Land reform sector, budget process and audit process: analysis by Committee staff & Auditor-General; Department of Rural Development and Land Reform, Commission on Restitution of Land Rights 2014 strategic plans, in the presence of Minister

Meeting report

Budget vote process, timelines and roles: Committee staff briefing
Ms Phumla Nyamza, Committee Secretary, explained what the budget process was, the timelines for the Committee to report before a debate in the house, and the role of the Committee in oversight (see attached presentation for full detail).

She emphasised that although normally stakeholders would be invited to comment on the budget, the timing of the elections prevented this in the current year as the Committee was expected to finalise the budget vote process by 11 July 2014. The budget vote of the Department of Rural Development and Land Reform (DRDLR or the Department) would be debated in the House on 17 July 2014.

Discussion
Mr T Walters (DA) stated that he understood the presentations to be background information for the remaining deliberations.

The Chairperson responded that the briefing was to highlight the roles of the Committee and the process expected to be followed.

Ms A Qikani (ANC) read out a sentence from the presentation, which she had intended to query, but said that now she had re-read it, its meaning was clear.

Mr A Madella (ANC) asked how many stakeholders could normally be accommodated if the Committee was not pressed for time, and how much time would be allocated to each.

Ms Nyamza replied that the number of stakeholders and time allocation depended on the Committee and stakeholders, and there was nothing definite from year to year.

Overview of Land Reform and Rural Development in Post- Apartheid South Africa: Policy trajectories and implementations
Mr Tshilillo Manenzhe, Committee Content Advisor, outlined the historical context and the policies relevant to the Department of Rural Development Land Reform. He also outlined the constitutional and legislative framework for land reform in South Africa, speaking of restitution, tenure reform, communal land tenure, land security and security of tenure in commercial farming areas.

He noted that despite having high numbers of strategic partners, rural provinces such as Eastern Cape and Limpopo had trained a relatively low number of farmers. Only KwaZulu Natal (KZN) trained significant number of farmers. There was particular focus on the policy for “strengthening the relative rights of people working the land”. The proposals for a new model were that 50% of the land would be retained by the historical owners, while the remaining 50% share-equity of the land would be owned by the labourers, in proportion to their contribution to the development of the land. The policy was presently at the stage of being a final draft for public comment, and this would allow the Portfolio Committee to engage with the Department. He suggested that relevant issues that needed to be asked of the Department would include:
- What mechanisms would be employed in the acquisition of the 50% share of the land?
- What happens to the present ownership of the land?
- Who will own the land in future, and how will it be subdivided?
- The detailed meaning of “disciplined service”?
- Who funds the financial demands of the responsibilities imposed by the policy on municipalities?
- Would it be possible to terminate the 50% stake of the historical owner if the owner failed to comply with the duties and responsibilities?
- How would the policy apply to farms owned by emerging black commercial farmers
- How would this policy apply to state owned farms?

He stated that there were no statistics in respect of finalised claims for land restitution and reform mentioned in the Department’s latest documents. The majority of the claims that had been settled and finalised were in urban areas, and settlements were mostly through cash compensations. He highlighted the study conducted by the Human Science Research Council (HSRC) on the Comprehensive Rural Development Programme (CRDP), which suggested that there has been significant increase in expenditure on its three core components between 2009 and 2013. The study also noted a tenfold increment in rural development spending in the overall budget during the period. However there was no clarity as to what exactly the money was being spent on.  The state land audit was regarded as one of the Department’s greatest achievement.

He suggested that the Portfolio Committee should pay special focus to the policies developed by the Department to ascertain their alignment with the National Development Plan (NDP) and the overall focus of the government.

Mr Manenzhe also suggested, in relation to restitution, that the Committee engaged critically with the process related to the claims by the Khoisan communities, development of the land claims register, and prioritisation of pre-1998 land claims.

Discussion
Mr T Walters (DA) referred to the documents as interesting and was keen to discuss some of these matters during the meeting with the Department. He asked what procedure would be followed in achieving the goals of the National Development Plan (NDP) for the 300 000 households mentioned in the presentation. He complained that the term “incentive voluntary approach” was not clear as there was no reference to it in the body of the policy proposal. He furthermore wanted to know the role of the Department and the process involved in the acquisition of land.

Ms N Magdala (ANC) complained about the use of acronyms and abbreviations in the document, without a full spelling-out upfront, and asked that the full meanings should be provided.

Mr M Filtane (UDM) stated that the Committee needed more time to go through the documents presented. He emphasised that he did not think that the Department was ready, financially or technically, to implement the policy on “strengthening the relevant rights of people that work the land”. The training of farmers in most rural areas had been unsuccessful despite the high numbers of strategic partners, and this was also coupled with the decline in production of food, despite food security being one of the main objectives of the South African government. He stressed the importance of technical and financial expertise and input from stakeholders before the implementation of the policy.

Mr A Madella (ANC) asked what the ratios of farm workers to farm owners were. He questioned what plans the Department had put in place concerning the families that were evicted from farms when their fathers passed away. He furthermore asked for the reasons why, despite high numbers of strategic planners, the turnout of trained farmers was low. He commended the policy on land distribution as a positive step towards creating stability and security for all stakeholders, but stressed that the Department should give a time frame of when all processes would unfold.

Mr J Mngxitama (EFF) said that he would prefer to wait for the Department to give its full presentation before formulating all of his questions. However, based on this presentation, he wanted to know if the standard settlement offer was still being used as the criteria for the payment of black people after claims had been finalised and approved, and claimed that whites were being paid the market value of the property. He believed that such differentiation was “racist, apartheid and anti-black”.

The Chairperson wanted to remind Members that Mr Manenzhe had only brought forward for emphasis some of the issues noted in the documents, and the content of those issues raised must be raised with and responded to by the Department.

