Housing Development Agency: Progress report; & International agreement process briefing

Meeting report

Opening Remarks by the Chairperson
The Chairperson noted that the Housing Development Agency (HDA) had come into existence in April 2009, but this was the first opportunity for this Committee to exercise oversight over it and hear of its progress. In future, the Committee would demand quarterly reports, because these would allow the Committee to address the issues at the end of the year.

Members’ comments on procedural steps
Ms M Borman (ANC) expressed extreme dissatisfaction with the fact that the Department of Human Settlements (DHS or the Department) and the HDA did not forward the document setting out their presentations to the Committee in good time, and demanded to know why, particularly since this meeting was originally scheduled for 24 February 2010.  The oversight function should be taken very seriously and it was therefore unacceptable that the Committee could not prepare proper questions for this meeting. The Committee had been on several site visits, and, during a joint visit with the Ad Hoc Committee on Service Delivery, had recently witnessed the major outstanding land and housing issues. She suggested that if documents were submitted late, the Committee should not entertain the presentation.

Mr M Mdakane (ANC) understood Ms Borman’s concerns, and agreed that the Department should be encouraged to submit documents on time. However, he appealed that now that both the Committee and departmental officials were all present, the Committee should allow the presentation to be given. In the event that matters might arise that required further thought, then the Committee would have to call on the Department again at a later stage. Having said that, he stressed that it was crucial for the Committee to receive documents on time, so that Members could do thorough research on the issues, otherwise the oversight function would become futile. In principle, the documents should reach the Committee five days prior to the meeting.

Mr A Figlan (DA) shared the sentiments of the other Committee Members and noted that all Members were sitting as government, and if tasks were not delivered, this resulted in difficulties. It would be regrettable if the Committee failed in its tasks because this presentation was delivered at the last minute. However, he agreed with Mr Mdakane that this presentation should be delivered so that questions could be asked, but pleaded that this situation should not be allowed to happen again.

Mr R Bhoola (MF) said that the matter had been addressed adequately. He, however, added that without wanting to cast aspersions on the character or credibility of officials, this request had been conveyed to the Department in the past, and the Committee should take exception to this kind of behaviour.

Mr J Matshoba (ANC) agreed that this was not the first time the Department had been requested to hand in documents in on time. It seemed that the message was not getting through. He suggested that perhaps the Committee should listen to the presentation, but raise questions at a subsequent meeting.

Ms Borman again noted her dissatisfaction, and agreed that this was not the first time the Committee had had to spend time on such issues. She firmly believed that the Committee should not allow the presentations to continue, but would abide by the majority decision.  

The Chairperson noted her disappointment with the Department, but said that the Department would be given an opportunity to make the presentation. A workshop was held in December 2009 to ensure the Committee and the Department understood each other and it had then been stated that the Committee had to receive documents in advance, and the Department should have seen to it that this happened. The Members of this Committee were serving on several other committees as well as this one, which meant that they had many documents to read, and failure to submit on time and allow Members to read the documents meant that the Committee was not fulfilling its function of oversight to the full. She said that the Department should ideally submit documents five days prior to the meeting, or, at the latest, three days prior to the meeting. In this particular case, she noted that she had personally made an effort to get the documents, requesting them on Friday, and again on Monday, when she had asked Mr Dlabantu at the Department of Human Settlements to ask HDA for its documents, and when he reported that he had spoken to the HDA. She said that the Committee should perhaps report this to the Minister, as it seemed the Committee was not being taken seriously.

Mr Morris Mngomezulu, Chief Director, Department of Human Settlements, said that he, on behalf of the Department, noted the displeasure of the Committee and wanted to register an apology, and the assurance that in future the Department would do its utmost to respect the five-day deadline.

Housing Development Agency (HDA): Progress made since its establishment
Mr Taffy Adler, Chief Executive Officer, Housing Development Agency, introduced himself and other members of the senior management team, namely Mr Neville Chainee, General Manager: Intergovernmental Relations and Stakeholder Management, Mr Keith Govender, Manager responsible for communications, Ms Rooksana Moola, the Chief Financial Officer, Mr Joseph Leshabane, Chief Operating Officer, Department of Human Settlements and Ms Odette Crofton, General Manager: Projects and Programmes, Department of Human Settlements.

Mr Adler noted that the criticisms about the documents were not an auspicious way to start a presentation. This was the first time the Committee had spoken to the Housing Development Agency (HDA or the Agency) about the handing in of documents. He assured the Committee that much time, effort and work had been put into the presentation, to respond to the Committee’s demands. On 17 March 2010 the parties would have another engagement and he hoped that the Committee would not have occasion to make the same comments at that time.

Mr Adler then detailed the progress of the HDA since inception, taking the Committee through the attached presentation.

The objectives of the HDA corresponded to those set out in the Housing Development Agency Act, No 23 of 2008 and were translated into three core functions of land assembly, project delivery support services to organs of states such as provinces and municipalities and also monitoring and facilitation. The HDA was to be a public development agency that promoted sustainable communities by making available well located and appropriately planned land so that sustainable human settlement and communities could be developed. As required by Section 8 of the HDA Act, the Agency would consult with the Minister as well as provinces and municipalities on their mandate and have it concluded by 31 March 2010.

