Ingonyama Trust Board Annual Performance Plan: Further briefing, Committee Report on Department Rural Development and Land Reform

Rural Development and Land Reform

09 July 2014
Chairperson: Ms P Ngwenya-Mabila (ANC)
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Meeting Summary

The Committee adopted the Minutes of the Committee meeting held on 2 July 2014, although the EFF and UDM Members registered their objections because they believed there were material omissions from the minutes. They noted that at that meeting, the Minister of Rural Development and Land Reform had spoken of policies in development, and questions were put to the Minister by Members on the “Strengthening the Relative Rights of People working the land” proposal. The point had been strongly made by Members that this posed substantial risk of evictions. However, this was not captured in the minutes. Members discussed whether the Minutes were intended to be merely an overarching summary, or refer to specifics, with the majority feeling that they were adequate, but the minority stressing that the points raised were not just details, but important principles that should have been captured. The Department of Rural Development and Land Reform summarised that there was, at present, a national reference group currently discussing this matter, and the Chairperson noted that the policy would be put on the Committee’s agenda as a priority item for further debate.

The Ingonyama Trust Board (ITB) returned, with its Chairperson, to brief the Committee again  on the Strategic Plan 2014/15 to 2017/18, as the Committee had been dissatisfied with the previous presentation on 2 July. The Committee cautioned the Ingonyama Trust Board (ITB) and the Department of Rural Development and Land Reform again that they must timeously submit documentation to Parliament. The ITB was intended to “contribute to the improvement of the quality of life of the members of the traditional communities living on Ingonyama Trust Land”. Its strategic objectives related to creating enabling environments for development on ITB land, managing the assets effectively and efficiently, and providing human resources management and support to the Traditional Councils, particularly through capacity building programmes. It derived its income from a State allocation and its own funding, and the budget for the year was anticipated at R62.7 million.

Members asked how the ITB’s plans linked up with the National Development Plan (NFP), and asked about the relationships also with the Land Committees, and between Traditional Councils and Land Committees. They called for clarity on the Acting Chief Executive Officer position and were informed that the previous CEO had been suspended. They asked if any social impact study had been done to assess the real contribution of the Trust to the lives of people on its land, asked for clarity on land “administered” and land “presided over. Members asked how much land was in the hands of women, but the ITB conceded that it had no statistics on that. Other expenditure and budget items, including purchase of cutlery, and the expenditure on vehicles, which was quite high, were questioned. Members asked – and ITB conceded that this was a weak area – whether policies were being reviewed by outsiders and called for more clarity which policies mentioned in the Strategic Plan were new, and which were to be revised. Members further said that there should be a policy offering guidance to Traditional Councils on requests for money for cultural events. Questions were also asked on income and the payment of royalties, rates and the relationship with municipalities, and clarity was sought on the permanent and contract staff, and the policy on outsourcing. Questions were also asked on the reserves, how the leases operated, why there were two asset registers and why internal audit fees were accounted for separately, and the decline in the budget for capital expenditure. Some questions were to be answered in writing.  

Members finally considered the draft Committee Report on the budget vote for the Department of Rural Development and Land Reform, highlighting several areas for correction of either content or grammar, with input also from the Committee Support Staff.  Members agreed to question the Department about the budget allocated for training and skills development. The area of policy development was identified as an area of weakness, which the Department must fast-track. Clarity was sought from the Department on some figures. The recommendations and the Report would be finalised on the following day.

Meeting report

Adoption of Committee Minutes 2 July 2014
Mr T Mhlongo (DA) said that his initials were incorrect, and asked that they be changed to read “TW”.

Mr M Filtane (UDM) said that the Minutes omitted to mention an issue that was discussed when responses were given after the Minister of Rural Development and Land Reform (the Minister) had made a presentation.

Mr A Mngxitama (EFF) said that his was a process question, and he would like to go back to the response to the Minister’s announcements. He referred to paragraph 4.2.1 on page 3 of the minutes, noting that this was a summary and details of the interaction were not included. This presented a challenge. During the discussions with the Minister there was a strong call from the floor on the proposed policies, and the Minister had recognised the difficulty around his proposed policy and the implications for evictions. The comments and proposals around evictions should have been recorded.

