A joint delegation from the Departments of Rural Development and Land Reform and Public Works, briefed the Select Committee of Public Services on the progress they had made with the identification and confirmation of the custodianship and vesting of State immovable assets.
Members were informed that the immensity of the uncertainty about the nature and extent of state immovable assets was a result of a series of institutional problems; a legacy of apartheid and the transition which had persisted until today. Measures had been undertaken by the departments to remedy the situation. Steps taken included the creation of an intergovernmental structure called the Provincial State Land Vesting and Disposal Committee to manage the immovable asset disposal and vesting confirmation processes in the national and provincial spheres. The Chief Surveyor General had also led a national surveying plan which aimed to survey all unsurveyed state land and state domestic facilities. The several aspects relating to the Immovable Asset Register kept by the Department of Public Works (DPW) were said to be complete or nearing completion, including a reconciliation of the DPW's register with the provincial registers and the linking of buildings to the correct land parcel.
The Committee was told that the collaboration between the departments and other entities such as the Office of the Surveyor-General was of a strategic and operational nature, including policy and legislative reform which had resulted in the drafting of three Bills: the Expropriation Bill, Property Valuation Bill and Land Commission Bill, which was the focus of the presentation as a centralised solution to unaccounted for and undisclosed assets.
Members were generally pleased with the progress that had been made on both fronts, especially seeing as this has been achieved through a collaborative effort lead by the above Departments. They took issue with the lack of specified targets for the completion of the various projects. The uncertainty about the status immovable assets controlled by municipal structures, traditional communities and other certain other departments also caused concern. The Committee also discussed issues around the technical aspects methods used in the data collection processes and the Departments awareness of the basic problem with a view to anticipating distortions.
The Deputy Minister of Public Works spoke to several issues during the meeting, noting that the progress was slow in coming but pleasing in light of the historical roots of the problem and South Africa's comparison to other more established countries with regard to asset registries. He later spoke to issues of the strategy which underpinned the collaborative strategy in this area, tackled issues relating to mismanagement of immovable assets.
Chairperson’s Opening Remarks
The Chairperson welcomed everyone and noted the apologies from the Minister of Rural Development, the Director General in the Department of Public Works and several members of the Committee for their absence.
Briefing on progress on the audit of land and property that belongs to Government
Adv Vela Mngwengwe, Acting Director: Public Land Support Services, Department of Rural Development and Land Reform (DRDLR), and Mr Peter Chiapasco, Acting Deputy Director General: Asset Investment Management, Department of Public Works (DPW), led the presentation on behalf of their respective departments (see document for details). The presentation focused on two major areas: firstly, quantifying the progress made through the joint efforts of the respective departments and the Office of the Surveyor General (OSG) in identifying and confirming the custodianship of state immovable assets and the State Land Audit, and secondly, the nature of the strategic collaborative efforts between the departments.
Adv Mngwengwe said the immensity of the uncertainty about the nature and extent of state immovable assets is a result of a series of institutional problems; a legacy of apartheid and the transition which had persisted until today. He then set out the required measures undertaken by the departments to remedy the situation. Steps taken included the creation of an intergovernmental structure called the Provincial State Land Vesting and Disposal Committee (PSLVDC) to manage the immovable asset disposal and vesting confirmation processes in the national and provincial spheres. The Chief Surveyor General had also led a national surveying plan which aimed to survey all unsurveyed state land and state domestic facilities. The several aspects relating to the Immovable Asset Register kept by the DPW were said to be complete or nearing completion, including a reconciliation of the DPW's register with the provincial registers and the linking of buildings to the correct land parcel.
Mr Chiapasco then led the Committee through sets of data to demonstrate the development of the contents of the Immovable Asset Register, as gathered over the period of October 2011 to 31 March 2013.
The Land Audit Project, which began in 2010 under the Chief Surveyor General, aimed at identifying how much land is owned by the State, what it is used for and who occupies it. This was carried out through a physical audit of State properties, i.e. controlled by the nine provincial governments and the national government, and public land -- land controlled by public entities, including those listed in the Public Finance Management Act (PFMA) and municipalities. Only land parcels registered by 2010 formed part of the audit. The desktop analysis was completed in 2011, the field verification began in 2011 and was completed in March 2013, and a report detailing this was presented to Parliament in 2013. Data clean up was currently in progress and an offer to present the detailed findings of the Land Audit project had been made to the Committee.