Funding remained a big issue for the HDA. Section 25(1) of the HDA Act determined how the Agency received its funding. In the first budget, which was now coming to an end, the HDA did not have working capital. The only available money was that from Parliament, which in turn was restricted to the use for land acquisition. Considering that HDA had started less than one year ago, its institutional development had come quite a way. The macro organisational structure had been developed and was in the process of being enacted. High emphasis was placed on the employment of competent staff, with equity being a prime consideration. Currently, there were 15 vacant posts, of which five would be filled on 1 March 2010, another one post would be filled on 1 April 2010 and the remaining vacancies would be filled by the year end.

The HDA’s Governing Board, consisting of appointees by Ministers, was the accounting Authority for the agency and had already met six times, during which it had approved various governance documents. The Board had good working relations with all the stakeholders and any tensions were healthy ones. Various Intergovernmental Protocol Agreements were in place, but were pending legal or political finalisation in some cases. Thubelisha Homes and the Limpopo Province had reached an agreement by which all applicable land would be transferred back to the Province. The HDA had been approached and this was regarded as a priority project. Other matters in which the HDA participated were the Cornubia Projects with KwaZulu Natal (KZN) Province and Ethekwini Metro, a protocol agreement with the Ekhuruleni Metro, finalisation of agreements for the Zanemvula Project in the Eastern Cape and also the N2 Gateway projects in the Western Cape.

In terms of the Land Acquisitions Management (LAM) a business model had been developed, and also a strategic criteria to inform and guide land acquisition. The HDA was in consultation with Servcon and also Transnet regarding their properties and property portfolios. The issue of funding was stressed as the major constraint, because without it the HDA’s hands were tied and it could not deliver on its mandate. Projects and programmes were well on their way, as outlined, with a few exceptions where there were legalistic and funding obstacles. The HDA was well aware of this and was working actively to resolve outstanding issues. Another prominent issue, but one which was likely to be concluded, related to the government-to-government land transactions.


Discussion
Ms Borman said that, although her initial comments had been negative, she was now very pleased with the planning and progress the HDA seemed to be making. She noted, however, that although the presentation looked good, it was at ground level that Members would be making their assessments. The Cornubia project was of particular delight to her, because it was related to one of the last projects she did on the re-zoning of land in the Ethekwini district, where she had worked previously.

Ms Borman said that in regard to Integrated Human Settlements and Integrated Developments, it was known that there was a huge backlog of informal settlements, and that the inclination was to develop Reconstruction and Development Programme (RDP) houses. She asked for an indication whether the first phase would build 5000 RDP houses, as mentioned.

Mr Chainee confirmed that the first phase of the Cornubia project was 5 000 units. The HDA worked together with the City of Cape Town and the Provincial Government of the Western Cape (PGWC) within a framework that the two parties had envisioned and agreed upon, namely the Spatial Development Plan. The HDA only had a supportive role and did not dictate to the City or the Province. For example, the Agency tried to ensure that, in respect of the 5,000 units, there was an integrated plan that allowed for fully subsidised and affordable units. A business plan had been approved by the Ethekwini Metro, while they were still awaiting the Province’s approval. The tender for the first 5 000 services had been prepared, and now it was only a matter of waiting for the funding to be finalised between Ethekwini and the Province. As members were aware, there were challenges around funding. The HDA was part of the Committee that provided assistance and strategic support on this matter. In the last nine months the Cornubia project had moved from the land acquisition phase, to the approval of the business plan, and on to the phase where project managers had been appointed and services were being finalised. Overall, the HDA did not take all the responsibility, but instead demonstrated that it was possible to achieve things if everyone worked together in a coordinated fashion without egos getting in the way. He appealed for the Committee’s support on the funding issues.

Ms Borman noted that land and housing were two major problems. The backlogs in the informal settlements were a priority, and in the particular conditions these were understandable. In the Metros, and in the Ethekwini district, a fixed objective had been set to clear up everything by 2014. This was not a realistic target. The backlog in the Western Cape, as at the previous week, was 400 000 units and 18 000 to 20 000 people were coming into the informal settlements every year. These people grew up in the informal settlements, and later qualified for houses themselves. She asked what the time frame and planning was to address these issues.

Mr Chainee responded to the issue of the Metropolitan targets. He pointed out that the Millennium Targets for 2014 were set at the turn of the century. He noted that commitment to delivery of targets, at both a political and administrative level, was difficult. Although the HDA and Department were aiming to eradicate the existing backlog by 2014, the target had actually already been set in 2003/04. That target had to be compared with the current situation, to measure progress. In 2014 there would still be an issue of upgrading and formalisation, because these were a consequence of urbanisation. He said that not too much emphasis should be set on South Africa’s 2014 targets, because in reality the country had made huge strides in reaching the Millennium Development Goals of making a difference in families’ lives world wide.

Ms Borman asked for clarity on the funding arrangements. She asked if there was still a problem with the funding that went through the Provinces, as indicated during a previous discussion. Parliament also provided funding for the working arrangements, but the question was whether there was currently funding for land acquisition. She agreed that the Committee needed to give support to the HDA on funding.

Mr Leshabane responded that there were two parts to the issue as to whether the funding was still going through the Provinces, when in fact it was earmarked for specific things. Firstly, the Housing Grant as it stood allowed the Provinces to provide for land acquisition, and this situation had been in existence for a number of years. Discussions were under way to allow the Department to review this, so that a portion of the grant would be specifically ring fenced for land acquisition through the HDA. At the moment that was not the case, but it would be the new direction. Secondly, lessons had been learned from several current projects, such as Cornubia. In some instances funds were ring fenced and upon agreement the Provinces would release the money to the HDA. These funds were usually by way of a conditional grant for land acquisition or to fund the municipality. It was not, in itself, problematic to release the funds, but there was a question on who would be accountable for the funds. Even if the HDA was the land acquisition agency and used the funds, it had no ability to control or even manage those funds. The question was one of alignment. Ideally, the agency responsible for the funding should preferably also be able to account for it, and vice versa. It seemed that the Department was supportive of clearly defined funding arrangements.  

