Communal Property Associations Amendment Bill: stakeholder engagement: day 2

Meeting report

Comments on previous meeting

The Chairperson welcomed the Members and reiterated the clarifications made by the Department on 30 January  2018 -- that the purpose of the requirement for the Minister’s signoff on the process of disposal was to protect the beneficiaries of the land, and to also give the state the opportunity to be the first purchaser of such property. The Committee would receive briefs from the content adviser, the researcher, the legal unit and the State Law Adviser. The team was led by Ms Vuyiswa Nxasana, Acting Deputy Director General, Land Tenure and Administration.

Mr S Matiase (EFF) said although Advocate Sello Ramasala, Legislative Specialist, DRDLR, had answered most of the questions he had posed to the Department the day before, the Department had not answered questions on the relationship between labour tenants and the Communal Property Associations (CPAs). The Department had said the labour tenants had a choice, and he had asked what the choice was about, but had not got clarification on the role of the labour tenants.

Ms T Mbabama (DA) said she had mentioned the importance of education to the beneficiaries, but it had not been addressed in the response of the Department.

Mr P Mnguni (ANC) said he thought the meeting of the day would move from addressing the Department, so that the Committee could begin to consolidate the response made by the Department, analyse it and find a uniform approach to the issues discussed before the Amendment Bill went for a second reading. There might be a need to seek a legal opinion on rephrasing the clause so that it would clarify the confusion between the definition of the CPA, community and beneficiary. He understood that the CPA was referred to in the Bill as the executives, but there was no reference to ‘executive’ throughout the Bill. Also, the Department was opening itself up to unnecessary litigation based on ownership. Ownership should not be lost through the context and definition of the CPA, because people had been robbed and this was frequently reported during public hearings.

He supported the clauses that regulated the CPAs. According to him, a 60% majority should be adhered to, though it may be difficult, as 50% plus 1 should not be used for issues that concerned the lives and future of the people, because it was proven to be ineffective in the past. There must be a mechanism for a 60% majority, because it was democratic. He also supported the proposal of the Department of Rural Development and Land Reform (DRDLR) to professionalise the management of CPAs through the Registrar’s office. Stakeholders needed to know that the office of the Registrar did not refer to the current officials of the Department, as these officials had not carried the community along in the amendment process. There was overwhelming evidence that CPAs were at odds with Departmental officers. He supported the notion that the Registrar was a necessary tool that had been proposed in the amendment, but observed that defining the Registrar as a retired judge should be debated, because land was a scientific product. Therefore surveyors could be considered as Registrars. 

He asked the Committee to consider the issue of ministerial responsibility in the disposal of property, even though he agreed that a Minister got the first opportunity to buy. He remarked that the Minister would be conflicted in the sense that he was signing off from CPA and selling it to himself. The principle was accepted, but the legal technicalities must be reworked because of the conflict of interest.

Mr M Filtane (UDM) hoped that his comments would not be misrepresented because he had not been present during the meeting of 30 January, as he had been at a Public Works Committee meeting. He supported the 60% majority, and said that administration must move away from the autocratic approach and an element of development must be infused. People had to understand that administration needed patience and must be endured. A lady in KwaZulu-Natal had said the Department was taking away ownership and making the people mere managers. The Department must not be seen to be taking away ownership from the people -- they must be allowed to remain owners and managers.

The Chairperson said most of the questions had been responded to on 30 January, but she asked Adv Ramasala to reiterate the points.

Implications of Bill clarified

Adv Ramasala said labour tenants were the labour tenants to whom land had been restituted. He gave the definition as stated on page four in clause 2(6) of the Bill, in line 35.

Education was referred to in the Act on page five in line 9 of clause 2d. In the definition, the Department indicated that part of the Registrar’s responsibility was to educate the beneficiaries of the land by providing information on how to comply with the expectations of the Act.

