Green Paper on Land Reform: briefing by Minister of Rural Development and Land Reform

Rural Development and Land Reform

19 September 2011
Chairperson: Mr S Sizani (ANC)
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Meeting Summary

The briefing covered the key policy questions addressed in the Green Paper and presented the vision and new trajectory proposed for land reform. The proposals included the establishment of three new institutions: the Office of the Valuer General, responsible for valuing land in a nationwide reliable hub; the Land Management Commission to coordinate land management and the Land Rights Management Board. A new four-tier land tenure system separated communal ownership of land as a category and set parameters for foreign ownership.

Some Members expressed concern over the constitutionality of the proposed Land Valuer-General and the responsibilities it would have. Concerns over the cost of new institutions, land-price regulation and capacity deficiencies were also raised. The Green Paper’s focus on colonialism and apartheid as a cause for land reform, while ignoring more recent government inefficiencies, was raised as a concern. Several members asked question about the outstanding Land-Audit and emphasised the need for clarity on current government land ownership. Foreign-ownership legislation was widely questioned. It was suggested that current policy might be adequate if fully implemented. The equality of the four-tier system was also questioned. Questioning was largely incisive and critical but the discussion was cordial and not heated.

Meeting report

Briefing on the Green Paper on Land Reform
Minister of Rural Development and Land Reform, Mr Gugile Nkwinti, stated that the Green Paper was a discussion platform and that the South African citizenry would be allowed to influence the detail. Land was an emotive issue, yet as a national asset, it must be dealt with head on, such that all people feel satisfied that it has been dealt with. The Green Paper focussed on the proposal for three new institutions: The Office of the Land Valuer-General, the Land Management Commission and the Land Rights Management Board. The four-tier land tenure system and amendments to legislation on the land restitution model were also critical issues it covered. The important aspect of the four-tier system was the separation of communal ownership of land. Communal ownership related to both traditional communities as well as land which was communally owned, such as land claimed from farms by people who had resided there for the prescribed period of time. Communally owned land had been separated as a tenure system from the other tiers as it was more complex and required a lot of consultation. Though the recent nullification of the Communal Land Rights Act (CLaRA) by the Constitutional Court was based on procedural issues, there was an implied substantive issue that related to constitutional aspects of CLaRA. There should be great care taken in dealing with communal tenure so that ownership and use rights were both institutionalised to protect rights enshrined in our Constitution.

Mr Sunday Ogunronbi, Chief Director of Policy Research and Legislation for the Department of Rural Development and Land Reform, noted that the Green Paper had been published in the Government Gazette on 16 September. He outlined the five key policy questions addressed in the Green Paper: Why should the state invest in land transformation? What was the importance of land reform in South Africa today? The question of the relationship between the people and the land should be addressed with the question of whether South Africa was primarily an agrarian society. Questions of demand for land and the prospective beneficiaries of reform should be located within the historical context of dispossession. Lastly, there was the question of how land reform can be effected to create a radical and rapid break from the past without significantly disrupting agricultural production and food security.

He then addressed the policy statements of the Green Paper, highlighting the importance of land reform for national identity and the constitutionality of citizenship. The vision for land reform was summarised in four objectives addressing: land tenure, property rights, non-citizen land tenure and effective land-use and regulatory systems. The principles for land reform, the proposed new trajectory and the strategic thrust were outlined next. Past policy weaknesses such as the land acquisition strategy and resulting distorted land market and beneficiary selection process were acknowledged and issues specific to communal tenure were addressed. The key land reform policy components needing review were listed.
The four tiers of the proposed land tenure system were:
? State & Public Land: Leaseholds;
? Private Land: Freehold Title with limited extent;
? Foreign-owned land: Precarious title with regulatory limitations, obligations and conditions
? Communally-owned land proposed to be mixed uses with institutionalised use rights (to be dealt with separately)

For state and public land,
? Due to the separate and different public land management for local government and the absence of legislation to compel the three spheres of government to consult one another in the event of intended disposals, paralysing fragmentation impacted negatively on service delivery and accountability.
? The current fragmentation made it possible for any sphere of government to dispose of any property which could have been utilised to achieve service delivery objectives by another.
 The immediate thrust of leasehold tenure on State and Public land was that the State be able to keep land in State hands.

