2008/09 Annual Report of the Department of Land Affairs

Meeting report

The Chairperson expressed her appreciation for the consistent effort of the Department of Rural Development and Land Reform (DRDLR) to dispatch delegations when called upon by the Select Committee.  Although the briefing by the Department was the only item on the agenda, the delegation might be requested to return at a later stage to respond to further enquiries by Members of the Committee.

The apologies of Mr J Gunda (ID, Northern Cape), Mr B Mashile (ANC, Mpumalanga) and Mr M Mokgobi (ANC, Limpopo) were noted.

Briefing by the Department of Rural Development and Land Reform (DRDLR)
Mr Thozi Gwanya, Director-General, DRDLR, conveyed the apologies of the Minister of Rural Development and Land Reform, who was unable to attend the meeting.  The Committee was briefed on the final Annual Report of the former Department of Land Affairs, which had been replaced by the DRDLR (see attached document).

The main focus of the Department was to facilitate the access to land by previously disadvantaged persons and to administer the investment made in land-related programmes. The amended Provision of Land and Assistance Act (No 126 of 1993) provided the Department with the power to pro-actively acquire land with moveable assets (a function that was previously prohibited) through the Pro-active Land Acquisition Strategy (PLAS). Another notable initiative was the pursuit of partnership initiatives to foster farm management training and general capacity building of beneficiaries.

Under the first strategic programme (Administration) progress had been made in several key areas. The Gender Unit had completed the Gender Responsive Framework as well as the Older Persons Rights Framework. 98 persons with disabilities were employed, i.e. the 2.4% quota for the employment of persons with disabilities was achieved. The Braille Atlas was officially launched and 47 copies were distributed to schools and organisations which supported the blind.

The Monitoring and Evaluation framework was improved and Programme Performance Monitoring and Statistics and Information Guidelines were produced to ensure improved performance, accountability and informed decision making. In an attempt to address a high vacancy rate, the Department had recruited 246 interns, allocated 41 bursaries, trained 440 employees on customer care and 153 employees on handling complaints and management and implemented a four-year graduate programme. Although the vacancy rate was reduced from 27% to 16.7, this was still an unacceptably high percentage and the measures taken were expected to help with reducing the vacancy rate to 10%.

The third programme dealt with cadastral survey management. A national control system with 52 trignet base stations was established and 328 869 property units were processed. Through NEPAD, the Department was pursuing the creation of a detailed map of Africa.

Under the Land Restitution Programme, 653 claims totalling 394 000 hectares were restored to 30 000 households, bringing the cumulative amount of land restored to 2.47 million hectares. Although 4 296 complex rural claims remained outstanding, the Department was confident that these claims would be finalised by the end of 2010.  All projects involving land transfers had been reviewed and approximately 200 had been found to be struggling and in need of further assistance and support. In conjunction with the AgriSETA, R20 million had been committed to the training of beneficiaries to allow them to make optimal use of the land transferred to them. Other types of post-settlement support were necessary as well.

Under the fifth programme, Land Redistribution and Tenure Reform, approximately 443,600 hectares were re-distributed.  This was considerably less than Government’s original target of 1.5 million hectares and the revised target of around 6.5 million hectares. Currently, 3 137 parcels of state land had been vested or officially allocated to various Government Departments and the DRDLR would have to engage with the Auditor-General to ensure that these fixed assets were appropriately managed.  Land leased from the State technically belonged to the DRDLR and the Department of Public Works.  However, since the homelands under the previous Government were dismantled, large swathes of land remained unregistered to either Provinces or municipalities and finalising this aspect of land ownership would be a mammoth task.

The Land Redistribution programme continued to provide several types of discretionary grants to different categories of beneficiaries, for example the Land Redistribution for Agricultural Development (LRAD) grant, the Settlement and Production Land Acquisition (SPLAG) grant and the Commonage grant (which was the most common type of grant).

The Land Rights Management Facility continued to offer effective legal support and mediation services to persons with insecure tenure and to farm workers and farm dwellers who were illegally evicted. The Department planned to extend the programme. The Communal Land Rights Act was still under judicial review after the constitutionality of the Act was challenged.

Under the sixth programme, Spatial Planning and Information, the chief directorate continued to provide zoning assistance to municipalities and spatial planning offices had been established in all the Provinces. The Directorate provide technical support to the South African Council for Town Planners. The amended version of the Land Use Management Bill was presented to and supported by the Portfolio Committee on Agriculture and Land Affairs, and was currently passing through the National Assembly.

In respect of the registration of deeds, there had been an increase in the number of land parcels registered, from approximately 7.9 million in 2008 to 8.1 million in 2009. The Department provided assistance to other SADC countries in the development of their property registration systems and intended to send teams to Europe to observe more efficient digitised systems for potential application in South Africa.

Mr Gwanya reported that the Department had consistently utilised its full budgetary allocations and that the failure to meet the targets set were largely attributed to insufficient funding. This situation was exacerbated by persistent high land prices, particularly in instances where farmers incorporated so-called ‘sentimental value’ into the selling price (often two to three times the commercial value of the land), as observed by AgriSA valuation specialists. Whilst Government was prepared to pay a fair price for land, such inflated prices were unacceptable. The bulk of the budget was consumed by the Restitution programme but some legal transferring of funds between programmes had occurred. The Auditor-General could not obtain sufficient and appropriate evidence to complete the audit on rental revenue receivable from leased State-owned land or tangible assets. The Department was therefore embarking on an exercise to clean up and verify the asset register and title deeds of property owned by the State.