Ms Borman asked how many people served on the board and what the remuneration packages were. It should not be revealed in the newspapers that the top structure received huge benefits, and therefore she suggested a “lean and mean” package should be designed. It was a step in the right direction that HDA aimed to employ competent people in its structures.

Ms D Dlakude (ANC) noted that the presentation only addressed the informal settlements. She asked what the plans were for the people in the rural areas under Chiefs, and also for those people who had been retrenched but had already started to build a house for themselves.

Mr Mdakane commented that the presentation had been useful. He was concerned with the policy for government selling property to government. It was suggested that the Committee members should have a thorough discussion with the policy makers, the Minister and other MEC’s, on the matter. He did not think that one sphere of government should be engaging in transactions with another sphere of government. The Committee should support the HDA and assist them in this matter.

Ms M Njobe (COPE) noted that in spite of the earlier comments that Members might be impeded from asking questions, in fact several had arisen from the presentation.

Mr Adler said that the HDA was more concerned about content than processes, and on a few occasions had been caught up in arguments about this issue with cooperatives. The HDA had been advised to first put agreements and processes in place, but the HDA placed more value on the content behind those. It was easy to create an impressive presentation, but this must be matched with the realities on the ground. On a policy level, the HDA would like to receive an invitation from the Committee to present a policy proposal on the issue of government-to-government land transactions. This was a complex issue involving many State and non-State actors, and the Agency was quite involved in it.

Mr Mdakane was very pleased with a particular development of 2000 ha. He suggested that the Committee Members should visit some of the areas themselves, to get a clearer picture of what type of development would be appropriate. He hoped that the HDA was facilitating the lower and middle income class and gathered that the higher income class was excluded, so this particular development’s approach might not work in this instance. However, he thought that this should be encouraged, and that the HDA should be able to cover the large number of people who did not qualify for the land subsidy or the RDP type housing. There were people who, although earning, were not earning enough to qualify for assistance from banks. The HDA should play a critical role to close this gap. A large number of young, mobile and vibrant people had disposable income, but it was insufficient and it would be ideal with the HDA could assist in the general development of these people and if local government could assist in providing subsidiaries.

Mr Mdakane said the Agency should include, in its planning, the phenomenon of migration to urban areas. Poor people and migrants would not stay in houses located in rural areas if there were not job opportunities in those areas for them. On a policy level, the Committee had to ensure the Agency was supported when it engaged in intergovernmental relations. The Committee also acted as an oversight body. There were many counterparts to this Committee at provincial and local government level who should be engaged politically to address the issues. It would be helpful if the agency could work on this matter. A large number of people, who seemed to be educated, vibrant and articulate, were complaining and creating many problems in Alexandria, on issues relating to RDP houses.

Ms V Mugwanya (ANC) congratulated the Agency on its efforts to establish itself in the short time it had been in existence and said that the organogram was well structured. She also asked what the arrangements were for the lower and middle income class. She too expressed concerns about the rural areas, particularly in light of migration to urban areas, whilst some people in a higher income class wanted to have their homes in the rural areas. In light of the many uprisings in the country and the fingers that seemingly pointed at the Committee, it was asked if the HDA was trying urgently to fast track the problems that had been encountered in settlements throughout the country.

Mr Adler said that urgency was a very important element, but that it needed to be tempered with an deliberateness, to avoid making mistakes. Any sense of urgency in the Agency was seldom matched by the various Departments with whom it interacted, and delays often occurred in matters that required cooperation. they Nevertheless, the Board, which was an excellent Board, certainly moved with careful speed.

Mr Figlan thanked the Agency for its fruitful presentation and asked for the address of the HDA’s office in Cape Town.

Ms Crofton indicated that the Cape Town office was at 129 Bree Street. There was also a site office in Delft and in Delft 729, where the HDA had been trying to get closer to the community so that community members would not have to travel to the inner city to discuss matters. At the Joe Slovo project, there was also a site office within the 709 units, where people could contact the HDA. For the upcoming N2 Gateway projects locally based offices were envisioned for consultation with community members. In the interim, community members were seen on a regular basis. She would elaborate on this later.

Mr Figland noted that 2000 hectares (ha) of land was available, and wanted to know where, and in which province, this was located. The N2 Gateway was “a mess” and he wanted to know how far the HDA had come with it. There were so many issues with the N2 Gateway that he suggested these be taken up outside of this meeting. However, as part of the N2 Gateway project he asked specifically how far the developments with Boys Town in Old Crossroads were.

Mr Leshabane said that approximately half of the 2 000 ha was situated in the Western Cape and agreements were in place to make the land available to the Agency. The balance, which was approximately 1000 ha, was the property that Servcon had acquired from Transnet at the request of the Department, during the time that the Agency was establishing itself. The Agency, Servcon and the Department were attending to the transfer of those properties, which were situated across several provinces, to the HDA. For the future, HDA was engaging Transnet, as well as other State-owned enterprises, on their property portfolios, so that the HDA could begin to isolate the properties and land that would be suitable for viable settlement development. The work of the HDA was not restricted only to these, but these were the start.

