Richtersveld Community & Alexkor Deed of Settlement implementation: progress report by Public Enterprises

NCOP Public Enterprises and Communication

21 February 2018
Chairperson: Ms E Prins (ANC, Western Cape)
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Meeting Summary

The Select Committee on Communications and Public Enterprises is toying with the idea of putting the Richtersveld land restitution claim under administration and conducting a forensic investigation on the matter.
The Committee indicated the Richtersveld issue has been moving at a snail's pace and stakeholders do not seem to be speaking with one voice. However, in order to speed up the process, there is an opportunity for wealth creation this community would enjoy.

The Committee heard that the ever-present conflict in the Richtersveld is between members of the Communal Property Association and this has led to litigation between them. The conflict between executive members of the Association has spilled over into the general membership as executive members try to lobby for their entrenched positions. Government stakeholders have tried to intervene in the conflict but attempts have failed.
Another sticky issue is that of R45 million which still needs to be paid to the beneficiaries. The Committee indicated it is not clear how much each beneficiary would be given and pointed out the reasons for the delay of payment are not clear because no department - between the Department of Public Enterprises and Department of Rural Development and Land Reform - is known to be leading the process. Each department is seen to be dilly-dallying and procrastinating on work to be done.

The Department of Rural Development and Land Reform reported that the financial compensation made available by the Land Claims Commission was transferred to the Richtersveld Investment Holding Company. R50m was transferred for recapitalisation of the agricultural and mari-cultural properties or for other developments which would benefit the CPA members. R190m was transferred to be grown and invested in terms of an investment policy and to provide an income for the Richtersveld Investment Trust, and R45m was transferred to the CPA for property development by the Richtersveld Property Holding Company but which was to be managed by the Richtersveld Investment Holding Company. The Richtersveld Community Trust is obliged to distribute/disburse the income from the Richtersveld Self-Development Company to CPA members. It was reported that a strategy is on the cards for the development of the Richtersveld. There is a plan to organise an economic development indaba for the Richtersveld Community in partnership with the local economic development agencies and government departments like the Department of Public Works, Department of Energy, Department of Mineral Resources, Department of Rural Development and Land Reform, district and local municipalities, and development organisations. The purpose of the indaba is to bring together all stakeholders (government, business and civil society) to explore economic opportunities that could be unlocked in an attempt to improve the socio-economic status of the Richtersveld community. This indaba is penned to take place around September 2018.

Alexkor RMC JV briefed the Committee on its mining contractors and corporate social investment. The entity reported it has awarded 17 mining contracts to Richtersveld community members. These contractors were assisted by the Pooling and Sharing Joint Venture to form a chamber and to deal with the Pooling and Sharing Joint Venture as a collective corporation. The purpose of the chamber is to establish a workshop for the manufacturing and refurbishment of mining equipment to be utilised by them; secure business finance from various institutions like the Industrial Development Corporation, Development Bank of SA, and Department of Trade and Industries; to train contractors in business, financial and mining skills; and to train divers and diving supervisors. Historically disadvantaged individuals comprised 62% of all mining contracts to date. Contract revenue paid out to Black Economic Enterprise compliant companies was R195m during the financial year of 2016. This includes R51m paid to 100% Black owned companies for the 12 months that ended 31 March 2016. For the financial year of 2017 R174m was paid to Black Economic Enterprise compliant companies and this includes R66.7m to 100% Black owned companies. For the 2018 financial year, a sum of R151m was paid to Black Economic Enterprise compliant companies, which includes R43m to 100% Black owned companies.

Members proposed that the Richtersveld issue should be put under administration seeing that it does not seem to be finalised and there is in fighting within the stakeholders; wanted to know if there was a mechanism to ensure the deceased beneficiaries would be able to benefit from the R45m set aside for them; commented it is not clear how much each beneficiary would get from the R45m and it is not known where the money is exactly, but if it is not known, there must be a forensic investigation; wanted to establish if there is a legal way of reviewing the Deed of Settlement between the Richtersveld community and Alexkor; and asked if Alexkor is being paid money for the court cases.

