Restitution of Land Rights Amendment Act: Constitutional Court judgement; Ingonyama Trust Board on 4 Quarter 2015/16 performance, with both Deputy Ministers

Meeting report

Opening Remarks 
The Chairperson said the Ingonyama Trust Board was one of the entities under the Department of Rural Development and Land Reform. When a budget was passed for the Department in Parliament; a portion was allocated to the ITB to execute its mandate. An apology was noted from Minister Gugile Nkwinti who was attending a Cabinet business matter.

Mr T Walters (DA) suggested that the meeting should begin with the legal implications of the Constitution Court judgement since it was a very important matter.

Mr P Mnguni (ANC) argued that the briefing from ITB should be heard first because the Parliamentary Legal Adviser was always in Parliament while the ITB officials had to travel back to KwaZulu Natal. He added that the meeting for the day would not end without a briefing on the court judgement.

The Chairperson said the briefing from the ITB would be dealt with first and afterwards the court judgement which was on the agenda because of its significance.

Ingonyama Trust Board (ITB) briefing on 4 Quarter 2015/16 performance
Mr Sipho Ngwenya, ITB Chairperson, said the CEO joined the organisation at the beginning of the 2nd quarter of the 2015/16 financial year. This would be her 3rd quarter in that office.

Dr Fikisiwe Madlopha, ITB CEO, reported on its targets for Quarter 4 2015/16. Policies that had to be approved was not achieved; all movable assets to be recorded was 100% achieved; vacant positions to be filled were 94.83% achieved; 86 land tenure rights were approved against a target of 325; there was an over achievement on the agricultural projects approved; the target to develop a strategy on economic development was not achieved as a result of capacity constraints; nine traditional councils were trained against a target of 11; and 21 educational awards were granted against a target of 25 in the period under review.

Mr Amir Mia, ITB CFO, said the total expenditure for Q4 was R16.8m. 19.17% of the total budget was spent during Q4 including capital expenditure. There was 24.85% expenditure on the total salary budget and 26.25% of the total goods and services budget was utilised in Q4. Actual spending per programme was apportioned as Administration (80%); Rural Development (7%); Land Management (7%); Traditional Council Support (6%). Spending per economic classification for Q4 was: Ulundi Office rental (0.32%); Capital (3.86%); Compensation of Employees (28.23%); Goods and Services (67.59%). R1.6m was spent on provision for doubtful debts and R3.1m was spent for Depreciation. Total revenue generated for Q4 was R6.29m; income generated for the year was R37.6m. The transfer payment of R18.1m was fully utilised as at 31 March 2016. Actual Income consisted of the transfer payment (16%); rental income (27%); investment income (43%); other income (14%). Nine males and 12 females were granted educational awards which amounted to R144 297.

Discussion
Mr T Mhlongo (DA) said he was concerned about the inconsistency of the report especially as regards the finances vis a vis performance. There was no consistency in order to know if there was value for money. It did not say how much was spent in administration under policies approved which was not achieved. ITB needed to give the Committee an understanding of the R40.1m that was spent on policy reservations.

Mr Ngwenya replied that the Trust wished to make it easy for the Committee to understand but it was the system. The PFMA guidelines for reporting were very technical and it got more complicated when the ITB had to report to the Minister and the Committee on the information concerned. He said with the assistance of his colleagues, the details would come clearer.

Dr Madlopha added that it was a policy that when reports were made, the first three columns could not be changed. Unfortunately reports had to be made against targets that were set. As it stood, there was nothing the Trust could do except to report against these because targets could not be changed in the course of the year.

Mr M Fitane (UDM) appreciated the improvements made by the ITB. He could see value for money in the entity under the new CFO. The communication reports approved by the Board were listed as zero. The reason given for this variance was “Reports done”. What did that mean as it was confusing? The review of residential leases was rather weak and there was a lot of talk in the media about this. The Committee was not convinced that the ITB was out to achieve. What target was the Trust going to set for itself in the current financial year when it had not achieved 50% of that in last financial year?