Mr Manenzhe agreed with the Chairperson, saying that some of the information that had been presented by the Department, as outlined in the document, was not entirely clear, but noted that some representatives from the Department were present and the Department would be able to give more information. The cost of land purchase would be provided by the Department, as it was in charge of purchasing the farms. He suggested that the Committee should focus on the equity scheme when deciding what area of policy it wanted to work on.

Mr Walters commended the presenter on his visual presentation of the binary nature of agriculture. He recommended that subsequent presentations should include some information on soil quality of the South African land, as well as the areas that could generate more funds and contribute to the country’s economy if well utilised.

Mr M Nchabeleng (ANC) requested at this point that the Chairperson ask that everyone should introduce themselves.

The Media Liaison Officer for the Committee explained his role to the Committee as the spokesperson for this Committee to the media houses and on social media.

Mr T Mhlongo (DA) pointed out that there were several people in the room, and wondered whether it was in fact correct for the briefings – essentially directed to the Committee – to be held in public.

Ms Nyamza clarified that all meetings of the Committee were generally open to the public and the Departmental officials were present at this stage as observers. She agreed that the Department would be privy to the kind of information primarily prepared for the Committee Members, but noted that nothing that was politically sensitive or confidential was going to be disclosed.

The Chairperson agreed and reminded Members that the presentations were merely highlighting issues from documents submitted by the Department already.

Committee Researcher’s Summary and Analysis of DRDLR budget and strategic plan 2014/15
Ms Tembisa Siyo-Pepeteka, Committee Researcher, took the Committee through an analysis of the budget and strategic plan of the Department, focusing on government priorities such as the National Development Plan (NDP) and the 2014 State of the Nation Address (SONA). She noted that the budget allocated to the Department in 2014/15 was R9.455 billion, which was a decrease of 5.88% compared to the revised allocation of R9.459 billion in 2013/14.

She also highlighted that rural development and land reform programmes accounted for 79.4% of the Department’s 2014/15 allocation.

Ms Siyo-Pepeteka noted the decrease in the Programme 1 allocation for 2014/15 by 7.44%, due to the significant decrease of 58.73% in the Office Accommodation sub programme.

She highlighted the issues that needed to be addressed by the Department, such as the R7 billion reprioritised to rural development over the medium term, and the impact that such move could have on restitution.

She also noticed that the budget for the National Rural Youth Service Corps (NARYSEC) had decreased drastically in 2014/15, compared to 2013/14, while the target to train 5 000 young people remained the same.

There was also a drop in the budget in the allocations for the restitution programme. She commented that there were many indications of funds being shifted in the Department. This might point to poor planning on the part of the Department.

She noted, in relation to performance in the previous year, that the Department had spent most of its budget, with overspending in some areas, although it had achieved only 44% of targets. She reported that it had exceeded some targets, having settled 270 new land restitution claims against the target of 230, whilst 292 claims were finalised against the target of 208 claims. It was also noted that 47 of the claims settled were rural, while 223 were urban. There was more settlement by way of cash compensation than land transfer.

The issue of capacity was also recognised as a major and recurrent issue in the Department as it hindered it from achieving its goals.

Discussion
Mr M Nchabeleng (ANC) asked if the allocations to Ingonyama Trust showed any increase from government and what strategies the Committee might apply to help the Trust in generating more funds for itself, instead of being sustained by the Department .

Ms Siyo-Pepeteka replied that there was an increase.

Mr M Nchabeleng (ANC) asked the presenter what value other Department s (that were also stakeholders in the process of land reform and rural development) might have contributed to the DRDLR, in terms of planning, joint meetings and policy evaluations.

The Chairperson replied that because this presentation was a briefing by the Committee staff, it was the Department itself that would be in the best position to answer the questions.

Ms Siyo-Pepeteka responded that the Department would be able to respond to the questions. However, she agreed that there was a need for joint planning on cross-cutting issues, to avoid duplications.

Mr P Mnguni (ANC) again commented that there was no list explaining the acronyms used, and this was particularly difficult when so many Members were new to this Committee and not familiar with all relevant acronyms in the sector. He also asked why there was no indication by the presenter that the Ingonyama Trust Board had not submitted its document.

The Chairperson noted that there was a list of acronyms on the Departmental documents.

Ms Siyo-Pepeteka responded that a list of acronyms would be included in subsequent briefings.

Mr A Madella (ANC) noted that the ITB (Ingonyama Trust Board) presentation was available, but it was simply not tabled at the start of the meeting. He also asked the Committee Secretary to clarify this. He also asked the Committee Researcher why she had highlighted the decrease in the funds generated by ITB, but ignored the increase.

Ms Siyo-Pepeteka replied that the increase was due to the increment in the funds transferred from the government to the ITB, and her point was that such transfers might not be sustainable.

Mr Walters suggested that the decrease in the Departmental budget would affect the land restitution claims, especially with the estimate that there would be 95 000 verified claims, and that might also worsen the already worrying issue of capacity constraints. He also advised that the Committee should strictly monitor the Ingonyama Trust Board, as it was meant to be an asset in the whole process.

Ms Nyamza clarified that the ITB had brought its documents, accompanied by a letter from the Minister explaining the lateness, and that the presentation would be distributed to the Members.

Mr Nchabeleng emphasised that in future, the ITB was not to submit documents later than expected.

The Chairperson replied that due process was followed by the Trust Board.

Audit processes: Auditor General of South Africa (AGSA) briefing
Mr Eugene De Haan, Senior Audit Manager, Auditor-General South Africa, outlined and explained the purpose and process of the annual mandatory audits performed by this office (AGSA). He noted that the audits covered the financial statements, gave reports on predetermined objectives and compliance with laws and regulations. He mentioned that the legislation required that an audit report must reflect an opinion relating to the performance of the audited Department against predetermined objectives. He furthermore listed the legislative requirements for planning, budgeting and reporting of performance information. He gave details of AGSA’s strategy on the audit of predetermined objectives from 2004 to 2009, as well as the changes between 2009 and 2013.