From Alexkor, they wanted to know if the entity has thought about plans when mining ceases after ten or twenty years; remarked that mining companies put grandiose plans on townships near mines but nothing happens to these settlements in terms of long-term development; asked for clarity on the salaries paid to ten teachers of ten different schools; asked what the impact of Alexkor and Pooling and Sharing Joint Venture is on the lives of the people who reside in the area they operate in because the performance of these two companies looks good but poverty is persisting; and wanted to find out when would the investigations be finished on fronting and what the recourse would be.
 

Meeting report

Richtersveld Land Restitution Claim: Department of Rural Development and Land Reform (DLDR) presentation
Ms Cindy Benyane, Land Commissioner: DRDLR, briefly took the Members through the background of the Richtersveld land claim and updated them on the status since 2011.  The Richtersveld Community Trust was established having 100% shareholding in the Richtersveld Self-Development Company (RSDC). The entities created as part of the settlement required more than 50 members to be operational and it has been a constant struggle to capacitate and resource the entities.

Financial compensation made available by the Land Claims Commission was transferred to the Richtersveld Investment Holding Company (RIHC) as follows:- R50m was transferred for recapitalisation of the agricultural and mari-cultural properties or for other developments which would benefit the CPA members- R190m was transferred to be grown and invested in terms of an investment policy and to provide an income for the Richtersveld Investment Trust- R45m was transferred to the CPA for property development by the Richtersveld Property holding Company but which was to be managed by the (RIHC).The Richtersveld Community Trust is obliged to distribute/disburse the income from the Richtersveld Self-Development Company (RSDC) to CPA members.

Ms Benyane updated the Committee about the status since 2011. The Richtersveld Sida! Hub Communal Property Association (CPA) has since its reconstitution in July 2011 consisted of two factions – those who had opposed the previous CPA and those who were on the CPA Executive Committee in 2010. The Office of the Regional Land Claims Commissioner in the Northern Cape had since 2011 implemented a programme of regularisation. Concerted attempts were made to align the CPA and the community around a common goal and to unite the various factions. The regularisation process was supposed to culminate in the elective AGM in 2014. The AGM took place but soon, thereafter, conflict arose amongst members over access to the vast resources which were supposed to benefit all. The CPA was regularised and is generally complying with the CPA Act except for regular communication with the general members of the CPA. The term of office of the CPA Executive members has expired and an elective AGM was planned for April 2016. However, the CPA was unable to convene the AGM.

The ever-present conflict in the Richtersveld is between members of the CPA and this has led to litigation between them. The conflict between executive members of the CPA has spilled over into the general membership as executive members try to lobby for their entrenched positions. Government stakeholders have tried to intervene in the conflict but attempts have failed.

It has become clear that the Deed of Settlement (DoS) that was given a court order in 2007 is unimplementable. The myriad of Trusts and entities created are mostly dysfunctional and non-operational. The CPA executive is unable to manage and control the entities due to a lack of appropriate management, business and financial skills. The most recent conflict relates to the R45m owed by Alexkor for the right to use the properties under claim in Alexander Bay. Alexkor has made the funds available but the DoS requested for the funds to be paid to the Property Holding Company which is non-operational. The members of the CPA resolved that the R45m be split and paid equally to individual members. This requires a variation of the DoS, which must be applied for in court. The government task team is working tirelessly on this matter and an attorney and counsel have been briefed. According to counsel, the applicants (members of the CPA) must prove that circumstances have changed significantly since 2007 in order for a variation to be considered by the LCC.

Another source of the constant conflict is the election of a new CPA executive committee. The DRDLR was planning to assist the CPA with the elections which were to be held on 9 December 2017. However, this process was derailed once again due to issues in the community. The Commission has implemented the Deed of Settlement insofar as the settlement awards are concerned. The outstanding matters relate to the payment of the R45m and the concomitant transfer of the properties utilised by Alexkor. These processes are proceeding and require a variation of the DoS.