Mr M Nchabeleng (ANC) said that it was not necessary, in committee minutes, to go into the deeper levels of the discussions and analyse who said what.

Mr P Nguni (ANC) appreciated the matter raised by Mr Mngxitama, but tended to agree with what was raised by Mr Nchabeleng. He proposed that the minutes be presented as an overall reflection of what had transpired, whereas Hansard could be used as a point of detailed reference and analysis.

Mr T Walters (DA) said that he was willing to support detail being added to the minutes if this read that the Minister had said that all policies proposed were in the framework of the constitution. He agreed that the minutes were only the Committee’s short note.

Mr Filtane said that the Minister had publicly acknowledged the points, around the acquisition of land by foreigners, and this should be reflected in minutes.

The Chairperson said that everything that was raised would be accommodated by the minutes. These issues would be followed up in other Committee meetings.

Mr Mngxitama said that there was no dispute about the need to go into detail. However, he wanted to stress that the points raised to the Minister were of particular significance, and the Minister had acknowledged this. It was important to record the detail here; it was a follow-up on the crisis this policy announcement would have on farms, if farm workers were evicted. The Minister had acknowledged this and said that there was legal research being done, and that should be reflected. The Minutes also did not make it clear that the Minister had promised further engagements as had been mentioned by the Chairperson.

The Chairperson said that the Department had its own processes and when the time was right, this policy would be presented to the Committee, who would then follow its own procedures. The matter could not be discussed now and it was preferable to rather wait for this policy. She mentioned that there was a Land Rights Management facility that the Minister had spoken about, with regard to evictions, and this panel was dealing with such cases. She appealed for patience.

Mr Nchabeleng started to state what the Minister had outlined, but was interrupted.

Mr Mngxitama wanted to raise a point of order. He said that matters were discussed in this Committee, and he should not be told that he discussed matters outside of the meeting.

The Chairperson said that this Minute would not reflect in detail who said what.

Mr P Mnguni (ANC) said the discussion was degenerating. Minutes were an administrative matter. Policy matters were still to be discussed.

Mr Filtane disagreed, and said that this meeting was not being derailed. Something should have been reflected about the discussions, and he asked whether the Minutes would indeed reflect the issues raised with the Minister.

Ms A Qikane (ANC) expressed concern about the length of this discussion.

Mr Mngxitama said that everyone wanted this Committee to function, and reiterated that the issues being raised were not “mere detail” but were vital. The Committees Minutes said nothing about policy matters, and he stressed that the matters that had been discussed related to the most vulnerable sectors.

The Chairperson interjected and said that this matter was not under discussion. It was being taken seriously. However, details would not be recorded now. but the Committee would not go into details on this matter.

Mr Walters said that the issue of documents arriving late should be included in the minutes.

The Chairperson agreed on that point.

Mr A Madella (ANC) moved for the adoption of the minutes.

Ms N Magadla (ANC) seconded the motion.

The Chairperson asked that the meeting to proceed.

Mr Mngxitama said that he had been waiting to see if the Chairperson asked for any objections to the adoption of the minutes and wanted to register his objection. He believed that there was a material omission from those minutes.

Mr Filtane also objected to the adoption of the minutes, because a material matter that was raised was not even alluded to in the minutes.

The Chairperson acknowledged their objections.

Mr Mduduzi Shabane, Director-General, Department of Rural Development and Land Reform, said that he could possibly throw some light on the matters. There was a national reference group that was currently discussing this matter, after the Minister had asked that group to deliberate and confer with him. If the Committee wanted Mr Shabane to convey a message on the point to the Minister, this would be done.

The Chairperson asked that the policy debates be noted as a priority agenda item.

Mr Walters then said that the Committee should consider rejecting the report on the Ingonyama Trust, with a strong argument for closer oversight over the Ingonyama Trust and a serious investigation into what type of impact it was making.

Mr Shabane replied that the issue of documents arriving late should be raised with the Department of Rural Development and Land Reform (DRDLR or the Department), and not with the Trust.

