Department of Rural Development & Land Reform: Restitution Court Cases; 2010 3rd Quarter Expenditure Report: briefings; Comprehensive Rural Development Programme: response on Memoranda of Understanding with sister departments for implementation

Meeting report

Department of Rural Development and Land Reform. Restitution Court Cases. Presentation
Mr Thami Mdlalose, Acting Deputy Lands Claims Commisioner (ADLCC), Department of Rural Development and Land Reform (DRDLR), presented the Restitution Court Cases. His presentation underlined the number of restitution cases in court; the categories of litigation matters that had arisen in restitution; the nature of the disputes; how disputes were dealt with; the role of the Department in each category; the challenges faced in dealing with litigation; court orders; and remedial action in place.  

The number of cases currently in court was 316: the Eastern Cape 11; Free State and Northern Cape together 20; Gauteng and North West together 44; 114 in KwaZulu-Natal (KZN); Limpopo 52, Western Cape 8; and Mpumalanga 67. The referral of disputes to court was 147 (47%). The percentage of disputes that were on the validity of a claim was 85%, the quantum payable 10%, and the type of restitution to be provided 5%. The role of the Department was to refer the claim to the court and presents its research findings. Claimants were required to prosecute their claim, i.e. by bringing evidence of entitlement to restitution. The Minister abided by the decision of the court where there was merit to the claim. There were currently 63 cases under review. Reviews took place where a party affected by a decision taken by a functionary, in terms of the Restitution of Land Rights Act, was not satisfied with that decision or action and required a court to review the decision.

There were 10 cases where claimants opted for Direct Access. Most of these cases were in Limpopo and the Eastern Cape. In this instance, claimants approached the Land Claims Court directly, but claims had to be lodged within the prescribed period. The role of the Department was to provide all the relevant information, and the Minister had to abide by the decision of the court where there was merit to the claim. Mr Mdlalose stated that there were 37 Specific Performance cases. Those were about contractual arrangements. The number of other cases regarding issues related to interdicts, etc., was 59.   

Discussion
The Chairperson hoped that the presentation answered all the questions that were previously asked by Members.

Ms A Steyn (DA) said that she did not always understand the terms used by the Department and indicated that the number of referral cases were too high. She noted that the cases for the past 17 years were outstanding and asked what happened to those cases. She asked why it took the Department so long to reach its current status.

The Chairperson responded that the Portfolio Committee had asked the Department about current cases and not previous cases. Therefore, the question that was asked by Ms Steyn was a different question and thus not relevant to the questions that were previously asked by the Committee. He asked again if the questions that were previously raised by the Committee regarding the current restitution court cases had been answered by the Department. 

Mr Mduduzi Shabane, the Director-General (DG), DRDLR, agreed with the Chairperson that question raised by Ms Steyn was different from the ones that were previously raised and stated that he could not answer that question at that stage. He would provide the information she requested at another stage.

The Chairperson asked why KwaZulu-Natal and Mpumalanga had so many cases in court compared to the other provinces. He asked about the underlying issues regarding the high number of cases in those provinces. He asked how it was possible for some parties to go to court with their own legal representation and if the parties did their own research in that regard. The Chairperson expressed his concern regarding interdicts that prevented the development of land because of the consequences (job losses, food security, etc.). He asked if the interdicts did not contradict the aims and goals of the Department in creating jobs and further development. He asked about the estimated interest value on all cases and wanted to know if the Department calculated the value related to the cases.

Ms Steyn said she read some of the past cases where the court indicated that the Department did not do its job properly. She asked if the Department had learned from previous concerns and experiences. She understood that some claimants could not afford legal representation, and asked if the Department also assisted owners and claimants who could afford their own lawyers. Ms Steyn noted that the Msobotsheni case (KZN) was issued on 05 May 2009 and the Roodepoort case (Gauteng and North West) in 2005. She asked about the delays in payout and how much was paid to court cases thus far.

Ms P Ngwenya-Mabila (ANC) indicated a lack of consistency in the report. Some figures indicated the amount of interest while others did not. She asked if the Department submitted the information requested by the court on time. She asked why there were such a high number of court cases with direct access in the Eastern Cape and Limpopo.

Mr B Zulu (ANC) said it seemed as if the Department only focused on restitution. He stated that the Department should act for all parties involved and not only for the claimants so that food production and development could not be affected. He asked what happened if the claim was not finalised within 10 days.