Mr Henri Marais, MISA Acting Provincial Manager (Northern Cape), reminded the Committee of the resolutions it took on 22 November 2017.
First, the Committee resolved to review the settlement model (CRLR). In working towards review of the settlement model and on the advice of Counsel in order to vary certain conditions in the DoS, the CPA must prove ‘changed circumstances’. The Commission then appointed an attorney, Mr Duncan Korabie, to represent the Richtersveld CPA. The variation of the forms could only be approved by LCC through an application.

The attorney appointed by the Commission, Mr Korabie, is supposed to instruct Counsel to draft papers with regard to these changed circumstances. The court documents were drafted to be lodged by 18 February 2018 where after the court processes would unfold.

Second, he reported on the governance issues relating to Communal Property Association.
On 8 and 9 November 2017, community consultations were held by the Tenure Systems Implementation Directorate to determine what was said by the committee and to indicate the effect of not holding an AGM. It was agreed the AGM would be held in early January 2018. However, due to interpretation/ effects of the court orders and non-availability of the IEC, the DRDLR could not continue with the AGM as planned for January 2018.

Due to the non-availability of IEC, Provincial Shared Service Centres (PSSC) sourced and received quotes from three service providers. An appointment was expected to be finalised by 15 February 2018. As a result, a meeting with attorneys representing members of the CPA was held on 6 February 2018 in order to allow each party to explain the court orders and to comment on the proposal from the DRDLR regarding the elections.  21 March 2018 is proposed to be the day for elections, and the AGM would be held on 24 March 2018.

Third, the Committee resolved to institute forensic investigation on assets at Richtersveld. The DRDLR Internal Investigation unit had previously conducted an investigation. However, as it could not be a detailed forensic investigation, the unit recommended that further investigation be conducted. The sourcing of a service provider to conduct further investigation closed on 9 February 2018. Only two providers, Price Waterhouse Coopers (PWC) and KPMG, responded with quotes above R500 000. Therefore, the service needs to be put on tender as it is above the threshold. It is hoped the tender process and the forensic investigation and submission of its report would be completed by June 2018.

Fourth, the Committee agreed to the establishment of a township. The town of Alexander Bay was originally developed as a mining town to provide accommodation and services to the employees of Alexkor. Part of the settlement agreement was for the State, through Alexkor, to upgrade the municipal services infrastructure and handover the infrastructure to the municipality. Alexkor completed the upgrades in 2014. However, the process to handover the services has been slow. The NCOP instructed the stakeholders to expedite the process of the handover under the leadership of the Department of Cooperative Governance (DCoG). A meeting was held at the Richtersveld Local Municipality (RLM) on 17 January 2018 to address the matter and was attended by relevant stakeholders. The meeting resolved that a task team be constituted to deal with the matter. It was agreed the parties would enter into an agreement which would contain tasks and time lines. Then if the outcomes are achieved, the RLM agreed it would take over the town on 1 July 2018 pending the outcome of due diligence report. So far, the relevant parties have committed to the process and progress is being made and the task team has been able to carry out its tasks and keeping to the time table.

Mr Marais reported a strategy is on the cards for the development of the Richtersveld. There is a plan to organise an economic development indaba for the Richtersveld Community in partnership with the local economic development agencies and government departments like the DPW, DOE, DMR, DARDLR, district and local municipalities, and development organisations. The purpose of the indaba is to bring together all stakeholders (government, business and civil society) to explore economic opportunities that could be unlocked in an attempt to improve the socio-economic status of the Richtersveld community. An indaba would provide a platform for all stakeholders to commit to contributing to the Richtersveld in their individual capacity. This indaba is proposed to take place around September 2018.

In conclusion, these activities would require a united Richtersveld community and buy-in from both internal and external stakeholders in order to be successful. The indaba would include other interested parties that were not necessarily direct participants in the claims settlement process but are nonetheless crucial for successful post settlement development.

