Communal Property Associations on its 2015/16 Annual Report, with Deputy Minister

Rural Development and Land Reform

02 November 2016
Chairperson: Ms P Ngwenya-Mabila (ANC)
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Meeting Summary

Annual Reports 2015/16 

The Portfolio Committee was briefed on the Communal Property Associations (CPAs) 2015-2016 Annual Report. It was noted that 1 483 CPAs had been registered since the passing of the Act and 53 in the period under review. Some of the challenges facing CPAs were outlined.

The department expounded on the institutional support for CPAs, interventions and the annual targets and budget for CPAs.

The total land rights management facility expenditure was R24 million. Details were given on the sale of land by CPAs in various provinces. The implication of the CPA Amendment Bill was also highlighted. It was noted the Amendment Bill and the Rural Economic Transformation Framework would assist in developing institutional capacity for CPAs.

The Department of Rural Development and Land Reform updated the Committee on the N’wandlamharhi (Mala Mala) CPA and Rama CPA, noting that the delays in finalising the verification process in Mala Mala CPA had created a schism, which also affected the payment of dividends to Members. An interim structure had however, been put in place to resolve this issue.

Further details was given on the issue of an annual general meeting  (AGM) that was organised in the Rama CPA, but was not attended by many members. The department had set up an enquiry to look into the affairs of the Rama CPA, and taken steps to investigate all issues attached to the incidence.

Following the two presentations, MPs questioned the incomplete verification process in Mala-Mala CPA, as well as the interim structure in place; the reason for bringing in a non-representative of the CPA as an officer; the overall impact of the CPAs on the Communities; the impact of the training, and policies that dealt with the right of the CPAs to sell lands; the number of registered compliant CPAs; lack of specific budget for the CPA; why the Department assisted CPA to manage its affairs; delays in intervention in Rama; and the essence of passing the Bill if legislations were not implemented.

MPs also commented on the absence of an institutional model of good governance; the impartiality of the officials; the imperfect sharing arrangement in Mala-Mala CPA; the under-resourced state of CPAs; faulty annual report; the failure of the Land Rights Management Facility (LRMF); the absence of a roadmap for the Rama; as well as the use of the words ‘low literacy level of the people’, which reflected colonialism and apartheid.

The Department was asked to provide to the Committee a letter appointing an acting Deputy General, an approved structure for the CPA, detailed reports on Rama and Mala-Mala CPAs, and terms of reference for the service provider in the administration of LRMF.

Meeting report

The Chairperson started the meeting by noting that the Communal Property Associations (CPA) Act placed a mandate on the Department to submit an annual report to the Parliament on the functioning of the CPAs.

Apologies were received from Ms A Qikani (ANC); Minister Gugile Nkwinti and Deputy Minister Candith Dlamini-Mashego who were attending a Cabinet meeting, as well as from Mr Mduduzi Shabane, Director General (DG) of the Department of Rural Development and Land Reform (DRDLR), who was sick.

Remarks by Deputy Minister
Deputy Minister Mcebisi Skwatsha noted that Section 17 of the CPA Act made it a necessity for the Department to make presentations on different programmes that it was undertaking. This particular briefing was of a serious nature as it was related to the plight of the People and what Government was doing in relation to that.

Briefing on Communal Property Associations
Mr Jeff Sebape, Director, DRDLR, began the presentation on the Communal Property Associations (CPA) 2015-2016 Annual Report by noting that 1 483 CPAs had been registered since the passing of the Act and 53 CPAs were registered in the period under review. Most of the CPAs had been affected by challenges such as incomplete verification, external interference, poor governance, as well as litigation.
Institutional support was provided to help solve some of these challenges. This support included the establishment of a CPA District Fora, Tenure Forum as well as Land Rights Management Facility (LRMF).
A total of 138 CPAs received capacity building support in the form of training, workshops and focused skills transfer. However, the stability of some CPAs had been affected by on-going litigation.

The Department was making progress in implementing the resuscitation plan of CPAs that were under the judicial administration (see slides 8 to 11 of the attached document for details of the interventions).
It was pointed out that two out of the 18 provisional CPAs on record had been converted due to lack of registration.

In terms of the annual targets and budget, the department noted that 200 CPAs were targeted for support towards compliance. However, a total 203 CPAs were eventually supported towards compliance. The department had no separate budget for CPA work, and funds allocated to the LRMF were used to pay panellist who did CPA work.
The total LRMF expenditure was R24m.