For private land,
? South Africans continue to exercise freehold rights over land;
? Regulatory limitations be placed on the freehold titles held by South Africans in respect of:
- prime and unique agricultural land, sustainable utilisation of land, subdivision of rural/agricultural land;
- non-resident ‘absent-landlord’ properties, land quantity restrictions, special consent and approval regimes on selected controlled land, right of first refusal, etc.

Regulatory limitations for foreign-ownership were proposed. There had to be strict compliance with obligations and conditions; partnership by foreigners with South Africans in respect of land-based investments in the country; exclusion from sensitive and national security land such as communal, coastal, heritage, rural, agricultural, environmentally-sensitive, security-sensitive, and border lands; and controlled transactions such as transactions valued at a prescribed threshold, non-resident ‘absent-landlord’ properties, and land quantity restrictions be subject of special consent and approval regimes

Three new institutions were proposed to support the new trajectory. In creating the Land Management Commission (LMC), the key motivation was to create an overarching umbrella authority to oversee, coordinate and monitor the execution of land management functions by all state and public land custodians to ensure compliance with the agreed policy of government on land management. The LMC would act in the following capacities: (a) advisory; (b) coordination; (c) regulatory; (d) auditing; and (e) reference point.

The second proposed institution was the Office of the Valuer-General. Such an institution existed in other countries. The key motivation for its creation was the lack of a comprehensive nation-wide reliable hub of property values. There was no macro reference point for land-valuation. Expropriation was not limited to market value. The Constitution assisted courts in deciding when market value would be considered and when not. Variances on land valuation had been quite extreme and conflicts of interest had been problematic. In the land market, the state was almost an unwilling buyer and unhelpful valuations had been done for compliance purposes. Further responsibilities of the Office of the Valuer-General were provided.

The Land Rights Management Board would be composed of representatives from various land-ownership sectors with particular professional expertise and it would maintain harmony and build institutional capacity (full list of functions on page 21).

In conclusion Mr Ongunronbi noted that the solution could not be mechanically applied and that time and enduring effort would be required.

Ms Lindiwe Mazibuko (DA), Shadow Minister for Rural Development and Land Reform, thanked the Minister and Department for the presentation. The most important question was the ‘diagnosis of the problem’. The propositions in the Green Paper were based on a particular diagnosis. A lot of the blame was rightly apportioned to colonialism, apartheid, and the 1913 Land Act, but with no acknowledgement of what the government had done wrong subsequently or that recent policy and implementation had contributed to problems. This was an important part of proposing solutions because diagnosing current capacity problems was crucial in order to handle the proposed new work in the Green Paper. Why was the diagnosis of the problem so limited?

Mr Thulas Nxesi, Deputy Minister of Rural Development and Land Reform, responded that it was not correct that the diagnosis was so limited. The production from land that had been transferred was assessed; many of the farms transferred to black ownership had failed. The Department had been upfront on this matter. However this should not come as a surprise. The apartheid system had dumped black people in the rural areas and simultaneously denied them meaningful access to productive agricultural land. Land transferred without the provision of follow-up training and support, set up failure. However, the damage done prior to 1994 should not be run away from. The degradation map of South Africa showed that the ‘homeland’ areas had very little arable land. The way land was distributed during white South Africa must be addressed. Degradation was worsened by over-crowding and over-grazing. People felt the interventions made so far were merely tinkering and not a substantive response.

Minister Gugile Nkwitni responded that the many challenges were summarised on pages nine and ten and in the conclusion of the presentation. There was a critical look at the state and certain system failures. Legislation had not been implemented fully. This was an indictment on society as a whole, not only the ANC or DA et cetera. He appreciated the point being made, but re-affirmed that there had been a critical assessment.

Ms Mazibuko commented that Section 25 of the Constitution, in the Bill of Rights, stated that valuation was up to the courts. Therefore the Valuer-General proposition was an unconstitutional proposal in the policy document. Was research conducted to check whether or not this was feasible in terms of the Constitution?

