Commission on Restitution of Land Rights: Annual Report 2009 & Financial Statements

NCOP Land Reform, Environment, Mineral Resources and Energy

10 August 2009
Chairperson: Ms A Qikane (ANC, Eastern Cape)
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Meeting Summary

The Commission on Restitution and Land Rights briefed the Committee on its Annual Report for the financial year ending 31 March 2009, setting out the achievements as well as the challenges confronting the entity. A full description of figures for claims outstanding (4 296), rural claims settled in the past year (548) and claims dismissed (108) was given. It was noted that to date there had been 136 755 beneficiaries and 394 755 hectares of land restituted, with total compensation of R5 billion being paid out. The Commission outlined the challenges to its work. These ranged from high land prices, the unavailability of State land, problems in determining what the State assets were, conflicting land claims across different communities and traditional authorities, the fact that trusts were not recognised under the current system, the lack of amendment as yet of the Expropriation Act and the need to obtain buy-in from all sectors. A comprehensive description of the actions that would address some of the problems was outlined. The total projected cost of restitution for this year was R65.3 billion, of which R20 billion related to the Kruger National Park claims. The financial constraints put pressure not only on the Commissioners, but also on farmers who were not sure whether they should be planting. The challenge was to either review the Commission’s existence or reschedule delivery.

Members asked the reasons for the high vacancy rates, and whether this had been addressed in certain provinces, and asked what was being done about the asset register. They enquired as to the status of urban and rural claims, what the stance of the Commission was in respect of farm owners who were willingly donating land to long term dwellers, the problems around the costs of acquiring land, the reasons for delay in proceeding with the amendments to the Expropriation Act, and the role of the Land Bank. Members also questioned whether the Commission was making it clear that the land was to be used for agriculture, and a Member questioned the statement that certain of the claims were complex, which led to a further discussion of the position in respect of land currently used for mining, forestry, or in respect of which mining licences had been granted. Members also questioned why the Commission had become involved in issues such as beneficiary arguments and post-settlement support issues, and questioned why so many claimants seemed to have taken the financial benefit rather than returning to the land. A Member asked for a report on the 200 struggling projects for recapitalisation, broken down by province, and the Commission undertook to provide this within fourteen days. The length of time taken to settle claims in some provinces was explained.

Members adopted the Committee’s report on the meeting, and also adopted the Minutes of 7 July and the revised programme.

Meeting report

Commission on Restitution of Land Rights (CRLR or the Commission): Annual Report 2009 
Mr Andrew Mphela, Chief Land Claims Commissioner, Commission on Restitution of Land Rights set out the vision and mission of the Commission, highlighting its sole aim of restitution of land to victims of dispossession, through sustainable development initiatives and equitable redistribution of land. The purpose of land restitution was to provide equitable redress to victims of racial land dispossession in terms of the Restitution of Land Act, No 22 of 1994, to provide access to rights in land, including land ownership and sustainable development, to foster national reconciliation and stability, and to improve household welfare, underpinning economic growth and thereby contributing to poverty alleviation.

He presented an overview of the Commission’s work for the period under review, and figures also since inception of the Commission. He said that the successful restitution process was critical - especially now that the world was facing a global economic meltdown and escalating food prices. The key to achieving success in the programme was the effective post settlement support within the context of rural development. However, he indicated that the complex nature of some of the claims affected the pace of settling claims, and the price of land was a huge factor affecting the State’s ability to acquire more land for beneficiaries, since land averaged around R12 949.00 per hectare. Due to the increase in land prices the Commission had spent more money to buy less land.

Mr Mphela noted that during the last financial year, 653 claims were settled, which affected 30 112 households, that 136 000 individuals from rural areas benefited, and that almost 100% of the R1.3 billion allocated was spent. The cost for restitution awards (including land purchase and financial compensation) amounted to R2.8 billion, R338 million was spent on administering the Commission, which included salaries and service providers. A total amount of R803 million was committed as development grants, 75 400 claims were settled so far, the number of households that benefited so far was 315 433 and the total amount of claims settled as at 31 March 2009 represented 95.5% of all claims lodged.

Forestry, Mining and especially the Kruger National Park areas were complex cases that were subject to more risk. He also indicated that careful sector planning and transversal consideration was key to ensuring that rural development objectives were met. This could be eliminated by careful integration between departments. Hence it was important to get buy in from all sectors as settlement of claims must be aligned to broader objectives of rural development, to fight poverty and create work opportunities, amongst other things.

