“Operation Bring Back”: Progress Report, with Minister & Deputy Minister

Meeting report

Opening remarks by the Chairperson
The Chairperson stated that he was pleased that Mr Thulas Nxesi was back as Minister of Public Works. There were problems around the Department of Public Work’s (DPW’s) properties when it came to housing. For instance in the Western Cape Province , in a Cape Town suburb called  Kuilsriver there were renovated houses belonging to the DPW that were not occupied. The properties in Kuilriver were supposed to house metro police. It was currently standing vacant, nor was it given to the poor who needed housing. A housing issue was also playing itself out in the Eastern Cape Province at Greenville in Umtata. At Greenville persons were willing to renovate the houses belonging to the DPW themselves.

Opening remarks by Deputy Minister of Public Works
Deputy Minister Jeremy Cronin asked the Committee to think about how it wished to approach public hearings on the Expropriation Bill. The Expropriation Bill had been parked for now. A Constitutional Review Committee had been set up and would hold public hearings on whether the property clause in the constitution needed to be amended. As part of the motion that was passed in the House, 30 August 2018 was the deadline set for the Constitutional Review Committee to report to Parliament. The Bill was presently with Parliament. He pointed out that joint hearings could be held by the Committee and its counterpart in the National Council of Provinces (NCOP). The implications of joint hearings could be considered as well as its pros and cons.

Mr M Figg (DA) responded that a joint meeting might be problematic.

The Chairperson responded that nothing would be rushed. The Committee would wait for the process to unfold. The Committee needed to obtain proper advice on where things were.  He understood the point made by Mr Figg. The Committee would get legal advice over the matter. The National Assembly (NA) usually did things their way and the NCOP did things their own way. The best way to take the matter forward would be considered. He felt that the Expropriation Bill had been delayed for far too long.

Opening remarks by Minister of Public Works
Minister Nxesi stated that he had not been part of the Public Works team for eleven months. In his absence, the structure of the Department of Public Works (DPW) remained in place and progress had continued. There were minor changes here and there. He noted that his mandate for now was to operationalise the Property Management Trading Entity (PMTE). The issues that the Chairperson had raised earlier fell within the ambit of the PMTE. The intention was to make the PMTE a full entity.

Briefing by Department of Public Works (DPW) on progress on Operation Bring Back (OBB)
Mr Imtiaz Fazel Deputy Director General: Governance Risk Compliance (GRC), DPW, said that the briefing would speak to Phase 1 of OBB which was the identification phase. The DPW had in 2011 started an OBB Programme but within months it had ceased to exist as no whistleblowers had come forward to report cases. The OBB was re-launched in 2015. The OBB Programme would specifically deal with identifying, investigating and in possible cases recover where state properties had unlawfully/to the detriment of the state been:

• Disposed of other than through a proper transfer

• To another state custodian, private individuals, companies, trusts
• Transferred incorrectly/unlawfully (incorrect property transferred)
• Occupied unlawfully or encroached upon
• Sold and transferred at below market value where not donated for valid reasons

Irregularities identified through asset register rebuild program and whistleblower reports

The Committee was provided with a breakdown of results on possible irregularities identified through an asset register rebuild programme and whistleblower reports. The total number of irregularities identified under the DPW was 9 906. Figures for the provinces were also provided. The total number combining the DPW and the provinces figures came to 11 797. Further detail was provided on illegal transfer cases reported by whistleblowers. The total number of illegally occupied properties identified through physical verification was 1 300. Of the 1 300 properties, 28 properties had been verified and were in the process of regularisation through lease agreements and eviction process. On the remaining 1 272 a detailed verification process was to be done. The DPW was to also have strategies to deal with informal settlements (squatters/land grabbing) and to deal with dilapidated properties. On desktop reviews to identify illegally transferred properties, for instance on properties where the DPW was paying rates and taxes a total of 2 414 anomalies had been identified. Of these 852 belonged to the DPW whilst 1 031 were owned by other organs of state. On the remaining 531 investigations were underway.