The Chairperson said that in her understanding the Ingonyama Trust Board (ITB or the Trust) first submitted its documents to the Department, who then submitted the documents to this Portfolio Committee. Mr Shabane was asked to ensure that in the future documents were submitted on time and circulated to all Members.

Ingonyama Trust Board (ITB) Strategic Plan: 2014/15 - 2017/18: New briefing
The Chairperson noted that this was the last Committee meeting at which work must be finalised in preparation for the budget debate. She reminded Members that the Committee had, when hearing the earlier Ingonyama Trust Board’s presentation on its strategic plan, decided that there were some outstanding matters and had asked the Ingonyama Trust Board to refine its presentation. She stressed again that documents must be submitted on time.

The Chairperson noted the apologies from the Minister and the two Deputy Ministers.

Judge Jerome Ngwenya, Chairperson, Ingonyama Trust Board, provided some background to the Trust, and highlighted that its key focus was to “contribute to the improvement of the quality of life of the members of the traditional communities living on Ingonyama Trust Land”. The strategic objectives of the ITB were described as:
- Unlocking an enabling environment conducive to development on Trust land
- Effective and efficient asset management services
- Provision of Human Resources Management and support to Traditional Councils in capacity building programmes.

The ITB’s Own Fund Expenditure was R45 395 664, and Departmental Funding Expenditure was R17 306 336, with total expenditure being R62 702 000. (See attached document for full details)   

Mr Walters asked how the ITB linked up with the National Development Plan (NDP) reference to Land Committees at District Council level, where various stakeholders would meet to drive land reform and identify land projects.

Mr Ngwenya said that in KwaZulu Natal, 90% of the land spoken about by the NDP was land that belonged to the ITB. The ITB aligned itself with the Constitution and all the laws of country. The ITB based its mission and plans upon what was contained in the NDP. There was a clear charter for interactions, set out also in the NDP.  

Mr Walters asked how Traditional Councils linked with Land Committees.

Mr Ngwenya said that the ITB interfaced through the Traditional Councils and the responsibility of the Department was to see that the Traditional Councils operated in a particular way. The Intergovernmental Relations and Framework Act also prescribe for interface between the different governmental spheres and institutions. There was a need for co-operative agreements that could link the ITB, the local municipality, the district municipality and other departments, like the Department of Tourism. The deliverables as far as cooperation was concerned was that ITB should help to foster a clear understanding of each party’s role and what had to be done.

Mr Nchabeleng asked about land in the hands of women.

Mr Ngwenya replied that the Trust did not have statistics for that. The situation of Zulu women in KwaZulu Natal was a challenge. It was difficult for the ITB to talk about women and land.

Mr Nchabeleng asked for clarity about the Acting Chief Executive Officer position.

Mr Ngwenya said that the current Acting Chief Executive Officer (CEO) had been in this post for about six weeks, after the appointed CEO had been suspended. The ITB hoped that the process would be finalised by the end of August.

A Portfolio Committee Member asked for clarity about the budget item for cutlery.

Mr Ngwenya said that to mitigate the expenses on rental, the Trust had chosen to buy its own offices, although rent was paid for the satellite office. The cutlery costs were in relation to the ITB’s own offices, and he suggested that this was probably a once-off.

Mr Thapelo Motsoeneng, Acting Chief Financial Officer, Department of Rural Development and Land Reform, confirmed that the Trust had moved into new offices and since meetings were held their in these offices it was necessary to buy cutlery.

Mr Mngxitama said that in its mission statement the ITB said it must “contribute to the improvement  of the quality of life of the members of the traditional communities living on Ingonyama Trust Land”.  Some of the Committee Members suggested that the ITB was doing a good job, but he asked if there had been any audit that could give a sense of the social impact of the ITB on the number of people that were under this Trust, so that it could be seen to what extent the Trust was realising its mission. If there had been no social impact, then the Committee would no doubt have to make some suggestions on that point.

Judge Ngwenya said that a social impact audit had not been conducted, and he was not sure if the capacity existed for such an audit. These communities were independent on their own. Where they required the Trust, the existing interface was adequate. The ITB facilitated the interaction between parties.