The CPA was defined in the Act as a legal entity, not as natural persons, and a community was a physical entity. The concept of a CPA was meant to allow a legal entity to transact on behalf of the community, who were the beneficiaries. The principal Act read that the CPA held the property in common, which tended to create the assumption that it owned the property. A CPA never owned a property for itself, but on behalf of the community, and did not transact on behalf of itself. The Department was seeking to make it clear that CPA as a legal entity transacted on behalf of the community unlike in the past, where CPAs had transacted as if the property belonged to it. Having made the distinction; the Committee had the choice to decide if they wanted the CPA to continue to assume ownership of the property, or to adopt the proposal by the Department which clarified the CPAs function. He said the definition of community had not changed, except in relation to the labour tenant.

He said if the office of the Registrar had to be autonomous and outside the Department, then the clause had to be redrafted, because the Registrar answered to the accounting authority in the Ministry according to the previous Bill.

He agreed that there was an element of conflict of interest by the Minister. However, the Minister was not transacting for himself, he was acting and transacting on behalf of the State.

Discussion

Mr Mnguni said the purpose of the day should be to acknowledge that the issues were beyond the Department, and continuing to deliberate might lead to executive over-reach. He did not think it was important for the Department to continue to clarify. There was confusion between the community and the beneficiaries. The community was composed of groups of people, and the CPA were the executives. There was a need for a registrar, but there should be clarification on the role and person of the registrar, i.e. an objective scientific office not muddled with the affairs of the Department. He was not in support of an autonomous registrar, but the Committee should ensure that the registrar had to be held accountable for actions he/she took.

The Chairperson said the Committee was aware that there was a point where the Department would not be involved, but the Department had been given an opportunity to re-clarify so that all the Members were with one mind on the issues.

Mr Matiase said he did not see a situation of over-reaching, and felt it was not fair to address the Department in the way that Mr Mnguni had. He was happy that the Chairperson had addressed the situation appropriately. University experts had raised three questions on land reforms. They were: why was the process undertaken; for whom; and with what or with which specific rights. Until these questions were answered the situation of inequality and injustice would continue. It was important that the Committee should address the issues concerning the flawed process or policy that exists.

Mr T Walters (DA) agreed with Mr Matiase’s submission that fundamental questions on land reform needed to be answered. Independent and autonomous institutions were increasing, but he understood that they were issues of alignment, and autonomous institutions were not necessarily non-aligned. The perception should be changed, because more debates were needed on land reform. There was a need to break away from one incremental change to another and move to policies that aligned with one another.

Mr Filtane said there was a need for Parliament to undergo a self-examination. The shortcomings found in legislation were for Members to close the gaps. A high level panel presentation in November, 2017 had said that no single legislation had been championed by Parliament since 1994. All the laws passed in Parliament had been through observations made by the Department having looked at it through their perspective. Parliament had not really been creative in pointing out what should be corrected in legislation, so Members should not point out the faults of the Department but ensure that it attempted to amend Bills in favour of South Africans. The presentations made during the public hearings showed that there was a need to amend the CPA Bill.

Ms N Magadla (ANC) asked for clarity on the issue of the title deeds when land was restituted to the CPA.

Mr A Madella (ANC) said he agreed with Mr Matiase, because the Bill in its original form did not answer most of the questions on what was needed for successful land reform. The State was operating in silos, and many departments were dealing with the same subject. The different sections of the old Bill had tried to explain the different definitions, but there was a need to update the list of the beneficiaries, and he asked if it included generations of beneficiaries. The Bill did not refer to the executives, but it would be better to refer to the CPAs as executives. The Committee should look more broadly into what it sought to achieve. It must also be put into the context of other legislation. It was important that the land was optimally utilised so that poverty was eradicated.

Mr Mnguni said he would clarify matters by saying that the amendment of the Bill was currently at the Committee stage. The Department was not an institution of the ruling party, but an institution of all. He wanted to ensure that the Committee did not degenerate because if it did, the ANC would be the biggest loser. He had submitted a Bill to the Committee which had not been processed. He was worried that the Bill would not be completed before the Constitutional Court’s deadline of July 2018. The Department had to stop to clarify after yesterday’s meeting, because the agenda for the day should be for the Committee to deliberate on the submissions. There were not many differences between the proposals and the comments that had been made. There should be clarity between the elected people in the CPA, who were the executives, and the CPA, which consisted of all its members.

