SPLUMA transfer to Presidency; Communal Property Associations Amendment Bill: briefing, with Deputy Minister

Rural Development and Land Reform

24 May 2017
Chairperson: Mr P Ngwenya-Mabila (ANC)
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Meeting Summary

The Department of Rural Development and Land Reform (DRDLR) spoke about the transfer of the Spatial Planning and Land Use Management Act (SPLUMA) from DRDLR to the Presidency. However the components which were within the DRDLR would not move but it would support the Presidency as well as the Department of Cooperative Governance and Traditional Affairs (COGTA), as may be required.

Background on spatial planning prior to 1994 was designed to serve racial segregation, discrimination and privilege. Parallel legislation existed across the former homelands which had created an inefficient and disjointed system. The Development Facilitation Act of 1995 was passed to address spatial planning after 1994. That legislation was however declared unconstitutional by the Constitutional Court in 2010. That reignited the need to create new national and provincial planning legislation.

SPLUMA is the legislation created to replace it. The Act has four goals: to promote certainty and economic investment, address unequal planning and spatial patterns, balance economic needs with conservation imperatives and to improve service delivery. The Act came into force in July 2015 and regulations were gazetted in October 2015.

Chapter 5 of the Act requires municipalities to develop SPLUMA-compliant land development schemes. All municipalities are also required to develop municipal land use tribunals. Additional protocols will be developed by the national sphere of government to guide provincial and local government on their obligations to implement the Act. Most municipalities in the nine provinces have made strong progress in establishing municipal land use tribunals. However the Eastern Cape, Gauteng and KwaZulu Natal are making slower progress than the other provinces.

All municipalities must establish a SPLUMA-compliant land use scheme plan within a five-year period. Some problems with the implementation of the Act were identified. Municipalities did not always prioritise its implementation whilst others were making slow progress. A reassurance was given that the Department is working hard to identify and remedy this. A meeting between the Ministers of Rural Affairs, Cooperative Government and the Planning, Monitoring and Evaluation had taken place. A memorandum of understanding was signed to divide the tasks and functions in the implementation and monitoring of the Act amongst these departments. The division of tasks and functions are still being discussed but once complete, the President will sign the proclamation for the transfer. The financial implications for the implementation of the Act were outlined. Treasury had implemented budget cuts around 2013/14 and the budget for the implementation of the Act had not been materially increased since then.

Members could not fathom why the functions of the Act were being divided across departments. They asked if the lack of cooperation from traditional leaders had led to the transfer to the DPME within the Presidency. They asked why Treasury had not allocated the funding needed to fulfil implementation of the SPLUMA within the DRDLR. Would the spatial planning programme be properly prioritised and would the Presidency address the concerns of the traditional leaders. The Constitutional Court judgment was handed down in 2010 but SPLUMA had still not been fully implemented which was unacceptable. Some Members had concerns about centralising the implementation of the Act in the Presidency. It was clarified that DRDLR would still be responsible for spatial planning in the rural space and DPME would work together with DRDLR as it could not properly implement spatial plan without considering urban spatial planning at the same time. The Committee agreed to wait until the functions had been divided amongst the departments and the  proclamation was ready.

In its briefing on the Communal Property Amendment Bill, the Department said that various forums and engagements had been held with all relevant stakeholders to ensure proper public participation on the Bill. Most amendments dealt with technical issues as one of the main purposes of the Bill was to align the current Communal Property Association (CPA) legislation with other applicable legislation. A land acquisition model is currently been used which allows the community to establish either a CPA or a trust as a business entity. Since the promulgation of the Act in 1996, there were currently about 1500 registered CPAs.

The initial Communal Property Association had been too complicated to properly operate in communities. Various loopholes had been identified in the structure which had led to exploitation by less scrupulous community members. There were issues pertaining to democracy and accountability of CPAs. Government had not exercised much oversight in relation to transparency and good governance but the Amendment Bill aims to address those concerns in various ways. A CPA Office would be established and a Registrar would be appointed by the Minister of Rural Development to oversee the administration of CPAs. The rights of CPA members such as their rights of the alienation of immovable property would be clarified and their rights expanded upon. The Bill would provide greater detail on the process to be followed for CPAs which have been placed under administration. The Registrar would be empowered to dissolve a CPA in certain instances or place it under administration. In addition, 60% of CPA members would have to affirmatively vote for the adoption of the CPA constitution. The Bill would provide for name changes of CPAs. In an effort to secure improved management and deter unlawful or unethical behaviour, the Bill would criminalise the prohibition of a CPA constitution and disqualify certain persons from holding office in the CPA executive. The Office of the Chief State Law Advisor was of the opinion that the Bill will pass constitutional muster. As the Bill will affect traditional communities, it should be passed according to section 76 of the Constitution.