The collaboration between the departments and other entities such as the OSG, was said to be of a strategic and operational nature, including policy and legislative reform which had resulted in the drafting of three Bills: the Expropriation Bill, Property Valuation Bill and Land Commission Bill, which was the focus of the presentation as a centralised solution to unaccounted for and undisclosed assets. Coordinated processes had been started to deal with the historical institutional problems in this context, including the sourcing of records of various stakeholders’ immovable asset registers, the creation of an operating model for immovable asset registers within the national and provincial levels of the DPW. Interdepartmental task teams had been set up, including the National Vesting Task Team, generally tasked with ensuring the efficiency of the vesting process, and the Immovable Assets Task Team which had thus far reviewed the minimum requirements for immovable asset registers and developed a sector specific guide on immovable assets to inform reporting standards.
The presentation was closed by identifying the further steps which would be required to complete the identification and confirmation of the custodianship of State Immovable Assets, including capacitating the DRDLR to deliver on the vesting requirements, finalising surveying requirements for state land, and the compilation of an integrated register of State Immovable Assets.
Mr Z Mlenzana (COPE, Eastern Cape) said he appreciated the manner in which the departments had engaged in collective governance and achieved progress. He also raised the issue of the absence of time frames under the 'Key Next Steps' section of the presentation, emphasising the need for continuity after the forthcoming elections.
Mr Mduduzi Shabane, Director-General, Department of Rural Development and Land Reform, replied that all government departments were in the process of finalising and tabling their strategic reports for the next five years. He agreed that it would be important to include appropriate milestones in the strategic report, as well as identifying the annual target in their annual performance plans in respect of the present topic, and he would arrange this with his counterpart at the DPW.
Mr R Tau (ANC, Northern Cape) echoed the appreciation for the collaborative effort and commented that taking part in the “Taking Parliament to the People” programme gave him insight into the people's concerns with state immovable assets and land. He then asked for clarity on point 3, under Policy and Legislation Reform Collaboration -- specifically how the database would contain unregistered state land? He asked whether the establishment of the Land Commission, despite the existence of the Inter-ministerial Committee (IMC) shifted the responsibility away from the executive towards an administrative body.
Adv Mngwengwe replied that the reason that there would be unregistered parcels of land in the Land Commission's database was that in the immediate post-apartheid period -- in an effort to achieve RDP targets -- many housing projects were started at the risk of private parties. The housing policy at the time allowed such individuals to have a sub-division diagram drawn up and approved by the office of the Surveyor General. This had been rejected by the department, resulting in the state land being divided, but this fact not being registered with the Deeds Registry. Therefore, it was necessary to include the power to demand diagrams of these parcels of land in the Land Commission Bill, to allow proper oversight by the proposed body.
In reply to the question concerning the IMC, Adv Mngwengwe said that the IMC was chaired by the Minister of Public Works. The changes in leadership had hampered the body, because it had reduced the frequency with which meetings should sit and therefore the momentum of the team. The Minister had been approached to resuscitate the IMC in order to maintain political oversight over the work in which the IMC was involved. This response is also relevant to the point raised by the Chairperson with regard to the IMC.
Mr H Groenewald (DA, North West) asked for clarity on the manner in which the departments treated certain types of immovable assets for the purpose of immovable asset registries. These were land under the curatorship of traditional leaders, where for example, the state builds buildings on such land, or immovable assets under the control of the defence force, or assets under the control of municipalities.
Mr Chiapasca, replying to the question concerning the Ministry of Defence land, said that all immovable assets occupied by the Department of Defence were captured in the Asset Register and that the thoroughness with which that department had conducted the field investigation alleviated the need to repeat this. There was a problem with whether the 79 properties under the Defence Force endowment were supposed to be under the custodianship of the Department of Defence (DoD), which disclosed these as their assets presently, despite the DPW managing them. The DoD had agreed with the DPW that their respective positions concerning these immovable assets be formalised.
His second reply dealt with structures on land owned by a traditional community, controlled by a government department. In such a case the department in question, in line with the Sector Specific Guide on Immovable Assets (SSGIA), was treated as being the custodian of the building and must disclose it as such. However the land under the building still remained under the custodianship of the traditional authority. The land under the building was recorded by the departments and there was a process in place for the DPW to acquire that land for the sake of a complete record.
Mr Ngwengwe then clarified that Mr Chiapasca had been speaking about instances where a traditional community held land in its own name. However, where the land in question was part of a former homeland, the legal framework that resulted from the transition had led to this type of land vesting in national government. In this case, both the building and the underlying land vested in national government and was certified as a state asset, under the custodianship of Public Works.