The importance of strategic partnerships between various stakeholders could not be overemphasized. A lot of valuable lessons were learned from the liquidation of the South African Farm Management Company, particularly as this liquidation affected quite a few projects in Limpopo and Mpumalanga. The Commission was currently in the process of reviewing all partnerships to ensure value for money for all beneficiaries. Several agreements were concluded with role-players including First National Bank (FNB), Development Bank of South Africa (DBSA), Amalathi Forestry Company and Anglo, regarding the provision of strategic support to beneficiaries. Although Anglo as the only mining house with whom the Commission currently had an agreement, it was were in the process of pursuing partnerships with other mining houses as well. An agreement was also concluded with the Sector Education and Training Authority AgriSETA towards provision of critical skills training for new land owners.

The Commission had identified 200 struggling projects for recapitalisation, and he noted that the Department of Agriculture, Forestry and Fisheries (DAFF) would be assisting with funding for the identified projects.

The status regarding the finalisation of outstanding claims was as follows: Gauteng, Free State, Northern Cape and Western Cape were preparing to finalise their claims at the end of 2009/2010, whilst the years for completion of claims in other provinces were Mpumalanga (2012), Limpopo (2013) and Kwazulu Natal (2014). A memorandum outlining the challenges regarding the issue of the 2008/09 deadline was submitted to Cabinet and all outstanding claims would be finalised in line with the budget cycles regarding disbursement of funds for government programmes, subject to availability of resources and creation of capacity for post settlement support.

There were several serious challenges facing the Commission. These included the conflict between Community Property Associations (CPA) or Trusts and Traditional Authorities, which could be overcome with reviewing the CPA legislation and aligning legal with cultural practices and traditional forms of governance. The problems around the method of land valuation could be overcome by reviewing the policy and constitutional reform. The difficulties around disposal of State and public land could be overcome by bringing the Municipal Finance Management Act (MFMA) and the Public Finance Management Act (PFMA) into alignment with the Restitution Act and related laws. There was currently stalling of the Expropriation Act of 1975, and this could be overcome by  finalising the amendments to that Act. The lack of resources could be overcome by increasing the baseline allocation or rescheduling the finalisation of claims. The current exit strategy from projects was hampering smooth handovers, but this could be overcome by forming partnerships with lead agents and government departments. The recapitalisation of failed projects could be overcome if development agencies such as the National Development Agency (NDA) and others could play a more prominent role in the land restitution process. The fragmentation of the grant and funding regime could be overcome by reviewing and aligning these regimes. The tenure system regarding communal, individual and leasehold system could be overcome by subdivision of land and more individual forms of tenure.

The following figures were provided as an outline of the financial aspects of the Commission: 4296 claims were currently still outstanding. Between April 2008 and March 2009 548 rural claims were settled, and 108 claims were dismissed. There were 136 755 beneficiaries to date, and 394 755 hectares of land were restituted, and during the same period a total amount of R5 billion was paid out, of which R3.5 billion was for land cost, R568 million was for financial compensation and R924 million was for grants.

The total projected cost of restitution for this year was R65.3 billion, which was made up of  R10.4 billion for the Medium Term Expenditure Framework (MTEF) requirement, R21.5 billion for projects, R10 billion for betterment claims, R20 billion for the Kruger National Park and R3.4 billion for the 2009/10 Budget.

Mr Mphela concluded that the financial constraints put massive pressure on Commissioners, which affected their morale and created further disillusionment. This also put constraints on all other parties such as farmers as they did not know when the money would be paid out and they also did not know if they could plant new crops. There was also a further threat of legal action, which could further deplete the already depleted budget, and if the matter were not to be settled, but go through the full court process, this could even delay matters further. Hence the challenge was to either review the Commission’s existence or reschedule delivery.

Mr D Worth (DA, Free State) asked the reason for the high vacancy rate (31% in Eastern Cape and 35% in Kwazulu Natal) and what was done about it.

Mr Worth also indicated that according to the Asset Register of the Department of Public Works in Kwazulu Natal not all State land could be identified. He wanted to know if there were similar challenges in other Provinces, as this land could possibly be used for restitution.