Members asked about incomplete verification of documents relating to CPAs, the qualifications and appointment of the Registrar and if the position would be independent from government, whether a single Registrar would be able to adequately deal with them; whether a quorum of 60% of all beneficiaries should be a requirement rather than a mere affirmative vote of 60% present; if the criminalisation of breaching the constitution of a private entity such as a CPA had precedent in any other legislation; and who would be disqualified from sitting on the CPA executive. Some Members suggested that the communal approach to land was the divisive factor causing the problems, and could not DRDLR assist beneficiaries of a CPA, if they want their own title deeds, to subdivide the property to fix many of the problems which have arisen thus far? From on the ground experience, many of the beneficiaries of CPAs felt that they were being forced to work together. The current framework is based on the assumption that it would benefit the whole community if they worked together as a group. This could be the real source of the problems which have currently arisen about CPAs as many people may not want to work collectively. The Department needed to step back and consider this and perhaps adjust based on changing circumstances and the realities at ground level.

Meeting report

Transfer of Spatial Planning and Land Use Management Act from DRDLR to Presidency
Ms Leona Archary, Acting Director General, Department of Rural Development and Land Reform (DRDLR) and Ms Aluwani Matsila: Acting Deputy Director-General: Spatial Planning and Land Use Management, presented. Prior to 1994 land planning was designed to serve a political idea of racial segregation, discrimination and privilege. Multiple laws, institutions and parallel processes were instituted by the pre-1994 legislation. Planning legislation was fragmented across the old boundaries of what where then the four provincial administrations, homelands and self-governing territories. In 1994 South Africa had inherited a complex and disjointed system which resulted in unequal and inefficient settlement patterns.

The Development Facilitation (DFA) Act of 1995 was the first post-Apartheid legislation passed as an interim measure to deal with Apartheid’s spatial legacy. In June 2010, however, the Constitutional Court found the DFA to be unconstitutional. This reignited the need for proper national and provincial planning legislation.

The Spatial Planning and Land Use Management Act (SPLUMA) emerged in response to that need to regulate spatial planning and land use management in the country. It aims to achieve four goals:
• to promote economic investment in land development and establish sufficient certainty in the land market.
• to address the segregated and unequal spatial land patterns, inherited from Apartheid.
• to balance South Africa’s economic needs with those of environmental conservation.
• to improve and support infrastructure and service delivery initiatives.
The Act and its regulations came into operation on 30 October 2015.

The Minister is the primary person responsible for the implementation of the Act. He is responsible for monitoring and overseeing the three spheres of government regarding the implementation of the National Spatial Development Framework (NSDF) and other frameworks and guidelines. He is responsible for guiding any land development for the national interest, for developing regulations, for developing for a framework for the applications of exemptions and for delegations in terms of the Act.

In terms of Chapter 4, all three spheres are responsible for developing development frameworks. The national sphere is responsible for the national spatial development framework. All local government municipalities will be responsible for developing municipal spatial development frameworks.

In Chapter 5, municipalities are required to developed SPLUMA compliant land development schemes. The national and provincial spheres will be responsible for assisting in the implementation of that process. In terms of Chapter 6 on land use management, all municipalities will be responsible for setting up municipal land use tribunals. The national sphere will be required to develop additional guidelines for use by municipal government.

Municipalities have three immediate implementation requirements in terms of SPLUMA.
• develop, customise and gazette SPLUMA compliant municipal by-laws.
• establish Municipal Planning Tribunals (MPTs)
• develop a framework for delegations and tariffs.

The following percentage of municipalities have established MPTs in the nine provinces: Eastern Cape: 18%. Free State: 68%. Gauteng: 33%. Kwa-Zulu Natal: 18%. Limpopo: 82%. Mpumalanga: 100%. Northern Cape: 100%. North West: 44%. Western Cape: 96%. Municipalities in the Eastern Cape, Gauteng, KwaZulu Natal and North West are making slower progress than the other provinces in establishing MPTs.

Municipalities per province which had gazetted their by-laws: Eastern Cape: 79%. Free State: 95%. Gauteng: 89%. Kwa-Zulu Natal: 80%. Limpopo: 41%. Northern Cape: 100%. Mpumalanga: 100%. North-West: 83%. Western Cape: 100%. The slowest progress was occurring in Limpopo.

The presentation did not go into detail regarding tariffs, delegations and appeal structures. Whilst these are key indicators they are largely linked to the establishment of MPTs and gazetting of by-laws. The overall progress of implementation is currently at 79%. That percentage however measured only the gazette notices which have been published. The council resolutions were not factored into that figure. If council resolutions were factored in the figure would most likely be around 90%.