Ms Njobe asked for clarity on the relations between the HDA and the Department of Rural Development and Land Reform (DRDLR), because it seemed that there was overlapping and duplication in their functions and budgeting. The DRDLR was also concerned with land use, land planning and settlements in rural areas, similar to the HDA.

Mr Leshabane confirmed that the HDA enjoyed much support, possibly unprecedented, from the Department of Rural Development and Land Reform. The agreements that were being negotiated sought to delineate the role of the HDA and other stakeholders in terms of rural development. The HDA was very confident that agreement would be reached that the HDA would attend to specified areas, alongside other role players.

Mr Bhoola said that it was always important to match plans to what was available. The HDA had an enormous task and his concern lay with the availability of working capital.

Mr Bhoola also said that while the HDA might have good plans to implement, he wanted it also to elaborate on the obstacles experienced during the implementation. The HDA said that it employed people of competence, but that it also had unfilled positions. He asked which positions were unfilled, because the nature of these would impact on their capacity to deliver on their mandate.  

Mr Bhoola asked for the physical address of the office in KwaZulu/Natal. Although he did not require details, he wanted to establish the progress that had been made in KZN and whether the problems between the HDA, the Ethekwini Municipality and the Province had been finalised. He expressed concern about intergovernmental relations, because it would be pointless to attempt to move forward when agreements had not yet been finalised, since there would effectively be no direction or mandate to deliver on the other aspects.

Mr Adler said there was not an office in KZN. When the need arose more offices would be considered.

Mr Chainee responded that, as with any other agreements, there were tensions in the intergovernmental agreements in the KZN Province and with Ethewkini Metro, particularly around issues of money and accreditation. These tensions were, however, healthy ones and the participating stakeholders had moved along. Each stakeholder had to respect the constitutional and intergovernmental relations framework within which these relations were regulated, and had to adhere to their own roles and responsibilities.

The Chairperson asked what the HDA’s progress on the recommendations was. The recommendations had to be brought to the Portfolio Committee for its input before they were approved by the Minister, and she said that the Committee would not act simply as a rubber stamp. The most important aspect was implementation of legislation, and it often happened that there might be problems, after all the trouble that the Committee had gone to in passing legislation, if recommendations had been manipulated.

Mr Chainee asked the Committee for inputs and recommendations on the draft regulations, and also for guidance on the process that needed to be followed in this regard. Recommendations would be accepted as points for consultation with outside stakeholders. Together with the Department, the Agency planned to present the draft of the regulations to the Committee during the course of April. Only after receiving the Committee’s comments would these be presented to other parties. It was important to follow a process that was collective and inclusive and would harmonise the outcomes between Parliament, the Minister, the Provinces and the Municipalities.

The Chairperson asked what the involvement of the HDA was in the project that was run by Thubelisha. The Committee had been informed that all the projects would be taken over by the HDA. The Committee was tired of being “the call centre” of the Department. An influx of complaints had been received from contractors, mainly from projects in the Eastern Cape, who had not yet been paid by Thubelisha. Mr Mngomezulu was asked to deliver the message to Mr Dlabantu, Director General of the Department of Human Settlements, to whose office the complaint documents would be referred. The chairperson could not blame these people for approaching Parliament if they did not receive any response from the government departments. The President’s call centre was also inundated with Human Settlements problems. The Chairperson asked what the Department’s call centre was doing.

Mr Adler clarified the HDA’s relationship vis-a-vis Thubelisha. The HDA was mandated to, and had taken over two of the priority projects in which Thubelisha was involved. The staff and offices in Cape Town and Port Elizabeth had been taken over as of 1 August 2009. Various agreements still had to be finalised to give legal authority to HDA, although it was actually working on running those projects. Other than those, HDA had no other arrangements in respect of the projects in which Thubelisha was involved, nor those that Thubelisha and the Department had been negotiating with the Provinces. The HDA had no insight or comments on that process.

The Chairperson said that the Department had to take responsibility and be held accountable for unresolved issues with Thubelisha. Lump sums of money had been paid to ensure its closure and to clear up all the issues.

The Chairperson raised the issue of acquiring land, saying that certain properties were to have been acquired, although the Committee had not heard about developments. Property could not be bought if the rental obligations would thereby be affected, but it had been found that many houses were rented by immigrants, whilst South African nationals were not able to be accommodated. The Social Housing Act was in place and cooperatives could also be accommodated. The Committee was encouraged to look at the situation and initiate legislation, since the government was concerned that more communities be accommodated.

Mr Leshabane responded that the HDA could acquire land and landed properties. Some might be inner-city multi-storey structures. It was collaborating with the Department to make these properties available. Provinces, Municipalities and the Department would then be able to attend to the rental question. There were certain policies in regard to these in place.

The Chairperson mentioned that the planning component for Human Settlements fell within the responsibilities of the Department, not the HDA; the latter only acquired the land. The Department would be asked about this issue during the meeting scheduled for the following Friday.

Mr Chainee said that the business plan was an integrated settlement. The 25 000 units of which Mr Adler had spoken were fully subsidised. It was envisaged that the entire project, in terms of Human Settlements, would consist of 55 000 units, ranging from fully subsidised right up to high end. This would include retail, commercial and industrial. How much of this would be in each price range would depend on management issues. This depended on the densities. Higher densities had the risk of a certain type of socio-economic consequences downstream, and demanding higher densities could thus create other social problems that in turn needed to be addressed. There were many examples of this all over the world. The province and the City would determine the ideal density rates.