It was pointed out that 24 CPAs sold lands. The DRDLR was preparing a list of asset, and was also drafting a distribution plan prior to deregistration (see slides 15 to 19 of the attached document).
Untraceable CPAs had been reduced from 29 to 10.
In terms of the compliance summary, the department noted that a total of 208 CPAs were now compliant (see slides 21 to 24).

One of the implications of the CPA Amendment Bill was the transfer of experienced officers of the department to the CPA office, where possible.
It was pointed out that Cabinet had approved the CPA Amendment Bill on 31 August 2016. The Bill had been submitted to the Office of the Chief State Law Advisor for a final certification and tabling to Parliament.

Ms Vuyiswa Nxasana, Acting DDG: DRDLR, added that the Department appreciated the oversight role played by the Portfolio Committee. The DRDLR was at the stage of finalising its dealings with both the Communal Land Tenure Bill and the CPA Amendment Bill. A conference was held between the 29th September and 1st October 2016 where there were good suggestions on the alignment of the two legislations. It was recommended at the Conference that no new post would be gotten in the entire government, structures should be built and institutions should be established in instances where CPA had no capacity. These institutions would be empowered to make the CPA as effective as it should be.
The Amendment Bill and the Rural Economic Transformation Framework in particular, was a possible solution that would assist the CPA in developing institutional capacity to deal with its own issues, rather than rely on government for all its governance issues.

The Chairperson said the Committee had reached a decision on the Rama CP, and detailed progress report should be given on the interventions for the Rama CPA, since it was a special case.

In briefing the Committee on N’wandlamharhi (Mala Mala) CPA and Rama CPA, Mr Samuel Mogaswa, acting Director: DRDLR noted that during the presentation of the 2014/15 CPA Annual Report, the Department was advised to report to the Portfolio Committee regularly on the developments in these two CPAs.

The delays in finalising the verification processes in Mala Mala had created a schism within the CPA, and had also affected the payment of dividends to Members. An interim structure had been established to assist with the verification of members who were left out of the first verification process.

As for the Rama CPA, arrangements were made by the department to hold the AGM at a secure venue outside the villages. However, some members went to a party while others stayed at home due to fear and intimidation on the day of the nomination meeting. Following the aborted meeting, the department instituted an enquiry in to the affairs of the CPA. Prior to this enquiry, a letter was written to the CPA Committee to submit the CPA documents. The letter would be followed by a subpoena and a notice of enquiry if the documents were not submitted. This process would run parallel to the investigations conducted by the Auditors and the court process

The Chairperson said that although two presentations were made, the two reports could not be separated, especially because Rama CPA was part of the annual report presentation.

Mr K Robertson (DA) said he was concerned that there were no hard copies on the presentation on Mala Mala CPA which would have enabled Members to go through them since it was the largest land claim in the history of South Africa.
Mr Mogaswa apologised and said some information was received late which made it impossible for the edited report to be brought in hard copies. (The support staff however went to make hard copies of the second presentation which was distributed to Members).

Mr Robertson wanted to know how a verification process could be incomplete before the finalisation of a 900 million deal; which interim structure participated in the verification process on Mala Mala; and what rental fee was paid by Mr Ratla paid to the CPA on a monthly basis for the Mala Mala farm.

Mr Mogaswa replied that there was an on going verification of people that were left out. This was a measure to ensure that the right beneficiaries benefited from the resources of CPA. The amount paid as rental would be supplied with the other information requested by the Committee.

The Deputy Minister added that it was possible that the officials of the Department were involved in corrupt practices which the DRDLR was not aware of. All the Stakeholders had to work together, and it was only then that progress could be made on this particular issue.
Ms N Magadla (ANC) asked for the number of registered compliant CPA, and their specific budget, as this was not included in the presentation. She expressed dissatisfaction on the lengthy period it had taken to intervene in the Rama CPA as it had taken years. She also asked for the date when the AGM in Elandskloof was held.

Mr Sebape replied that the date was not within reach at the moment. It would be submitted with the structure as well as other issues that were requested.

Mr T Mhlongo (DA) asked for the person that wrote the report.

Mr Sebape replied that that he wrote the report but did not want to give a wrong date as he was not sure of the exact date.

Mr A Madella (ANC) wanted to know what steps were being taken by the department to complete the verification process of Mala Mala, since there was no indication as to the early completion of the process; and if the department was in support of potential opposition groups.
He referred to institutional support under page 5 of the first presentation, and pointed out that the department spoke of things that was yet to happen as though they had already happened.