The five year SPLUMA compliance applies only for land use schemes (LUS). In terms of the Act all municipalities must have a SPLUMA compliant land use scheme which must be established within a period of five years from 5 June 2015. This is the only major risk in terms of legislative compliance. Currently the 79% figure poses a minimal risk in terms of compliance. The Department has however been working hard with local and provincial spheres of government to ensure that 100% of the five key indicators is achieved.

SPLUMA implementation challenges were identified as:
• Municipalities did not always appear to be prioritising the implementation of the Act.
• There was a lack of capacity to implement the Act across all three spheres of government.
• The finalisation of the by-laws has been slow in some provinces, in particular, Eastern Cape, Limpopo, North West, Gauteng and KwaZulu Natal. This is due to various reason such as a lack of funding in the 2016/17 financial year to prepare and gazette by-laws, delays in municipal council decision-making, lack of capacity to deal with the by-laws process, the unwillingness of some traditional leaders to co-operate and participate in the programme, and incorrect gazetting.

The presentation then dealt with the re-allocation decision which had recently been taken.

The Ministers of the Department of Rural Development and Land Reform, Department of Cooperative Governance and the Department of Planning, Monitoring and Evaluation had met on 04 November. The purpose of the meeting was to assess the appropriateness of the location of the national spatial planning and land use management functions.

At the meeting the following decision was taken. The compilation of the NSDF was to be led by DPME. The land use management function was to be ideally overseen by the Department of Cooperative Government (COGTA). A decision was taken that there is a need to further divide the planning functions to be shared across the three spheres of the various departments. A Memorandum of Understanding would be developed to govern that arrangement and any possible reallocation would be discussed and consulted on. After those meeting several engagements with stakeholders have been held to determine what further action would be taken to bring those decisions to fruition.

The Office of the Chief State Law Advisor had been engaged to determine what legal process should be established to further oversee the implementation of the Act. A draft proclamation was prepared by DPME which was sent to the Presidential legal services for signature. The legal service unit in the Presidency subsequently advised all affected Ministers to sign which was inclusive of the relinquishing Minister of Rural Development and Land Reform. The signature of these Ministers was seen as a necessary step before the President should sign the document.

On 7 April the DPME Minister signed the proclamation. Those documents have been sent to the COGTA Minister for consideration. Following consideration by the COGTA Minister the documents will be sent for final signature by the President.

The proclamation states that the primary custodian for the implementation of the Act is the Minister of Minister of Rural Development and Land Reform. Secondary responsibilities have been granted to the COGTA Minister, which primarily deal with Land Use Systems and the alignment of authorisations. The cross-cutting functions were outlined. This is necessary because all three spheres of government have responsibilities under the Act. A policy would have to be developed by government to ensure an alignment of authorisations as all three spheres have responsibilities in terms of the legislation.

The Spatial Planning and Land Use Management branch in DRDLR was formed in 2013 as part of an augmentation of an existing Chief Directorate named Spatial Planning and Information (SPI). The new SPLUM branch was broadly funded through internal reprioritisation of the Department budget. It was noted that no new funding was allocated by Treasury for SPLUMA implementation.

DRDLR will still retain the primary function of planning and information. This function will have a specific focus on rural development and land reform programmes which are key in addressing historical and spatial imbalances. It is envisaged that through the spatial planning function, DRDLR will develop spatial plans which will guide the use of land in alignment with provincial and local government plans. It will however be necessary to support rural and underdeveloped municipalities to advance rural development and DRDLR programmes.

The presentation then dealt with the implication for budget and resources. It contrasted different financial years: 2011/12 when the chief directorate was still known as SPI and 2013/14 year when the SPLUM branch came into operation. The baseline in the presentation was used to inform the current budget allocation so 2014/15 was not dealt with. This is because the budget has not increased in that time period. The only increase has been the annual inflation increase which is not material.

The overall budget had increased (see document). Treasury had begun to implement quite aggressive budget cuts after 2013/14, so additional resources had not really been received following the enactment of SPLUMA.

Currently there are no implications for the Departmental Annual Performance Plan. This is because the SPLUMA implementation support activities are contained with the SPLUMA Branch operational plan together with activities on spatial planning support for the DRDLR.

Task teams have been established between the three affected Departments as well as the Department of Public Service and Administration (DPSA) and National Treasury to take the process forward. Each Department has nominated representatives for each of the different work streams:
• Finance, Infrastructure and IT.
• Organisational Scoping, Human Resources, Labour Relations and Change Management.
• Legal and Policy Matters.
• Transitional Arrangements and content of work which is currently been managed by DRDLR.

The task teams are currently in place but it had been agreed that the work of the task teams will continue after the President has signed the proclamation. DRDLR is currently scaling down on SPLUMA implementation activities as part of the transitional arrangements. All current activities will be reported to the task team on Transitional Arrangements and the task team on the content of Work. Where it will be possible, the DPME and CoGTA will be brought in for ongoing work.