Mr Mdakane disagreed with the notion that there were instances in South Africa where densification caused social problems. Developments were always planned to use resources optimally and to accommodate transport and other basic services in a viable manner. In fact, certain services such as the Bus Rapid Transport system, would only be viable if it had enough customers, who would be provided precisely through densification projects. He thought that space in the cities should not be wasted and densification was recommended. It would, however, be very unfortunate if these developments created slums.   

Mr Chainee responded by pointing to experiences drawn from the Cape Flats as well as the former Indian and Coloured areas in Durban. A densification project should be conscious of the developmental input and the human resources in question, especially when it was planned for lower income families. The social networks and support for maintenance should also be considered. It was agreed that densification would be successful when it was managed properly. Mr Chainee reiterated that there were many examples from which to learn.

The Chairperson asked Mr Chainee to provide the Committee with examples on international case studies of densification projects and their outcomes.

Mr Chainee said that up to date the Agency had consulted with the Department and seven Provinces on arrangements and implementations around land acquisitions, which would allow the HDA to undertake land acquisition on behalf of the Provinces. The agreements still had to be concluded and would then allow the money to flow to implement the agreement. The conclusion of the agreements would reach the real objective of giving the HDA the responsibility for all land acquisitions. Also, the HDA could then politically be held accountable for any land acquisition for human settlements. He was in favour of such an arrangement.

Mr Leshabane responded to the issues of land and properties and the acquisition thereof. The HDA Act provided that the Agency could acquire private, public and communal land and the HDA’s programme was aimed at acquiring all these types of land. However, one of the obstacles in this regard was the lack of funds. It was foreseen that the Agency would come to an agreement with the relevant authorities to acquire State land for free. State land, however, did not exist in isolation. Often privately owned land had to be unlocked as well in order, together with the State land, to create developments that were sustainable and integrated. If the Agency was unable to acquire private land to unlock State land, it could not complete a successful project. This issue needed to be resolved. The Agency was confident that discussions with the Department and National Treasury would open in the following months and that the Medium Term Expenditure Framework process would be taken into account. The arrangement was that the Agency would present both a funding and an operating model which addressed these questions.

Mr Leshabane said that the President spoke about 6 000 ha of State land that was specifically allocated for low-income households, as well as middle or affordable income housing developments. This would divert the necessary attention to the gap-market.

Ms Crofton reported on the progress with the N2 Gateway projects. There were a number of complexities on the N2 Gateway which were systematically being worked through. The outcomes would be visible in the next few months, as the momentum increased. The main areas of focus at the moment were Joe Slovo, Boystown, New Rest, Delft Symphony and Delft 729. On all of these sites, excluding Boystown, the services were mostly fully completed. In Delft 729, services were around 96 % to 97% completed. In New Rest, they were 98% complete. At the moment, focus fell on the top structure delivery. Delft 729 was moving quite rapidly at the moment and it was envisioned that it would be finished within the current year. Legal arrangements prevented movement on the Delft Symphony project, while New Rest was nearing completion. She noted, however, that although New Rest had had some complexities, due to the combination of contractor and Public Housing Project (PHP) building, there were also specific dynamics with the servicing, which were of legal nature and had to be followed up with the contractor. HDA was aware of the enormous problems with the sewers in New Rest and was engaging with the City of Cape Town to find a legal resolution to them. The aim was to complete the contractor component, and then to conclude the project with PHP.

Projects were continuing in Joe Slovo. There were two components, one of which was the community consultation, whilst the other related to the technical design layout and approval of those components, so that the actual top structure and infrastructure work could be done. This project would be a much higher density project than the rest of N2 Gateway.

A contractor had submitted a tender for Boystown and was willing to restart work. The HDA and the Province were concluding agreements with the contractor to start work on the layout and design, and then the structures. Importantly, a community development process had also been initiated. The main Boystown community, the fire victims, and Phillippi needed to be brought together to finalise the project. From a technical point of view, the work would be restarting in the next month. The top structure completion was half way and the balance of it would be constructed over about a two and a half year period.

Ms Crofton emphasised that a new community engagement and development framework had been introduced. Individual precincts were planned in detail, for every single precinct, to map out exactly how and when things would happen. One constraint, which would hopefully be concluded soon, was the legal handover. Various challenges were prohibiting the conclusion of the handover. The Province had been spearheading that and was quite supportive in terms of closing off contracts with Thubelisha, signing contracts with the contractors and then signing with HDA as well. The reason for this taking so long was that it had been very complex.

Ms Crofton assured the Committee that the cooperation between the City, the Province, the National Department and the HDA, on the projects of the N2 Gateway, was going very well. HDA would also be working with the City of Cape Town on all the issues of concern that were raised on the project.

Ms Crofton said the Province was responsible for a number of temporary relocation areas(TRAs) while the HDA managed these. Recently the HDA had met with the City of Cape Town address the maintenance, upkeep and cleaning elements of the TRAs. There were complexities around who owned the land, who was contractually responsible and what could actually be done. Apart from clearing those technical issues, the HDA was also engaging with the communities. An overall movement plan had been approved for the projects to make it very clear who would be moving, and to where and when this would take place. The challenge was that there were more beneficiaries than available sites to which they could be moved. It was important for the HDA to clear this with the communities and not to create uncertainty on what would be happening to them. The governance structures were assisting, so that the approvals were planned and managed in the correct manner.

Ms Crofton said another challenge was that not all the legal arrangements had been concluded yet. HDA did not want to speak outside of its contractual and legal mandate on the projects. Until then, the Province and the City would engage on the projects.

