Communal Property Associations Annual status and performance report: Department's & Deputy Minister's briefing

Rural Development and Land Reform

30 August 2011
Chairperson: Mr S Sizani (ANC)
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Meeting Summary

The Deputy Minister and the Department of Rural Development and Land Reform presented the annual report on the status and functioning of Communal Property Associations (CPAs), as required under the enabling legislation. This was the first annual report that had been presented for 14 years, but the Department had recently instituted a turnaround strategy and was attempting to bring the CPAs into full compliance, and to address a number of difficulties that had built up since 1996, when communities were first empowered to form juristic persons to be known as CPAs, for the purpose of joint ownership of land, and in line with a written constitution. There had been poor compliance with the Act in all provinces. There were about 1 500 CPAs, provisional associations and similar entities, and the Department had managed so far to investigate 887. Only 59 were keeping financial statements, 241 had convened Annual General Meetings, but only 173 had kept minutes of those meetings, 224 had changes to committee members without notifying the Department and four were under administration. In addition, 34 had not had their land transferred, and some did not know their registration numbers, whilst others were untraceable.  Struggles for control and access to resources were prevalent, either between members of the CPAs, or between the CPAs and traditional authorities. All CPAs needed assistance from government, in the form of funding, capacity building, skills development or mentorship. The Department was in the process of developing a complete turnaround strategy, was training officials and would be amending the Act. It was necessary to try to develop tailored interventions as the needs of each CPA differed. Phase 1 involved regularisation, with appointment of mediators, facilitators and legal experts, to restore the CPAs to acceptable levels of functioning. Phase 2 would deal with operational issues, and the RDP programme should bring the farms into full production, and would be directed also to giving help to the farms that were working, to meet the objective of consolidation of commercial farming. A new unit had been developed in the Tenure Systems Reform Unit of the Department to support this.

Members were concerned that not much appeared to have happened since the Department had last reported to the Committee. They asked for clarification on the numbers, and on conditions that would lead to CPAs being placed under administration, as also the reasons why some were marked as “untraceable”. Members were concerned with the financial and human resources requirements for turnaround and asked when it was likely to be implemented. They enquired about the two matters that would require the most work, and asked if the land was able to be used for anything other than farming.

Members adopted minutes of 14 and 15 June 2011.

Meeting report

Communal Property Associations Annual Report: Department of Rural Development and Land Reform briefing.
The Chairperson noted that the meeting would hear the Annual Report of Communal Property Associations (CPAs) that was to be presented by the Department of Rural Development and Land Reform (DRDLR or the Department). He explained that many issues had been highlighted since the legislation was first drafted. Some of these problems had received more immediate attention than others but he was confident that the DRDLR was making progress.

Mr Vusi Mahlangu, Acting Deputy Director General, Department of Rural Development and Land Reform, firstly explained that the report was submitted in order to comply with the requirement that the Department submit annual reports to Parliament on the status and performance of the CPAs, in terms of the Communal Property Associations Act (the Act). This Act had been promulgated in 1996 to enable communities to form juristic persons, to be known as Communal Property Associations, in order to acquire, hold and manage property on a basis agreed to by members of a community, in terms of a written constitution. This particular report covered the performance of CPAs for the period 1 April 2009 to 31 March 2010. Mr Mahlangu highlighted that the Department was submitting this report for the first time in fourteen years, and reminded them that the DRDLR was instituting a turnaround strategy to improve the poor conditions on the ground.

Mr Mahlangu explained that a national study by the Department into the functionality of existing CPAs had found that there was poor compliance in all provinces. Mr Mahlangu added that there was a detailed account of each province’s CPA status and performance set out in the report.

Mr Mahlangu explained that about 1 500 communal property associations, provisional associations and similar entities had been registered since 1996. The investigation found multiple cases of non-compliance by the CPAs to the requirements of the CPA Act. 887 registered CPAs were visited. Of those, only 59 had financial statements, 241 had convened Annual General Meetings, but only 173 had kept minutes of those meetings. Four CPAs were currently under administration and 224 had experienced changes in committee members. Mr Mahlangu also highlighted that there were yet more problematic findings – namely the 34 CPAs that had not had their land transferred to them, the CPAs with missing registration numbers, and untraceable CPAs. He said that the issue of missing registration numbers was currently being rectified.

Mr Mahlangu emphasised that there were often continuing struggles for control and management of CPAs, between CPA Committees and Traditional Authorities. As a result, some CPAs could not hold meetings without the permission of the Traditional Authority in its area of jurisdiction. Furthermore, in-fighting was prevalent amongst CPA committee members for control of CPAs and access to resources. Mr Mahlangu claimed that all CPAs, in one way or another, needed assistance from the government in the form of funding, capacity building or skills development, and mentorship, in order to be empowered to run their businesses in a profitable and efficient manner.

Mr Mahlangu understood that his Department had a tough task ahead, but assured the Committee that the Department was in the process of developing a roll out plan and turnaround strategy, to train officials on the implementation of the CPA Act, and had also drafted technical amendments to the Act, which were soon to be tabled to Parliament. Mr Mahlangu explained that the aim of the strategy was to provide institutional State backing, to ensure compliance. Mr Mahlangu added that as CPAs had different needs, it was necessary to formulate an intervention that did not follow a “one-size-fits-all” approach. Furthermore, he assured the Committee that systemic issues would be dealt with through the proper roll-out process.

