Communal Property Associations Amendment Bill: deliberations, with Deputy Minister

Meeting report

The Chairperson wished former Minister success in the Department of Water and Sanitation, especially in providing water and sanitation for people living in previously disadvantaged areas. She welcomed the new Minister of Rural Development and Land Reforms, Ms Maite Nkoana-Mashabane, and said she was expected to be a part of the meeting. She told Department representatives that the Minister must be informed that it is important for her to be a part of the Committee’s meetings because there are many outstanding issues that needed to be dealt with.

Ms Candith Mashego-Dlamini, Deputy Minister tendered an apology on behalf of the Minister. She said the Minister was aware of the need to be present at the Committee meetings.

The Chairperson requested that Mr Mnguni proceed reading the Bill from Clause 13.

Clause 13 and Clause 14
Mr P Mnguni (ANC) read Clause 13 and 14 of the CPA Bill.

Ms S Mbabama (DA) suggested that the phrase ‘by a substantial number’ in Clause 13(3)(a) should be replaced by '60% majority' as dealt with in related matters by the Committee.

Mr M Filtane (ANC) agreed with Ms Mbabama. He opposed the wording in Clause 13(1)(a), saying there should be a process followed before placing a Communal Property Association (CPA)  under the administration of the Registrar. It should read: ‘apply for the placement of the Association under the Registrar’ rather than ‘place the Association under the Registrar’. This is so that there is an opportunity for anyone who wishes to counter the charges or claim, can do so. Also, 13(d) was a concern as it might make the Association expect that the Department would cover recklessly-incurred indebtedness. In clause 14(a) he asked if the ‘a’ in ‘a member’ would include where more than one person is prejudiced or threatened.

Mr Nathi Mjenxane, Parliamentary Legal Adviser, replied that in clause 14(a), the rule of interpretation is that where a singular is provided, it can be applied as the plural and it was not necessary to change it. In 13(d), the context relates to when the Association is under curatorship of the Registrar. Only then is the administrative cost borne by the Department. The expense being on the Department was in context. The 60% required in 13(3)(a) was provided for in 13(3)(b) but could be re-worded if Members decide as such.

Adv Sello Ramasala, Head of Legal Unit Department of Rural Development and Land Reform (DRDLR), agreed that 13(3)(a) was provided for in 13(3)(b) and it would not be necessary to keep the two sub clauses if 13(3)(a) was reworded to include ‘60% majority’. In 13(1)(a), he said that the phrase ‘on application to the court’ covered Mr Filtane’s suggestion. The Association is placed under the supervision of the Registrar and it is only when there is not sufficient to cover its cost that the Department is obliged to assist. He said there is process that established if people are guilty or not.

The Chairperson asked if Members were satisfied with the explanations from Mr Mjenxane and Adv Ramasala. She asked for the opinion of the Members if Clause 13(3)(a) and 13(3)(b) should be left as they are, or re-written.

Mr Filtane said for the purpose of consistency and the avoidance of ambiguity, ‘60% majority’ should be added.

The Chairperson asked if there are other matters in Clause 13. Clause 13(3)(b) should specify a 60% majority requirement

Ms Mbabama asked if was possible to integrate Clause 13(3)(a) and Clause 13(3)(b).

Mr Mjenxane replied it was possible to integrate them.

The Chairperson asked if Members agreed to the integration of the Clause 13(3)(a) and Clause13(3)(b).

Members agreed.

Mr Mnguni noted that the word ‘anything’ was written in two ways in the Bill; ‘Any-thing’ and ‘Anything’ and it should be corrected by using ‘Anything’ which is the correct way of writing the word.

Clause 15, Clause 16 and Clause17
Ms Mbabama read Clause 15, Clause 16 and Clause 17

Mr Filtane observed that a vital component was missing in Clause 17. The Bill is to empower the CPA to run a viable enterprise, but the Bill relates to everything except the success or failure of the enterprise. This is rooted in the failure of government to assist communities in their endeavours. He suggested there should be clause that provides for an assessment of the success or failure of the enterprise.