Irregularities identified through interrogation of electronic deeds records
The Committee was provided with a breakdown of results on possible irregularities identified through an interrogation of electronic deeds records. The total number of red flags identified under the DPW was 8 939. Figures for provinces were considerable and the total inclusive of the DPW’s figure was 286 402. 
The DPW undertook to do data analytic scripts on 2086 of the 8 939 red flags identified. Some of the data analytic scripts were to identify and analyse movement of properties between the state and private individuals/entities, identify and analyse unexpected fluctuations in the purchase price of properties and to identify properties that were registered on weekends or public holidays.

Disposal Records
It has emerged from comprehensive immovable asset register enhancement processes in recent years that state disposal records may not be entirely accurate, inter alia, owing to the restructuring of government and departments at the dawn of the new South Africa in 1994, as well as the integration of TBVC and self-governing territories into a single nation.  National and Provincial departments report to the OBB forum on progress in relation to their verification of immovable asset disposals in accordance with the analytical records provided them. Irregularities detected in this process will be subjected to forensic investigation as part of the phase two of the OBB project. Concurrent with sector processes to confirm disposal records, and in light of the numerous legislative instruments that regulate state immovable assets disposal, the public works sector has also embarked on a process to develop a uniform disposal policy to inform disposal strategies tailored to specific sector asset register requirements.

Former Homelands
The primary custodian of properties in homelands was the Department of Rural Development and Land Reform (DRDLR). The DPW had had numerous engagements with the DRDLR in an endeavour to kick start the process. One of the major challenges encountered was that properties in the former homelands were stored on microfiche. However when the deeds information was recorded on the Deeds System from 1997 only the last title holder was recorded on the System. The only way to identify possible misappropriation of former homeland properties would be by receiving specific information from a whistleblower or by reviewing each and every deed that was available.

Mr Fazel said that there was a need for a public participation strategy if the OBB was to succeed. The DPW was also working with the Department of International Relations and Cooperation (DIRCO) on properties abroad. Phase 2 of the OBB would commence in the new financial year. He recommended that the Portfolio Committee on Public Works:
-Note the progress made during the initial identification phase ( phase 1) of OBB in respect of illegal occupation and illegal transfers of state owned property;
-Note the limited progress made with respect to identifying illegally transferred properties during phase 1 and the need for an alternative strategy that includes public participation during phase 2; and
-Note that Phase 2 will be driven by a dedicated OBB Project Management Office that includes Investigators, Lawyers and Property Experts to build on the results of the identification phase of Operation Bring Back

Ms Swanzi Matthews Deputy Director General: Real Estate Information and Registry Services, DPW,  emphasised that a lack of budget and resources was a major issue.

Discussion
Ms P Adams (ANC) congratulated DPW on a job well done. She had not realised how much progress had been made. The DPW had exceeded expectations. She suggested that the Committee in writing put in a request that the DPW’s budget be increased. The DPW was asked whether it had sufficient capacity.  Land belonged to the people. She referred to Minister Nxesi’s plans of operationalising the PMTE. She felt that if it was to take place greater expertise was needed. Once again budget issues came in. The DPW should take on experts and consultants for their expertise even though government tried to discourage the practise. If Operation Bring Back (OBB) was launched in 2011 she asked why it been stopped. Had the broader public not bought into the OBB? There was a need to get greater buy in on the OBB from all government departments. The DPW was asked to provide the Committee with the exact dates of its programmes at grassroots level. The public needed to buy into the programmes and various communication methods and media should be used to get the message out there.

Deputy Minister Cronin stated that the OBB had initially been publicly launched in 2011. The way it operated back in 2011 was that the DPW would wait for information from whistleblowers. The ball was thus placed in the hands of the public to initiate things. This however yielded zero results as there was no response from the public. The OBB was re-launched in 2015 and the briefing showed the results of efforts by the DPW. A whole range of things were being done. These included whistleblowers coming forward.