He explained terms such as “usefulness”, “reliability” and “compliance” in relation to the relevant laws and regulations, and noted how these terms were used in assessing the Annual Performance Plan (APP) 2014/15 of the DRDLR.

He informed the Committee that the Department’s Strategic Plan and APP of 2014/15 were submitted to the AGSA in March 2014. He confirmed that AGSA had verified the consistency of the APP to the overall strategic plan of 2014-2019, and noted significant improvement in the reliability of the APP and Strategic Plan, due to its very good cooperation with the AGSA on reliability. However, the measurability and relevance of the APP could not be verified, due to the non-submission of the technical indicator descriptions by the Department.

He explained that the final audit in relation to the 2014/15 APP would focus on issues such as the process followed for the preparation, submission and approval of the Strategic Plan and APP, as well as an assessment of the measurability and relevance of the indicators and targets planned for each selected objective.

The audit findings as set out in the 2013/14 audit report for the DRDLR included duplications of actual targets achieved as reported in the Annual Performance Report (APR). It also recorded inconsistencies between targets set out, respectively, in the APP and the quarterly reports. There were also inadequate information systems to enable monitoring of the progress made towards achieving Departmental goals. He noted that that the Department failed to submit one quarterly report within 60 days to the National Treasury.

He listed the recommendations made to the Department by AGSA on how it could improve on the reported audit findings.

He emphasised the importance of aligning individual performance contracts to the organisational objectives, and advised that the audit Committee should report on the acceptability of the quarterly reports submitted to the National Treasury.

Discussion
Mr M Nchabeleng (ANC) suggested that the internal auditors should be present during the meetings to point out any identified negligence, and to also help minimise risk by guiding the Committee during its processes.

Ms A Qikani (ANC) asked what type of audit report was issued in the last year.

Mr De Haan replied that last year’s report was unqualified. Material adjustments were made to the financial statements, due to lack of internal controls, but all issues had been resolved. However, the performance report had been qualified, in relation to usefulness and reliability of indicators.

Ms N Magdala (ANC) noted the Department’s failure to submit the technical indicators. She asked what time frame was given to the Department to submit this.

Mr Mnguni asked an inaudible question.

Mr Filtane asked for an explanation on the variations, such as the increase of funds transferred to Ingonyama Trust Board and why there had not been information to support them.

Mr Madella requested a copy of the National Treasury framework.

Mr De Haan confirmed that he would make this available to the Chairperson, for distribution to Members. This would help the Committee to assess if the targets were being met.

Mr Mngxitama asked that AGSA should explain what was meant by “immeasurability” as well as what was meant by the statement “21% defined for that period not clear”.

The Chairperson asked for comment on the fiscal background and the increase. She asked if the shifting of funds and the unsupported variances on expenditure were compliant with the rules of the National Treasury. She noticed that the reported targets were not the same as the planned targets, yet there was no notification of the Department having made amendments. She reminded Members that the Annual Performance Plan must be drafted to show Specific, Measurable, Accurate, Realistic and Time-bound (SMART) targets, to permit effective oversight by the Committee, but this APP seemed to fall short on that.

Mr De Haan explained that some shifting of funds was acceptable, provided there was authorisation for it. He furthermore explained the references to fiscal dumping. Some agencies tended to transfer huge amounts of money into the Independent Development Trust before year end, supposedly to pay for certain infrastructure, but these moneys might remain unused for up to four years.

Mr De Haan agreed that SMART drafting was very important in the measurability of APP, and had a great impact on the Annual Performance Report. However, he confirmed that the APP was not well defined and some targets could not be measured.  

Mr Nchabeleng) requested that AGSA should conduct more training on how to use the budget and APP as a tool for oversight, to ensure the success of the Department. Furthermore, he explained that there should be a link between the budget, APP and the APR, but there were often no traceable links identified.

Mr De Haan responded that in respect of the training workshops, he would communicate with AGSA’s technical unit; it was important to identify the links in predetermined objectives and the financials.

Mr P Mnguni (ANC) observed that AGSA’s report did not reflect on the Ingonyama Trust Board.

Mr De Haan replied that he received no reply from the Ingonyama Trust Board, but he went through its previous reports and found no issues on usefulness and reliability. He promised to engage with the Chairman and Manager of the ITB.

Mr Filtane emphasised the need for developing and utilising legal boundaries for variances, as it could become problematic

Mr De Haan suggested that questions on variances should be posed to the Department. AGSA was not sure whether the Department did have guidelines.

The Chairperson thanked all participants and recommended that training should be a continuous process. She agreed that the internal audit should be present, for guidance on oversight. The documents requested would be circulated by the Committee Secretary. She agreed that it was important, as suggested by Mr Nchabeleng, to be able to link the Strategic and Annual plans and the Annual Performance Report, particularly to assess whether the Department was overspending or under spending.

Adoption of Committee Minutes
The minutes of 25 June 2014 were tabled and approved, subject to the correction of Mr M Nchabeleng’s initials.

Department of Rural Development and Land Reform: 2014 Strategic and Annual Performance Plan
The Chairperson acknowledged the presence of the Minister and Deputy Ministers, congratulated them on their appointments and welcomed them to their first meeting in the Fifth Parliament. She noted the apologies of Committee Members who would need to leave early. She confirmed that the meetings of this Committee were open to the public. The Committee would today engage with the Department on the Strategic Plan for 2014-2019. the Committee have to expedite the budget vote process. Its oversight function required that it make recommendations, while approving resources, and exercise continuous over sight in respect of management of resources and budget intentions, in order to improve the lives of people living in rural areas and farms. She noted that the Committee would need to hear how the Strategic Plan of the Department aligned to the Annual Performance Plan (APP) and the Annual Performance Review (APR), which would take place in September, and would examine quarterly reports to keep track of the Department ’s progress.