Mr M Nchabeleng (ANC) expressed happiness that the meeting would commence, based on the proposed agenda of taking briefs from the support staff -- the content adviser, the researcher, the legal unit and the State Law Adviser. Therefore clarity would be sought from the Department only when it was needed.

The Chairperson agreed with Ms Magadla that the issue of title deeds needed to be processed further, and said that when other departments were engaged the issue of the title deeds should be discussed. She also agreed with Mr Madella that post-settlement support issues needed to be discussed further. The departments must work together so that lands that were restituted were adequately utilised.

She invited the support staff to provide their briefing.

Mr Mnguni asked if the meeting was just starting.

The Chairperson remarked that the meeting had started, and she had only allowed Members to reflect on the presentation made by the Department on 30 January, 2018.

Support staff presentations:

Committee Researcher

Ms Tembisa Pepeteka, Committee Researcher, gave an overview of the findings and recommendations made in the high level panel (HLP) report on the CPA act. The report proposed that Parliament should put the Bills on hold until the HLP recommendations had been thoroughly considered. The key challenges included poor capacity in the Department, while the service providers contracted had affected the land reform process. Also, many CPAs that held land for communities that benefited through land restitution were dysfunctional, and attempts by Government to resolve the problem had disempowered people and given too much power to traditional rulers. The key findings showed that the Act provided for dispute resolution but did not enable members to voluntarily leave the CPA and establish a separate CPA with its own land. The current CPA registrar also had limited powers, and individual and family rights were often disregarded.

The HLP recommendations included the provision of capacity that supported the CPAs, and embraced a dedicated budget and cost plan with a clear capacity requirement. The financials of CPAs should be attached to the annual reports, and there should be registration of all land holding entities involved in land reforms as CPAs. New regulations had to be introduced for the CPA Act, which would require a detailed process, an amendment of the Act to provide clarity as to how CPAs could unbundle themselves and enable dormant or inactive members to withdraw from CPAs that were large.

The Chairperson thanked her, and said the recommendations were not resolutions and were subject to changes. She asked Members to comment on the presentation.

Discussion

Mr Mnguni commended the high level panel for the work done and welcomed the brief from the researcher. He disagreed with the recommendation that the Bill should be put on hold until the HLP recommendations had been thoroughly considered. He said the Bills should not be put on hold because of the recommendations of the HLP, as this was not in line with the rules of Parliament, as panels were advisory. He thought the Registrar was an innovation and improvement, and asked for clarity on the term ‘expanded CPA registrar’ under recommendation one. Under recommendation two, he pleaded for caution on the ‘new regulations for the CPA Act,’ and suggested that the sale of shares recommended should be limited to 49% of the share values so that big corporations did not take over the land completely. Under recommendation three, he suggested that the registrar should be in a position to resolve issues on land reform. Under recommendation four, he suggested that the term ‘non-executive’ be changed to ‘oversight’ in order to introduce checks and balances in the CPA constitution. He also did not agree that there should be an ombudsman-type structure, because the CPA was a small organisation that had a Registrar, a Director General (DG) and the Minister.

The Chairperson said these were recommendations that could be debated, but the Committee was not under compulsion to accept them. She suggested calling Dr Anika Klaus, a member of the HLP and facilitator, to clarify the recommendations.

Ms Magadla commented that the Registrar should be a competent official who could handle the position, particularly as it was indicated that remuneration would be paid. It was important to employ competent people in positions so that they could be held accountable.

Mr Filtane said the key challenges were addressed on page 4 of the brief, and most of the recommendations were fit for the regulations, so the Committee must be able to make informed decisions. Also, since the Registrar reported to the DG, they were both responsible to make sure that things were done in an orderly manner. He said the old Bill did not restrict people from leaving the CPA, and said the proposals in the amendments were superficial.

