Amakhabela Land Claim, Mkhuzangwe Community Property Association issues: Department of Rural Development and Land Reform, Project Members, & National Land Claims Commissioners briefings

NCOP Land Reform, Environment, Mineral Resources and Energy

15 October 2013
Chairperson: Ms A Qikani (Eastern Cape, ANC)
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Meeting Summary

The Department of Rural Development and Land Reform (DRDLR) briefed the Select Committee on Land and Environmental Affairs on the Amakhabela Land Claim, and the difficulties which had become apparent between the Mkhuzangwe Community Property Association, the Department and Crystal Holdings over land that had been resettled, which was a matter that came to the attention of the Committee during an oversight visit to KwaZulu Natal. An overview focused on the purpose of land restitution, its strategic objective, the background to the claim, the approved settlement by the Minister, post and current settlement arrangements. A brief description of the work that the DRDLR did with community properly associations, and the problems that arose through their non-registration, was outlined.  

The background to this matter was that the Commission on Restitution of Land Rights (CRLR) was responsible for investigating and processing restitution claims. The Amakhabela Land Claim it was lodged on the 16 January 1996 with the CRLR. The claim was investigated and found to be in compliance with the criteria set out in Section 2 read together with Section 11 of the Restitution of Land Rights Act. In 2003, the Office of the Regional Land Claims Commissioner KwaZulu-Natal undertook an extensive verification exercise to identify the originally dispossessed members of the claimant community and, in their absence, to find their descendant beneficiaries. 267 households and 200 beneficiaries formed the core members of the claimant community. In 2004, the Gayede Community Trust was established by the claimant community and registered with the Master’s office. Land was purchased for the Gayede Community to the tune of R40 million. The Mkhuzangwe Community owned 60% and Crystal holdings owned 40%, in terms of the Shareholder’s Agreement. In 2005, Crystal Holdings approached the High Court for an order declaring the Shareholder’s Agreement as valid and sought to interdict the DRDLR and RLCC from interfering in the relationship between the two parties. The DRDLR had recommended that the Trust should terminate the Lease Agreement with Mkhuzangwe and recover outstanding rental money, that there should be disinvestment and that a new strategic partner develop a business plan. There were allegations that the community property association was not properly formed.

Representatives of the Mkhuzangwe Community explained that when the land claim was granted, it had been promised money, settlement of the remaining portion of the claim and assistance in identifying a partner with whom to work. However, when the DRDLR visited, it was accompanied only by Crystal Holdings, and the people gained the impression that they had no choice other than to partner with them. No money was paid, nor implements with which to farm or irrigate, and eventually the community had found funding through the companies to whom they would be selling their goods. The interdict had made it impossible to continue.

Members said that there had clearly been some serious problems and failure to honour undertakings, with which the DRDLR agreed, but suggested that more information was needed. Since the relevant people were no longer with the DRDLR, it was impossible to try to deal with historic matters. The Community was asked to produce documentation, including its constitution, and a further meeting would be arranged, attended by all stakeholders, to try to isolate and reach agreement on the issues. A positive was that the community and DRDLR had already started to resume their communication.

Meeting report

Opening and Welcoming Remarks
The Chairperson opened the meeting by welcoming the Department of Rural Development and Land Reform (DRDLR or the Department), Project Members, and the National Land Claims Commissioners, who had been invited to brief the Committee in an attempt to address and possibly resolve issues that were raised by the Mkhuzangwe Community Property Association (CPA), which had been noted by the Committee during visits to KwaZulu Natal (KZN).

Mr Vusi Mahlangu, Deputy Director General, Department of Rural Development and Land Reform, said that on the previous week the Department had presented the CPA’s Annual Report, in line with statutory obligations, but he would report to the last week Tuesday, they’ve presented the CPA Annual Report. These reports covered both the CPA and the Trust.

He noted that 1 350 CPAs were registered with the Department; some were holding land and some were not holding land. The DRDLR had an obligation to assist them in terms of governance issues, skills development, financial management, and so forth. It had been difficult for the Department to cover all the CPAs. As a result, a decision was taken in 2011 that about 100 would be identified – comprising around 10 from each province plus a further ten – to see what kind of assistance the DRDLR could give. DRDLR had been working closely with them, trying to assist with facility management and governance, which involved looking at their Constitutions and whether this was in line with what the CPA members wanted, elections, whether these were done regularly and their books and audits. The reports painted a very bleak picture. Only eight out of 1 350 were regularised and adhering to the regulations of the CPA Act. Consequently, the Department was in the process of amending the CPA Bill so that it could be user friendly and to allow for greater intervention in the CPAs, especially in the Trust. He pointed out that it was rarely that the DRDLR would intervene in the Trust; it only mostly intervened through the CPAs when there were issues.