Mr M Jacobs (ANC, Free State) wanted to know the reason for the focus on national and provincial land, and the exclusion of municipal immovable assets from the Land Audit project. He also asked whether there was a centralised body which would be the custodian of the state's immovable assets, and whether the respective departments would be responsible for the disposal of state immovable assets which they controlled.
Adv Ngewngwe replied that where a national or provincial asset is located on land belonging to a municipality, it is recognised as a State asset. The distinction being drawn has its roots in Section 239 of the Interim Constitution, in terms of which state assets were defined as those belonging to the former homelands, the four provincial administrations and the central government. Therefore there was a separate dispensation for dealing with immovable assets at the local government level. The application of Section 239 was continued by the 1996 Constitution, through item 28 of schedule 6. The result was that the departments continued to use this framework and municipal assets were governed by a slightly different legislative scheme.
The Chairperson spoke to the issue of the completion of the Global State Land reconciliation, asking why there is a preference to rent properties for foreign missions. He said that the departments had not made use of all the possible sources of information about State immovable assets -- for example, traditional leaders and universities -- which would alleviate over-reliance on the Deeds Registry and departmental asset registries. He asked why, in March 2012, South Africa had reached 15.5% of the 30% target -- or four million hectares of the 25.9 million -- and what was the progress in 2013? His final point was to ask about the nature of the issues faced by the IMC, due to the changes in leadership it had experienced.
Mr Chiapasca said foreign assets such as Marion Island, the Antarctic Base Station and the Antarctic Weather Station are fully captured in his Department’s Asset Register. He also reminded the Committee that it had received a copy of the Asset Register, along with a DVD detailing the Asset Register as it pertained to Foreign Affairs, after their November meeting. Regarding renting versus buying buildings for foreign missions, he said that this was a managerial responsibility which devolved to the Department of International Relations as part of their custodial functions as set out in the SSGIA, but they could consult with the DPW if an embassy was being built, in which case the DPW would render a consulting service.
Adv Ngewngwe replied to the charge that they had not made use of all possible sources of information on state assets. He said that the compilation of the Immovable Asset register was a two-phase process. The first is confirming whether land belongs to the state. The second phase, which is a continual one, is determining who is in occupation of state land and on what basis. The Land Audit Project was part of both phases. In determining on what basis parties occupied state immovable assets, various stakeholders were consulted.
Deputy Minister's Conclusion
The Deputy Minister of Public Works, Mr Jeremy Cronin, spoke to several points. He said he was pleased with the levels of cooperation which are demonstrated by the joint report and highlighted the importance of the provinces' input as a third partner. The IMC leadership was his next focus, saying that the response given to the question which raised this issue was rather bureaucratic and that what was stated to be leadership changes, was a symptom of something more deep-seated. However, the report presented shows new seriousness and determination to rectify the institutional failings which have left state immovable assets improperly accounted for. The points regarding the need for timelines were appreciated and he pointed out that there were some in the presentation, but that full and detailed timelines ought to be included. He also said that continuity was important, because of the changes which will be brought by the elections. The department needed to ensure that leadership changes do not stall progress in the future. He agreed with the Chairperson that while official records are important, there was a lot of knowledge to be gathered from non-bureacratic sources, even though these raised the issue of reliability.
His final point was that progress has been demonstrated and that government needed to take collective responsibility for the slowness of the process. The complications of the unique context of South Africa, with the disparate government property owners under various regimes, cannot be used as an excuse. However, even at the international level, there were governments which were not on top of their asset registers, pointing out that only 16 out of the 32 OECD countries recorded the extent of state immovable assets.
Discussion: Round Two
Ms L Mabija (ANC, Limpopo) asked whether the transition from the apartheid administration to the democratic administration and the complications, such as corruption on the part of officials, that came along with this process has led to inaccurate records in the immovable asset registers and therefore the audit resulting in writing off of the misdeeds which occurred during that time. She also questioned the nature of the moratorium on the disposal of immovable assets within the DPW declared by the Minister.
Mr Shabane replied that the departments did not assume that there was certainty about what the South African government owned pre-1994, or that the records of the 15 administrations were a complete tally of what was owned by these disparate institutions. He used the example of the Ngwenyama Trust, where the process of building an immovable asset register had to be started from scratch because of missing title deeds. The departments therefore relied on various laws which stipulated what the homelands and other pre-democratic institutions owned. A contributing factor was the fact that all these records were paper based, and this was the reason the departments had been digitising Cadastral. This was part of the second phase of the Land Audit Project, which aims to identify who owns what land and the demographics of the property owners, and to track land ownership patterns in the future.