Mr Fazel, on funding and capacity, explained that as part of the Medium Term Expenditure Framework (MTEF) the OBB would be raised as a separate category with National Treasury. During the OBB’s initial launch in 2011 there had not been buy in from the public. No information had been received. The way things were now was that the OBB was very practical. Lessons were learnt from the 2011 experience. Members would be provided with dates of programmes on the OBB.

Mr M Figg (DA) agreed that the DPW had presented a good report to the Committee. He asked how things had gotten so bad to the extent that it currently was. He too was concerned about the DPW running out of resources. Without resources action could not be taken. He felt that the DPW had a huge task. A great deal of government’s properties and land had been stolen. There were even huge profitable businesses paying as little as R100 a month rental for the use of government premises. These types of practises should be put to a stop and action should be taken against these businesses as they were making millions in profits. Often the business would threaten that if they closed shop there would be job losses. The DPW should also look at ways of recovering monies that these individuals/businesses owed retrospectively. The DPW was asked how much it was losing on illegal occupation of its properties. The DPW had in its briefing spoken about some provinces like the Western Cape that did not have an appetite to take action in terms of OBB. The DPW needed to find ways to give these provinces an appetite. He felt that national should intervene. He noted that the DPW had found 2 414 anomalies where it was paying rates and taxes on properties that was not registered to it. Apparently these properties were owned by other organs of state. He hoped that the matter was being addressed.

Deputy Minister Cronin, on provinces like the Western Cape that were not active on the OBB, said they were either clean or did not simply show an appetite to implement. He added that this initiative was an opportunity for South Africans to all be committed to deal with corruption. There was a communication strategy in place. Cooperation was needed amongst officials themselves, with provinces and with government all round. This was the message being sent out. Everyone had to come on board. Members could also be messengers. He agreed that when launches took place members of parliament should be present. It was a collective task. The OBB linked up to the broader debate around the land issue. Public property should not be abused. He was pleased that members had appreciated the report.

Mr Fazel, on the matter of provinces not having appetite, pointed out that the problem was that provinces did not have resources.

Mr Peter Chiapasco Chief Director: Portfolio Analysis, DPW, on the determination of rental, said that rent was determined according to market related rental. The PMTE was looking into the matter of people/businesses paying low rentals for many years. On how the situation had gotten to where it was, he stated that history had a role to play. In the current era it was partly due to the fragmentation of SA into the Transkei, Bophuthatswana, Venda and Ciskei (TBVC) States. On who owned what he said that SA’s Interim Constitution was quite specific on it.  

Mr D Ryder (DA) too thanked the DPW for a good report. He appreciated the fact that the DPW had a mammoth task. The figures presented to the Committee painted a scary picture. He also agreed that the DPW needed additional resources. Money was needed to take action to get properties back. On illegally occupied properties, the occupiers varied from informal settlements on government land to nice buildings being occupied. In many of these instances the occupiers did not maintain the properties. There was a reputational risk to government to have degraded properties on its books. These degraded properties not only degraded properties around it but also degraded the area as well. There was a need to ensure that these properties did not ruin the reputation of government. On irregularities identified through interrogation of the electronic deeds records a total of 286 402 red flags had been identified. He felt the figure to be huge. Did the majority of this fall under provinces? Of this figure only 8 939 fell under national ie DPW. These properties needed to be traced. He asked what determined which properties fell under national ie DPW. The DPW had identified 2414 anomalies in properties where it was paying rates and taxes on properties. Of this total 1031 of these properties belonged to other organs of state. He felt that the Deeds Office was a state entity which needed to be red flagged. He asked what the acronym LAW stood for. He pointed out that slide 7 & 8 spoke to the oversight role of the DPW over provinces. What was the DPW’s oversight role? He also observed that the property portfolio of provinces seemed larger than that of the DPW. He was concerned that investigation into ex staff members having transferred properties into their names had been done internally. Why was the investigation not done externally? He felt that the Auditor General of SA (AGSA) should perhaps audit the findings of the internal investigation. The DPW was asked whether it had a Geographic Information System (GIS) that mapped out properties that belonged to government.