Mr Shabane said the Department learned a lot from previous court cases. The centralisation of power to national office and the restructuring of the Department were some attempts to deal with claims more affectively. The Department also came up with improved guidelines explaining given interpretations.

The Chairperson asked if the centralisation of power was an indication of the lack of strong regional structures.

Mr Shabane indicated that there were Departmental staff members in every province in order to assist the Land Claims Commissioner. There were nine Chief Directors (one in each province) leading department staff to fulfil the mandate of each province and the Regional Land Claims Commissioner was accountable to the National Land Claims Commissioner.  The reason for the high number of direct access court cases in KZN and Limpopo was because people were dispossessed from their land and were not compensated. Those people were not happy and opted to go court while some were impatient with the processes of the Commission, regarding it as time consuming.

Mr Shabane said that a very small percentage of people were affected by interdicts to restrict further developments, i.e. cases involving change of land use from sugar cane farms to golf estates. The major cause in delays was because of the appointment of only one permanent judge dealing with land claims. He said that claimants and land owners could be entitled to legal representation. There were some issues regarding documentation that were outstanding in the Msobotsheni case, but the Department was trying by all means to fast track the process. Some delays were caused by unhappy members who withheld their signatures. The current interest rate on payments was 15.5% and determined by the Minister of Finance. The Roodepoort case was delayed because of parties who could not reach and agreement. The high number of court cases in KZN was directly correlated to the high number of claims lodged in that region. The high number of court cases in KZN had a direct correlation to the high number of claims lodged in that region. Mr Shabane said that the Department did not have the total value of all cases at hand but would provide the information to the Committee in writing.

The Chairperson asked the Department to present the underlying issues regarding the high number of cases at some stage.

Ms Steyn expressed her concern regarding the money spent on court cases and asked what the Department did to avoid court cases.  

The Chairperson was concerned about who would benefit from the financial compensation in the case of Huma and other Families.

Mr Mdlalose replied that the case of Huma and Families was brought by direct access and it was agreed by the court that the claimants were dispossessed from the land and should be compensated. The Department wanted to pay the money according to the family trees but the lawyers wanted the money to be paid in their trust account and they would pay out money to the relevant parties.

The Chairperson said he suspected that a list of beneficiaries was already submitted in the Huma and Family case. He asked about the exact nature of the delays because the delays in court cases increased the interest payable.

Mr Mdlalose responded that he did not recall a list of beneficiaries in the Huma and Families case. The Department did take the issue regarding interest into account, but some cases were delayed because they went to court prematurely.

The Chairperson noted a communication problem regarding the court cases. It seemed as if the lawyers of the Department and the lawyers of the claimants mainly communicated amongst themselves and left the parties involved in the dark. He asked if the families were informed about the development of their cases and if they understood what was happening, because it seemed as if most cases were around lawyers who benefited financially from their services.

Ms P Xaba (ANC) asked how many families would benefit from the Msobotsheni and Gujini claims and wanted more details on the hectares involved.

Mr Mdlalose replied that he did not have the requested information at hand but would provide it to the Committee at a later stage. The amount that was reflected on the presentation referred only to the property and not the size of the land.

Ms Steyn was concerned that there was only one permanent judge appointed to deal with land claims and asked who appointed judges. She asked if the Committee could ask for the appointment of more permanent judges to deal with land claims. She also highlighted the lack of consistency in the report.

Mr Zulu asked if there was one land claims judge per province or one judge in the whole country.

The Chairperson responded that the Department of Justice and Constitutional Development appointed judges under the leadership of its Minister. He suggested that the Portfolio Committee engage with the Department of Justice and Constitutional Development on appointing more judges dealing with land claims.

Mr Zulu indicated that the President had set a time frame for indicating when all cases should be settled. He asked how this was going to be achieved with one permanent judge.

The Chairperson replied that it was good that the President had set a time frame for all cases to be settled, but the President should also see that more judges were appointed to deal with land claim cases.  He said that the Committee should engage with the Portfolio Committee on Justice on the issue. The Chairperson asked the Department to submit all requested information to the Committee not later than the 20 May 2011.

