: This could result from transferring Lebalelo employees on more favourable terms & conditions than those currently in place for Lepelle employees Potential disruption in effective delivery of services Increased financial cost to the organisation in harmonising terms & conditions Lepelle Inclusion of key differences between Lebalelo, Lepelle as an input into the Lepelle harmonisation project Initiation of change management programme 7

8 INTEGRATION RISK REGISTER: COMMUNITIES No. Consequences 1. Heightened community expectation: There is increased community expectation to receive potable water services due to the change to Lepelle. This particularly given Lepelle s role as a bulk and potable water services provider. The potable water service delivery role has historically not been well understood by communities and needs clarification 2. Increasingly volatile environment: Communities may make it increasingly difficult for Lepelle, DWS or its agents to operate in the region 3. Termination of existing community projects/ services: This could occur due to lack of resources or funding by Lepelle / DWS Where expectations are not met it could lead to vandalism of scheme infrastructure and disruption in delivery of bulk and potable water services to users Safety concerns for employees Discontinuance of existing critical services to communities (ie. borehole maintenance) SDM Lepelle Lepelle / Lebalelo SDM to be included in integration workstream team Identification of key stakeholders. Process to ensure that the right recognised / duly elected leaders are identified SDM to implement a stakeholder management and communication plan to actively manage community expectations and clarify delivery roles Develop and implement a branding / PR strategy and campaign Safety protocols to be reviewed and communicated to employees Identification of existing community projects / services and commitments Develop mitigations specific to each project/service 8

9 INTEGRATION RISK REGISTER: COMMUNITIES No. Consequences 4. Continued pressure for employment in the region: Communities have high expectations for employment and given current low levels of National and Regional economic development these expectations are unlikely to be met There is very high unemployment in the region and this will continue to increase discontentment and impact on Lepelle s social licence to operate. Employment generated by the mines is limited and will be unable to meaningfully address the high unemployment Lepelle / Limpopo Dept of Economic Dev. Include Limpopo Department of Economic Development & Planning into integration workstream Stimulate LED programme for the area Refine regional economic development plan and IDP s for the area Identify ways for industry to collaborate around Social Labour Plans and other pooling opportunities 9

10 INTEGRATION RISK REGISTER: CONTRACTS No. Consequences 1. Transfer of risk allocation during transition: There may be new role and responsibility allocations during the transition phase between Lepelle and Lebalelo transferring risks to each organisation (eg. 2C tiein) 2. Interim licensing of water: The abstraction of water and allocation of water licenses may not be completed in time to meet the interim arrangements timetable. A further issue which may arise from a delay in the reissuing of water licencing is that this will prohibit the extraction of water from the Steelpoort system in the oversubscribed allocation from Flag Boshielo Dam which prohibits further water being drawn from this source Financial loss could be suffered in the event of an event or incident where an organisation has taken over new risk allocations This could result in Lebalelo members not receiving water, despite water being available from an alternative source Non-compliance with regulation leading to penalties and reputational damage for Lepelle and DWS Lepelle/ Lebalelo DWS Review risk allocation between parties based on transitional requirements Assess how these risks are to be managed Define and agree interim contractual arrangements for water licensing, operational responsibilities and pricing Review and refine insurance cover Escalation of risk at Workstream 5 (Water user licensing) Regular monitoring and progress reporting 10

11 INTEGRATION RISK REGISTER: CONTRACTS No. Consequences 3. Compliance with contract obligations: Contracts entered into by Lebalelo may have responsibilities and potentially long term commitments. Plant and other assets may also have specific requirements that need to be adhered to so as to comply with warranty terms and conditions Non-compliance with contract and warranty conditions may lead to financial loss and reputational damage being incurred by Lepelle. Additionally some of the contracts may not be transferable to Lepelle, or may require the consent of the other party (such as change in control clauses and the like) Lepelle Review existing long term contracts for any commitment and obligations Identify and analyse all key assets with existing warranties Review important agreements such as critical supply contracts with warranties on important parts and obtain the consent to transfer (assign or novate) such contracts in advance Develop an approach and allocate accountabilities 11

12 INTEGRATION RISK REGISTER RISK PROBABILITY RATING Rating Range * Expected % 5 - Critical 20 to 24 Highly Likely % 4 - High 15 to 19 Likely % 3 - Medium 10 to 14 Unlikely % 2 - Low 5 to 9 Remote - 1 less than 20% 1 - Minimal 0 to 4 RISK INDEX