Mr Ogunronbi responded that the Constitution imposed an obligation on the courts to determine compensation payable where there was no agreement. The Valuer-General would provide the parameters within which compensation should be payable; the Constitution did not prohibit this assistance. It would offer a framework which courts could use to implement decisions and determine price.

The Minister referred members to Sections 25 and 36 of the Constitution and added that constitutions were tools created to help society move forward in particular directions. When society became stuck in moving forward it must have the courage to review the Constitution and amend it accordingly if needed. If there were aspects of the Green Paper suggested to be unconstitutional, then the Department would ask Cabinet to change the Constitution in order to achieve the objectives of the country.

Ms Mazibuko asked if the proposed institutions had been costed and whether they could be afforded.

Mr Ogunronbi responded that a regulatory para-assessment would be conducted which would give a cost benefit analysis and the implementation implications of the proposed organisations.

Mr Mdu Shabane, Director-General: Department of Rural Development and Land Reform, added that the LMC and Valuer-General would save the Department money on land acquisition. As required by Cabinet and Treasury, a regulatory impact assessment and cost-benefit analysis would be conducted.

Ms Mazibuko commented that the Land Valuer-General was essentially a proposal for price regulation. The responsibility was with the Department to employ the right skills internally to ensure that fair prices be attained. Price regulation in areas such as food had international consequences; what would be the knock-on effects of land-price regulation? Had research been conducted on this issue?

Mr Ogunronbi responded that it was incomplete to suggest that the policy was about price regulation. There was a duty to establish stability in the land market so as not to disadvantage certain sectors of society. This had many socio-economic implications. In certain instances prices were artificially inflated through, for instance, the acquisition of different land rights (such as unneeded development rights for farmland). This distorted the market. The Valuer-General would provide parameters to fairly determine land values and mitigate the irrelevant factors that inflate prices. This had been done in other countries. Stability and predictability in the land market served the interests of the country.

Ms Mazibuko asked for clarity on the definition of ‘appropriate land investments’ in respect of foreign ownership. What research indicated the concerns listed on page 15? What was the basis for this radical intervention? Research conducted by the former Minister of Rural Development and Land Reform in 2004/05 suggested that foreign land-ownership was no more than 3% and legislation had been abandoned as a result.

Mr Ogunronbi responded that South Africa was one of only a few countries without regulation on foreign ownership. It was a red herring to suggest that the percentage of foreign-owned land should determine the need for regulations. The geography and sensitivity of the land had more significance. Agricultural land acquired by foreign governments had implications for food security, for example. A World Bank study on land grabs released in 2010 showed that large amounts of land in areas considered fertile across the globe were bought by supposedly private investors backed by foreign states. The World Bank acknowledged this as a problem. The question of national interest was not easily defined, but criteria were needed for determination. These could be reviewed by the courts. This would inform what were considered appropriate investments. Developed economies stopped investments not considered to be in the national interest.

Mr Shabane added that panel of experts had been established by the former Minister and that many of these propositions came from recommendations by that panel.

Mr Nxesi added that it was not the first time the issue had been an international debate. Some of the agricultural land along both coasts of the country has been converted to game reserves or golf estates. Against the background of food security and water scarcity should prime agricultural land be used for golf? Western democracies were quick to protect sensitive land. Not everything should be left to the market.

Ms Mazibuko expressed concern at the proposed responsibility for audits by the LMC, given the failure of this Department to complete a long outstanding audit of all state-owned land. Was there no way the Department could commit to halting land acquisition until the land audit was complete? How could land acquisition continue without a complete audit? It may be found that up to a third of South African land was already government-owned and could be used for reform purposes.

Ms A Steyn (DA) expressed concern that the system proposed was more unequal than the previous one. When would a more equal system be adopted? There was great emphasis on race within the policy document. The proposed policy provided different rights to different people. When would there be a system in which all people were equal?

Mr Ogunronbi responded that there was a move away from a tenure system that gave security only to those with freehold tenure-ship. The emphasis would be on security in all four tiers which could not be offered in a uniform system.