Ms Crofton assured the Committee that movement would happen on the Boystown project by next month.

Ms Crofton said that in the Eastern Cape, Zanemvula was a two fold process. There was an existing project and then there were the number of new projects. By the end of the month all the tenders on the new projects would be out. HDA was also ready to initiate on the new projects. The existing project had come to a complete standstill because of the delays in the legal hand-over. The National and provincial departments and Thubelisha had to sort this out. On other Zanemvula projects the contractors had been quite frustrated with non-payment, to the point that there was not any work being done at the moment. Although the team on the ground had been trying to do what was required, it was now out of their hands, since the HDA did not have legal standing. Pressure was mounting from the side of the community and the municipality to resume work. New projects were being worked on at speed, and signatures on contracts with the Province were pending, to allow the HDA to execute fully on its mandate and do the work.

Ms Moola responded to questions on governance and human resources. She confirmed that there were seven board members, of which four were completely independent. Three members were appointed by the Minister and were representatives from the Department. The two members of the Executive were the Chief Financial Officer and the Chief Executive Officer.

Ms Moola said remuneration of the top structure at executive level was well within the required bands of the sector and could be researched. The band fell within R1 million to R2 million rand and was in line with the government structures as well.

Ms Moola reiterated that there were 15 vacancies in the HDA. Five positions would be filled on 1 March 2010 and another on 1 April 2010. The other nine vacancies would be filled throughout the year.

Mr Adler ended off by inviting the Committee to visit the various projects towards the end of the year and said the HDA would gladly host them. The HDA would always be open to discuss problems from particular areas the Members might have interests in.

Mr Bhoola was very pleased to hear about the movement on the synchronisation and alignment of the land acquisition process. He wanted to discuss the challenges in Ethekwini.

Mr Mngomezulu commented on the various matters raised around Thubelisha. He said the closing of a State entity such as Thubelisha was a very messy and difficult affair. Thubelisha had ceased operations in July 2009. Currently, some of the projects were still being shifted back to the Provinces, but in KZN, Gauteng and Limpopo this had already been done. The outstanding Provinces were the Western Cape, with the N2 Gateway project, and Zanemvula in the Eastern Cape. Thubelisha could have shifted these projects back to the Provinces without doing a reconciliation, so that the assets and liabilities would have simply been inherited by the Provinces, but the latter had requested that the reconciliations be done on each of these mega projects. It emerged that in some cases there were cases of over-payment, over invoicing and fraud. In these instances Thubelisha opened a case with the police and handed the project over together with the case number. The Department was mindful of certain disputes between contractors and Thubelisha and was attending to these matter. Mr Mngomezulu said he had noted the displeasure of the Chairperson and the influx of complaints the Committee, including the Committee Secretary, had received. The Department would provide the Committee with a full report on each problem area.

The Chairperson said she believed that the Department had taken note of the issues raised. She reiterated that the Committee took its role seriously and if the documents had been received in good time, even more deliberations would have resulted from this meeting. The Committee played a supportive role, but in turn the Department and the entities should also be supportive to Parliament. She warned that the Department should expect a challenging time this term.

The Chairperson said that the most important challenge that emanated from the meeting was that of funding. The Committee had to follow up on this challenge. The HDA should note that it had the right to approach the Committee, and should not always wait for the Committee to raise issues during presentations, which would help also to make the Committee aware of the pressing issues that may need to be prioritised. , when they were ready to present on an issue. In this way, the Committee would be made aware of pressing issues they could prioritise.

Section 231 of the Constitution: Process for International Agreements in South Africa: Parliamentary Legal Services Unit
The Chairperson said the Committee had very good relations with the Parliamentary Legal Services team, and commended them for always being available to the Committee.

Ms Zuray Adhikarie, Senior Parliamentary Legal Advisor, presented a document entitled “The Process for International Agreements in South Africa” to support her briefing on Section 231 of the Constitution.

Ms Adhikarie said that the questions around the processes for international agreements in South Africa had arisen from a recent matter in which an agreement was sent to the Committee for ratification, but was withdrawn as soon as it became apparent that it had been sent under the wrong sub-section of Section 231 of the Constitution. A representative form the National Assembly was supposed to be here to explain the events, but could not attend.

Ms Adhikarie explained that when an international treaty was entered into, only those states who had signed the treaty, or had both signed and ratified it (depending on the requirements of each particular state) were bound to the treaty. Historically, the word ‘treaty’ had a very specific meaning, but now it had a more general meaning and could be used synonymously and interchangeably with a list of other words. ‘Convention’ or ‘Charter’ usually referred to more formal type of agreements, while ‘Memorandum’ or ‘Declaration’ was used for looser agreements.

Each state had its own way of describing how it would bring a treaty into being and how the state agreed to be bound by a treaty. The Constitution of the Republic of South Africa Act, 1996, recognised that too much legislative involvement was unnecessary, and consequently the role in relation to treaties was now a shared power between the legislative and the executive.

The Constitutional provisions on treaty signing and ratification processes were provided for in Section 231. The difficulty usually arose, specifically for this Committee, when it came to distinctions between the nature of treaties. There were four categories of treaties. A treaty that was technical and administrative could be made binding without any involvement of Parliament, other than that the treaty be tabled. The difficulty here lay in deciding exactly what was meant by ‘technical and administrative’.