Mr Ngwenya replied that the pronouncement from the King was a dialogue. It must unfold and there must be clarity. It would only be fair for the Trust to be held accountable if there was a law before the ITB as the Trust would then go according to the law. On the question of not meeting targets on tenure rights, people who live in rural areas under traditional systems had ownership of land which was protected by various laws. The only weakness was that such ownership was not formally recognised. Such people would require a document as proof of access to land. This was an interim arrangement pending the process by Government to upgrade the status. It was in this context that there was a review process.

Mr Fitane commended the Trust for over achievement of its targets in the number of agricultural projects approved under rural development. How would the Trust overcome the mentioned capacity constraint? Was this capacity constraint within the ITB?

Mr Ngwenya replied that it was both internal and external within the ITB. Internal in the sense that the skills required by the ITB were unique and there was need to get in house training. External in the sense that if the people who were ultimate beneficiaries of the economic development projects were not capacitated, the projects were bound to collapse

Mr Fitane said the Trust seemed to be behind target as regards Cash at hand. What was ‘doubtful debt’ for under the schedule of goods and services? The Committee had not seen the list of assets that had depreciated to the tune of R3 169 159m.

Mr Amir replied that doubtful debts were those owed by the customers of the Trust which was not certain to be paid. In terms of reporting, it was called doubtful pending when it was paid and all such debts were handed over to the legal authorities. Regarding Depreciation, in terms of accounting standards, there must be provision for depreciation in any financial statement. The provision was made for the entire year. The level of Cash at hand was based on the number of requests from the communities. If there were more requests in a year, Cash at hand would be utilised.

Ms N Magadla (ANC) said she appreciated the areas of improvement in the report. The amount given to students under educational awards was not the same. Why was that?

The CEO replied that there were two awards from two different traditional councils. The awards were based on the money the tc had from the commercial leases which were collected on its behalf. The traditional council would usually specify how much should be given to each student. The differences were informed by the traditional council. Sometimes the awards were based on what the students requested.

Ms Magadla said one of the budget incomes was trading income. What was the meaning of that?

Mr Amir replied that trading income was generated on its own in terms of servitudes and royalty income. Finance income was income from money that had been invested with banking institutions. On how much money was utilised, he said the transfer money that was received within the year was fully utilised

Mr A Madella (ANC) asked what was the co-relation between tenure rights and illegal occupation. What were the mitigation plans as he had hoped this would be presented to the Committee?

Mr Ngwenya replied that there was very little illegal connectivity in those areas as land was managed by the owners which were the structures on the ground such as the traditional councils and the communities. There was illegal occupation on land where there were no such structures. There were people who were from outside who did not follow the proper procedure. People still identified themselves by landmarks because such people could not define the land which they occupied. The Government was developing a new Act as the Communal Land Rights Act of 2004 was set aside by the Constitutional Court and that left a vacuum for ITB.

Mr Madella said the target on MOUs under Land Management had not been met. What was the impact on socio-economic development for the traditional communities in the area of jurisdiction? The cost of education is extremely high. R5000 which was the educational award to most of the students could hardly buy all the books that were needed.

Mr S Matiase (EFF) commended Mr Ngwenya for always making himself available to attend the ITB briefings. It showed he appreciated his responsibility on behalf of the Trust and how much importance he had placed on his job. Ordinarily there was a full knowledge that land belonged to the people but was kept under the custody of the state. Now there was a parallel where other forms of land ownership were proposed and promoted. There was currently the promotion of private ownership. Only 86 land tenure agreements were approved. What had the Trust been able to achieve through the residential lease agreement under its Land Management? If title deeds were not given to occupants of land, the ability to maximise the economic benefit would be hindered. There was a need to move from a feudal form of land ownership. The people who occupied land in whatever form must be given some form of title deed. How did they propose the people should be given occupation and access to land? What strategies were in place to give people access to land; and not how to prevent people from occupying land?

Mr Ngwenya replied that this was still the most accessible communal land because it was collectively owned and once accepted by the group on ground, the access was strong. Since the communal residing people did not have documents you could equate that to a feudal system of occupation. Tenure was however strong.

Mr Matiase asked if the Trust had considered developing indigenous food programmes to improve food security and combat starvation. Would the Trust be willing to share that with the Committee if so? Africans from way back have had ways of providing their own food.  Indigenous food had high levels of drought resistance and adaptation.