The Chairperson asked Members to comment on the proposal that the Annual Report must contain the successes and challenges of the CPA.

Ms Mbamba asked what Mr Filtane meant by success and failure because the success or failure of the CPAs would be reflected in their financial statements.

The Chairperson said the proposal was a request that the CPA Annual Report should include its successes and challenges.

Mr A Madella (ANC) said his understanding was that, although there is a provision for CPAs that had been deregistered, Mr Filtane would also like to hear the success stories of the CPAs.

Deputy Minister Mashego-Dlamini recommended that the Registrar must submit its report to the Director General and the DG must submit it to the Minister

The Chairperson agreed, however, she reminded the Committee that the DG had been deleted from the clause. She asked if it would be in order to add "the success and failure of".

Ms Mbabama said the number of CPAs might make it overwhelming to request all the successes and challenges in the CPA Annual Report which contains so much information beyond the financial statements.

The Chairperson asked Members to comment on the proposal

Mr Mnguni supported Mr Filtane's recommendation but requested that this should be in the regulations because it should not only be failure and success stories but a general overview in a formal report.

Mr Filtane said the report was the report of the Registrar to the Minister so he believed that the report should be in the Bill. It is important to ensure that the CPAs are aware that government would not continue to support them. There is a need to know about the operations of the CPAs because the government had invested a huge amount of money into them. The CPAs should ultimately be able to support themselves. However, if substantive reasons are given he would accept including it in the regulations instead of the Bill.

The Committee Researcher said Clause 9(d)(ii) requested the annual financial record of the Association. Therefore it would not be out of place to request a performance report of the CPA. The need to give a performance report was valid. He added that not all CPAs are business in nature. Since the Registrar was already required by the Bill to collate a report, the requirement for a performance report should be included in the Bill.

Adv Ramasala said Clause 9 indicated that there would be a financial report and the Department requires the CPAs to submit their financial statements. There was no clause providing for them to express their successes, based on the assumption that the CPAs were created to succeed.

Mr Mjenxane said the Annual Report is an enabling document for oversight over CPAs. It would not be difficult to require that the Department include the performance of the CPAs as one of the categories in its Annual Report.

Mr Filtane said he was happy with Mr Mjenxane's proposal to add a clause to indicate performance covers those CPAs that are not formed with a business objective.

Mr Mnguni recommended that due to the huge number of CPAs, the CPAs should be provided with a template for the report so that it would be easy to extract the necessary information from the report.

The Chairperson said the Annual Report should follow the Treasury Regulations because the Department is mandated to follow those Regulations.

The Deputy Minister said because the report requirement is an administrative matter, it would not be flexible if it is legislated.

Mr Mnguni said the Committee requires the Department to regulate the CPAs. The PFMA would be too broad for the CPAs. He requested that there must be standardized format tailored to deal with the matters that concern the CPAs. It should not necessarily be in the Act.

The Chairperson agreed there should be a template for CPA Report.

Clause 18 and Clause19
Mr Filtane read Clauses 18, 18A and the Amendment of Schedule to Act 28 of 1996.

Ms Mbabama asked about the possibility of stating the specified number of years of imprisonment in Clause 18(2). She asked what is meant by ‘Provisional Association’. She noted that "in any manner’ in Clause 18A(2) was not consistent with the Committee’s past corrections to the Bill. In Clause 18A(6), she requested that a timeframe within which the post must be filled should be added to the clause. She added that there is a need to make a final distinction between Community and Association because references in the Bill show that they do not mean the same as the Committee had believed.

Mr Filtane asked who for clarity on who is legally responsible for the actions of an Association that is placed under administration.

The Chairperson said most Bills specify the number of years of imprisonment. She requested that the legal team provide clarity on this.

Mr Filtane observed that Clause 18(A)(7) required that communal lands registered in the name of an Association must be registered within 24 months of the commencement of the Act. He asked who will take ownership of the land if they fail to register within the stipulated period and what is the consequence for defiance.