Mr Jacobs again raised his question of whether the Land Commission Bill would be the central body for the coordination of state immovable assets, and asked whether municipalities and departments such as foreign affairs would be accountable to this body.
Mr Shabane replied that the current legislative regime allows a variety of organs of state to be custodians of parcels of state land and account for these individually. This is the reason for the Department’s efforts with the intergovernmental framework to foster collective accountability and the Land Commission Bill would help in this regard, but neither of the departments nor the proposed Land Commission could be a central accountability agency, because the legislation stipulated that the individual organs were accountable individually to the Auditor General.
Mr Groenewald asked for clarity on the negotiation process concerning the land belonging to traditional communities, which have government structures built on such land. He then asked whether Nkandla would become state property due to the amount of taxpayers’ money spent on it, or whether it would remain the traditional community’s property.
Mr Tau said that in the foreword by the Director-General in the report on the Land Audit Project, state land is defined as land owned by the state, national, provincial, local municipalities and parastatals, which contradicts the explanation given to Mr Jacobs' earlier question. He then asked about the above definition's long term interaction with legislation such as the Single Public Services Bill, which seeks to streamline the public service by including local municipalities, and the implications for the custodianship of State immovable assets. He also asked the Director-General to clarify the situation in Nxutho in KwaZulu-Natal, where mismanagement had been found.
Mr Shabane acknowledged the contradiction of definitions in the reports, and that provided by the departments. However, the definition of state immovable assets as provided by Adv Ngwengwe, which was in line with the Constitution, was the correct one. The definition used in the Chief Surveyor's report on the land audit was a loose definition, because it included land belonging to municipalities. Speaking about the Single Public Service Bill, he said that this would be a problem which the political entities responsible for producing the Bill would have to grapple with in order to make it compatible with the rest of the legal framework. Regarding the situation in Nxutho, a Presidential proclamation was signed in 2010 to deal with allegations of fraud and mismanagement across the country, and in that region some people were investigated, and a number dismissed.
The Chairperson then reiterated his concerns with the factors which led to only 15% of the 30% target being reached in 2012, and the progress in 2013 and the completion of the Global State Land Reconciliation.
Mr Shabane replied that he believed that the 30% target referred to the 1994 target for redistribution of land and conceded that progress was not satisfactory. Over seven million hectares of land had been acquired by the State through the land redistribution program since 1994. The reasons why the target had not been met were numerous, but one of the reasons was that government almost solely relied on the property market to acquire this land and government was not properly equipped to negotiate on the open market, and had spent more that R20 billion in the past five years. The state had therefore reviewed its stance on heavy reliance on the land market for redistribution and that was the reason for the Expropriation Bill, in order to better use this method to fast track land redistribution. The state's inability to interact efficiently with the land market is to be remedied by the Land Value Bill, which will allow norms and standards to be set for the state's dealings in the land market.
Deputy Minister's Conclusion
Deputy Minister Cronin began by reiterating what the purpose of the presentation was, which was to report on the progress of the identification of what immovable assets the state owns, to provide a clear picture of the immovable assets of the state, which is demonstrated in the table titled “State land reconciliation: (Registered, unregistered, Sec 42 land parcels).” He then clarified that the moratorium declared by the previous Minister of the DPW was not an amnesty, but rather a moratorium on disposals to try and determine the extent of the properties owned by the DPW and review what had been lost through corruption and mismanagement. Part of this was operation Bring Back, which produced no results and has thus been transformed into operation Take Back. Speaking about a central body controlling all state immovable assets, he noted that the legislative framework at present did not allow this, and neither of the departments had the capacity to do this. The aim of this was rather cooperative governance. The true purpose was to have a centralised understanding of the scope of state assets and a common strategic perspective so as to better leverage these assets for the objectives that government is concerned with, such as using public assets to drive transformation.
The Deputy Minister then dealt with Mr Groenewald's comment on Nkandla, saying that the issue is not ownership of the land, but rather the problem of serious over-spending which had driven up the price and demonstrated signs of corruption which the Special Investigation Unit was investigating.
Finally, he said that management of the state immovable asset portfolio was a key objective, and towards this end, Cabinet began introducing a Property Management Trading Entity in 2006. This entity is to form part of the DPW, but will be separately accountable and aimed towards professional management of immovable assets.
The meeting was adjourned.
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.