The Chairperson asked the Committee whether they would prefer for both presentations to be made before engaging in a discussion on their contents.

The Acting Director General stated that a separate presentation was not necessarily going to be made. Rather DPME would expand on what had been made in the presentation.

Mr D Mnguni (ANC) stated he could not understand why the Acting DG felt it necessary to speak on behalf of the DPME. As DPME representatives were present the Committee could conduct its own oversight as part of its parliamentary duty. The DPME must speak for itself and they should begin with an apology for the Minister. It is ultimately the Executive which must account to Parliament.

The DPME delegate apologised for the absence of the Minister, Deputy Minister and the DPME Acting Director General. Two sector experts were present to support the SPLUMA presentation which had been made. This is because the two Departments work closely together.

In terms of the Public Service Act, the accounting officer of DRDLR remains responsible for that function until such a time as the proclamation has been signed by the President. As had been noted, the two Departments have been working together and joint processes implemented to facilitate the implementation of SPLUMA.

In terms of progress going forward, one of the main objectives to think about is how to implement spatial planning into the entire national plan to address the spatial inequalities that continue to exist in the country. The DRDLR had stated that it would still be responsible for spatial planning in the rural space and DPME would work together with DRDLR as it could not properly implement spatial plan without considering urban spatial planning at the same time.

Ideally COGTA should have been present as some of the SPLUMA functions will be undertaken by COGTA. Discussions are currently underway in terms of the Public Administration Management Act to sort out the finer details regarding the implementation of the planning legislation as well as the functional shift. All of the Departments would continue to work together to ensure that it would be implemented timeously.

The Chairperson thanked the presenters. She noted that on page 18 of the presentation a summary had been provided. However, it appeared that only two of the Departments are properly up to date. Where is the DRDLR traced in the diagram? It appeared as though the DPME would be undertaking all the activities of the DRDLR. What specific role would DRDLR play?

Mr K Robertson (DA) noted on page 15 it stated that traditional leaders had been unwilling to cooperate with the DRDLR. SPLUMA is a vitally important. Why are they refusing to cooperate and what is their role and function in terms of the Act? Page 19 stated that rural and under capacitated municipalities would be supported in the mission and programmes of the DRDLR. How did they plan to support them in that regard? What was the cause of the need for support in the first place?

Mr T Walters (DA) noted that this was a difficult issue. DRDLR did have limited capacity in terms SPLUMA. Would the concerns of the DRDLR be properly maintained in terms of the Act. On page 19 the comment was made that there was a problem with budgetary support and that no new funding had been directly allocated by Treasury for SPLUMA implementation. Why had additional funds not been allocated to implement the Act? Secondly, how can the Committee know that the planning spatial function would be prioritised? What mechanism will be put in place to ensure that each municipality has a rural development component in their IDPs?

Mr M Filtane (UDM) stated that he had a fundamental problem regarding whose responsibility it would be to address the concerns of the traditional leaders? Would the DRDLR or COGTA deal with that issue? In addition how would it work that the DRDLR Minister promulgate regulations in 2015 but the implementation of the Act is later moved elsewhere? It does not seem to be the norm that one department makes regulations and the implementation is shifted to another department. What else is being done to address technical problems such capacity and funding gaps? How can three or four different departments deal with the implementation of SPLUMA? It is concerning that the Constitutional Court judgment was passed in 2010. The purpose of SPLUMA was to address the laws of Apartheid and it appears that it is no closer to full implementation. How can the implementation of this legislation have taken so long? This was totally unacceptable for this not to be properly resolved and so much confusion around SPLUMA to still exist. The solution may be to engage the Minister to engage the Presidency and the various departments to fast track its implementation given the lack of progress thus far.

Ms Magadla (ANC) noted that the Act was currently at the proclamation stage. Traditional leaders however are currently unwilling to cooperate and they state that they are the personal custodians of the land? What is the true position in that regard?

Mr A Madella (ANC) said [inaudible] various departments “poaching” members and personnel from the Department of Rural Development.

A Committee member wanted clarity from DRDLR on what the reasoning and justification was for sending the legislation to the Presidency?

Mr Robertson noted that the municipalities did not have proper capacity to implement the Act due to various issues such as lack of capacity and the traditional leaders. Would those capacity problems be solved if it was moved to the Presidency? An argument could be made that it would be better placed under COGTA. Why had DRDLR capacity not rather been improved? Issues about the constitutionality of the Act were because the municipalities determine land use. SPLUMA was supposed to avoid that issue but the approach has been to move those issues to the Presidency. The Committee should be made aware of long term constitutional implications. It appeared that a fundamental implementation challenge was that of capacity which should first be sorted out.