Deputy Minister Cronin said that it seemed that there was a misunderstanding around the internal investigation that the DPW had undertaken. He explained that the entire operation of the OBB was driven by the DPW. He agreed that the potential problem that the DPW was facing was huge. Most of the figures shown were red flags identified. He explained that the DPW staff that was being referred to were low level staff of the DPW that had received Reconstruction and Development Plan (RDP) houses. The total number of cases was 40. No wrongdoing was found. Perhaps it would have been better to have gotten an outsider to have done the investigation but the quotes received were far too expensive and ran into millions of rands. Using an outsider did not necessarily guarantee that the investigation was done properly. He agreed that there should be no cover ups.  

Mr Fazel, on the possibility of the Deeds Office being investigated, said that the Special Investigation Unit (SIU) had a proclamation to investigate four Deeds Offices. Employees who were suspected of wrongdoing would be investigated. LAW stood for Land Administration Web. The Intergovernmental Relations Act was used to engage with provinces. There was collaboration taking place. On the issue of whether provinces seemed to have more properties than the DPW, he explained that the figures were not a representation of the number of properties but rather the number of red flags. Provinces had way too many red flags. He conceded that the DPW had been paying rates and taxes for properties registered to other organs of state. He explained that vesting depended on what the property was used for. The DPW worked with various organs on this. DPW had investigated its staff in the past.

Ms Matthews on whether provinces had a credible Information Asset Register (IAR) said that the DPW performed biannual reconciliations with asset registers of provinces. A line by line check was done. The DPW’s role in provinces was driven by a concurrent mandate. The DPW did provide provinces with guidance and support. Oversight was done. The idea was to have a single repository which would provide a single view of asset registers across SA. The DPW did check on amongst other things whether provinces complied with legislation. There were various initiatives. Perhaps members were correct to think that provinces had more land parcels than the DPW. The DPW had 33 000 parcels of land and provinces had 61 000. However when one took into consideration the size of the parcels of land the DPW perhaps had greater hectare size. The DPW needed to use GIS technology to do an expansion on hectares. The DPW was building a GIS Unit. There was a need for expansion.

Ms E Masehela (ANC) asked when people were evicted what happened to the people. She asked for how long had these illegal transfers and illegal activities been taking place. If some provinces were not eager to get on board, how did the DPW intend to get them on board? Where properties were disposed of to provinces she asked how the DPW ensured that provinces had credible asset registers. Government parastatals like Transnet also had a great deal of properties especially around train stations. If there were persons paying minuscule amounts of rent to the DPW how were these contracts to be terminated.    

Mr Fazel agreed that parastatals like Eskom and Transnet also owned properties but that the DPW was the central point.  

Mr Chiapasco, on the challenge of disposals, stated that the DPW had its own disposal policy. Provinces had their own disposal policy. Attempts were made to align disposal policies. Different disposal modalities had a role to play.

Ms Nyeleti Makhubele, Division Head: Real Estate Management Services, DPW, agreed that DPW had a mammoth task. She said that evictions were used as a last resort by the DPW. DPW first looked at the demographics of people. The responsible department would be contacted by the DPW. Those persons who could afford to pay rent were made to pay rent. Those who could afford to pay but refused to pay would be evicted.

The Chairperson asked whether arrear rental was paid.

Ms Makhubele responded that arrangements were made for the payment of arrears.