Ms Steyn expressed concern that the Green Paper attempted to fix things which could rather be fixed through better implementation of the current White Paper. Many Acts put in place since 1994 had not been implemented, some with particular relevance to land reform. Chasing the 30% land redistribution target may have become a distraction. The White Paper in Box 5.3 stated that 12% of state land was used for public purposes and 13% of state land was held by individuals and on behalf of communities. Since 1994 transferred land was 6 or 7%. This was only the land currently known about and it totalled 31%. That does not into account land privately owned by black communities which the state should give more attention to and assist because those people really want to farm. They took the trouble to buy land themselves. The document is not clear on how we are going to assist people who of their own want to farm and make a contribution to this country.

Mr Nkwinti responded that it was true that good policies and legislation were in place. A new institutional framework was required to implement the policies. It was not only a matter of human capacity deficiencies, but also institutional deficiencies which the proposed institutions would correct.

Ms Steyn expressed serious concern over the proposed authority given to the LMC for the validation and invalidation of individual or corporate title deeds. Why was this in the document?

Mr Ogunronbi responded that there had been instances in the deed registration process of wrongful acquisition of land. The LMC would investigate and establish whether those acquisitions were lawful.

Nkosi Z Mandela (ANC) thanked the Department for the presentation. He asked when the Land Audit would be completed and emphasised the need for comprehensive knowledge of what land was owned by Government before other issues could be assessed. When will we ever get a report from the Department about how much land is owned by the state and thoroughly assess what is there before we look at other things.

Mr Shabane responded that the Department did know what was owned. There were 123 million hectares of land in South Africa, 83 million hectares were privately owned. Not more than 30 million hectares of that was state-owned. The precise position in terms of deeds registration was not always known.

Nkosi Mandela asked who defined the role of traditional authorities. Traditional leaders owned a huge amount of land in rural areas; how was the Department forging relationships with these authorities and ensuring there was institutional capacity there? He suggested that the LMC duplicated the role of traditional leaders who were the custodians of communal land and they should be capacitated.

He noted that historic dispossession of land needed consideration, whether from the colonial or apartheid eras. What were the Department’s thoughts on this? Geography meant that peoples were affected differently and at differing times and eras. Some people were dispossessed of their land more than a hundred years ago. This affected land claim applications and rights. Had the Department given this enough consideration? 

Mr S Ntapane (UDM) commented that the significance of the issue must be kept in mind; it was a ticking bomb. South African blacks were over-populated in the barren parts of the country. They did not have the money to allow access to fertile land. The Valuer-General could be valuable in stabilising the property market against the distortion caused by foreign buyers with stronger currencies. This was necessary for private land as well. He expressed wariness that new wrongs were not created when correcting the wrongs of the past. He requested that the Minister re-open land claim applications because so many had been unable to submit in time. The creation of the proposed new institutions might aid in dealing with the backlog of the courts which significantly slowed the process. The issue was a ticking time-bomb.

Mr Nkwinti responded that in consultations held with over 3000 people about the Green Paper, the need to reopen land-claim application date was highlighted. Poor research had excluded many deserving people and verification methods had been out of order.

Ms Steyn commented that four to five percent of land was put on the market every year. She asked why there was a stipulation to ‘limit extent’ if there was not a problem of land-scarcity, but of pricing. Was the limitation of extent intended to scare investors off and thereby reduce land prices? What was the reasoning behind the stipulation?

Mr Shabane answered that availability in the land market was not the main factor. The land could be available for any number of reasons. The condition of the land, for instance, might require major recapitalisation beyond the means of farmer. Location was important; proximity to markets was another critical factor. The willing seller willing buyer model was a choice by government, not a constitutional principle. The complete reliance on market value did not apply all the principles of Section 25 of the Constitution.

Nkosi Mandela asked how food security would be addressed in rural areas, particularly in the context of communal land tenure.

Mr Nkwinti added a final comment that the land claim model was extremely complex. It needed to address equity and not just reconciliation. The model was being challenged on the basis of equity. He thanked members for the guidance they had given.

The Chairperson commented that this was merely the first bite and that there was still a great deal to debate. More opportunities would be given. It was important to offer the public guidance; confusion in the public domain would have ongoing repercussions.

The meeting was adjourned.



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