Mr Mnguni noted that the phrase in the presentation that the DFA was declared “unconstitutional because it was unconstitutional’ is a meaningless statement. The Constitutional Court would give proper grounds on why the Act was declared unconstitutional. What were the grounds for the DFA being declared unconstitutional? On the point about traditional leadership, his view was that if traditional leaders had serious concerns about SPLUMA they would have litigated which they have not yet done. Clearly it appears that the traditional leaders therefore do not have a legal leg to stand on. Every week high profile litigation matters appear in the media. If the traditional leaders had a proper substantive case to make, it would have been made by now. All the respective Departments should be congratulated for the fact that the case has not been litigated. The fact that it had not, showed that the SPLUMA was probably legally sound. It may be necessary for the Committee to carefully think about spatial planning as a whole. Planning is a separate function from that which is performed by the DPME. He had travelled to Tanzania which had warned him about placing planning centrally within the Presidency. It could create future problems regarding a different point of view from the Department as to how the powers around planning should be properly exercised.

Mr Walters had concerns about the potential constitutionality of SPLUMA. For example, the local municipalities had the responsibility to engage with traditional leaders and various stakeholders at a local level. Would it be the Presidency who would engage with those stakeholders at the local level which would not be in accordance with the Integrated Development Plan (IDP) process or would there be a support function to ensure that local government had proper functions in that regard?

The Chairperson noted that the DRDLR would retain planning over rural development programmes. What planning functions would then be undertaken by the DPME? The rural areas fall largely within municipalities. If the DPME took over local planning but planning for rural areas was undertaken by DRDLR, it created a confusing situation. The presentation indicated that it would be necessary to divide planning functions between three different departments. That created a very confusing situation about their respective functions. Could that be clarified as it was very confusing? Activities would be reported to the task team but then who would the task team report to? Municipalities did lack capacity but more than 70% of the municipalities had managed to properly implement their by-laws. With all of those different functions divided between the various departments what role would the Committee play? 

A DPME delegate noted that she would ask the DRDLR to answer further questions about the presentation specifically as they would be better equipped to answer these.

The Chairperson interjected that according to the correspondence received by the Committee, it stated that DPME would give a presentation on this matter which did not occur. This must mean that the DPME would then jointly respond to the presentation made by the DRDLR. This was due to a deliberate decision on their part and therefore she should be prepared to.

Thw Acting Deputy Director General responded that the Department was monitored by the DPME which visited their various sites and assessed the progress and implementation of their programmes. A report had been presented to the DPME which recommended that the implementation of SPLUMA should shift from the DRDLR to the DPME which was according to its own assessment. The DPME felt that as the implementation of the legislation required the cooperation of a number of departments and municipalities it could not be managed by the DRDLR alone, without additional cooperation. It was felt that process should rather be managed centrally by the Presidency which would allow the various Departments to cooperate jointly as co-ordinated by the central Presidency department. The resolution of Cabinet was that three Ministers should form a ministerial task team. The three Directors-General should form a technical committee to unpack the legislation. After the legislation had been properly unpacked, the proper role of each Department could then be assigned and they could then report centrally to the DPME. DPME would then report on behalf of each Department on the implementation of the legislation. Once those processes had been completed, a report could then be sent to the Presidency about the further implementation of SPLUMA. That information had to be gazetted as it was a full function of the DRDLR which was now been allocated collectively to the various Departments. As had been indicated both the DRDLR and COGTA were still engaged in that process to determine what their proper input and allocation of functions would be. At present the full functioning is still with DRDLR until the other two Ministers had properly examined the information and reached a decision about the different allocation of functions. It is currently difficult for the programme to be fully clarified until that process has been completed. The task team will only operate until the President has properly allocated the various functions after the completed report has been sent to the President and the various functions properly published in the gazette. The DFA was declared unconstitutional because the appeal authority of the previous legislation was dealt with concurrently by the Minister and the MEC for Local Government.

The Chairperson stated that it appeared from the response of the Deputy Director General, that the process had not yet reached a stage where proper Committee engagement could be done. She put it to the Committee whether it would be preferable to postpone questioning on this until a further stage.

Mr Walters agreed with the Chairperson and stated that it would preferable to postpone discussion until the process had reached a stage when proper engagement with the process could occur. Proper implementation and monitoring should be continued and the relevant stakeholders should be asked to appear at a later date.

Mr Filtane noted that municipalities appear to be doing all that can feasibly be done at the moment about the implementation of SPLUMA. The main purpose of the engagement was to establish what the current position is and at least the Committee now knows what the current position is about the implementation of SPLUMA.

Communal Property Associations Amendment Bill: briefing
Deputy Minister of Rural Development and Land Reform, Candith Mashego-Dlamini, apologised for having taken so long to table the Bill. Their original intention had been to table the legislation last year but there had been a delay.