Department of Rural Development and Land Reform.  2010/11 Third Quarter Expenditure Report
Mr Protas Phili, Chief Financial Officer, DRDLR, gave the Department's presentation for the Standing Committee on Appropriations on the Third Quarter Expenditure Report 2010/11 financial year. The presentation would provide explanations and reasons for the under-spending of R621 million or 8.50% against linear target, more especially the 56.65% spent against current payments. It would also provide progress to date on the plan that was implemented by the Department to address the above under-spending.

A total roll-over of R495.7 million was approved by National Treasury in November 2010 whilst R487.5million was approved for the Restitution Programme and R8.3 million for year-end accruals (goods and services not paid by year-end). A further allocation of R28.1 million was made to the Department to cater for salary increases following the public sector wage strike. An amount of R478.5 million was re-prioritised during the Adjustment Estimate process from Transfers and Subsidies to augment the following departmental priorities withR8.1 million for information and communication technology (ICT) infrastructure and furniture for office buildings; and R470.5 million for current payments regarding goods and services.

The R470.5 million current payments for goods and services funded the newly created components, the establishment and the equipping of newly leased office buildings, including associated ICT infrastructure;  Rural Disaster Mitigation and Management and Technology Research and Development in support of the new rural development mandate to implement the Comprehensive Rural Development Programme (CRDP); funding of the National Rural Youth Services Corps (NARYSEC); the Occupational Specific Dispensation (OSD) and Job Evaluation (JE) costs to improve the services of Geospatial, Cadastral and Spatial Planning (specialists services); and augmentation of the insufficient allocation of office accommodation budget.

The Department had undergone a restructuring process to align its organisational structure and resources to the new mandate. A moratorium on the filling of vacant posts was put in place which was lifted in January 2011. The moratorium delayed spending on the compensation of employees and related goods and services expenditure, hence the 56.65% spent in the third quarter. The NARYSEC programme was implemented during September 2010; the planning for the training and activities took place during the third quarter, whilst payment was being made during the fourth quarter. Savings from current payments would be utilised to augment excessive expenditure in line with Section 43 of the Public Finance Management Act (PFMA).

The less than linear target expenditure was attributable to the delay in ICT infrastructure expenditure which was projected for September 2010 but only took place in February 2011 due to delays in finalising the lease agreement for newly leased office buildings with the Department of Public Works. The Restitution Grant budget was already depleted and there were still outstanding court cases to be settled. In order to prevent the accrual of interest and possible fruitless and wasteful expenditure, savings from other programmes would be used to settle the excessive expenditure in the Restitution Programme.

The Restitution budget decreased from R3.6 billion in 2007/08 to R2.5 billion in 2011/12. The reduction in budget was because the programme had been expected to be completed by 2008. Sections 38 and 39 of the PFMA placed a responsibility on the accounting officer to ensure that effective and appropriate steps were taken to prevent unauthorised expenditure and to ensure that there was effective risk management in place to prevent such from happening. Given the restitution exposure to date, the Department was compelled to re-prioritise an amount of R2 billion to pay urgent court orders and finalise critical outstanding claims. The R2 billion was funded by R1.5 billion shifted from Land Reform Grants and R0.5 billion received from the roll-over of funds as approved by National Treasury (NT). The shifting of these funds was requested through section 30 of the PFMA, i.e. during National Adjustments Budgets. Fiscal funding still remained a challenge, particularly for the Restitution Programme. Over the Medium Term Expenditure Framework (MTEF) period the Department had committed itself to finalise restitution claims within the allocated baseline. However, court orders would continue to be a challenge.

The Fourth Quarter Expenditure Report depicted progress to date. Spending trends had been monitored on a regular basis by the Executive Management Committee of the Department. Intervention Teams were put in place to improve turnaround times and to reduce red tape in the departmental processes. As a result, total spending increased from 66.6% in the third quarter to 93.9% as at 24 March 2011 (fourth quarter).

This was already an improvement from the previous year’s actual results which recorded final actual spending of 91.6% for the 2009/10 financial year. Savings from other programmes would be utilised to settle the deficit/ over-expenditure in the Restitution Programme to prevent the accrual of interest and possible fruitless and wasteful expenditure. The Department was confident of spending at least 95% of its appropriated final budget in line with the limitation imposed by PFMA in terms of shifting funds post the Appropriation Process.

Discussion
Ms N November (ANC) raised some concerns around the NARYSEC programme. She understood that youth received a stipend and asked whether skills were transferred and if the youth were developed.