Mr Filtane asked how many vehicles the Trust had, noting that R185 000 had to be spent on vehicles.

Judge Ngwenya said that the vehicles were bought from the Trust’s own income. The Trust owned about 17 vehicles.

Mr Motsoeneng said that tracking, storage and servicing of vehicles was covered by that expenditure. The vehicles were not used on ordinary terrain, therefore servicing was crucial.

Mr Filtane asked how many staff members the Trust had.

Mr Ngwenya replied that the Trust had 55 staff members with two vacancies. The staffing was not adequate.

The Chairperson asked how policies were maintained and reviewed, and if an outside person was needed to review policies.

Mr Ngwenya replied that this was a weak area in the Trust at this stage. The Trust did have competence when it came to maintaining and complying with policies to support the work of the ITB.

The Chairperson asked if the Trust had a policy, showing the procedures to be followed, that would guide traditional councils who requested money for funding cultural events.

Judge Ngwenya replied that this kind of policy still had to be developed.

The Chairperson asked about royalties, paid to the Department in terms of the Royalty Act.

Judge Ngwenya responded that when royalties were payable in respect of land that the ITB administered, they were paid through the National Treasury. It was difficult to identify the communities to whom the royalties should be paid. 

The Chairperson asked for clarity again about the staff complement of the ITB, the vacancies and permanent posts.

Judge Ngwenya replied that the ITB had a staff complement of 55, 27 of which were approved positions in the organogram. 25 of these positions were filled and two persons had left. 28 positions were contract positions,  because they were additional to the establishment. The Trust was not confident about how far to go in human resources. Most of the staff had started on lower levels but had remained with the organisation.

The Chairperson asked the Trust to define its policy, if there was one, on outsourcing. She asked further how many of the five policies were going to be reviewed; and how many of those mentioned in the Strategic Plan would be new policies.

Mr Ngwenya said that outsourcing came about as a result of inadequate staff, which obliged the Trust to get a service provider who would assist the ITB in providing all the policies. The ITB had in the meantime developed practices that it could document as policy.

Mr Mngxitama said that 3 million hectares were “presided over” by the Trust. However, he had been told that not all the land was “administered” by the Trust. He asked for clarity about this and what the current implications were.

Mr Ngwenya said that the land that the ITB had administered before 1994 was not subject to rates. During the integration and transition, some more municipalities were set up in ITB areas, that had not existed prior to 1996, and they then passed or extended legislation that sought to impose rates on the ITB. The political leadership had been alerted to this. The matter ended up in Court and the outcome was still not clear. When the Department of Rural Development and Land Reform had appeared before Parliament in relation to audit queries, one of the qualifications mentioned by the Auditor-General related to lack of provision in the accounts for the payment of rates.

A Portfolio Committee Member asked for clarity about reserves

Mr Motsoeneng replied that, as shown in the financial statements produced for audit purposes for 2013/14, the Department had R108 million sitting in accumulated surpluses, which was called reserves.

Mr Mngxitama asked if the money obtained from the State covered all areas or only specific areas that the Trust was directly responsible for.

Mr Ngwenya said that access to communal land leases was still important and less costly. The Board felt that the most secure thing to do was to make leases available. If someone wanted access to land the entry was via the Traditional Council. Rental was charged at rates from R10 to R100 per month. There were various pieces of legislation covering differing situations; for instance, the Fencing Act required people on farms neighbouring ITB land to contribute towards the rental.

A Committee Member asked why there were two registers.

Mr Motsoeneng replied that there was an asset register for both immovable and movable property.

Mr Filtane asked why internal audit fees were reflected separately from salaries

Mr Motsoeneng replied that Internal audit fees were not part of salaries. Currently the internal audit was outsourced, so it was treated separately from staff costs.

The Chairperson asked why there was a decline in the budget.

Mr Motsoeneng said that sufficient provision had been made in 2014/15 under capital expenditure to complete the new satellite offices for the ITB, and this explained the decline in this line item of the budget for 2015/16. It would be reviewed in that year.

The Chairperson asked why salaries came from two budgets.