Amakhabela Land Claim
Mr Nhlanhla Mndaweni, Chief Director, DRDLR, said that the purpose of land restitution was aimed at settling land restitution claims under the Restitution of Land Rights Act (Act No. 22 of 1994). The Commission on Restitution of Land Rights (CRLR) was responsible for investigating and processing restitution claims, and then making awards, either of land, or through alternative forms of equitable redress, to claimants whose land rights were dispossessed as a result of past racially discriminatory laws or practices, after 19 June 1913 (the date on which the Natives Land Act of 1913 was promulgated).

Mr Mndaweni described the background of the Amakhabela Land Claim. It was lodged on 16 January 1996 with the CRLR. The claim was investigated and found to be in compliance with the criteria set out in Section 2, read together with Section 11, of the Restitution of Land Rights Act. Consequently, the claim was published in the Government Gazette by Notice No. 24964 dated 7 March 2003.

In 2003, the Office of the Regional Land Claims Commissioner KwaZulu-Natal (RLCC-KZN) undertook an extensive verification exercise to identify the originally dispossessed members of the claimant community and/or in their absence, to find their descendant beneficiaries.  The outcome of this exercise resulted into the identification of 267 households and 200 beneficiaries forming the core members of the claimant community. In 2004, the Gayede Community Trust was established by the claimant community and was registered with the Master’s office to receive and manage the claimed land, for and on behalf of beneficiaries of the claimant community. Land was purchased for the Gayede Community to the tune of R40 million. The community owned 60% and Crystal Holdings owned 40%, in terms of the Shareholder’s Agreement.

Mr Mndaweni said that in 2005, Crystal Holdings approached the High Court for an order declaring the Shareholder’s Agreement as valid as well as interdicting the RLCC from interfering in the relationship between the two parties. The Court granted the order.

Mr Mndaweni said that the delegation of the National Council of Provinces that recently visited the Project resolved that the matter be referred to the Select Committee on Land and Environmental Affairs so that Parliament could deal with the matter. It was recommended that the Trust should terminate the lease agreement with Mkhuzangwe CPA and recover outstanding rental money. The Trust should disinvest from Mkhuzungwe or have it liquidated. In terms of the interdict application against the RLCC (and Department) by Crystal Holdings the recommendation was that if the Trust should disinvest from Mkhuzangwe, the interdict would become academic and the Department would be able to provide support to the community. With regard to recapitalisation and development, one solution was that this could be provided where the environment was conducive, and where parties were willing to work together, otherwise limited resources were wasted.

The recapitalisation process would involve the appointment of a strategic partner to develop a business plan, the presentation of the business plan to the Provincial Technical Committee, the presentation of the business plan to the National Land Committee, the approval of the recapitalisation memo by the Deputy Director-General of Land Reform, and the release or transfer of approved recapitalisation funds.

Mr Mndaweni concluded that other issues requiring attention in the Gayede Community Trust were the continued involvement of the Trust in Mkhuzangwe, the rebuilding of relationship between the Trust and the Department, the election of new Trustees, and structured community meetings to give progress reports to the community.

Mkhuzangwe Community briefing
Mr Mandla Dhlomo, Director: Mkhuzangwe Community, said that it was a pity that the people from the Department who had held office at the time when this whole process started were no longer present. The CPA understood that some mistakes had been made, but it was not correct that Crystal Holding directly approached the CPA. Crystal Holding came to the community, along with the Department, but right from the start the farms in the community were never financed or assisted by the DRDLR.  The community started from scratch with nothing - no tractor, no material, no water tanks that would support their venture. The CPA had then, together with Crystal Holdings, approached the mills to whom the farmers were going to supply their products and asked for funding to start the business, but the farmers they were still waiting for funds that they were promised by the Department. The farmers had approached various sugar cane companies for assistance, which helped them to start the business.

Mr Dhlomo said the farmers were not in the business of holding grudges against the Department because it would not help their cause in the future, but they did feel a need to voice what had happened so that they could move to a new chapter. The farmers did not have tractors and had thus had to approach a garage for tractors and Crystal Holdings was a guarantor on those tractors.