Another distinction had to be made between treaties that were binding between states, as opposed to treaties that became a matter of national law and would be applicable to the public at large. It was also important, however difficult, to understand what a self-executing provision of an agreement was. A self-executing agreement would automatically become binding on the citizens without it having been enacted into a specific State’s legislation.

Treaties under Section 231(3) were those of a technical and administrative nature, and these only had to be tabled within a reasonable time. Treaties under Section 231(2) required ratification, by a resolution by both Houses.

Ms Adhikarie clarified that in this Committee, a treaty had been submitted for Members to recommend ratification, as if it had been a Section 231(2) treaty, whereas it was a Section 231(3) treaty, and so it was withdrawn. The focus of her briefing would therefore concentrate on these two sub-sections.

A practical example would make it easier to distinguish between Section 231(2) and 231(3). When the treaty affected only routine and operational matters, it would falls under Section 231(3). Such a treaty would not impact on policy or content. She cited, by way of example, the document that was referred to the Committee, which was an agreement entered into with India and Brazil in 2008. The explanatory memorandum read: “India, Brazil and South Africa share a common vision with regard to human settlement development and are pursuing similar domestic policies”. This wording indicated that there was already something in place in those countries.

It continued “..policies that are socially inclusive and aimed at addressing a range of social problems. In this regard the three countries have a mutual interest and benefit in sharing information and expertise.”  This would be the key phrase, and it indicated that there would not be any policy engagement at the time, but simply an exchange and share of experiences and knowledge. That would be a technical arrangement.

Wording such as “…relating to housing and human settlements, the three countries have bilateral agreements in place” would be another key to show that agreements already existed.

The treaty went on to say that “..in view of the shared understanding and common desire to learn from each other’s experiences, and the will to cooperate on ways to overcome the challenges faced by these countries…they want to explore new areas of mutual interest” indicated that there was a bilateral agreement in place, which committed the parties to exchanges of resources, knowledge and skills with each other. This agreement was only about administrative sharing, and did not involve any policy making. Furthermore, the period for the duration of this agreement was determined and was set out in the document. Ms Adhikarie reiterated that the fact that this agreement was based on other existing international agreements that were in place, and also was in place for a defined period, made it purely administrative.

Ms Adhikarie noted that Section 231(4) was easier to understand. Here, a treaty entered into by a state would only be applicable if the particular state wrote the treaty into its law, and passed the law. The self-execution provisions were also contained in this subsection.

Ms Adhikarie explained that self executing provisions in agreements stated details, which would be accepted by the courts of law, as to how the parties intended to be bound by the agreement, when it was already a binding agreement. When the provisions contained sufficient information, which was also in accordance with international law, then, for instance, South Africa did not have to incorporate such provisions into its own law, because the South African courts were permitted to interpret international law as well. An example could be found in the agreement on the Childrens’ Rights, based on the African Convention on the Rights and Welfare of the Child, ratified in 2000. Some of the provisions in this agreement, specifically those relating to who would be bound by this agreement, had not been incorporated into our law.

Discussion
The Chairperson said that when presenting agreements, the Department had, in the past, presented a very generalised briefing, indicating only that such agreements were tabled in terms of Section 213, but not indicating the sub-sections.

Ms Adhikarie referred the Members to slides five and six for clarity on the distinction between the sub-sections.

The Chairperson asked for clarity on the sharing of resources in these agreements.

Ms Adhikarie responded that the content in the agreement detailed the specific arrangements for the sharing of resources. In practice, the parties would share information, engage on exchanges, build capacity and transfer skills. The Department in question had the prerogative of negotiation on the arrangements.   

Mr Joseph Leshabane, Department of Human Settlements, said that when the Department originally tabled the agreements, it had in fact been very clear as to which subsection these fell under. They were tabled as falling under Section 231(3) for specific reasons. Research from the Department’s Legal Services unit had been done, and had determined that the term “of a technical, administrative and executive nature” in fact referred to three categories. The first would relate to agreements that were departmental-specific and were purely about the operations of the department. The second were agreements that were not of major political or any other significance. The third would be the agreements that had no financial consequences or that would not affect domestic law. These agreements were simple, and followed from the day to day activities of the Department.  

The Chairperson admitted that she still needed clarity on agreements falling under Section 231(2). She asked what exact processes needed to be followed for the approval to be granted by the National Assembly. The fact that an agreement went to Parliament was outside the processes of this Committee. However, at the same time the Committee must exercise oversight over the Department’s activities, including over Memorandums of Understanding. The Committee needed to know the exact process in order to fulfil its oversight function.

Ms Adhikarie said that that was the very reason why any agreement entered into by the Department had to be tabled, so that the Committee could be aware of it. The agreement in question was very technical and administrative. It bound the three States that entered into it essentially to exchange information but nothing in the agreement was binding on the State in terms of policy or politically. The Committee’s oversight would be guided by the fact that the agreement was in place, and therefore the Department was well within its mandate to, for instance, set up an exchange program. This must be distinguished from another agreement that might be agreeing on matters that would have financial and policy implications for the general public. A Minister signing such an agreement could not bind the state to that extent and therefore that agreement would have to go to Parliament. It would have no binding effect on the State before it went through the went through the legislative process, and would thus go through the normal channels of Parliament, and would have to be ratified before becoming binding. If Parliament refused to ratify it, the State would not be bound, but until it communicated this to the other state, then the agreement would be considered binding as between the two states.