Finally, she noted that the Department was an important one with two Deputy Ministers, and its primary aim was to improve the lives of rural people as well as improve the rural economy. 

Minister’s Overview of the Department of Rural Development and Land Reform
Mr Gugile Nkwinti, Minister of Rural Development and Land Reform, thanked the Committee for the opportunity to present the plans, which paid particular note of the most recent State of the Nation Address (SONA). This presentation would also deal with the re-opening of land claims, the Commission on Restitution of Land Rights (CRLR) and the Ingonyama Trust Board.

Mr Mduduzi Shabane, Director General, Department of Rural Development and Land Reform, introduced the presenters.  The Strategic plan and the Annual Performance Plan would be presented by Mr Eugene Southgate, Deputy Director General: Corporate Support Services. The budget allocation would be presented by Mr Thapelo Motsoeneng, Acting Chief Financial Officer. Ms Nomfundo Gobodo, Chief Land Claims Commissioner, would present the Strategic Plan of the CRLR. Mr Amin Mia, Acting Chief Financial Officer, would outline the Ingonyama Trust Board Strategic Plan.

Mr Eugene Southgate, Deputy Director General, DRDLR, presented the achievements and progress of the Department over the last five years, including the significant improvement in areas such as land acquisition and land recapitalisation and development. He noted an increase in the number of farms recapitalised and developed since the inception of the programme. The Department of Monitoring and Evaluation found that employment creation was impacted positively, although weakly, by the programmes of the DRDLR. He noted an increase in the number of households assisted in producing their own food, although the progress was very slow. Performance trends in the settlement and finalisation of land claims had been consistent.

He also highlighted some disappointing trends. The number of jobs created through the DRDLR was too small and insignificant to justify the funds invested in it. Moreover the Department had not performed well in either job creation or community empowerment.

He acknowledged that the land reform had not yet translated into the establishment of sufficient numbers of sustainable new black farmers and restitution of land. He also recognised the threat to food security due to the under-utilisation of productive and communal land.

The DRDLR experienced challenges such as constrained economic growth of the agricultural sector, which was due to insufficient progress in increasing production efficiency and accessing new markets and opportunities, as well as the under-utilisation and unsustainable use of natural resources. Overall, inadequate or no access to socio-economic infrastructure and services, as well as low literacy and skills levels, were presented as major challenges plaguing the rural areas. To this end, the Department had institutionalised a new way of integrated services improvement mechanism, through a Model it called “Virtuos Model Cycle”.

Mr Southgate briefly presented the key priorities in achieving the vision of the National Development Programme (NDP) and also listed the focus of the rural sector in the next Medium Term Strategic Framework (MTSF) cycle, as well as the Departmental strategic outcome-oriented goals (see attached presentation for full details).

The APP for 2014/15, showed a focus in spending, over the medium term, on provision of corporate services, financial services and provincial coordination within the Department, with much of the spending allocated to personnel, IT services and consultants, who would provide audit services. The implementation of the Spatial Planning and Land Use Management (SPLUM) and National Geomatics Services (NGMS) sub programmes would in turn cause an increase In the expenditure of goods and services.

Mr Southgate highlighted the number of land claims settled in the first quarter as 51. 42 claims were finalised.  15 phased projects were approved. The number of land claims lodged by 1998 still to be researched was at 380. Eleven functional lodgements offices had been opened.

He outlined the 2013/2014 budget estimates and links to programme and sub-programme plans. He noted that 50% would be spent on the new Office of the Valuer General (OVG).

Mr Shabane corrected the name of the bill cited as the “Land Protection Bill” to the “Regulation of Land Holding Bill”.

Mr Shabane also added that the six priorities of the MTSF were shared with other Department s at both national and provincial levels, and he briefly identified 15 national Department s and the Departments of Agriculture and Rural Development in all provinces that contributed to the mandates and vote. However, he also explained that these strategic plans being presented related to the areas being driven by the National DRDLR. The Department was responsible for the targets set and allocated votes in both the Strategic Plan and the APP.

He explained that the Government framework for the mandate at a national level was the Technical Implementation Forum, which comprised senior government officials such as Director Generals and Deputy Director Generals, who reported on the implementation of the mandate. He also mentioned that the Forum of the Ministers operated at the political level, where there were monitoring and evaluation Committees responsible for Agriculture and Rural Development, convened by the Minister of DRDLR. These forums assisted in reporting coherently the investments made by government in addressing the challenges highlighted in the strategic plan.

Discussion
Mr Walters highlighted the drop in budget percentage, between 2013 and 2014, for the Land Restitution programme and said it should be noted that the DA had already expressed concern over unfunded elements that had led to the drop, before the commencement of the programme.

Mr Walters also challenged the statement that depicted 7 800 households being supported as a strategic outcome, and suggested that surely the outcome was 7 800 empowered households; the number was an output, not an outcome.

Mr Mngxitama expressed concern over the lack of targets pertaining to land redistribution, and the absence of a policy proposal to address the issue. He explained that government had a target of 30% for 2014, but there was none stated in the present strategic plan.

He further expressed surprise over the lack of any reference to the policy proposal for “Strengthening the Relative Rights of People working the land”, and the model proposed, and asked why neither the policy nor model were included in the Strategic Plan, and what the status of the policy was, especially since it was being broadcasted in the media. He feared that farmer owners would start evicting farm workers to protect their interests, and the Department responsible for land distribution was silent about the issue.

Mr Filtane informed the Minister that there would be questions regarding the policy as reported in the media and he would want the Minister to respond to these questions himself, and to also give the Committee Members the opportunity to comment further on the Minister’s response.

Mr Filtane expressed great concern over the percentage of South African land owned by foreigners, referring to the issue as “something close to my worried heart”, and he enquired of the Minister if there was any policy that put a limit to the percentage of South African land acquisition by foreign nationals.