Mr Matiase said the report showed that there were certain things that had not been done and which should be put in perspective by the Committee. He proposed that the recommendation made by the Chairperson should be considered. There was a need to ask further questions that would help to isolate problems further and find solutions to them.

Mr Walters said that he agreed with Mr Matiase. There was a need to see if the Bill made an incremental improvement, or if it was able to achieve the objectives of the Committee. The objective should be to make good legislation that could stand the test of time. He supported the suggestion to call Prof Klaus for interrogation on the recommendations.

Ms T Mbabama (DA) said there was a need to agree on the recommendations that would go into regulations, and the recommendations that would go into the policy. Her concern was that the recommendations should not be ignored, so the Committee should invite Dr Klaus to clarify them.

Mr Madella said he recommended familiarisation with the recommendations. The original Act had not provided for trust, and neither did the amendment, and the primary thing was that the Committee should not find itself at loggerheads with each other. Clarification would help, but would not be the complete answer. The Committee should find out if it was in line with Parliamentary processes.

Mr Nchabeleng said the Committee needed to go over the amendment of the CPA Act clause by clause and line by line, to see how it fitted. The Committee should not be worried that some of the clauses might not work, because laws were meant to be changed and the practicality would be seen only when they were implemented.

The Chairperson agreed that the Committee would invite Dr Klaus to clarify the recommendations of the HLP. She said the report did not relate only to the CPA, but the CPA-related issues were extracted from legislation relating to land reform. The recommendations would not stop the Committee from proceeding with the amendments. The Committee would invite Dr Klaus to comment on all the issues raised in the HLP report and the recommendations would be discussed with the Minister of Rural Development and Land Reform.

Ms Magadla requested the researcher to check other issues in the report.

The Chairperson said Members had received the hard and soft copies of the report. She requested that the support staff assist them with the complete report.

Content Adviser

 

Dr Tshilo Manenzhe, Content Adviser, said the brief would focus on the views expressed at the public hearing on land reform issues in the amended CPA Act.

 

Definitions of ‘community’

 

The public had complained that the community had challenges in expressing their rights to the land. A member became an association. It was a community of selected people, identified by name. A committee was elected to manage the community. He defined community as written in the principal Act, and the definition in the amended version. There was an ambiguity in the definitions which should be dealt with by the Committee.

Requirement for general plans

 

Consideration should be given to the requirement for general plans before a farm or property was transferred. This might be difficult to do within two years as stipulated in the Bill, and he questioned if the Spatial Planning and Land Use Management Act (SPLUMA), LSA and Deeds Registration Act (DRA) were insufficient. The issue of appointment should be looked into, because it seemed to be a trust deficit issue, and not that the people wanted a registrar.

Ownership

 

The association must own property, and the administration and management could be handled by the executives. He said the plan to take the properties away from the CPA to give them to the community was not provided for in the CPA Act. It was reported during the public hearings that most of the time even the 50% plus 1 majority had been reached, yet the CPAs sold properties. There was a need to think of other restrictions through which the CPAs would not be able to sell people’s properties without their consent. There was a need to clarify if there were constitutional impediments to protecting the community.

Briefing by Parliamentary Legal Adviser

The Parliamentary Legal Adviser said the legal department had applied its mind to the submissions made by the Department. Issues of the accountability of CPAs, crime and collusion came across in all the places where the public hearings took place.

Registrar

 

He said the Bill envisaged that a specialised unit, the Registrar’s office, would be established. The Bill did not specify what to do to ensure proper running of the CPAs. The regulations should empower the Registrar and create a mechanism for the Registrar to bring a periodic report to the Committee. If the Bill did not say anything on the role of traditional leadership on land that had been restituted, the beneficiaries would continue to suffer harassment from traditional leaders. The conflict resolution mechanism that the Department had engaged in had not been productive, so there was a need to put a check in place. He added that there was little or no oversight by the Department on conflict resolution.