Ms Steyn agreed that the issue around the youth needed more attention. She said that it was going to be difficult for the Department to budget on restitution if the Committee that budgeted on the issue had no figures. She did not view the court orders as a challenge, but the undisclosed figures. She noted that the payment on capital assets in the fourth quarter was 51.8% and asked why the percentage could not be improved.

Ms Ngwenya-Mabila thanked the Department for a much improved document and asked for more clarity on the payment on financial assets.

Mr Phili replied that the figure indicated was notional. The account would have been closed if there were no figure indicated. The Department therefore inserted the figures to avoid account closure.

Ms Ngwenya-Mabila asked for an explanation on how the payment on capital assets could be 61.28% in the third quarter whilst 51.8% in the fourth quarter. 

Mr Phili said that the 146% indicated on the fourth quarter payments for capital expenditure should have been the actual position whilst the 51.8% was the current position.

The Chairperson indicated that the key issue was not about the amount spent, but the consistency that in the report. He asked Mr Shabane to explain the inconsistency.

Mr Shabane believed that the answer given by Mr Phili was consistent.

The Chairperson said the payment for financial assets indicated R2.320 million and the percentage was therefore not meaningless. He said the presentation lacked consistency and advised Mr Phili to present his reports in a clear, simple and coherent way in the future.

Mr Phili responded that the figure “1” indicated in the payments of assessment for the third and fourth quarters acted as a denominator to keep the account open and would be adjusted at the end of the year.

Department of Rural Development and Land Affairs. Memoranda of Understanding between the Department and other sister departments on the implementation of the Comprehensive Rural Development Programme. Response
Ms Leona Archary, Acting Deputy Director-General: Rural Infrastructure Development, presented the Department's response to the Committee. Ms Achary stated the DRDLR had Memoranda of Understanding with the Human Sciences Research Council (HSRC) and the Agricultural Research Council (ARC) regarding research on innovative technology and on youth related matters for the NARYSEC programme. The Department of Defence had to provide non-military training to NARYSEC participants; the National Youth Development Agency (NYDA)was to provide support to the NARYSEC programme; and the various Further Education Training (FET) Colleges were to provide training in various skills areas for NARYSEC participants. The Development Bank of Southern Africa (DBSA) and the National Development Agency (NDA) had to provide research in rural livelihood and social development. The ARC had to play a role in the training of Master Gardeners.

The Eastern Cape Departments of Agriculture and Rural Development, Economic Affairs, Health, and Education had agreed to be involved with Ilima collaborations with Agri villages. The South African Graduates Development Association had to provide training whilst the Perishable Products Export Control Board agreed to hold village production value chain meeting with Agri Parks. The Department of Trade and Industry took on the responsibility for enterprise development, and the North West Public Works, Roads and Transport Department was to develop road construction. The Mpumalanga Department of Human Settlements and the Mpumalanga Department of Agriculture and Rural Development agreed on the construction of 130 houses; the Eastern Cape Department of Public Works, Roads and Transport had to build a bridge and offer road construction, and the Siyanda District Municipality in the Northern Cape took on the responsibility for the Water pipeline project.  The Independent Development Trust (IDT) had to assist with technical support of the Comprehensive Rural Development Programme (CRDP), the Post Office had to see to the roll out of e-Rural Access Programme (e-RAP) Centres, and the Free State Department of Public Works agreed to be involved with CRDP collaboration on projects.

Discussion
Ms Ngwenya-Mabila said it seemed as if the document was written in a hurry and it did not reflect all the details which Ms Archary had presented to the Committee. The document needed to be specific, clear, and detailed.

The Chairperson agreed with Ms Ngwenya-Mabila that the document was inadequate and more could have been done.

Ms Steyn requested more information on the NARYSEC Programme and asked which institution was monitoring NARYSEC. She asked about the idea behind NARYSEC and what its goal was. She asked if there was a skills transfer in the NARYSEC programme because to her it seemed like a repetition of the Public Works programme.

The Chairperson said there was documentation available on the NARYSEC programme but more clarity was needed regarding its institutionalisation.

Ms Xaba said there were reports that some people in the NARYSEC Programme received a monthly stipend of R1 000 but did nothing and received no training. She said the initiatives on paper looked good but were not visible.

The meeting was adjourned.