Mr Mphela indicated the reason for the high vacancies was because agriculture was a difficult industry. The emerging farmers face the same challenges that experienced farmers faced, with very little support, as there was minimal loan finance or grants available. The Agricultural Credit Board and Land Bank also did not assist emerging farmers, hence there was also very little support from the State. Even where emerging farmers produced the stock, it was often rotting, as they did not have adequate storage facilities or transport. They also come from a history of non farming activities. Fertilizer was expensive. Commercial farmers could get credit from Banks and other institutions, yet emerging farmers had nobody to fall back on.

He agreed that the Asset Register had not been completed, hence the Commission did not know all the properties that the State owned. However, the Department of Public Works was looking into this matter.

Mr R Lees (DA, Kwazulu Natal) noted the bulk of the presentation was about rural claims, and asked if this was an indication that the urban claims had all been settled.

Ms Beverley Jansen, Senior Commissioner, Western Cape, indicated that 96% of the urban claims had been settled. 80% of those making claims in the urban areas had opted for financial compensation, as these were elderly people and they did not want to be removed for a second time. In the Dysselsdorp case the claimants had opted for half financial support upfront and the other half was invested. In this way the community was then also developed, hence catering for an immediate and a long term need. The question of committed projects would be dealt with at a later stage.

Ms B Mabe (ANC, Gauteng) asked what the Commission’s stance was on farm owners who willingly donated their land to long term dwellers. Furthermore she wanted to know if the Commission had done a feasibility study to determine if land was suitable for agricultural or human settlement. She also requested that Slide 6 be broken down so that the numbers per provinces, municipalities and the beneficiaries per province would be mentioned as well.

Mr Mphela indicated that before land was handed over the Commission would do a feasibility study in order to ascertain if the land was suitable, and whether it could be used effectively by the claimant. He had knowledge of very few instances where farm owners willingly donated their land to long term dwellers. If that happened they registered the land in the name of the new owners, and handed over the land with grants, to support the claimants.

Mr T Mashamaite (ANC, Limpopo) sought clarity regarding the statement that more money was spent on less hectares, as well as the reason for delaying the amendments to the Expropriation Act.

Mr Mphela indicated that land prices had gone up, generally because people made developments to the land. Coastal land had become more expensive; inflation had risen, and in general, because of this, farming and all other land prices had also gone up.

Mr Mphela indicated that the amendments proposed to the Expropriation Act were not followed through in the last Parliament because there was not enough consultation. It was driven by the Department of Public Works. He was unaware of the current status of this Bill.

 Mr G Mokgoro (ANC, Northern Cape) wanted to know from the Commission what the other matters were that had to be considered where land restitution was concerned, since as far as he was aware the first and second  generation land owners did not buy the land; it was taken from the people. He agreed that the CPA needed to be reviewed as this was stopping the land restitution process, and asked how far the review had gone. He also indicated that the Land Bank was introduced to address the problem of poverty, so he asked what its role was in the land restitution process. Some of the challenges the Commission faced related to communities arguing over the use of the land. The Commission, in his view, must make it clear to the beneficiaries that the land must be used for agricultural activities, and he wondered if this was indeed the case.

Mr Mphela mentioned that other factors that had to be taken into consideration in determining a fair price included the market value of the land, the history of acquisition, current land use and the extent of State investment. The Land Bank was in crisis. It should have played a much bigger developmental role in assisting emerging farmers. It should not operate like a commercial bank. Its role was being redefined and transformed in doing exactly that. The market price of the land should be the sole determining factor for the price of the land, but other factors such as legislation for instance should also be taken into consideration.

Another Commissioner indicated that the CPA was in the process of being reviewed, and amendments were considered, not only in the CPA, but in other spheres as well. Legislation was required to deal with specific indigenous issues. The subdivision of land and handling of complaints regarding the land should not be dealt with by the Commission, but by other departments. Although the Commission was doing this at the moment, he would prefer, and suggested that an African traditional, or quasi judicial system should be established to address the endless personal, tribal and family disputes regarding land claims. Another complicating factor was that some beneficiaries had formed trusts after the land was given to them. This resulted in claims taking quite some time to be finalised, as trusts were not recognized under the CPA system, and these had to be wound up under the Court system. Trusts would have to be included under the CPA in order to overcome the problem.