Alexkor Presentation
Mr Mervyn Carstens, CEO: Alexkor RMC JV, briefed the Committee on the social-economic status of Richtersveld through diamond mining in terms of contractors and corporate social investment. Historically disadvantaged individuals comprised 62% of all mining contracts to date. Contract revenue paid out to BEE compliant companies was R195m during the financial year of 2016. This includes R51m paid to 100% Black owned companies for the 12 months that ended 31 March 2016. For the financial year of 2017, R174m was paid to BEE compliant companies and this includes R66.7m to 100% Black owned companies. And for the 2018 financial year a sum of R151m was paid to BEE compliant companies, which includes R43m to 100% Black owned companies.

The Pooling and Sharing Joint Venture (PSJV) has awarded 17 mining contracts to Richtersveld community members. These contractors were assisted by the PSJV to form a chamber and to deal with the PSJV as a collective corporation. The purpose of the chamber is to establish a workshop for the manufacturing and refurbishment of mining equipment to be utilised by them; secure business finance from various institutions like the IDC, DBSA and DTI; to train contractors in business, financial and mining skills; and to train divers and diving supervisors.

The PSJV has embarked on a diving programme. The entity recognises that a significant impediment to the meaningful participation of the local Richtersveld community members in marine mining opportunities is the scarcity of commercial diving skills amongst members of the community. The PSJV, therefore, embarked on a programme to develop commercial diving skills locally and YTD has enrolled eight candidates at Sea Dog Diving School in Saldanha Bay.

The PSJV Adult Education Training (AET) criteria focuses on what students experience and learn. It adds critical value to our workplace where quality, precision, and safety are of the utmost importance. AET students – who are also employee members of the community - can be confident that the AET programme meets the quality standards that produce graduates prepared to enter a global workforce. The AET facilitators give their time and effort to support quality assurance activities by serving as programme evaluators and advisors. Of the 19 employees and community members who enrolled in January 2015, 9 learners can proudly claim a 100% pass rate of the level 4 group and 10 learners are busy with their Grade 12 qualifications which they would complete in June 2017. The PSJV AET Programme's winning efforts are the result of the successful support of the employer (Alexkor RMC JV) who engages and supports the community.

The following are, amongst others, some of the CSI and SLP interventions at various towns:

Eksteenfontein
- Salary of one teacher at the Primary School
- Donation to Primary School - Financial assistance to rugby tour
- Donation for Woman’s Day celebrations
 - Transport costs for “VGK” Sunday School children’s tour to the Richtersveld National Park

Lekkersing
- Elizabeth Wimmer Halfeeu Fees 2015
- Salary of one (1) teacher at the Primary School
- Salary of one (1) teacher at Haasbekkie Nursery School
- Donation to Elizabeth Wimmer Primary School
- Transport costs for Full Evangelism Church towards Woman’s Conference in Strandfontein

Sanddrift
- Salary towards one teacher at Dryfsand Primary School
- Salary towards two (2) caretakers at Doffel & Bekkie Playgroup
-  Donation to Dryfsand Primary School
- Funeral assistance
- Donation to Dryfsand Netball Club towards transport costs to attend a netball game in Aggeneys

(Tables and graphs were shown to illustrate PSJV revenue; carat production; PSJV and mining contractors’ revenue; job creation; corporate social investment; and SLP projects linked to mining rights)

Discussion
DRDLR Presentation

The Chairperson proposed that the Richtersveld issue should be put under administration seeing that it does not seem to be finalised and there is in fighting within the stakeholders.  She suggested that dates for when targets should be met should be in place. She asked the communities and stakeholders to put their small issues aside so that there could be progress on the matter.

Ms N Mokgosi (EFF, Northern Cape) agreed with the proposal. The issue has caused confusion among the community members, and putting this matter under administration should be processed with immediate effect. A new CPA should be elected and timeframes put in place. If there is no progress, the whole matter must be put under administration.