Mr Clement Dlamini, Board Member: Gayede Community Trust, repeated his colleague’s remarks that there was no grudge against the DRDLR, a previous representatives from the department had promised everything and told the farmers it would introduce four companies from whom they could choose one to work with. However, they were introduced to one company only, which was Crystal Holdings. The Department chose Crystal Holdings for the farmers and told them they should not consider other companies. They trusted the Department, since it had purchased the land for them and had trust in government, and although the CPA had worked together with Crystal Holding matters did not go well, because it seemed that Crystal Holdings was not in a good relationship with the Department, the matter having ended up in the courts.

To date, the CPA had, however, continued with the relationship with Crystal Holding and did not have a conflict with the department. The interdict that was issued against the Department was to warn the department to stop interfering with the work, but when CPA approached its own lawyers, for advice on that interdict, the advice was that the interdict had apparently expired. The CPA had now approached the Department again to try to get the money that had been promised from the start. The conflict between the department and Crystal Holdings left them paralysed.

Mr Mvuthuza Sibisi, Director: Mkhuzangwe, agreed with his colleagues that the company Crystal Holding was unknown to the CPA until it was brought in by the Department. In February 2005, the Department invited the farmers to go to see the beautiful work that was done by the company and Ms Shange organised the meeting. The CPA was rebuilding its relationship with the DRDLR. It would not be fruitful to go back over what had happened in the past. It was instead trying to fin a way to move forward with the project. It was only requesting the Department and the government in general to assist them in this situation. It also wanted to be assisted with the other land that was still outstanding and assisted with funds in order to carry on with the work.

The Chairperson asked Mkhuzangwe whether it had the financial report of the CPA, the agreement with Crystal Holdings, the CPA Constitution, the copy of the interdict and all the relevant reports of the company.

Mr Dhlomo responded that these documents were available but had not been brought to the meeting.

The Chairperson requested that the CPA send all those documents to her office.

Ms N Magadla (KwaZulu-Natal, ANC) said that when things started to go wrong she would have thought that it was the Department which had to resolve the matter, because it was the Department that brought Crystal Holdings to partner with the community, according to the members of the Mkhuzangwe Community. As new officials of the Department, the representatives should have researched all the facts about the involvement of Crystal Holdings with the Mkhuzangwe Community before they came to present to the Committee.

Ms Magadla said she was disappointed with the report from the Department and it should answer to the allegations put up by the community. It was unfortunate if the Department had misled people; the name of Ms Shange had been mentioned several times by the Members representing the Community of Mkhuzangwe. The Community had trust in her because she was the one who was managing the Department and that was why they accepted Crystal Holdings, having had faith in the Department. However, she accepted that they could not go back. It was important to note that these people from the community were not working and were poor, and were expecting to feed their families. The reason they gave their lives to the Mkhuzangwe project was the hope that government was going to help with their vision of making their CPA project succeed and be prosperous.

Ms Magadla said asked why the project of Mkhuzangwe took so long to be registered. She also asked why it took so long for the Department to resolve the dispute with Crystal Holdings, which made the community suffer in the process. It was the Department which led the process, but it took so long to resolve the dispute with Crystal Holding, and the process having been brought before Parliament could have been avoided. The Department was supposed to assist people, as an implementing arm of Government. It was a shame that the Department was led by black people who were not able to assist other black people from poor backgrounds, who, having to mange to secure a partner like Crystal Holdings, had then encountered difficulties because the Department took so long to resolve a dispute it had with Crystal. The 40% shareholding by Crystal Holdings was also questionable, because it was too high compared to the 60% for the Mkhuzangwe Community over their own land. Secondly, she felt that the Department should come up with a solution and the way forward to assist the Mkhuzangwe Community.

Mr O De Beer (COPE) said that, having listened to the information both from the Department’s side and from the CPA side, two things were apparent. The  Department questioned the credibility of the Trust in terms of their constitution and re-election procedures and credibility was also an issue when it came to the finances. There was some question of the implementing agent in terms of the agreement between the Mkhuzangwe CPA and Crystal Holdings. In the interdict proceedings, both were cited as filing an interdict against the Department.

The trustees also said the recommendations came from the Department, because the agency was committed by the Department, but then there was a problem between the agency and the Department and the community was the victim of that process. Somewhere there seemed to be conflicts. The ordinary citizens of the country were saying that government was setting up projects to fail. There was a problem in the Department with the implementing agent, and it was not necessary to use a magnifying glass to see that there was corruption within that process, and the victims of that were the poor community that was supposed to benefit from the whole process. This process took too long. It must be remembered that there was a Memorandum of Understanding (MoU) between the community and the implementing agent. He asked where the copy of the MoU was, because someone was breaching the contract between two parties.