Mr Mahlangu explained that Phase 1 involved the regularisation of CPAs and trusts. He noted that mediators, independent facilitators and legal experts had been appointed to regularise the CPAs. Their objective was to restore under-performing and distressed CPAs to acceptable levels of functionality. This would involve conducting fact-finding investigations into issues of governance and instability, during which issues in dispute, the needs of CPAs and communication problems could be identified, as well as deciding upon the status of dividends for CPA members, and the development of an implementation plan.

Phase 2 was fundamental to dealing with the operational issues of which he had already spoken. The Recapitalisation and Development Programme (RDP) aimed to assist land reform beneficiaries in a number of ways, which included bringing most of the unproductive farms into full production, guaranteeing food security, creating jobs in the agricultural sector, and enabling the graduation of subsistence farmers into commercial farmers. Mr Mahlangu noted that Phase 2 was meant not only for distressed farms, but also extended to good farms, since the Department’s objective was the consolidation of commercial farming. Mr Mahlangu emphasised that the implementation of the plan was wholly contingent on levels of funding.

With regard to institutional capacity, Mr Mahlangu added that the Department had established a new unit within the Chief Directorate: Tenure Systems Reform, which would support the implementation of the CPA Act and report to Parliament annually on all the registered CPAs. In addition, the Department had established a new Branch whose responsibility it was to deliver community-level support and assistance.

Ms A Steyn (DA) thanked the Department for all the work it had been doing and for the effort that had been put into the compilation of this report. She expressed concern, however, that not much appeared to have changed since the last report was presented in June 2011. She asked for clarification on the actual number of CPAs that had been registered, as the numbers in the report were not very specific. Ms Steyn also noted that on a number of oversight visits the Committee had identified CPAs under administration, although the members did not appear to be aware of this. She said she was unsure about the conditions that would cause CPAs to be placed under administration, and asked for further details on this. She also asked what the situation was with the “untraceable” CPAs.

Ms N T November (ANC) was curious about the financial implications of the turnaround strategy. She was also concerned with whether the Department had enough manpower for the project. She asked for the approximate amount that the Department thought was needed to help the CPAs. She asked when the strategy was likely to be fully implemented so that continuous monitoring could then start.  

Mr Mahlangu assured the Committee that although many of the issues were indeed long-standing, the Department had now developed a comprehensive action plan, and was confident that there would be progress. He noted that the figure of registrations was constantly changing, as there were new registrations of CPAs on almost a daily basis, which made it difficult to pinpoint the numbers in the report. He explained to the Committee that 1 200 CPAs had been officially registered and that a further 300 provisional cases were being investigated.  

Mr Mahlangu expanded a little on the issue of CPAs being put under administration. This would happen after a set legal procedure had been followed. The notification would be made via the Deputy Director General. Any member of a CPA could apply to have the relevant CPA put under administration, and in practice cases usually involved gross manipulation of funds, or poor management. If the manipulation of funds exceeded R100 000 then the case was referred straight to the High Court. Ideally, issues between members should be settled by mediation, but in the cases of unresolved conflict there was no option other than for the CPAs to be put under administration.

Mr Mahlangu stressed that the Department wanted to ensure that all concerns related to governance and instability were tended to before movement to Phase 2, as that phase would deal with different problems.

He noted that the Department anticipated that R16 million would be needed for fact-finding, and R220 million for recapitalisation and development of the CPAs.

Mr Mahlangu then addressed the question on untraceable CPAs, explaining that after the reform of land systems began in 1994, it was found that many properties had been split up or their boundaries had changed, although there were still “unofficial” property lines drawn. An internal audit had brought many certificates to light, but beneficiaries in the CPAs continued to come and go in the meantime. Provincial officers had not always kept an accurate long-term account of property ownership.

Ms Steyn noted that the Committee was still waiting for the names of farms that required extensive work.

Mr Mahlangu noted that there were 504 cases that required to be recapitalised and developed. Two of them had ongoing disputes – namely Kudung and Richtersveld. The service provider who released the findings on the functionality of these CPAs had recommended urgent intervention in the form of official investigations. The service provider and the Department were aware that the process of regularisation would not be quick or easy, but in fact was meant to be meticulous and to try to highlight operational problems.

The Chairperson expressed concern over lack of manpower.

Mr Mahlangu assured the Committee that third party would be hired and that the issues would not merely be dealt with in-house.

The Chairperson asked if the Department would allow members of CPAs to use the land for anything other than agriculture.

Hon Thembelani Nxesi, Deputy Minister of Rural Development and Land Reform, emphasised that if the land was arable then it ought to be used for agriculture, but this was not always the case. He mentioned some particular cases that he had witnessed in Limpopo where there was conflict between modern and traditional institutions. Eventually these issues become political issues. He said that although the language used in constitutions of these bodies was not always clear, the mandate of the people must be regarded as paramount.

Adoption of Minutes
The Chairperson Sizani asked if there were any changes to be made to the minutes of the meetings of 14 and 15 June.

Members responded that there were none, and the minutes were adopted.

The meeting was adjourned.


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