Dr H Mateme (ANC, Limpopo) wanted to know if there was a mechanism to ensure the deceased beneficiaries would be able to benefit from the R45m set aside for them. She also wanted to find out which department is leading the process.

Ms Morongwa Mothengu, Director, Department of Public Enterprises (DPE), stated the R45m has been ring-fenced. Alexkor has put the money in the trust account. She said the DPE is leading the process with assistance from the DRDLR.

Ms Mangalene Du Toit, Chief Director for Land Restitution Support: DRDLR (Northern Cape) indicated that if the beneficiary is deceased, a verification process would be done to ensure the money goes to the relatives

.Mr O Sefako (ANC, North West) remarked that the Richtersveld matter is moving at a snail’s pace, but there is willingness to move to closure. There is an opportunity for wealth creation this community would enjoy.

Ms C Labuschagne (DA, Western Cape) stated that the matter under discussion had two options. One, the community proposed that the R45m be paid directly to the beneficiaries. Two, it is important to get a legal opinion on the R45m. She had concerns of the process about where the money is going to come from or if it would come from this year’s budget, or if the community would be prioritised.

Mr L Gaehler (UDM, Eastern Cape) commented it is not clear how much each beneficiary would get from the R45m and it is not known where the money is exactly, but if it is not known, there must be a forensic investigation.

Ms Du Toit indicated the people would elect a CPA to make sure it is credible and knows what it is supposed to do. The forensic investigation report would be ready by June. The process is already taking place.

The Chairperson wanted to establish if there is a legal way of reviewing the Deed of Settlement between the Richtersveld community and Alexkor. She asked who is paying for the court cases and who the winner is in the process. As politicians they could go out and politicise the situation, but she would not like to take that route. Hence it is important to know who is paying for the legal fees and costs involved in these court cases.

Ms Mothengu indicated it is proposed to deal with the R45m first so that people could settle quickly. The payment of the R45m would be amended. The review of the Deed of Settlement is going to take a long time.

Ms Cindy Benyane, Land Commissioner: DRDLR, stated the Deed of Settlement started in 2007. The money should have been transferred to the investment company. Unfortunately, it was not fully functional and effective at that time. The community resolved the money be transferred to the individual bank accounts of beneficiaries. The CPA provided all the details of the beneficiaries. There are to be changes to the clause dealing with claims of the Deed of Settlement, and the community was informed there is a council that is appointed for them to stabilise and rationalise the structures to be set.

Mr Johan Redelinghuys, Manager for Assets and Liabilities Management Division: National Treasury, stated the investment company is now fully functional. The money needs to come to the investment trust and then to the community trust. The money is now kept by Alexkor in a trust. It was paid by government to Alexkor 3 years ago in the trust account.

An official from the DPE explained there are two cases. One case is under appeal. It deals with the legitimacy of the committee and constitution of the CPA. The DPE is not paying for the costs because members are fighting amongst themselves in both cases. They are paying for themselves. Other cases are around the suspension of committee members by the chairperson, but that matter has been resolved

.Mr Gaehler commented that people lodged claims and there were high expectations. Money was paid in the investment trust. The claims structure has not yet been changed and beneficiaries have been waiting patiently. The money is accumulating interest daily, but it is not known how much the interest is. There is a need to change the Board so that people could be informed of when to expect the money. He suggested there should be an investigation into this matter and the DPE to account.

Ms Labuschagne suggested the Committee should be given proof of documentation that the money was given to Alexkor and what it has done with the money. Reasons of why the money could not be given to the beneficiaries should be forwarded to the Committee, including reasons why things have been done the way they have been done – from claims up to the present state.

The Chairperson assured the Committee and the community timeframes and cut-off dates would be put in place. That is why there is a proposal to put everything under administration.

Mr Sefako stated the community should get its money before the election of the CPA because the verification of the beneficiaries has already been done.