Mr Filtane mentioned that there was very little cooperation between local governments and sustainable Rural Enterprise Development agencies, and asked if there was any other plan, other than Spatial Planning and Land Use Management (SPLUM) Act to aid the cooperation .

Mr Filtane referred to the documents and wanted more clarity on what was meant by “public amenities completed”. He asked for details on the development of 235 rural enterprises and how they were chosen, especially since a previous report on farmers trained, said that KZN was the only rural province that trained up to 22%. He sought to know how the set targets of the Department on job creation worked out, because it was a crucial aspect of the Strategic Plan, and what considerations it was giving to a successful implementation, especially since the Department acknowledged that it failed to meet its own target son job creation.

Mr Filtane asked what tools would be used in measuring the strategic objective of the Department to improve the livelihood of the rural people by 2019. In addition he sought to know the social impact the budget would have on the rural areas. He also asked if there was a budget for 5 000 people to be trained in the aspects of rural development. He also asked why the Department would take the route of cooperatives when there were documented reports that 93.3% of cooperative establishments had failed, which made him “sick” when he saw the term. In conclusion, he wondered if the repeated references to the amount ‘227’ were a coincidence or mistake.

Mr Mhlongo asked if the omission of targets per quarter was deliberate, and, if so, why.

The Chairperson noted that the training related not to enterprises but to development programmes.

Mr Thapelo Motsoeneng, Acting Chief Financial Officer replied to the question concerning the link between the land opening and strategic plan and the movement within the budget. The Minister had earlier explained that land claims would be dealt with within the fiscal framework. The Department and government would continually work with the resources available to them.

He explained that the decline seen in the budget, as presented by the Committee’s administrative staff earlier, was due to the country’s economical situation and this would in turn be reflected in the budget of the individual programmes.

Ms Leona Archary, Deputy Director General: Rural Infrastructure Development, DRDLR,  explained that “public amenities” were 45 completed socio economic infrastructures such as community facilities, youth hubs and recreational centres, that were done during the last two years. The target for the current year was 31.

Ms Archary explained that the training of 5 000 youths would continue as scheduled and would not be affected by the decline in budget because the programme had partnered with the National Skills Fund to access funding for the training

Ms Archary moved on to the question on the establishment of mega-cooperatives, by explaining that the programme was linked to the National Rural Youth Service (NARYSEC) programme, and it provided an exit strategy for young people trained in various skills. NARYSEC was used in establishing the youths. Its role would be different from that of the usual cooperative. The target for this was the second quarter of the second financial year.  She elaborated that each youth would contribute financially for ownership, and this would be linked to job creation, when the youths had been skilled, and that they would be established in various areas to be empowered and to render services back to the society.

Mr Shabane responded to the question on improving livelihoods through establishment of 210 cooperatives and the target of establishing enterprises. He explained that the two were work in progress. The DRDLR was presently working with various women’s groups that were being trained in acquiring arts and crafts skills to develop products that could, in turn, be sold both locally and internationally, as well as turn the women into independent enterprises.

He also explained that the Department had liaised with the Department of Agriculture to do research and studies to determine what agricultural commodities would thrive in each province. As a result of the findings from such research, the Department was working with over 500 farmers, producing livestock and wool in areas identified as appropriate for such.

Mr Shabane acknowledged and agreed with what Mr Walters said about some of the outcomes listed being outputs. However he explained that the government adopted the outcomes-based approach in the Fourth Parliament and the Fifth Parliament adopted it too. He reiterated that the outcomes-based approach informed the strategic plan of the DRDLR.

Mr Shabane, responding to the question around SPLUM, described that the DRDLR had introduced the CRDP system which sought to get cooperation between the Ministers’ forum at the national level and Premiers and government Department s at the provincial level. He acknowledged that the national level has tried, and would continue to try, to make it work through a continuous call for reports and assisting to facilitate better coordination.

Mr Shabane agreed that the issue of foreign owned South African land was important, especially since the last audit showed that 79% of the land was still in private hands. The Department had drafted a Bill, which was signed and approved by the Minister, and submitted to the Leader of Government Business. He suggested that it might be taken to cabinet this November 2014.

The Minister responded to the direct questions asked by the members on the “new” policy, but explained that the policy was not really a new one as it emerged from the Green Paper that had been debated (and ridiculed) by the media and other institutions, for having only eleven pages, a few years back. This Green Paper was a framework. The policy proposal; out of the Green Paper, mapped the routes of the programme and the Department had begun implementation. He explained that there were ongoing discussions to be found on the Department’s website concerning the policy proposal, but the discussions would be finalised by April 2015.

The Minister expected sufficient consensus, due to the contributions and agreements reached between workers’ unions and other unions.

The Minister also addressed the issue of the budget credibility and was not sure why the DA had commented on this specifically. He explained that the Department would buy land, when people lodged a claim, using principles of equitable justice. He emphasised that the Office of the Valuer General would determine the price of the land, based on market value amongst other factors.

Mr Madella expressed satisfaction with the Ministers remarks. He pointed out that the strategic plan indicated a target of 5 000 people to be trained in the present year. However, if training 5 000 people per year became the trend, there would be a shortfall in the expected target of 40 000.

Mr Walters pointed out that there was no specific presentation on the proposed policy. He wanted to stress that the references to the policy did not constitute deliberations on the policy, and advocated that time be set aside later, when the policy could be presented and deliberated on fully. He also called for the inclusion of all amended documents in future presentations

He also asked about the resourcing of land restitution and the decline in budget. He had expected a reflection of the decline in budget, attributed to the state of the country’s economy, in the budget allocation. He expected prioritisation of the goals and more of the profit from establishments invested in land.

Mr Filtane asked if the proposed cooperatives were tertiary in nature.

Mr Shabane confirmed that they were tertiary.