Ownership

 

The Act in its original form identified three actors -- the beneficiaries (community), the association (CPA) and executives (administration) -- but it did not refer to any juristic entity known as the community. He said it was important to clarify that beneficiaries were referred to as the communities, and the Committee must clarify if this should be defined in the Amendment Bill. The original Act did not exclude labour tenants. There was no legal basis to justify the 60% consensus. He suggested that the important thing was to ensure that legislation was effectively carried out.

 

Ministerial consent

 

The requirement for the consent of the Minister could lead to a conflict of interest and onerous conditions. In law, there was a provision that the Minister should be consulted, rather than insisting on the Minister’s consent. However, guidelines could be provided for ministerial consultation rather than consent, based on the Committee’s decision.

Requirement for general plans

 

The requirement for general plans should not be addressed in the amended CPA Act because issues of land use were properly taken care of under the SPLUMA. Hence, where there was a predetermined use of land, it would be onerous for the community to make an application against such pre-determined use.

Opening a private account

 

He said that the process would be too onerous for proper regulations, and suggested that Finance Intelligence Centre Act (FICA) registration might be sufficient.

Constitution

 

There was a need for the Department to provide draft legislation instead of proposing that the CPA should meet with the Registrar to assist each CPA in drafting a constitution. Procedural concerns were not foreseen in the Bill because the Committee had done much deliberation, but the legal department would be on hand to advise the Committee on any issue.

Discussion

Mr Matiase said it was important to check the elements of one Act that existed in another, so that they could be aligned. He agreed with the suggestion of the legal adviser regarding ministerial consent on the disposal of land. He suggested that the Committee should not encourage the disposal of land acquired through land restitution, since the intention was to restore land to people from who it had been taken.

Mr R Celebekhulu (IFP) asked for a further explanation on the CPA being the holder of the property and an association being the vehicle to do business on behalf of the community.

Ms Mbabama suggested that the Committee should not legislate for lack of understanding. She was not satisfied with the response from the Department that educating the beneficiaries was included in the function of the Registrar, and it should be included in the Bill. She was not sure that legislating the requirement of land for general plans would resolve issues. The Committee needed to look into Clause 8b which dealt with the ownership of property. It also needed to fine tune the issue of percentage ownership, because it affected the community. She said most of the problems were coming from the Department due to the corrupt practices of its officials. There was a need to educate the people on their rights.

Mr Filtane said he never realised that legislation could be complex, but the Committee had to correct loose ends in the current legislation. The Bill did not address settlement support, but there had been several requests from the public for this. He asked if the Committee wanted settlement support to be integrated into the Bill or in another piece of legislation. He asked if the office of the Registrar would have sufficient capacity for settlement support and the management of the owners of the land. He also asked if the Bill was able to detect corruption and criminalise it, as the Bill made provision for terms of office. He said the proposed definition of community covered the current situation, where labour tenants were now recognised, and it should be included. The Committee should not rely on SPLUMA, because it was being deliberated and there was no assurance as to how and when the amendment would be implemented. He said the banks requested a constitution before an association opened an account, so the banks would need a letter from the Registrar. He said ministerial consent was needed, and this should be stated in the Bill because it was presumed that the Minister would protect the interests of the people of South Africa.

Ms Magadla agreed with the legal adviser that a bank itself should set its own standards.

Mr Madella said the legal advisers had clarified most of his concerns, except that the executives must be held accountable for their actions.

Mr Mnguni said the inputs were eye opening, and he agreed with the principles expressed in the comments of Mr Matiase and Mr Celebekhulu. He made a proposal of putting all lands into a trust, such as CPAs, and said the legal team should look into the possibility legally. He expressed his interest in the requirement of a 60% majority for land sales, because it was a way of restricting free-for-all sales of restituted lands. He maintained that 60% was a fair and democratic rule. A labour tenant who had been restituted became a beneficiary and part of the community. The issue of the Minister was about consent or consultation and the land reverting back to the ownership of the State, but ultimately the logic was that the land reverted back to the State for recycling and distribution for the benefit of others.

Mr Nchabeleng asked for clarity on the 60% majority.