Dr Mateme commented that transfers have been delayed because it is not clear which department is leading the process because each department is dilly-dallying and procrastinating on work to be done.

The Chairperson then wondered if it is not a better option to approach the courts to see how soon people can get their money if there is no other option.

Ms Du Toit informed the Committee a sum of R190m was deposited into the investment company account, but the money under dispute is R45m and was given to Alexkor. The DPE is responsible for the R45m given to Alexkor because it has to be paid to individuals within the CPA. But it is important to make sure the CPA to be elected would be functioning and effective in order to engage with the community. The problem is no AGM has been held to ensure the CPA is going to function well and be represented by the right people. So, that is what the DRDLR is trying to do right. The DRDLR has to convince the courts that the clause in the review of the Deed of Settlement has been done properly. By June 2018 the DRDLR would be able to report to the Committee on the results of the forensic report because it (forensic investigation) needs to be given 90 days to conclude its work.

The Chairperson indicated the Committee needs to be briefed by legal people on the legal processes of this matter.

Mr Gaehler asked if Alexkor is being paid money for the court cases.

Ms Mothengu replied the DPE is not paying Alexkor any money for court cases. The DPE has instead appointed legal counsel to advise the Department on matters related to the issue under discussion.

Mr Lemogang Pitsoe, CEO of Alexkor, also added there is no money being spent by the entity on court cases.

Mr Gaehler then stated there must be legislation to speed up the process. Let there be an administrator and a forensic investigation to giddy up the matter because paying beneficiaries after 6 months is too long. The administrator should educate the CPA of its duties and verify the details of the beneficiaries but within a stipulated timeframe.

The Chairperson stated the timeframes would be given until end of March, when the final things regarding the CPA are finalised. If by then things are not concluded, there is no other option but to go to courts. Few individuals cannot be allowed to hold the community to ransom.

Mr Henri Marais reported the Task Team has signed an agreement on what needs to be done regarding the township transfer. The DPE is part of the agreement. Within the Task Team, there are smaller groups with responsibilities so that parties involved know what is happening in terms of progress. The transfer of responsibilities would be given to the municipality end of July 2018.


Alexkor Presentation
Ms Labuschagne remarked there are problems with the Deed of Settlement because the Department says it would take a long time to deal with it. It projects that mining would cease after 10 or 20 years. There are factions within the community. She wanted to know what Alexkor is thinking of the matter.

Mr Pitsoe stated that Alexkor pays for infrastructure development. Post mining is possible if Alexkor is working with communities. But this requires time and commitment from the government and PSJV in terms of agriculture. Alexkor is mindful of the post mining activities.

Mr J Parkies (ANC, Free State) asked for clarity on slides 8, 9, 10 that deal with carat production and mining contractors’ revenue, respectively. He also asked if the municipality is involved in Social Labour Plans. Mining companies put grandiose plans on townships near mines but nothing happens to these townships in terms of long-term development.

Mr Frederick Strauss, Finance Manager: Alexkor RMC JV, explained that slide 8 is about revenue numbers to show it has increased since 2011. There is progress in PSJV. Slide 9 deals with carat mining which shows that getting diamonds from the sea depends on the weather conditions and that they use a hired deep-sea vessel to do the job. Then slide 10 shows that from the R2.6 billion revenue, R1.5 billion was paid to contractors for services rendered. The contractors are getting more than the R1.1 billion that PSJV gets. The municipality is involved in the drawing up of labour plans.

Mr Mervyn Carstens, CEO:  Alexkor RMC JV, on township long-term development, explained that before 1994 all projects in Alexkor were under the government. After 1994 there were changes. Between 2003 and 2007 nothing happened in terms of development due to uncertainty regarding job developments. From 2007 to 2011 new mining companies like PSJV emerged, unlike companies like De Beers and Alexkor that have been there for a long time. 80% of production comes from marine. When Alexkor inherited PSJV all the policy documents were missing. So, they had to start all over again and they made many mistakes in the process because they were using sketchy information. Then their task was to create employment. The DPE met the people of the four surrounding towns regarding employment opportunities. Agriculture was dead yet a R50m investment was allocated, but it disappeared.