Mr Filtane proposed that there should be a limit to land owned by foreign nationals in the proposed Bill, because there had been a slow, quiet and careful acquisition of South Africa land by foreigners that could be obvious to the least observant people. He said that this was necessary, to avoid later generations blaming their fathers and grandfathers in the future. He also asked the Minister how soon he would be comfortable enough to open up a debate on the land issue.

The Minister replied that Mr Filtane had a good point about limiting the land owned by foreigners. He mentioned that the ANC had taken a decision and made a resolution that would become effective after the completion of the land audit. 

Mr Mngxitama said that during a radio interview, the Minister had talked about the Green Paper and how he was drawing up a policy that would address an equitable environment, but there was no reference to this in the presentation. He declared that there was a crisis and the Minister did not recognise it. He explained that 80% of the privately owned land revealed in the land audit was agricultural land. The Minister was planning to give 50% of farm owners’ land to farm workers, on the basis of an agreement between the farm owners and black farm workers. He accused the Minister of not recognising the farm workers: farmer owners power dynamics, which remained in the nature of  master and slave. Over one million farm workers had been evicted by white farmers since 1994. He had expected government to intervene on behalf of the disadvantaged group, not throw them at the mercy of the white farm owners. He described the policy as intrinsically bad, and one that would encourage the “slavery of black people” before they could benefit from the land programme. In addition he said the Minister, through the policy, had created an avenue for the harassment of black farm workers by the white farmers. He suggested that the Minister should return to the Committee within a week to re discuss the details of the policy.

Mr Mngxitama asked the Chairperson if there was a target or land policy being worked towards in the Ministry. Every other discussion in the Committee was irrelevant without a target and ways of resolving the daily eviction of farm workers, without any form of protection from the government. He proffered a solution to the problem for the Minister, saying he had a 6.2% vote to get in order to get a  majority to achieve land compensation being given to the black people that needed it.

The Minister pointed to the fact that Mr Mngxitama was not present when the House had signed into law the Bill on the Office of the Valuer General, setting out how that office would determine the value of the land.

The Minister rejected the notion that he despised farm workers, emphasising that he took their issues  very seriously.

The Minister was prepared to concede that Mr Mngxitama had raised some good points that could be discussed further if he was able to persuade the Committee, on reasonable policies, he condemned the agitation for expropriation of land without compensation, stating that it was not the reality of South Africa, which was a Constitutional democracy.

The Minister agreed that farm workers were being evicted and he had come across such cases. He noted that there was a toll-free eviction hotline (0800 007095).

Mr Nchabeleng agreed that the issue was emotive but pleaded for Members to remain calm. He reiterated that South Africa was a Constitutional democracy and that calls for nationalising all land were not realistic of the South Africa context. He however suggested that the issues could be debated, and, where there were disagreements, alternative solutions should be provided, so that the Committee could present a united front. He also reminded the Committee that the present focus should be on the budget process. 

Mr Walters made an inaudible comment.

The Chairperson asked if the trainees would be able to contribute to the mega-cooperative financially, due to the stipends they were being paid by the programme.

The Chairperson asked for more detail on capacity challenges mentioned in the strategic plan, and noted that there had been nothing presented about the staff establishment, so she would like to know how many posts there were, how many were vacant, how many were prioritised, and what impact the vacancies had on the Department meeting its goals.  

The Chairperson asked when the Department planned on tabling the legislation presented in the APP before Parliament.

She furthermore asked if the Department was working on another strategy or renewing the pre-existing one as the rural development programme was not a new one

Ms Archary responded that the mega cooperative would be established through NARYSEC and the contribution would be by way of a once off payment, which the trainees would be able to manage. She also mentioned that specific actions were being developed for successful implementation.

Mr Nchabeleng asked if the Department had any litigation against it or if it was litigating against anybody.

Mr Southgate replied that he could not give a list offhand, but promised to send it across to the Committee.

The Chairperson asked why there was nothing in the budget plan about facilities assisting people evicted from farmlands.

Mr Filtane indicated that the Department admitted to a challenge in delivering its duties due to a shortfall in staff capacity, hence the need for a staff increment, which would lead to an increase in budget. He wanted clarity on how the Department planned on managing this, especially with its intention of dropping the amounts n consultants.

Mr Southgate responded that the Department had employed new staff the previous year but 769 people left to work in other places. The Department had started trying to develop strategies for employing, and retaining its staff.

The Chairperson pointed out that the rural development strategy, with focus on the enhancement of systems, was not a new strategy.

Mr Southgate replied that it was a review of the current strategy

Mr Southgate also promised to inform the Committee on the status of the Department ’s legislative programmes pertaining to the bills, at a later time.

The Chairperson said that the Department was expected to provide information on documents presented.

Mr Shabane replied that the Minister had approved all legislative programmes and four out of the five bills had gone beyond policy development stage. He mentioned that all five bills would have gone to Cabinet for approval by December.

He explained that the Land Rights Management Board (LRMB) and Committees budgeted for in the new budget sought to provide and create legal assistance to people facing evictions. He also mentioned that this board would be decentralised.

Mr Motsoeneng commented on the use of consultants, to the effect that government had made a concerted move to increase the capacity of the departments and therefore called for limited reliance on consultancy. The DRDLR also preferred to concentrate on creating internal capacity, although it still made use of consultants in necessary areas.

2014/15 Budget Allocation
Mr Thapelo Motsoeneng, Acting Chief Financial Officer, DRDLR, presented the budget report. He focused on money to be disbursed by the Department on core functions and the reductions in the final budget. He stated that the total budget allocation was R9.455 billion. The Administration programme took a budget share of 12.4%, Geospatial and Cadastral Services accounted for 8.2%, Land Restitution recorded a 28.4% slice, while Land Reform had the highest budget share percentage of 29.8%. 

There was a reduction of R450 million in the overall budget when compared to the 2013/14 overall budget allocation.