Mr Motsoeneng replied that the funding from the Department was not sufficient, hence the ITB also used its own funding for salaries.

The Chairperson asked how the impact of staff training would be measured.

Mr Filtane asked why R9.344 000 was spent on salaries.

These two questions were not answered in the meeting.

The Chairperson said that many questions were asked because the Committee was on a learning curve when trying to understand the role and mandate of the ITB. She reminded the ITB to send the requested information to the Committee, for circulation to all Members. She noted the serious need to comply with requirements for submission of documents on time, by both the Department and the ITB. The Committee had to engage with the ITB very seriously. There were a number of reports coming in that would help Members to gain more understanding of the role of the ITB, which was important as it had to alleviate the plight of the rural poor.

Draft Report of the Portfolio Committee on Rural Development and Land Reform on Budget Vote 33: Rural Development and Land Reform: Deliberations
Members were asked to go through the draft Committee Report (the Report) on the budget vote of the Department of Rural Development and Land Reform, Vote 33, page by page.

Page 1
Mr Walters suggested, as a matter of procedure, that Committee Members should today focus only on the substantive issues, and spelling and language issues should be dealt with by people employed for those purposes.

The Chairperson, supported by Mr Nchabeleng, asked that everything, including the spelling and grammatical errors, should be dealt with by Members.

Page 2
The Chairperson said that the second line of the second paragraph should read ‘ the Department, including the Commission, as part of programme 4’

Page 6
Mr Madella said that the first line in the paragraph after the figure, where the budget allocation was spoken of, should read ‘declined in real terms’.

Mr Madella, also referring to the same page, noted that there was a contradiction. One sentence expressed concern with regard to the shifting of funds. The other sentence seemed to welcome the decrease in spending on consultants. The Committee had expressed support for the latter idea.  

The Chairperson said that the Public Finance Management Act (PFMA) allowed for the shifting of funds, provided this was within the ambit of the PFMA restrictions, so the Department had a limited right to shift funds from one programme to another. She suggested there should also be a recommendation that any shifting be done within the prescripts of the PFMA and the National Treasury Regulations. She agreed that the sentences regarding the ‘shifting of funds’ and the ‘decrease in spending’ should be moved. The National Treasury had raised a problem regarding the overuse of consultants, and the Department was attending to this problem. If the Department was attending to this, then there should be a focus on the internal capacity.

The Committee agreed with the proposal to combine the two sentences to read: ‘The Committee commended the Department for the 17.4% decrease in budget allocation due to the usage of fewer consultants and greater reliance on its internal capacity’.
Page 7
Mr Madella said that there had been a decrease in spending on the Administration programme, and this cutback was due to the decrease in spending on consultants and travelling expenses. 

Mr Motsoeneng suggested that it would be preferable not to make a direct link between the two. The  reduction in office accommodation was a result of the cut in the budget, not as a result in any savings in the Department’s budget. He suggested that the Committee not highlight the cut in office accommodation. The budget was cut generally, as a result of budget pressures and a general ruling from National Treasury, as was explained in the previous meeting.

The Chairperson said that this change was not due to budgetary changes in office accommodation, but due to economic pressures, one of the external economic factors.

Mr Tshililo Manenzhe, Committee Content Advisor, said that this sentence would be rephrased to show how the concerns would be addressed. This would be presented at the meeting tomorrow for approval.

Mr Madella asked Mr Motsoeneng if he had a suggestion how this should be reflected in the matter in the Report.

Mr T Mhlongo (DA) asked for clarity on procedure, stressing that this was the Committee’s own Report.

The Chairperson said that clarity was needed, especially with regard to figures, so that the Committee could write an accurate report. This was why the Department had said that it would look at the decrease. Advice would be given about this on the following day.

Mr Mnguni agreed with Mr Mhlongo that this was a Committee report, and the Department should not engage at this stage, but could only clarify matters.

Mr Nchabaleng said that he agreed with both viewpoints. However, he did stress that final ownership of the report rested with the Committee.

Mr Mhlongo said that there was now confusion about the decrease based on the allocation. He urged that there should be a balance of powers. In future, he would like to see the Minister giving advice and providing justification.