The Chairperson said her understanding was that it was 60% of the total number of claimants, but the Committee would get clarification on it. There was a need to verify all attendance, and an official from the Department should be present at the meeting when there was a proposal for a sale. Land allocated to people could be used for different things, and if the land was not demarcated, development would be difficult. She agreed with the legal advisers that the Department should provide a draft constitution template for the CPAs in order to provide uniformity because it might be difficult for the Registrar to help draft individual CPAs’ constitutions. The letter to open accounts should have a uniform template so that fraudulent individuals could not use CPA accounts to defraud. The choice to sell land by the people must be reduced, otherwise the current status on land ownership would remain the same and make nonsense of the government’s programmes to address the inequalities of the past. She asked the legal team to comment on Members’ concerns.

The Parliamentary Legal Adviser said that the right of first refusal meant that when the community decided to sell it must first sell to the state, and if the state decided not to buy it, then the land could be sold to other people. He gave a further explanation on the CPA being the holder of the property and the association that transacted business on land on behalf of the community. He said the Bill had provisions to elect a Registrar who would monitor the activities of the CPA and included education and dissemination of information. He invited the State Adviser to address other concerns of Members.

Ms Lucinda le Roux, State Law Adviser, said that Section 14 of the Principal Act listed some offences on criminalisation, but she was not sure if the beneficiaries knew what the provision said, so there was a need to educate beneficiaries.

The Chairperson invited the Content Adviser to comment on Members concerns.

Dr Manenzhe said the Committee needed to consider requests from the public for settlement support, even though it was not addressed by Bill. The criticism on the proposal around general plans was the question of whether it would be problematic for the CPA, so there was a need to think about the confusion around the CPAs and communities. The Department also had to clarify the issue of restituted lands and other types of lands, such as redistribution, and it may not be possible to restrict other type of owners, so the provision of first refusal was sufficient to cover the Clause. He said the previous condition of 50% plus 1 was not implemented, and people still sold without meeting the condition. The Committee must look at other ways to protect the community to ensure that certain individuals did not sell land without the consent of the community.

The Chairperson said despite the amendment, the discussion revealed that a lack of implementation would affect the Bill.

Mr Filtane said that the amendment applied to 60% of the community, and agreed that if implementation was faulty then the Bill would not achieve its intended objective. He emphasised the need for closing the gaps that did not allow for the full implementation of the Bill in the amendment. It would also be good to know what the punitive measures against erring officials were, and the Committee had to ensure that the Registrar bore the consequences of officials who had neglected their duties. This could be done only by empowering the Registrar and his office with the required budget to carry out the assignment. The real strength of the Bill would be in the regulations which would empower the Bill.

The Chairperson said that Members were aware that the Minister was responsible for drafting the regulations, but the regulations had not been presented to the Committee yet. The Committee’s decision was that regulations should be presented to it before the regulations were gazetted.

Ms Vuyiswa Nxasana, Acting Deputy Director General (DDG), DRDLR, said that the Department took seriously the earlier briefings on land reforms, and the briefings held in Parliament. It was drafting a national implementation strategy and would brief the Committee soon. She highlighted some of the activities of the Department on the implementation strategy.

The Chairperson asked Members to propose whether to continue after a short break with the clause by clause deliberation, or adjourn to 1 February.

Mr Walters proposed that the Committee should adjourn till the next day before continuing with the clause by clause deliberation.

The Chairperson asked Members to consider the proposal to adjourn.

Mr Filtane opposed the proposal, and said that the Committee should continue.

Mr Mnguni said that there must be a drafting process before the clause by clause deliberation started. He proposed that because of the substantive alterations that had been proposed, the team needed to do some drafting. He persuaded his colleagues that since some legal work needed to be done before the clause by clause deliberation, the Committee should adjourn till the alterations had been completed.

The Chairperson said that her understanding was that the changes would be made after the clause by clause deliberations had been concluded. She asked for the input of the Committee secretary.

The Committee secretary explained the procedure.

The legal adviser advised that parliamentary procedure should be followed.

The Chairperson accepted the proposal to adjourn to 1 February.

The meeting was adjourned.