Discussion
Mr Filtane expressed concern about the Department s spending most of its budget without achieving many goals in the past year. He also pointed out that in the Land Restitution programme, the urban cases settled were greater in number than the rural cases, and suggested that this could create an impression that people living in the urban areas were getting a better share of the Department s programmes.

The Chairperson noted that the document from which Mr Filtane was reading was not part of the pack provided by the Department.

Mr Filtane suggested that if this information had come from the Department, he would want an answer.

The Chairperson responded that the Committee was now discussing the impact of the budget allocation.

Mr Filtane agreed that strictly speaking, the question was not in line with the discussions.

Mr Madella expressed concern on the impact that the reduction in budget allocation would have on the Department’s capacity.

The Chairperson asked why 100% of the budget was spent without implementation of all targets.

Mr Motsoeneng responded that there was ongoing work in the third quarter and it could not be recorded as accomplished until finalised or achieved in the fourth quarter, but expenditure would be recorded for the third quarter.

The Chairperson suggested further discussion on the issue.

Commission on Restitution on Land Rights (CRLR) 2014 Strategic Plan:
Ms Nomfundo Gobodo, Chief Land Claims Commissioner, said that the Commission on the Restitution of Land Rights (CRLR) 2014-2019 strategic plan was guided by the 2014-2019 MTSF and its contribution to the National Development Plan (NDP) and the MTSF would relate particularly to sustainable land reform and agrarian transformation, as also reflected in the strategic plan of the DRDLR.

Ms Nomfundo Gobodo explained the context for the reopening of the Land Restitution Act claims, and cited some limitations characterising the initial programme as including:
- the slow pace of processing and settling claims
- the fact that financial compensation rather than land restoration was offered for the majority of claims settled
- problems around inadequate provision of post-settlement support
- failure to link with broader development initiatives.
- resuscitation of communities and problems experienced by the Community Property Associations (CPAs)
- Lack of institutional capacity for proper planning, control and business information and operational systems
- Underfunding
- Lack of full understanding on the programme, as well as the exclusion of significant numbers of people and communities.

It was also noted that specific groups were prevented from submitting claims, including victims of betterment planning and certain categories of labour tenants and farm dwellers.

One of the major challenges was the difficulty in determining the exact number of historically dispossessed South Africans who had been excluded from the restitution programme, and thus how many claims would be lodged under the new restitution policy. A conservative calculation estimated that 7. 5 million people were alienated from their land after 1913, whilst 1.7 million individuals had benefitted from the restitution programme to date. The number of new claims to be submitted had been estimated to increase by a factor of five.

As at 31 March 2013, out of 79 696 claims lodged, 77 334 had been settled, of which 57 758 were finalised. 1.8 million individuals had benefitted from the restitution programs, and they were members of 369 451 households. Of these households, 136 968 were female headed and 672 were headed by persons with disabilities

Under the settlements, 3 million hectares of land, at a cost of R10.8 billion, had been awarded to qualifying claimants, of which R1 444 million hectares had already been transferred.

She stated that 71 292 out of the 77 .334 claims settled were for financial compensation, and a total amount of R6 billion was therefore paid to beneficiaries. Had these beneficiaries chosen land restoration, government would have had to acquire a further 1.9 million hectares of land

She also outlined the Commission’s strategic goals and strategic objectives (see attached document for full details)

Discussion
The Chairperson asked why the numbers of claims to be settled was 379, but 239 were finalized.

Ms Gobodo replied that claims settled and finalised did not necessarily relate to the same claims; they might be claims settled from previous years and finalized in the current year.

Mr Nchabeleng asked why some traditional authorities lost land claims to other chiefs because of agreements with a decree, particularly the case in Limpopo, and asked what the process was in giving these traditional authorities the chance to claim.

Ms Gobodo responded that all claims were treated alike and in the case of disputes on who was the legitimate claimant, the claimants have the opportunity to approach the court. The Department would however try to access the claim history to identify the rightful claimant, based on research carried out by the CRLR.

Mr Mngxitama asked if there was a set time frame for finalising the backlogs of claims received before the re-opening. He also suggested that targets should be set especially for the claims that were lodged in 1998.

Ms Gobodo responded that it had been legislated that old claims should be prioritised. She explained further that targets had been set to this effect and numbers had been escalated for the past three years. However, the number of claims settled was also dependent on the budget allocated for that purpose.

Mr Mngxitama asked if the flat rate was still used in paying blacks, whilst the market rates were used when paying whites, when making financial compensation. If so, then the Act was racist, and cited that whilst whites may be paid billions, black households might be expected to share R5 000.

Ms Gobodo explained that the historical valuation as well as the present value of the land was used when settling claims. In addition, the standard settlement offer was focused on tenancy plans paid to individual households. She informed the Committee that in the previous week, she had signed off a R3 million claim for a household of six individuals. All payments made were approved under a quality control system.

Mr Filtane asked if claims were prioritised and how the priorities were determined.

Ms Gobodo replied that prioritised districts were identified by government as the 27 poorest districts.

Mr Filtane asked how the Department could help claimants see that they could stretch the value chain instead of just getting cash, and wanted to know what part the Department could play in motivating claimants to opt for the land and see the real value in the land.

Mr Shabane responded that the Department had created the Recapitalisation and Development Programme to assist people returning to their lands. To this end, the Department set aside 25% of its budget. He stated that although the 25% had been inadequate but the Department always set aside funds for that assistance.

Mr Filtane also asked who had the right to occupy and utilise land when claims had been confirmed or verified, and in what way the Department could protect the claimant from the land being transferred to another person.

Ms Gobodo explained that in such instances the land still belonged to the current owner, but in the case where the claim had been gazetted, the land owner would be informed, and would subsequently have to get authorisation from the Commission before doing any development on the land. If, after gazetting of the claim, the present owner allowed another occupant on to the land, the CRLR would check to see whether it would affect the interest of the claimant and could approve or dis-approve that process.