Mr B Mashile (ANC, Mpumalanga) explained that the Commission’s prime focus should be on land restitution, and that it should not get involved in side issues such as fighting between beneficiaries, for instance. That should be the focus of other departments. He wanted clarity on this point. The Commission also focused too much, in his view, on compensation, whereas the prime focus should be on giving land back to the original owners. Maybe there should be a Commission of Enquiry into this. He also could not understand the notion that some of the claims were too complex and risky. It was surely a simple task: land was taken from people, and that land must be given back to the people. The Kruger case might be a complex matter, but he failed to see how forestry issues could be complex or risky. He urged the Commission that if they did not currently have funds, they should not be sitting idle, but rather attending to any problems with the legislation in the meantime, so that the Commission could move forward. The vacant posts were also a problem, as the saving in administrative costs could be seen as non delivery as well, as the provinces where there were vacancies also had the highest amount of cases not completed.

Mr Mphela noted that both options – financial compensation or land restitution – were given to the claimants, and it was entirely up to them to make a decision as to which they preferred. The claims that some commissioners may have received financial rewards were being investigated. Mining claims were complicated, as the land belonged to the mining houses. Rehabilitation of mining land was also a very costly exercise. Forestry also had its unique challenges as trees had a 25 year life span, and no community wanted to wait so long to get compensation or rewards from the land. Initially the Commission’s task was to settle claims, but he confirmed that it had become involved in other side issues, such as fighting poverty and post settlement claims. This would be eliminated when the Department of Rural Affairs took over under its new dispensation.

Mr C De Beer (ANC, Northern Cape) indicated that Page 13 of the report made mention that there were 200 struggling projects for recapitalisation. He wanted to get a breakdown of the projects per province, and the money allocated, and asked whether he could get this within the next fourteen days.

Mr Mphela indicated that the information would be provided within the timeframe mentioned.

Mr Mashile mentioned that Commissioners were alleged to have persuaded claimants to accept financial compensation, as this makes the workload easier and simpler. This was especially so in relation to mining owned land on restituted land claims. This practice was disempowering tribes, such as the Royal Bafokeng Tribe, and defeated the purpose of the Land restitution process.

One of the Commissioners indicated in this instance there were serious challenges in the Northern Cape. The (formerly named) Department of Minerals and Energy did not consult with the Commission before they granted mining or prospecting permits. By the time the Commission had settled a claim it might find that land was given to someone else to mine, which resulted in wasted time and effort. This law seemed to be unconstitutional and the Commission sought the intervention of the Members to assist the Commission, even to the extent that the Commission might have to challenge this practice in court.

Mr Worth mentioned that 30% of farms were not farmed effectively. He asked what assistance was being given to those being granted land, to ensure food security, and which department’s responsibility would this be.

Mr Lees wanted to know why there were so many Acting Commissioners, and why there were not permanent appointments, as this practice clearly hampered the finalisation of claims.

Mr Mashamaite wanted feedback on the Commission’s Human Resource Retention Strategy.

Mr Mphela said that this was no longer a problem as most positions had been filled or was in the process of being filled.

The Chairman then noted that the Commission was taking very long to settle certain claims, and there were quite a lot of claims still outstanding. She enquired what the Commission was doing to finalise claims within the shortest possible period of time, especially in the provinces of Kwazulu Natal, Mpumalanga and Limpopo.

Mr Mphela noted that the Commission had experienced problems in these three provinces, ranging from office accommodation, staff transfers between provinces, suspensions of commissioners, to contracts not being renewed. Interviews for commissioners had been done for all three provinces. The new Commissioner for Limpopo only started in June. As there was a labour matter pending for Kwazulu Natal, no final appointment of a Commissioner could be made. No suitable candidate was found for Mpumalanga as yet. In addition, in Limpopo and Mpumalanga, the Commission found that there were consolidated claims, which should not have been consolidated. There was currently an investigation pending into this issue. In addition the Commission also found that land was given to one community on which another community already had a claim, and both had to be investigated separately.  

The Chairperson wished the Commission well in its future endeavors, especially in the speedily settling of all claims.

Members adopted the Committee’s report on the meeting.

Adoption of Minutes
Members, having made a few technical changes, adopted the Minutes of the Committee meeting dated 7 July 2009.

Adoption of Programme
The draft Second Term Programme for the Committee was tabled. Members agreed that there was oversight in the last week of August, and therefore that there should be an amendment on this point.

The meeting was adjourned.


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