DRDLR Acting Deputy Director General: Land Tenure, Ms Vuyiswa Nxasana, said the Bill had been brought to the Committee after numerous consultations with the affected stakeholders. Forums had been established for that purpose. On a daily basis various emails and smses had been received about the content of the Bill. The CPA report had stated that it was important for the CPA to be the correct mechanism as a landholding entity but an informal indaba was going to be held to look further into this issue. A policy had been developed on the existing Act which is still in force.

The majority of amendments dealt with various institutional arrangements. It was emphasized that a massive consultation process had occurred and the Bill was envisaged to be aligned with other legislation currently in force. Concerns still exist about whether the CPA is the correct mechanism to regulate holdings in land.

A different set of models had been envisaged for different entities. A land acquisition model is currently been utilised which requires beneficiaries to establish a legal entity either in a trust or a CPA. It is the choice of the community or beneficiaries who decide which route to follow. The land acquisition entities are supposed to be business entities. It is the confusion between the CPA as both a business and a land holding entity which creates confusion, especially with regard to competition over scarce resources. In various instances mining resources are been embezzled. Currently there is not much that the DRDLR can do besides placing those entities under administration.

Mr Sam Mogaswa, DRDLR Acting Director: Tenure Reform, dealt with the substance of the amendments in the Bill.

Since the promulgation of the CPA Act in 1996, there are 1 513 CPAs currently registered. The overwhelming majority are facing challenges often of an operational nature and there are various compliance deficiencies. Despite the intervention of the Department little has been achieved in resolving those challenges. The nature and causes of those challenges are numerous.

First, the nature of the entity itself presents challenges. When the idea of CPAs was first conceived the Department wanted to create an entity which would be simple to operate and able to meet the needs of its members without been too complicated to operate. That had however led to a number of loopholes been identified and exploited by some CPA members.

Second, there was a lack of democracy and accountability in the CPAs. This sometimes led to an abuse of power by the elected community members. Government had not exercised much oversight over those entities which had made that situation worse. Whilst the Act had been promulgated in 2006, the first annual report had only been completed and released in 2010. This goes to show the extent to which the Department had been neglecting CPAs. Attempts have been made to rectify that situation through the Amendment Bill:

1. The establishment of a CPA Office would create greater oversight.
2. The Minister is empowered to appoint a Registrar that would oversee the implementation and administration of CPAs. These functions would be stipulated.
3. The rights of members with regards to rights such as immovable property held by CPAs would be further clarified and expanded upon.
4. The formation of CPAs would be allowed in respect of land given to labour tenants.
5. The Bill would provide for the management of CPAs that have been placed under administration.

The Bill aims to enable labour tenants who have been given restituted land in terms of an order of court to be able to form CPAs. The Bill will enable labour tenants to register CPAs. A new section 2A, B, C and D would be added which provides for the transfer of property to CPAs for the compilation of plans for property to be acquired by CPAs.

The Bill would require 60% of members to be present when a CPA constitution is adopted. The Bill would provide for the changes of names of associations and the issuing of new certificates which would reflect the new names. The Bill would regulate the opening of bank accounts by giving the Registrar the power to issue a letter stating that a CPA has been registered and therefore is permitted to open an account. This would prevent a situation where CPA executive committee members open numerous bank accounts without their members knowing.

The Registrar would be empowered to dissolve a CPA committee in some instances and appoint an interim committee to manage the affairs of that CPA when circumstances call for such a dissolution. In addition, certain people will be disqualified from been members of CPA committees. Immovable property may only be sold, donated or encumbered with the written consent of the Minister which will require at least 60% of the community members to be present at a meeting where such a resolution is adopted.

Any CPA that wishes to dispose of immovable property must first give notice of its intention to do so to the Minister. If that is the case, the Department shall have the first option to buy the property. The CPA may sell, donate or encumber movable property with the consent of the majority of its members present at a CPA meeting. Where such movable property is purchased with the financial assistance of the Department, the CPA must first obtain the Registrar’s consent before it will be allowed to sell, donate or encumber that asset.

New offences will be introduced in terms of the Bill which include: breaching the provisions of the CPA constitution, destroying the documents about the activities of the CPA and interfering with the duties of a competent person appointed to manage a CPA, which has been placed under administration. The reason for criminalising the destruction of documents is because it has become increasingly difficult for the Department to intervene in instances where there is alleged mismanagement of CPAs and allegations of fraud or embezzlement. In general, there is poor record keeping which is sometimes done intentionally for that same reason.

Clause 17 of the Bill will require the Registrar to prepare annual reports in respect of CPAs. This is currently the function of the Director General. Clause 18 will provide for regulations and fees. It will enable the Director General to determine fees which are payable in terms of the Act. Clause 19 will inset a new section 18A which will provide for various transitional arrangements. Clauses 20, 21 and 22 will provide for further consequential amendments.