The CEO replied that the analogy that the foods were resistant to drought was something that the Trust was interested in and was open to the suggestion.

Mr E Nchabeleng (ANC) asked how much went to National Treasury out of what was collected by the Trust from those using the land. What happened that the Trust could not fill the posts? Why did the person who accepted the offer decline? Was it because of the package or working conditions so that going forward, ITB would know how to keep the people that it attracted? What happened to the previous person who was acting in that position?

The CEO replied it might have been because of the package the ITB was offering. She was really not in a position to know why. The person was in an acting position. After the position was declined, the Board worked on an interim arrangement. On land invasion and illegal occupation, as questioned by Mr Fitane, Ms Magadla and Mr Matiase, this had already been answered by the Chairperson of the Trust. There was also invasion by government departments such as where you found someone digging a quarry, there was a hole and this was dangerous to the community as there was no post mining rehabilitation.

Mr Nchabeleng said how much was generated from the land and how much was paid to Treasury or was it all consumed within the organisation?

Mr Ngwenya replied that the ITB mandate was to administer the land for the benefit and the social well being of the members. Income generated was not for the state. It was for the benefit of the people. The transfer payment from Treasury was solely for the administration of the Trust. The beneficiaries said the money should be kept by the Trust until it was instructed on what to do with it. There was always a shortfall and it was supplemented by income generated by the activity of issuing of leases. Nothing went to National Treasury. The money was for the people that were defined in the Act

Ms Magadla asked how the Trust dealt with unregistered institutions like the Maritime Business Computer College.

Mr Ngwenya replied that the ITB had no mechanism to know if the institutions were properly registered but where there was a doubt, payments were denied.

Mr Mhlongo said expenditure on KPIs and targets did not talk to each other. How much was spent for each KPI? Your performance must talk to the expenditure. The Trust could not use more money and achieve fewer outcomes. There was a shortfall of 701 for the target for Tenure Rights. How much had been spent? There should be a detailed performance information for each KPI.

Mr Ngwenya replied that there was a need to have another engagement with the Portfolio Committee on compliance.

Mr Fitane said the Trust should be specific on when it would overcome its internal lack of capacity.

Mr Ngwenya replied that it had been a problem for a while but currently the ITB had appointed a business Development Officer. There were many challenges on the ground and it was not an easy task. The resources required were disproportionate to the task at hand. In the next three years, the Trust would be on top of it. Approval had also been given for the appointment of two community workers and an admin clerk. Some of the beneficiaries of the awards had graduated and were unemployed. There was a project to get the data of such beneficiaries captured.

Deputy Minister Candith Mashego-Dlamini said that in view of the questions asked, she would point out some details. The report was reflecting two aspects: Q4 and the financial year. In the expenditure report, there was the annual budget, the budget for Q4, expenditure for Q4 and the percentage. As it moved on, it was only the expenditure for the 4th quarter and that percentage. The last column was the percentage for the full year which was 57.92%. Secondly, depreciation could not be reflected in any quarter except in the full financials of the year. The full year depreciation was quoted because it was taken for granted that the 4th quarter was the end of the financial year. That was why there was no proper separation. These were the things the Board would correct.

Mr K Robertson (DA) asked what the security expenses of R141 721 were for. What communication had the Trust had with the police and how was police responsiveness as regards theft?

Mr Amir replied that security expenses referred to security of the office accommodation.

Mr K Robertson asked if there were models that assessed losses and theft on the emerging farm lands.

Deputy Minister Mashego-Dlamini replied that the security expenses were not on farms but in the communal lands where the chiefs were.

The Chairperson said there were no policies governing education. Was the ITB making a follow up as to whether the students were getting bursaries? There was a need to review the educational grant. R5000 was not enough. More money had been spent on goods and services than budgeted for and the Committee wanted a breakdown for more clarity. How much was paid to the community beneficiaries and how many beneficiaries were there. The CEO must answer whether the HR management strategy was finalised. In each quarter the ITB had not spent 25% but in the 4th quarter, Land Management was 43%, Rural Development 11.9%, Traditional Councils 6.8%.The Trust should provide the asset register, bursary policy, breakdown on agricultural policy for the quarter, and beneficiaries. She expressed concerns over the educational awards. ITB should provide the Portfolio Committee with a report in writing.