In conclusion, he said that the Department had done as much as was possible, with some notable successes, but continued to face some major challenges. The primary challenge was the struggle in the Redistribution and Restitution programmes to provide effective post-settlement support. The Department continued to seek donor funding, notably from Belgium and the private sector for this purpose.

Discussion
Mr D Worth (DA, Free State) asked for comment on the Auditor-General’s report for the year ending March 2009, which expressed concern over the lack of permanently appointed officials, the pervasiveness of ‘acting’ officials and the unacceptably high vacancy rate in the Department.

Mr Gwanya explained that the Department had gone to great lengths to attract suitable candidates for senior positions but applicants had been turned down because they did not possess sufficient skills, qualifications, or experience for the position. The Department had to interview several candidates during the current week. He agreed that the vacancy rate was unacceptably high, but this challenge could not be resolved quickly. 1 224 posts were vacant and the combined salary bill amounted to R500 million. The substantial financial strain would be best dealt with by a phasing in of new appointments. The Department was currently placing advertisements for the positions in the relevant media.

Mr Worth asked the Department to account for the extensive use made of external consultants.

Mr C De Beer (ANC, Northern Cape) asked if the Department was implementing any measures to develop the required skills in order to eliminate the dependence on external consultants.

Ms B Mabe (ANC, Gauteng) trusted that the Department’s use made of labour brokers would be discontinued in the near future.

Mr Gwanya explained that the Department’s use of consultancies was confined to areas where the practice resulted in considerable gains in terms of efficiency and time-saving. This was particularly true in the case of conveyancers, where the alternative of using the State offices was much slower. The Department tended to utilise external surveyor and valuation experts (who tended to be older, white males), because there were few professionals available in this field. Valuation experts earned three to four times the salary the Department could afford to pay by operating as consultants to municipalities. The Department was attempting to address the matter by offering bursaries to staff members to obtain qualifications in these fields.

Mr Worth expressed concern over the lack of effective deed registration and the resultant loss of income by the State.

Mr De Beer asked what was lacking in the Department’s financial systems that resulted in the inability of the Auditor-General to audit receivable rental revenue.  He wanted to know if the problem was caused by a lack of capacity and what was done by the Department to resolve the matter.  He gained the impression that the Director-General considered the reconciling of the asset register to be a hopeless task.

Mr G Mokgoro (ANC, Northern Cape) reported that the Minister of Public Works had claimed that the State was the country’s biggest landlord.  He wanted to know how the State was utilising the land it owned.

Mr Gwanya replied that there were many assets that were controlled by the former homeland authorities that were not re-registered.  The main challenges concerned land which had never been surveyed or registered. He did not consider the task to be insurmountable, but without proper surveying and registration, the land cannot be vested or audited.  Eighty-seven percent of the land which was owned by the State was utilised for farming.  Many municipalities leased the land without properly registering the lease through the Department. Before the usage of State-owned land could be reviewed, the assets had to be rendered auditable.

Ms Mabe remarked that the Department was still new and that the Auditor-General tended to be critical of the state of a Department. She suggested that the Department was invited to attend a strategic planning workshop to be held from 2^nd to 4^th November 2009.

Mr Worth asked for an explanation of the Auditor-General’s comment that an amount of R4.6 million had been fruitless expenditure.

Mr V Mahlangu, Acting Chief Financial Officer, DRDLR, replied that the details were provided on page 50 and 89 of the Annual Report.  He pointed out that all inter-programme budgetary transfers had been legal. The fruitless expenditure referred to instances during the initial application of PLAS when land was purchased at unacceptably high prices.  The acquisition and the officials involved in the transactions were under investigation by the Department.

Mr De Beer remarked that amongst the four thousand outstanding Land Restitution claims, two were in his Province and have been outstanding for a decade awaiting authorisation from the Minister.  He requested the Department to furnish the reasons for this unacceptable delay.

Mr B Mphela, Chief Land Claims Commissioner, DRDLR, explained that there were a number of reasons for delayed Restitution transfers and settlements, including cases where municipalities were not in favour of the land purchase by the Department, natural obstacles such as erosion and flooding and counter-claims by churches. However, much had been accomplished, particularly concerning claims on privately-owned land.

Mr Gwanya undertook to provide progress reports on Land Restitution claims (including the claims referred to by Mr De Beer) available to the Committee.

Mr Mokgoro asked how emerging farmers had been categorised.

Mr Gwanya explained that beneficiaries were categorised according to their land needs, for example, subsistence farming, small holding expansion and commercial farming expansion.  The different categories were listed on page ten of the Annual Report.

Mr De Beer asked what alternative models were contemplated as the current ‘willing-buyer, willing-seller’ model was up for review.

Mr Gwanya said that pressure to change the ‘willing-buyer, willing-seller’ model had emanated from the 2005 Land Summit and that the review was a Presidential priority. A different model needed to emerge out of consultation with the relevant stakeholders, including farmers, to determine a formula for the ‘just and equitable’ compensation provided for in the Constitution. Although there had been calls to utilise expropriation, this route was often more costly as it incorporated ‘sentimental’ value in addition to potential loss of profits.

The Chairperson suggested that the Department expanded the bursary program.

The meeting was adjourned.