The presentation then dealt with the financial and constitutional implications of the Bill.

Existing experienced officers will be transferred to the CPA Office where this is possible. The CPA Office will make use of the current office accommodation provided by the Department. Both the state and department legal advisors are of the opinion that the provisions of the Bill are in compliance with the Constitution.

The Office of the Chief State Law Advisor and the Department are of the opinion that Bill should be passed according to the section 76 procedure. This is because various provisions of the Bill will impact on traditional communities. In addition, the Office of the Chief State Law Advisor has advised that it is necessary to refer to the Bill to the National House of Traditional Leaders for consideration.

Mr Robertson noted that one of the challenges currently facing CPAs is incomplete verification. This is true from his own experience as every single one he has visited has had verification problems of some kind. What will the Department do in relation to re-verifying who the beneficiaries are of CPAs? This is one of the major problems facing CPAs. He asked for clarity that if there is a difference between trusts and CPAs what is the Department’s responsibility towards trusts? Would it simply be a contractual issue which would then differ on a case by case basis, or does the Department have a general responsibility towards trusts and CPAs as a whole? In addition, are the correct people present at ground level to assist with issues relating to accountability, democratic values and ensuring that the CPA constitution is adhered to? According to the Bill, the Minister will be empowered to appoint a Registrar to improve on those problems. What qualifications and criteria will be used in appointing that person? The problems facing CPAs are of an immense nature and it is unlikely that a single person will be able to properly address and manage all those issues. Will the Registrar be independent from the state or part of the Department? Will individual claims still be processed? Generally, CPAs which claim a large section of land with various stakeholders, the argument which arises is which land can be used and which land cannot be used. His suggestion, from personal experience, is to allocate different sections of land which can be individually managed. This would work far better than attempting to get a large group to attempt to cooperate over issues such as land. Attendance at meetings, from his personal experience, is that the people who agree with a decision to be taken are bussed in. People who disagree with proposed decisions are often either not bussed in or, in some cases, not even invited to those meetings. How can quorum then be required if the Department is unaware that both sides to that proposed issue have actually attended the meeting? A better alternative would be to make the quorum one of 60% of all beneficiaries as opposed to a 60% affirmative vote when dealing with communal property. That would place the government in a better position to ensure that all stakeholders are afforded an opportunity to make decisions about the management of CPAs. The affirmative vote decisions are the ones which in his opinion has created massive amounts of resentment about CPAs.

Mr Filtane noted that at the previous meeting with the Department he asked if the CPA constitution would be approved by a legally competent person. The Department had replied that that would occur. He asked if it was traditionally accepted to prescribe that breaching the constitution of a private entity constitutes a criminal offence? Is it the norm within South Africa to criminalise the breaching of a constitution of a private association as opposed to a statute or common law offence? The assumption in the presentation was that the offence in the Bill means that a contravention will lead to a criminal sanction as opposed to a civil law offence. There is a general opinion that the Constitutional Court adopts a purposive interpretation to legislation. This means that they ask what the purpose of the legislation is. The fact that a law has to be amended which was passed in 1996, means that a snag has been hit in terms of the current CPA legislation. The Committee should adopt a purposive approach to the legislation which it considers. His point is that, on a purposive interpretation, is the purpose of the legislation to criminalise a contravention of the constitution of a private CPA?

Ms N Magadla (ANC) noted that on page 7 point (g) certain people would be disqualified from holding membership in CPA committees. She wanted further elaboration on that point as to who would be disqualified and why.

Ms T Mbabama (DA) stated that whilst there is a summary list of the challenges, it would have been helpful for a schedule to state which amendment dealt with which particular challenge.

The Chairperson noted that it appeared that the Department had various challenges with the lack of compliance. Is there any amendment which would assist in the principle that the reporting period of the various CPAs be in line with government entities. Are there any amendments which would address that concern? The second issue related to the difference between the community, the CPA and the executive committee. Is there any differentiation between those three different groupings?

Ms Nxasana responded to the general queries. On the incomplete verification at CPAs, this is primarily a problem of restitution. The Restitution Act requires the Department to follow a set of processes before land can be restituted. This is one of the primary problems in putting a legal entity in place before that process has been completed. This is the reason they had provided communities with the option of creating either a trust or a CPA for purposes of a business enterprise for example. This is a recurring issue however. A related point is that community has a variety of choices to make when they have been restituted land such as creating a trust, a co-operative or a private close corporation. When the CPAs are established the assumption that the Department made in the legislation is that people had been workshopped prior and they could then make an informed choice as to which model to follow. The CPAs are administered in terms of statute by the Department but the Trust model falls under the jurisdiction of the Master of the Court which falls under the Department of Justice and Constitutional Development. The DRDLR had been in contract with the Department of Justice as the current legislation governing trusts did not provide for land reform trusts in particular. DRDLR is attempting to create a framework where the same protection can be provided to trusts which would be the same as if the community had chosen a CPA as their model. If these foundational issues are not dealt with, any other subsequent changes will simply be of a cosmetic nature.