Ms Mokgosi asked for clarity on the salaries paid to 10 teachers of 10 different schools.

Mr Pitsoe said they are getting into the beneficiation space. That is a Maths Programme because they need maths teachers to encourage students to do maths so that they could be part of the beneficiation because to participate in the mining beneficiation you need to know maths. That is what this Maths Programme is all about.

Mr Sefako commented there must be collaboration with other sectors to ensure sustainability. The land allocated to the community along the river is good for agriculture. Implements and tractors have been allocated to the community. Agriculture is a pillar to sustain the community when mining ceases. Another area that needs to be explored is that of tourism.

The Chairperson wanted to establish if PSJV Alexkor is guided by policies to identify individuals and communities that need assistance.

Mr Carstens indicated the policies they have developed have enabled people to approach them for assistance.

Mr Gaehler asked what is being done to uplift people socially and economically in the area.

Mr Strauss explained they employ 85% of the people from the Richtersveld community, also make sure they include people from the surrounding towns.  They have also made it a point they get a mining engineer. The bursary-holder would start working at the mine beginning of July 2018 when studies have been completed.

Dr Mateme asked what the impact of Alexkor and JPSV is on the lives of the people who reside in the area they operate in because the performance of these two companies looks good but poverty is persisting.

Mr Carstens said the impact is to ensure that people are being employed, and added that their salary bill has increased from R60m to R100m. Beneficiaries are around 300. Other issues would be addressed by the finalisation of the CPA elections in terms of agriculture.

Mr Parkies wanted to know the demographics of the contractors and executive team.

Mr Pitsoe stated the executive team comprises 1 white male who is responsible for IT, 2 Coloured females, and the rest are Black. 70% of the contractors are BEE. Alexkor provides technical abilities in terms of exploration. The presented figures remain as they are and nothing has changed so far.

Mr Carstens reported that contractors average around 60/40. This depends on the contract and the nature of work that needs to be done and the location. Criteria have been adjusted for the Richtersveld people to participate in the economy by forming a Business Chamber that would give them an opportunity to be participants in the economy of sea mining. Other contractors are from Cape Town and West Coast. Some of the contractors are white and, historically, are not from the Richtersveld area. Other contractors are fronting in terms of the BEE, but they are reviewing the contracts of those contractors.

Mr Parkies asked when the investigations would be finished on fronting and what the recourse would be.

Mr Carstens indicated the job would be finalised after 6 months because they have awarded 100 contracts and they need to verify information regarding ownership.

Mr Sefako asked if the deep ocean vessel is under the ownership of the state or private because it is the only one that has access to the diamonds.

Mr Pitsoe said the boat is owned by an international company, not by Alexkor due to cost reasons. It uses a lot of diesel. Alexkor’s core business is to get diamonds.

Mr Parkies asked for clarity on the disappeared R50m.Mr Redelinghuys explained the transaction of the R50m was done in September 2007. The trust meets annually to report on what has been done to the Minister of DRDLR. 9 reports so far have been produced and presented to the Minister.

The Chairperson asked if there were any Gupta or politician involvement in the Alexkor/PSJV operations or if there are government officials’ families involved in the awarding of tenders.

Mr Carstens stated he is not aware of any Gupta influence or involvement of politicians and government officials’ families in the awarding of tenders. There have been allegations of Gupta involvement in newspapers, but that had no basis.

Mr Gaehler suggested that all the questions raised by the Committee should be given to the administrator and forensic investigation team.

The Chairperson remarked that the more you deal with Alexkor, the more questions come up. Information on the R50m that disappeared is not clear. The Committee needs to do an oversight. She noted that the Richtersveld issue would not be allowed to continue for another term. Timeframes are going to be set with the Portfolio Committee on Public Enterprises and there is going to be consequence management in place.

The meeting was adjourned.

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