Implications of the Constitutional Court judgement
Mr Nathi Mjenxane, Parliamentary Legal Adviser, briefed the Committee on the implications of the Constitutional Court judgement for the Restitution of Land Rights Amendment Act of 2014. The challenge came from civil society movements that were concerned with land rights, as the Applicants. The procedure that was challenged was that Parliament failed to pursue its procedural obligation and ensure sufficient public participation. The Parliament through the National Assembly facilitated extensive public participation. The National Council of Provinces (NCOP) failed to facilitate adequate public participation. On the substantive aspect, the Applicants argued that section 6(1)(g) of the Amendment Act compelling the Land Claims Commission, when considering claims for restitution, to “ensure that priority is given to claims lodged not later than 31 December 1998 and which were not finalised at the date of the commencement of the Amendment Act” was too vague as there were several interpretations as to what “priority” meant.  Thus section 6(1)(g) did  not sufficiently protect the existing rights and should be set aside.

On the judgement, Mr Mjenxane said it was a mixed judgement in legal terms. It was a mixture of a declaratory judgement and an interdict. It declared a constitutional invalidity of the Amendment Act and interdicted the process of prioritisation. The Court agreed with reopening the restitution claims process. The timeline of two weeks in which the Provincial Legislatures had to hold public hearings, was found to be unreasonable. Provincial legislatures gave notice of the hearings only a few days prior to the hearings; hearings were held in certain municipalities excluding many affected individuals. These failures meant that the Provincial Legislatures, and by extension the NCOP failed to facilitate adequate public participation.

The Court interdicted the Land Claims Commission from processing the 120 000 new claims for a period of 24 months, pending the re-enactment by Parliament of the Amendment Act or finalisation of the old claims from before 31 December 1998, whichever occurred first. Parliament must hold a constitutionally compliant public participation process, and consider how best to deal with the new claims lodged before judgment date.

The Court ordered that the Applicants’ legal costs be paid by the NCOP.  Parliament had been given 24 months to respond to this issue of reopening the process. The time frame was stringent and the Committee would do well to look into the matter and prepare itself.

Mr Thami Mdontswa, Deputy Chief Land Claims Commissioner: Commission for Restitution of Land Rights, said the Constitutional Court had spelt out the impact of the processing of the legislation. There was obviously an impact on the operation of the Commission which would be a discussion for another day. Secondly, the interpretation of prioritisation remained a tool after the judgement. There was a process designed to provide clarification. The declaration’s validity takes effect from the 28 July 2016.

Discussion
Mr T Walters (DA) said what was before the Portfolio Committee was a constitutional decline, a definite political choice and a deliberate 2014 election lie. Taxpayers’ money must not be wasted in this way.

The Chairperson said the Committee had to discuss the way forward. The Committee had received the briefing and the role of the Parliament had been highlighted. The Court had indicated that there was no proper consultation by the NCOP.

Mr P Mnguni (ANC) said he had never heard Mr Walters stoop so low. He had always held Mr Walters in high esteem. It was true that a number of people were left out of the 1998 deadline. All lawyers always talked about procedure and substance. The only substantive issue that came up was about prioritisation. “Priority” meant someone came first and would have the opportunity to be attended to before others. Our NCOP colleagues had two weeks to do a six week job. This was a logistics issue. There was no election lie, wasting of tax payers’ money. The Committee should come up with a clear stance on this. The timing when the Department brought legislation to Parliament may lead to similar situations. He encouraged the Deputy Ministers to bring Bills to Parliament on time. If the Constitutional Court said it was not the way to do it, then so be it. All the things said by Mr Walters were disgusting and should not have been said at all.

Mr Walters said everything he had said was based on the document. They were facts.

The Chairperson said the Restitution of Land Rights Amendment Bill was taken seriously and Parliament did what it was supposed to do in 2014. The Constitutional Court gave Parliament and the executives the power to process a new Bill. There was a need to get advice on how to process this matter. This was a Parliamentary Committee and not a DA or ANC Committee. No Member should shift blame as it would not help in any way. The court supported the reopening of the land claims process and the Committee should take that collective responsibility.