On the transparency and democracy issue, this is not explicitly contained in the legislation but is a policy which was later introduced by the Minister. This is a policy which they are attempting to address particularly in relation to the allocation of land. This will be regulated in terms of the Land Tenure Act to ensure proper legislative oversight and accountability over the administration of land. These issues are being dealt with in a pragmatic way when they arise but they are taking a proactive approach to dealing with these.

There are issues around the slow pace of registration. The CPA framework has three main functions. The establishment which occurs at a provincial level, the registration which occurs at the national office and the support function falls under the national office. In terms of the support component, the turnaround time for registration of CPAs, as a record time, is 48 hours. There are no real problems with the registration of CPAs. The primary issues relate to support functions and the establishment of CPAs. The current amendments are of a technical nature and would be able to address these. The root causes of other challenges were not of a technical nature, but rather were policy or legislative as well as implementation concerns. Additional measures had been taken such as further training of staff and building the capacity of the Department.

Mr Mogaswa replied that the Registrar would be appointed by the Minister and the terms of the appointment would be done in accordance with the Public Service Act. The Registrar would therefore be a governmental official whilst the accounting officer would continue to be the Director General. Administratively, the Registrar will operate under the accounting officer and therefore would be accountable to the Director General. The focus of the Registrar would however be on the administration of the CPAs. The Bill did foresee the possibility of having to appoint Deputy Registrars in certain provinces. The Registrar would operate at the national level whilst the deputies would assist at the provincial level.

On the criminal sanction question, he replied that in terms of the Companies Act, for example, certain anomalies which could not be addressed administratively had been criminalised to assist in creating deterrence for certain kinds of activities.

On the question of when the CPAs would report to the Registrar, this would be addressed in terms of regulations to the Act. The finer details as to how the Act would operate in practice would be more fully fleshed out in those regulations. For the purposes of aligning the reporting with other entities in the Department, it was possible, for instance, that CPAs could be required to send their reports to the Registrar by the end of the financial year. The Registrar could then compile an overall report, detailing all the reports received, which could then be submitted to the Department.

On disqualification, clause 11(6A) states “No person convicted of an offence in the Republic or elsewhere which involves dishonesty or any other offence for which he or she has been sentenced to imprisonment without the option of a fine, shall be elected as a committee member or, if such person has already been elected to be a member, he or she shall resign as a member”. The purpose of the clause is to prevent situations where a convicted fraudster or thief can then be allowed to manage the affairs of a CPA and continue such activities.

On the difference between a CPA, a community and a CPA executive committee, an executive committee is a structure which is tasked with managing the affairs of a CPA. In terms of the current Act a community and a CPA are used interchangeably. In terms of the Amendment Bill, a community will be distinct from a CPA. A community then refers to those members which are on the membership list of a particular CPA. For example what often occurs is that within a traditional community a CPA is formed after land has been restituted. The restoration of land will only occur for those who are entitled to the restitution of land in terms of the Restitution of Land Act. The definition of community in the Amendment Bill gives a broader meaning to the word community, as those members who part of a CPA will be defined as a “community” for purposes of the Act. In terms of the current legislation a community is defined as an “association”.

Mr Walters said that it does appear that there is a problem with the current CPA model in general but it does appear that the Department is dealing with that. He did caution that there is a difference between fixing a flawed model versus adopting a new model entirely. He requested that additional documents and discussions within the Department, about the current model, be provided to provide information on that point. It would be helpful if documentation could be provided to shed light on what has worked and what has not worked in the past.

Mr Robertson wanted to know that if beneficiaries of a CPA, which were residing on a property, wanted their own title deeds could the Department not assist them and subdivide the property to fix many of the problems which had arisen thus far? He did not necessarily want a response to the question posed, but noted that it was more of a suggestion for the Department to consider.

Mr Filtane agreed, saying in his experience, many of the beneficiaries of CPAs felt that they were being forced to work together. The current framework is largely based on a government policy which rests on the assumption that it would benefit the whole community if they worked together as a group. This could be the real source of the problems which have currently arisen about CPAs as many people may not want to work collectively. He suggested that the Department take a step back and examine further whether the current legislative framework of co-operative business is still the best route to follow in this regard. It is necessary to keep on checking and adjusting based on changing circumstances and realities at ground level.

The meeting was adjourned.

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