Ms D Mathebe (ANC) pointed out that she had met with whistleblowers who had spoken about properties abroad. SA had a property along a river in the city of Bonn, Germany that was being used by a syndicate. There were also properties in Namibia that were dilapidated and were white elephants. If the DPW did not have money and capacity to deal with these properties and with illegally transferred/illegally occupied properties then the discussion would go on for many more years. The DPW also needed to take stock of itself around crime and corruption within itself. Action was needed.

The Chairperson noted that Ms Adams had made a key point about the Committee having to fight for a budget for the OBB. The Committee needed to take the matter further. The issue of how properties were lost and the modus operandi used should be investigated. Was the staff of the DPW involved? Perhaps the DPW needed to reconsider having an internal investigation since the result was that no wrongdoing was discovered. He was concerned that where properties were illegally transferred there was inevitably assistance by government staff. Perhaps a different approach was needed to do investigations. He noted that there were properties that the DPW was paying a great deal of money on but was not properly utilised. The DPW was essentially losing money. The Committee needed to be provided with a report on these types of properties in the provinces and municipalities. One such example was in a suburb called Kuilsriver, Cape Town where 89 properties had been renovated and was supposed to be occupied by metro police but was standing empty. Perhaps only one was occupied. DPW had to provide the Committee with a report on unutilised properties in both provinces and municipalities. The Committee should also be provided with a report which laid out how many properties the DPW was renting out. Members wished to know how the situation had gotten to where it was. He felt that the answer to the question would go back to the time of Jan van Riebeeck. The British had also colonised SA.SA had a history of colonisation and the situation was as a result of its legacy. The wrongs of the past needed to be corrected. The OBB was a good programme. The OBB should be taken to parastatals like Transnet that had many properties. There was also the issue of properties abroad. The Committee had to be provided with a report on unutilised properties including properties abroad. The Committee intended to go on study tours to Germany and Cuba to learn new things. Surely Germany did not have unutilised government properties. Perhaps there were lessons to be learnt. Perhaps members could even go to Namibia. The Committee was pleased with Operation Bring Back. The DPW should use whilstleblowers. He suggested that a hotline be in place where whistleblowers could report wrongdoings to. He understood that people were scared to be victimised if they divulged wrong doings.

Deputy Minister Cronin explained that the property in Bonn was the old South African Chancery. The DPW was well aware of the building. The issue was being dealt with in cooperation with the Department of International Relations and Cooperation (DIRCO).

Mr Fazel agreed to provide the Committee with the reports that had been requested. He stated that the DPW was working on a hotline and on amnesty for whistleblowers.

Mr F Adams (ANC) too expressed his appreciation for the efforts on the OBB. Why were the provinces not coming on board? He felt it was because they were arrogant. The provinces would fight with the DPW over high value properties. He noted that these types of issues did not even surface at Ministerial Member of Council (MinMEC) meetings. In principle provinces would not agree to hand over properties to the DPW especially if they were of high value. They were only willing to hand over derelict low value properties. A different approach needed to be taken. A concerted effort was needed to deal with the matter. He reiterated that at MinMEC these types of issues were not raised. MECs even instructed their Heads of Departments (HoDs) not to divulge too much. At the end of the day the DPW could only rely on what provinces wished to divulge to them. Even the present report only contained what provinces wished the DPW to know. A mechanism was needed to deal with the issue. The DPW needed to give the Committee its assurance that it was not afraid of provinces. The bottom line was that incomes of provinces were directly related to the properties that they held.

Mr Fazel responded that the matter had been served before the MinMEC two years ago. The Technical MinMEC had accepted it just the week before. Provinces said that resources had to be looked at. The DPW intended to make service to the MinMEC on 12 April 2018.

Ms Masehela was concerned about persons purchasing properties from government for R150 000 and then a year later selling it off for millions.

Mr Fazel said that these types of transactions had been red flagged and would be investigated. The results of investigations would be provided to the Committee.

Committee Minutes
Minutes dated 13 March 2018 was adopted as amended.

The meeting was adjourned.