Adv Ramasala said there was nothing wrong with prescribing the number of years of imprisonment in Clause 18(2). There was a restraint from prescribing the number of years because it was expected to be the function of the court. On the time frame stipulated for registration in Clause 20, this is meant for Provisional Associations, as soon as the Bill is passed there would no longer be room for Provisional Association because it was meant to be an interim status in the Principal Act but the current Bill did not make provision for Provisional Associations. Existing Provisional Associations have a stipulated time to become a full Association. He said the Department did not provide a time frame for the appointment of new Registrar because issues might arise within the Department that could hinder the appointment of the Registrar. However, when a time frame is attached it becomes a crime when the time is exceeded. He said the Registrar becomes responsible for the administration if a CPA fails.

Mr Mjenxane said the Committee had decided in its earlier deliberations to replace ‘in any manner’ with ‘in an equitable manner’ and this should apply in the clause. Members said the regulations did not appear in the Act. The legal team would need time to consider if the law allows for the prescription of a penalty for as yet non existing regulations and where in the Act one provides for a penalty without necessarily putting it in the legislation.

In response to what happens to the asset of the entity that failed to formalize itself, Adv Ramasala said there would be nothing in place. Although the assets owned would still be available to them, no CPA would exist.

The Chairperson noted that the Amendment Bill specified that anyone who contravenes would be liable to imprisonment not exceeding five years while in the Principal Act it specified that one would be liable for not more than ten years. He asked the Department to explain why it reduced the penalty from ten to five years.

Mr Filtane said he did not understand the purpose of Clause 18A(7) which stated that communal land registered in the name of an Association must be registered in the name of the Community within 24 months. He said the Committee had tried to fix the misunderstanding between Community and Association. However, he was still confused by the statement.

The Chairperson asked for clarification on the difference between the content of the regulations and the Principal Act with regard to offences.

Mr Mjenxane said Members have agreed to replace ‘in any manner’ with ‘in an equitable manner’. He asked for an opportunity to look at the Regulations so no confusion caused while trying to provide a penalty.

Adv Ramasala said offences in Clause 18(2) are for offences committed in terms of the Act and not in terms of the regulations. Offences in terms of the Act are different from offences based on the regulations.

The Chairperson said 18A(2) should be aligned with the previous agreement of the Committee, such that it is written as ‘in an equitable’

She asked what the Department meant by saying ‘registration in the name of Association must be registered in the name of the Community’.

Adv Ramasala said the question relates to the submission of the Department on the meaning of Community and Association. He said the Committee did not accept the proposal and he tried to explain what was originally intended by the Department.

Ms Mbabama asked if he meant that ‘Association’ and ‘Community’ has the same meaning.

Mr Mnguni expressed dissatisfaction at the attempt by Adv Ramasala to convince Members despite their refusal of the proposal on Community and Association. He told the Chairperson that the law of separation of powers should be respected. He said the issue of Community and Association had been unpacked and it should be dealt with based on the previous agreement of the Committee.

Mr Filtane recommended that the issue of Association and Community should be flagged until a common understanding is reached concerning Association and Community.

The Chairperson said Members were correct to point out the confusion between Community and Association.

Amendment of Long Title and Preamble
Ms Magadla read this out.

Mr Mjenxane noted the clarity around Community and the Labour Tenant had been discussed by Members in previous meeting.

The Chairperson said it should be corrected according to their previous correction.

Mr Mnguni said the proposal to delete ‘hold, acquire and manage property' under Amendment was rejected by Members in earlier deliberations.

The Chairperson asked if Members agreed to the proposal by Mr Mnguni to retain ‘hold, acquire and manage property'.

Mr Filtane and Mr Magadla agreed with the proposal.

Mr Mnguni recommended that anywhere the phrase ‘hold, acquire and manage property' appears in the Bill, it should not be deleted.

Mr Filtane tried to provide a recommendation on the definition of Community and Association.

The Chairperson said the confusion between Association and Community had been referred to the legal team. She announced the end of clause by clause deliberations on the Bill.

Mr Mjenxane requested one week to research and meet with the Department legal team to exhaust the issues referred to it.

The Committee adopted the minutes of the 21 February meeting.

The meeting was adjourned.