Mr Sebape replied that reference was made to those things in terms of plans to implement them, since there was no capacity at the moment for such implementation.

With regard to the tenure forum, there were officials in the Department that dealt with all tenure issues such as legislation.
Mr Madella said the CPA was under resourced. The Director had pointed out in the presentation that only three people oversaw the entire CPA in the whole country, which indicated the priorities of the Department. It was impossible for the trend to go on in this manner, as the same challenges would still be recorded in the coming year. It was therefore, necessary for more dedicated people to be recruited to assist with the smooth running of the CPA. It was the members of various CPAs that comprised the District Fora.
He asked for the extent to which the CPA District Fora would benefit when a non-representative of the CPA was brought in as an officer.
CPA staffs should not only be trained, but be capacitated to handle the affairs of the CPA.

Mr Mogaswa replied that at the formation of the District Fora, it was the community (and not the department) that decided on who should be nominated. In the nomination process, the CPA chose those that represented their interest well.

Mr T Walters (DA) said there was a problem with the institutional framework in terms of a good governance model. There was an institutional model that was missing and as a result of this, a lot of things that should be happening that were not happening. As long as these institutional models were not in place, the CPAs would always require interventions. The officials involved in the CPA were not necessarily impartial. There were signs of particular individuals being chosen to form part of the governance of the CPAs. When land was involved, money was equally involved and this was a concern.

Mr Mogaswa replied that the invitations were sent both to the concerned group as well as the executives Committee. The same platform was created for all the parties involved to participate .The executive committee chose not to participate for obvious reasons.

Mr Walters said Mala Mala land issue was of significant historical importance in South Africa. Clearly, something was wrong as there was an imperfect sharing arrangement. He wanted to know why the verification was yet to be conducted, why the agreement was hurriedly entered into such that it left some people out, if monies were transferred, and what measures had been put in place by the department to ensure that no one benefitted unduly.
Ms Nxasana replied that there were three important roles that should be touched when discussing matters of CPA, which were establishment of CPAs, verification of CPAs, and the operations. A commission was responsible for verification. Additional verification was conducted because some communities were left out in the first verification process, and this situation was not only peculiar to Mala Mala. There was a need for a systemic programme for the verification to be effective. The establishment of CPA had been done, and the process of whether a claim was valid or not had also been done. It was only then that verification could take place.

Mr Mogaswa added that at the time when a claim was settled, a number of people would have applied to be included in the claim. What the Commission did was to verify the new claims whose information was not readily available. People with new claims had to pass the hurdle of verification before their claims could be included.

In terms of the measures put in place to ensure that the right people benefited from the resources of CPA, it was noted that only those who qualified in the verification process in terms of the Restitution Act became members. It was only after the admission as Members that such people benefited from what accrued to members.

Mr Walters asked if the department was not going deeper by assisting the CPA to manage its affairs and what would be done to ensure smooth operation within the Mala Mala CPA.

Mr Mogaswa replied that the DRDLR did not limit its involvement with CPAs because it wanted to ensure successful intervention.

In terms of the efforts made by the department to ensure a smooth operation of the Mala Mala CPA, it was noted that a major challenge was being face in making sure the relationship between a business entity and the CPA as a land holding entity was properly regulated through a written agreement. It was necessary to strengthen the relationship by creating a proper mechanism of accountability to manage the relationship between the two entities.

Mr M Fitane (UDM) said he was concerned about the statement on page 4 of the 1st presentation which said poor governance was due to low literacy levels of the people. He said he was not sure the political heads of the Department saw that statement before the report was tabled, as it reflected more of DRDLR’s lack of capacity to do what the officials were employed to do rather than the people. It also reflected colonialism and apartheid. The statement made was too weighty, and it should not be said the people were unteachable because of lack of education.
He asked for the instrument that was used to come to this conclusion, and the reason why people were not allowed to go through individual phases of personal development rather than a corporate culture. The department was encouraged to introduce individual phases of development only if it had the capacity to follow through.

The Deputy Minister (DM) replied that those were strong words that were used in relation to that particular point but he stood by it. This was one of the challenges on ground and it was true. The Honourable Member had his own opinion on this particular issue and it was a subjective one.

Mr Fitane asked for the result of the support given to the CPAs, and what the impact of the training was.

Ms Nxasana replied that the impact would not be visible immediately. It was a capacity building of the land holding institutions that had also been trained to handle several issues, including financial statements.

Mr Fitane asked why there was no specific budget for supporting the CPAs. The budget from LRMF was for supporting related services and not the core business.