Mr Matiase said he could not understand the petty squabbles between the ANC and the DA. There was a need to understand who the Applicants were, what they had to lose or benefit and what propelled the Applicants to take this target. What political or economic benefit the ruling party wanted to derive by frustrating the process and how that could be corrected.

Mr M Fitane (UDM) noted he had said last year that the ANC had drifted away from the public and this was evidence to that effect. He said there was need to address the issues as members of the Committee and not as ANC. This was not the baby of the National Assembly but of the NCOP as declared by the judgment of the Court. This was what Section 72(1) was about. It was not about the NA but the NCOP.

The Chairperson said the Court had given the Committee a responsibility as the NA. The Committee had to start afresh. Public hearings would be conducted; the Bill would be passed and referred to the NCOP which would process the Bill accordingly.

Mr Mhlongo questioned what was meant by a mixed judgment. There was support for the redress of the imbalances of the past. Public participation was wrongfully done. In the future, there should be no embarking on projects without money; there should be no service delivery expectations without budgets. In the future, all languages must be engaged in public participation. The judgment said there should be involvement of the affected communities. This should be supported. 

Mr Walters said there was need to be 100% sure that the projects embarked upon by the NCOP/NA were absolutely correct. It should be noted that there was a rigid time frame.

Ms Magadla said she was disturbed by the comments made by Mr Walters, adding that the Committee should fix what was before it.

Mr Mnguni said the last point by Mr Walters was a very constructive one. The Chairperson should outline a process to be followed in a week or two for the Committee to adopt. There were two scenarios. The NCOP could not do the part on the substantive issue, so that was out of the way.  The second scenario was for the executive to start the process and adapt to the current situation on the land claims space.

The Chairperson said Mr Mjenxane should clarify the issue raised by Mr Fitane.

Mr Mjenxane said there was nothing to refer to the NCOP as the Court had declared the Act unconstitutional. The new Amendment Bill might not necessarily be the same as the Act that had been passed but it would go through the same process. It should be an NA driven project. This meant that Parliament must register the process. It also interdicted the Commissioner from processing any new claim until the process was re-opened. Prioritization meant that the claims prior to 1998 should be concluded before the new ones.

The Chairperson asked if the court process would affect what would be initiated as a Committee. He questioned whether that meant that the Committee had to wait.

Mr Mjenxane said the Committee had to wait.

Mr Fitane said that in the case of a municipal ICT case, the stakeholders went to court for clarity and had received better understanding. This was an option the legal team could pursue.

Mr Madella asked if this was a fresh application in the land claims court. Was it a completely new process brought by the same Applicants?

Mr Mdontswa replied that there was interdict on land claims lodged between 1 July 2014 and 27 July 2016, which conflicted with claims lodged before 1998. The Constitutional Court interdicted only claims lodged within that period but said nothing in respect of lands on which there were adjudications. The Land Claims Court picked two cases which had the widest scenario. This process will give the judges an opportunity to explain prioritisation

Mr Mnguni said the Chairperson should consult the Chair of Chairs and the Speaker for a draft parliamentary process that could be suggested to the Committee.

The Chairperson said the Committee supported the decision of the Court but she had been mandated by the Committee to make further consultations. The Committee would have to do this come rain or shine and refer it afterwards to the NCOP for further processing so that at the end of the day the land was given back to the original owners.

Committee minutes
Minutes of 24 August 2016 were discussed.

In matters arising, Mr Mhlongo said there was no time frame for the submission of outstanding reports mentioned under item 5.

The Chairperson said Mr Mhlongo should propose a time frame.

Mr Mhlongo said it was difficult to propose because there was no formal tracking system.

The Chairperson proposed that it should be presented to the Committee quarterly. The support staff should take note and also track it.

Mr Mnguni proposed a period of 14 days to receive a requested written report from the Department.

This was agreed to by Members.

The Deputy Minister said the Department would now work according to that time frame as there was none before this time.

The Chairperson said the support staff would write a letter and put a time frame on it as administration was done on paper.

The minutes of the meeting was adopted. 

The meeting was adjourned.