Mr De Beer said that trustees were supposed to be regulated; they knew when they had to go to the AGM in order for another group to be elected. It was not correct that one group should be there for life, and that was why he stated that it was the credibility of trustees that was at stake and the implementation agency. The problem was not with the trustees, but with the Department.

Mr De Beer said that the recommendations of the Department also suggested that the relationship should be restored between the trustees and the Department. The Department had further said that there should be no implementing agent until the Department dealt with one project to implement. It was unfortunate that the agent was not in that meeting; ideally the Agent, the Trustees, the Department and the Committee must be together, in one meeting, as soon as possible, so that everyone could hear what the Agency was saying about their agreement with the trustees. There seemed to be problems. He recommended that there should, therefore, be a meeting of all stakeholders and when the document was presented, it should state, upfront, what the CPA it constitution said, the MoU details of the relationship between the trustees and the agent, and legal opinion should be sought in the same meeting, in order to get closure on that chapter.

Mr D Worth (DA) concurred with what had been said by other Members. There were legal issues involved, and there was a need to understand who said what to whom, between the Department, the trustees and Crystal Holdings. Members would also need to see the correspondence. He suggested that when the Committee met again, there should be a representative from Crystal Holdings to put that side of the story as well.

The Chairperson thanked Members for their contributions. She agreed it would be very important to have a follow-up meeting that would include all relevant stakeholders. The process clearly could not be concluded in this meeting. There were indeed legal matters like the interdicts, on which a legal opinion might be needed.  The Department needed to fast track its processes and avoid a situation where people would still be crying out for things which should had been resolved by the Department a long time ago. From 2005 to now was a very long time during which that process was still not resolved. She did not want the Department to speak to the issues now, but at the follow up meeting. She asked the Department’s representatives to check the issues as stated by the community representatives, that Crystal Holdings had been brought in by the Department. The Committee would go to KZN and would invite all the relevant stakeholders so as to resolve the issue once and for all, and the Department should see to it that all the resolutions of the follow-up meeting were implemented as soon as possible, because people were suffering on the ground.

Mr Mndaweni said that he would like to apologise on behalf of the Department for not attending to the matter urgently. There were few changes in the Department, as the Minister had, in 2009, identified the need for a unit that concentrated on the main issues, and the Recapitalisation and Development Unit fell under him. It would  take over after the settlement of the claim and run with it, and be part of it. He had asked for the hand over of the report and had engaged with the community in order to assist them and move forward.

The claim involved about 18 000 hectares of land and already 11 000 of those hectors had been settled. Being such a large amount, it made sense for the Department to look after that land so as to assist those people. From this discussion it was clear that there were certain bridges to be crossed before the parties could engage properly. The CPA should have a meeting that would state it clearly whether they wanted to terminate their agreement with Crystal Holdings. The allegations that the company was brought in by the Department was not an excuse, since it did not help to point fingers at people who were no longer with the Department. Someone in the Department should have dealt with that process, but the community needed to reach a resolution and the Department would assist in facilitating that process. He suggested that people from Crystal Holdings were likely to try to tap into future money, and so it was desirable to start from a clean slate. They needed to come up with time lines but the nature of the legal system made this difficult. There would be community engagement and assistance, because the CPA was not able to deal with this on its own. A new process was needed where the Department would assist the community and monitor.

The Chairperson said that she was pleased the Department had committed itself to meet with the CPA, which would make the process very easy for the Committee, but the Committee wanted to fast track the process because at the end of the day those people should be assisted. There was no point in laying accusations against people who were no longer in the Department but those who were currently in the Department should see to it that the community was assisted in this process and, the Committee would ensure that that the Department would meet with the community by the following week and a report should be made to that effect.

Ms Magadla proposed that within a month’s time the Members should finish with that process. She had been deployed by the Province of KZN and would ensure that the Department met with the community.

The Chairperson reminded the representatives of Mkhuzangwe CPA to send the relevant documents to her office as soon as possible.

Mr Dhlomo said that they should point out that currently there was engagement with the Department, which was something positive.

Mr Dlamini concurred, adding that there had been a meeting on the previous Thursday. He thanked the Chairperson, and officials from the Province for the opportunity to meet with them, which might lead to positive results. The community had been starting to doubt the Department. He would send all the relevant documents to the Chairperson. At the moment, the CPA was facing difficulty as it had to pay workers about R200 000 in salaries, but with the intervention of the Committee he hoped that positive outcomes would be achieved.

The meeting was adjourned.


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