The Chairperson enquired if the Department could assist with the disputes amongst beneficiaries, especially how the Department could intervene on behalf of the vulnerable.

Ms Gobodo responded that all claims were treated alike and in the case of disputes on the legitimate claimant, the claimants would have to approach the Court, although the Department could also assess the claims history.

Ms Gobodo stated that the fact that more urban claims were settled did not mean that the urban claims were receiving the bigger share of the budget, and in fact CRLR spent more on rural claims than the urban. This was due to the small nature of the urban claims, as well as the fact that information was more easily accessible.

Ms Gobodo also informed the Committee that the Commission had engaged with the Khoisan community on two different occasions in Kimberley, to develop policies to assist with that specific process.

Mr Shabane said that the Communal Property Association legislation was being amended for the institutionalisation of dispute resolution. He said that some disputes were opportunistic but some were
historical in nature and when they involves entire traditional community claims, the normal legal process could not be applied, hence the need for special legislative measures. He listed a number of bills being amended and produced for the institionalised resolution of disputes.

Mr Walters asked if there were any mechanism or policy to fast track land claims.

Ms Gobodo responded that individual situation was studied, in its historical context as well as considerations on the future of the area.

Ingonyama Trust Board Annual Performance Plan 2014-2015 briefing
Mr Amin Mia, Chief Financial Officer, Ingonyama Trust Board, introduced the Ingonyama Trust Board (ITB) aims and objectives to the Committee, pointing out its duties such as the maintenance of a register to protect the land asset, its casual projects, infrastructure development project, local projects, and land audits. Its projects were beneficial in assisting stakeholders with food security, poverty alleviation and job creation. He mentioned that legal policies would be implemented in respect of land disputes and illegal encroachment.

The strategic objectives included:
- supporting traditional councils through capacity building programmes
- disbursement of funds
- legislation advice
- ensuring effective land use
- empowering traditional councils on land processes.

It must work with effective land planning and administration, with a strong bias to the rural areas, and there was also a focus on achieving increased access to and productive use of land, especially for food security.

He highlighted the overview of 2014/2015 budget and MTEF estimates and expenditure estimates (see attached presentation)

He said that the updated situational analysis set out the main challenges affecting the operations of the ITB. These included the rating of ITB land by local municipalities without proper regard to the provisions of the Municipal Property Rates Act, illegal land occupation, which included illegal mining of sand, threats of expropriation by certain local municipalities, improper land use which may lead to land degradation of the natural environment, and urbanisation in peri-urban areas. It also faced  operational constraints due to limited resources.

Mr Mia noted that the income of the ITB was derived from two sources. 68.72% of the funds (or R38.022 million) was derived from own sources, and ITB received transfer payment funding of R17.3 million (31.28%) from a government allocation, making a total income of R55.3 million. Its expenditure was also estimated at R55.3million. Its operating expenditure was set at 90.96% while the Capital expenditure was R5 million (or 9%).

Discussion.
Mr Walters declared that the information included in the presentation was too basic, and would have liked to see a proper balance sheet of the income of the ITB and how its assets could contribute to, as well as impact upon the South Africa economy. He furthermore stated that there must be an appropriate breakdown of the Boards’ income and expenditure, and its future plans. The background information provided by the ITB was not useful.

Mr Mnguni stated that the constitutional arrangement that put in place the Parliamentary Committees should be respected, and said that  late presentation of documents to the Committee was unacceptable. He suggested that all ITB board members must familiarise themselves with the Public Finance Management Act (PFMA), and that their future presentations must be in line with the PFMA requirements, to enable fruitful engagement with the Committee.

Mr Nchabeleng told the ITB members that in future, documents submitted late would not be accepted, and he specifically addressed the Minister saying that if he wanted the Committee’s support the Department and its entities must follow due process. He suggested to the Chairperson that if documents were not received on time, the meetings should not be convened.

Mr Filtane agreed and said that the documents presented by the ITB should not have been submitted as they carried little meaning. There was, for instance, no indication as to how the ITB had spent R15 million. He asked Mr Mia to explain whether the “savings” talked about in the presentation were lands or funds, as it would minimise their output, and he also asked if the ITB was the largest land owner in the province of KZN, as it claimed to be in the presentation. He accused the ITB of not being serious with its work and use of public funds, and also of performing below par. He asked how giving more funds to a non-performing institution could be justified. He declared the presented document as too “chaotic” to be endorsed.

Mr Mngxitama shared the sentiments of other Committee members on the presented document, and asked that there should be another discussion on the ITB, as there was clarity as to what the facility was and offered. He asked if the ITB was a “mini-homeland” and said there was a need for an answer to the question, hence there was a need for the Committee to deliberate on it.

The Chairperson said the Department should be held responsible, as the ITB was accountable to the Department. She pointed out that the presented document did not include where and how the money would be used, how and where the policy of 90/10 was applied (90% of funds for community upliftment and 10% for ITB expenses), plans for job creation, how would these communities be uplifted by ITB, whether ITB was assisting students with bursaries, how many projects was ITB funding in these communities, what was ITB trying to achieve with the workshops carried out, and it would spend the money in this financial year. She reminded Members that the whole purpose of the Department was to improve the lives of rural people.

Mr Mia replied by firstly apologising for the late submission of the presented documents, and said that three documents were submitted, which included the strategic plan and expenditure breakdown.

Mr Nchabeleng replied that valuable information and detailed functions of the ITB were not included. Many people had only negative information about ITB when it started and Mr Amin Mia would have done well to state in detail the positive work and values added by the ITB. He compared the presentation to “a dirty baby with whom nobody wanted to play”.

The Chairperson added that the document presented should be attached to the Annual Performance Plan (APP) instead of the Strategic Plan. However, she also requested that Members give the ITB anther chance, and allow it to come before the Committee on the following Wednesday, with detailed documents.

The meeting was adjourned.