The DM replied that it was true that there were no bracketed resources for the core business of the CPA and the DRDLR was struggling with that. Now that it had been raised in this meeting, there would be more ammunition to deal with it.

Mr Fitane asked for the department’s policy on the right of CPAs to sell lands.

Ms Nxasana replied that the Constitutional Court already ruled that people had the right to choose when it came to matters of land holding. Once the People had made a choice, the CPA had no option.

Mr Fitane asked for the overall impact of the CPAs on the owners and communities around the CPAs. Looking at it from the angle of the Portfolio Committee, it could not be said that the intervention had brought about socio-economic changes to the life of the people. There was no overall impact of running this programme.
He also wanted to know the volume of business generated by the CPAs, noting that it was this type of information that the Committee should be getting from the department, especially since there was no clue as to whether there was any value for money.

The DM replied that Mr Sebape had indicated the core business and where the job of the DRDLR supposedly started and ended, including the claims that had been dealt with and finalised. The Department was not perfect as it tried to sharpen its tools in order to get things right.

Mr Madella said going forward, the Department must put policies in place that would ensure the DRDLR had the first option of buying land so that lands could come back as State land. The CPAs should not sell any land without first consulting the Department.

Mr Mogaswa replied that the current amendment contained a specific provision that granted the department the first right of refusal to acquire land.

Mr P Mnguni (ANC) said since the DG was sick, the norm was to have a letter appointing an acting DG so that in legal terms there would be no issue of locus standi. The CPI was short-staffed. The Department was asked to forward to the Committee an approved structure for the unit at the national level, and sub units at the provincial level in a format of approved funding/vacancies.
The idea of running the CPA with only three members of staff was a recipe for failure. The department was asked to provide information on the approved structure so that the Committee could make recommendations on the issues of staff.

Mr Sebape replied that the Department would provide the terms of reference on staff issues.

Ms Nxasana added that there would be no increase in wages, as even the previously funded ones had been taken away.

Mr Mnguni said an annual report was a plan that reflected the budget versus what had been done, including the reason for the variance. This particular annual report was not right as it was thorny one. The LRMF was a dismal failure. The Department was asked to provide a two-page analysis on the new LRMF since it cost 5% of the vote. The people on the farmland were disgruntled about the government and this has betrayed the government. Justice must be done in Rama CPA. It should be resolved in earnest as there was no road map on how issues would be resolved.

Ms Nxasana replied that the department would provide specific information on the structure to the Committee. It
The department acknowledged that it had become impossible for a few number of people to run the operations of the entire CPA.

The DRDLR would give the terms of reference on the Land Rights Management Facility. It was important for the facility to come closer to the people and not become development tourism. The Department would however, continue to endeavour to play its role in supporting the establishment.

Mr Mnguni asked for the overall conceptualisation of the land that had been restituted and redistributed, and the details of what was expected from the land so that the CPA can take its due process. It was pointed out that there should be a transformation of the trend, as well as reciprocation.

The DM replied that this related to the actual reason why the Act was enacted in the first place and what the intentions were. Politicians were expected to uphold the vision of whatever it was they were trying to create. All political parties should promote active citizenry as the Department had to deal with a citizenry which as a result of colonialism and apartheid liked to see quick fixes. However, it was expected that there would be a struggle because most people preferred money to land. The point raised by the Committee was appreciated and would be considered during the amendment processes for CPAs.

Mr E Nchabeleng (ANC) said he was concerned about the marches in Pretoria on land claims. More information was requested in this regard.

Mr Mogaswa replied that Balsmasdam was a restitution case. As a result of the risk in mining the area, the Commission decided that the cost of restoration was too high. The CPA had been registered but the land could not be transferred because of the challenges faced in displacing the illegal occupants of the land.

The Chairperson said that the Committee would notify the department of other outstanding matters, if any. However, detailed reports about the Rama and Mala Mala CPAs should be submitted to the Committee in earnest.
In terms of the issues raised around the financial implication of passing the Bill, he asked for the essence of making legislations without implementing them due to financial constraints.
The Department was asked to provide the organogram for the CPA unit, the Provincial CPA, as well the terms of reference for the new service provider in the administration of LRMF.
The administrative issues around the Acting DG should also be addressed so that decisions taken would be binding on the DRDLR.
The delays experienced in resolving the issues of Rama CPA must be treated as a matter of urgency. Clarity was also requested on the issue of verification.
The Minutes of the meeting held on 26 October 2016 was adopted with minor amendment.

The Meeting was adjourned.


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