The Chairperson said that the Department should not be allowed to change the content, and all that the Committee was doing was taking advice from the Department and the Minister on factual matters. This was a Portfolio Committee Report so she agreed that the participation of the Department must be minimal.

Mr Filtane asked if the Report should be in the present or the past tense.

The Chairperson said that it should be in the past tense.

Mr Mnguni said that the contributions of the Support Staff were of great value to the Committee. He suggested that “Hansard language” should be used as a guide.

The Chairperson said that the Committee was just correcting content and the Support Staff would sort out any technical matters further.

The Chairperson raised the point, and the Committee agreed, that a sentence be revised to read: ‘address concerns raised by the Auditor General’

Page 8
The Chairperson said that the phrase ‘would be developed by the end of the fourth Quarter’, should be added to the line starting with ‘20 per cent of....’. 

Mr Madella asked for a correct statement of the percentage figure in the third paragraph, fourth sentence, to “3.4%”.

Ms A Qikane (ANC) recommended that, in the third line of the second paragraph, the grammar be corrected to “focus on ensuring that”.

The Chairperson said that the fourth line of the third paragraph should read ‘as a result of’’

Page 10
Mr Madella said that this page did not reflect the discussion that the Portfolio Committee had had, as it was stated that 50 000 people would be trained over five years. 

Page 11
Mr Mhlongo suggested that the percentage symbol be used rather than the word.

Page 13
Mr Mhlongo asked if a budget existed for the 2.7 million hectares.

The Chairperson said that the 2.7 million hectare figure related to land where people were accommodated for agricultural, commercial and residential purposes. No budget for hectares was needed. The land under the Department’s control had to be managed.

 Mr Mhlongo asked what the Department was going to get out of these hectares.

Mr Madella said that the question was whether there was a current budget. The Department did have funding to deal with this. There was also the reserve of R108 million. Funds had been earmarked for transfer.

Mr Manenzhe, Committee Content Advisor, clarified that almost all the land was under the traditional authorities. Some of the land was used for residential or other purposes, and there was also the leasing out of land; so if the question was whether there was a budget for the 2.7 million hectares, the Portfolio Committee simply needed to look to the plans, and assess whether the budget would cover what was in those plans for the land.

The Chairperson said that after she had read the Report it was clear that municipalities and other departments were the stakeholders. There seemed to be an integrated approach. This was not made clear from the Annual Performance Plan. There was no consistency. More money should be spent on community upliftment in the Department’s areas of jurisdiction.

Mr Nchabaleng asked what was being financed with bursaries and what was the focus of the Department, saying that in his opinion it should be rural development. He also wanted to know how many girl children were being offered bursaries.

The Chairperson said that she recalled questions on the non-existence of certain policies, and said that the development of policies had to be fast tracked. This would allow for the sustenance of projects.

Mr Nchabeleng asked if the recommendations could perhaps be studied during the meeting on the following day, so that all the inputs made would be based on recommendations.

The Chairperson asked for agreement from the Committee on whether the findings and recommendations could be finalised tomorrow.

Mr Mhlongo urged that the Department must be realistic about the targets. The budget was high, but the accomplishments were low. The budget should be aligned with the targets.

The Chairperson said also that spending should align with targets.

Mr Mhlongo said that a recommendation was needed on internal capacity.

The Chairperson said the use of consultants should be decreased. This part of the Report had to be rephrased. She asked that the figure for vacant funded posts should also be checked.

Mr Madella said that there was a need to increase the filling of vacant funded posts, and achieve a reduction in the use of consultants.

The Chairperson commented on the part of the Report that referred to the unqualified audit, and said that one of the improvements on matters highlighted by the Auditor-General was the plan developed for improved financial performance.

Mr Mhlongo said that a recommendation had to be developed regarding criteria used for skills development and recruitment.

The Chairperson said that the Department should provide information about how many people it wanted to train.

Mr Nchabeleng said that the Committee was just brainstorming at this point, and suggested that this could be finalised on the following day.

The Chairperson asked Members to check the document in preparation for making proposals on the following day, when the full Draft Report would again be gone through.

The meeting was adjourned.

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