Mr Bhoola thanked Ms Adhikarie for the briefing. He said that there was a debate in the House the previous day, which developed into provision being made that the Committees could hold the Executive accountable. He asked if, according to Section 231, a country that pursued domestic policies could agree in principle on something, although the State might not have something in its law as yet.

Ms Adhikarie replied that the parties would act in line with the intentions expressed in the agreement, even though it had not yet become legally binding on the State, because the intention was that it should be incorporated into the law. If a State no longer had this intention, then it had to communicate this intention. An agreement would only be legally binding once ratified. Self-executing provisions would only be recognised and interpreted by the courts and incorporated into South African law if they did not conflict with our written law and the Constitution.

The Chairperson said that, according to what she understood, the ratification process had to be aligned to the current internal processes of approving agreements. The agreements in front of the Committee would be tabled next week. She asked what the role of the Committee was, and also what the role of Parliament was in the approval of these agreements. If the Committee’s role on the agreements meant nothing, then she questioned why they were even presented, and what oversight function the Committee would be performing.

Ms Adhikarie replied that unfortunately the question could only be answered by the National Assembly representative, who was not present at the moment. The documents presented here did not need ratification and were presented merely for information purposes.

The Chairperson again said that the Constitution gave the Committee an oversight function, but asked how the Committee would, in practice, play this oversight role. It was a pity that the relevant person was not here to answer the question. An invitation would have to be extended to ensure the right person could clarify the Committee’s uncertainties. It was of utmost importance that the Committee understood the mandate it was given.

Ms Njobe remarked that she understood the Chairperson’s concern. However, many agreements had been signed by Departments without consulting with the Portfolio Committees first. It was actually a long-outstanding matter of contention that the Committees were asked to endorse a treaty that had already been discussed and signed. The Committee was merely being expected to “sign it off”. This happened not only in this Committee, nor indeed only in South Africa, but was common practice. Ms Njobe was not optimistic that the situation would change. However, she made the point that perhaps departments also had to be trusted in what they were signing.

The Chairperson disagreed with Ms Njobe and said that the Committee was not a mere rubber stamp. The Committee had roles and functions and, when these were understood, the Committee could deliver on them. The Chairperson was adamant that the Committee would succeed in its functions.

Ms Mugwanya asked if the briefing by the Legal Services Unit pertained only to this Committee or if it was of general application.                

The Chairperson confirmed that it was of general application to all Committees.

Ms Mugwanya said that she also doubted whether the practice would be reversible, and perhaps it was merely one of the functions of the Committee, whether it was liked or not. She posed this to the Chairperson. However, she posed the question that if the Department, for instance, wanted to come to an agreement relating to a human settlement policy with New Zealand, and South Africa had no existing agreements with New Zealand, would it be possible for the Department to do so.

Ms Adhikarie said that if there was not an existing agreement, it would still be possible for the Department to do so, because then it would be an agreement for a specific purpose. There would not be a general agreement for South Africa and New Zealand to have in advance, but a specific one reduced to writing on a particular issue.

Mr Mdakane said that Ms Mugwanya would need to look at the four categories of treaties, and decide into which category a treaty would fall. He asked if Parliament had made any mistakes or had done anything wrong in the past 15 years. Many treaties had been signed and the possibility of mistakes existed.

Ms Adhikarie replied that those were policy decisions, as the content of the treaties would be decided upon by the government of the day.

Mr Mdakane noted that Parliament was not the supreme authority, but rather the Constitutional Court. Every treaty that was signed would be subject to existing law. Human Settlements was a very broad subject and the chances were good that the Department would receive money somehow from other countries. He wanted to know what the Committee’s role would then be. The question was raised if it would be possible for the Committee to rule that the HDA should not accept money, if they actually already had done so. He also wanted to know if the Committee could prevent the Executive from signing a treaty. In principle all treaties that were presented before the Committee had already been signed. Mr Mdakane wanted examples because this was a very complex issue.

Ms Adhikarie replied that she could not venture into whether the Committee could stop the Executive from signing, because this related to policy issues. The Constitution would say the Committee could not, but politically it was a different matter.

Ms Borman said that this Committee could only attend to the agreements from Human Settlements. This was a very good starting point for the Committee, and it was good that it was setting an example. It seemed that the Committee would be able to review an agreement if it did not agree with it. The question was, however, how the Committee could pick up on agreements before or when they reached the Minister.

Ms Adhikarie said that the Department would have to be consulted on how the Committee could pick up on these agreements. She also pointed out that, unfortunately, the Committee did have a rubber stamp function with respect to treaties. The Constitution assigned the Executive the powers to sign and enter into the agreements.

The Chairperson accepted that the Committee did not sign agreements, but asked what the responsibility of the Committee was before the agreement was signed. There was a consultation process that followed before signature, and the Chairperson wanted to know exactly where the Committee would fit in.

Ms Adhikarie said that the Department might enlighten the Committee on the process before the agreement came to Parliament. She said that she could only vouch for what happened in Parliament and that the National Assembly should address the Committee on the processes. Where ratification was required, there would be normal Committee deliberations similar to when the Committee made recommendations. The Committee Secretary was responsible for reporting on that.

Ms Adhikarie confirmed that Section 231(1) gave the National Executive the power to sign. The President would in writing give the Minister the authorisation to sign.     

Ms Adhikarie ended by making a recommendation that perhaps the Committee could obtain an inventory from the National Assembly of all the international agreements pertaining to this Committee.

The Chairperson said the Committee should not take its role for granted, had to engage upon, deliberate and ultimately have a full understanding of its mandate.

The meeting was adjourned.