Electronic Deeds Registration Bill; Ingonyama Permission-to-Occupy change to Long-Term Leases & Annual Performance Plan; CPA Bill; Nqancule CPA; DRDLR APP: AGSA review

Rural Development and Land Reform

18 April 2018
Chairperson: Mr P Mnguni (ANC)
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Meeting Summary

The Committee received briefings from Department of Rural Development and Land Reform (DRDLR), Parliamentary Legal Services, the Eastern Cape and North West Province, Auditor General South Africa (AGSA) and the Ingonyama Trust Board (ITB) in a comprehensive meeting which lasted 11 hours.

Highlights of the meeting was the briefing of the Electronic Deeds Registration Systems (e-DRS) Bill. This Bill is to be prioritised as it would allow the registration of large volumes of deeds as necessitated by government’s land reform initiatives; and expedite the registration of deeds by decreasing the time required for the deeds registration process.  

Members suggested that the confidentially clause of the e-DRS Bill should be removed so adequate data on trust and corporate land ownership in South Africa could be gathered.

The Eastern Cape delegation reported on the Nqancule Communal Property Association (CPA) where in 2008 the CPA chairperson sold the land without consent of CPA members. The land, 817 hectares, was sold for approximately R500 000. The Department was in a legal process to acquire the land and is working with the Special Investigating Unit (SIU) to find the chairperson who illegally sold the land. The case was being treated as a criminal case.

Members commented that lawyers were needed who could win cases, especially the Nqancule CPA case. They also noted the lack of interdepartmental accountability between national and provincial levels on the matter of the Nqancule CPA

The Committee finalised the Communal Property Associations Amendment Bill for adoption the following day.

AGSA spoke about its review of Annual Performance Plans of the Department and its entities and what items were non-compliant. Feedback could not be provided on the ITB Annual Performance Plan (APP) as they did not submit in time. The Committee spoke of malicious compliance by the DRDLR in submitting an incorrect APP to the Committee and for mixing up the dates for submitting the revised APP to AGSA.

In the 7 March meeting with the Committee, the Ingonyama Trust Board (ITB) was instructed by the Committee to stop the conversion of Permission to Occupy (PTOs) to long term leases on Ingonyama Trust land. ITB updated the Committee that a consultation between ITB and DRDLR had taken place. It was agreed that programmes could not be implemented without presenting it to the Committee. Thereafter there has been no convergence between DRDLR and the ITB.

Members noted that the conversion from PTOs to long term leases would result in systematic eviction which was unconstitutional. The Committee stressed that people residing on ITB Trust land needed to be landowners, not tenants. An MP proposed that PTOs be converted to title deeds, especially for widows. This received support from the entire Committee. It was decided to hold off on this matter until the Committee Chairperson returned and an official position on matter would be discussed.

The Committee observed the ITB APP presentation was not up to standard and would need to be reworked. Reasons for rejection included a lack of budget breakdown and an income sheet and no monitoring system.

The North West Department presentation was stopped by the Committee due to the lack of a problem statement. The delegation was dismissed and would present the following day.

The absence of the Minister of Rural Development and Land Reform was of great concern to the meeting. The Committee undertook to write to the Minister to ask her to avail herself at the next meeting.


Meeting report

The Acting Chairperson welcomed the Deputy Minister, Mr Mcebisi Skwatsha. He commented that South Africans were upset with the Department for corruption allegations against it. He explained that assets were sold to reduce the sale price of land.

Mr P Mnguni (ANC) stated that there was pressure within Parliament for Committees to finalise its bills and implored the Department to motivate why the Electronic Deeds Registration Systems Bill presented today had to be finalised. He asked the Deputy Minister to explain to the Committee what the Department planned next.

Mr Nchabaleng asked how the Department’s plans related to the e-DRS Bill.

Ms Leona Archary, DRDLR Acting Director General, told the Committee that the Department’s legislative programme for 2018 included nine bills. of the nine, four were new such as the Regulation of Agricultural Land Bill, Rural Development Bill, Communal Land Tenure Bill, and Electronic Deeds Registration Systems Bill. She added that existing legislation was also to be amended.

Ms Archary stated the Department has been under pressure as land is a sensitive topic. The Regulation of Agricultural Land Bill was very important as it was linked to expropriation without compensation. This Bill could provide a framework for which surplus land could be made available. The Bill was taken back for amendments but would be reintroduced within the quarter to the system. The Deeds Act was very important as it was last updated in the 1930s.

The Chairperson thanked the Department for providing clarity and asked the Department to brief the Committee on the Electronic Deeds Registration Systems Bill.

Electronic Deeds Registration Systems Bill: briefing
Ms Leona Archary, DRDLR Acting Director General, explained that the current system worked on manual deeds lodgements. The proposed Bill sought to increase efficiency.

Ms Tsepo Mshleda, Legislation Specialist, DRDLR told the Committee that it was recommended by Public Commons and Cabinet that the Electronic Deeds Registration System should be prioritised as it would allow bigger transformative legislation at a later stage.

Ms Antoinette Reynolds, Assistant Registrar of Deeds: DRDLR briefed the Committee on the Electronic Deeds Registration Systems (e-DRS) Bill. She explained the e-DRS Bill seeks to provide legislation that is required for the development of an e-DRS. The e-DRS would enable the registration of many deeds, improved turn-around times for providing registered deeds and documents to clients. The e-DRS would also ensure country wide access to deeds registration services and enhanced accuracy in registration.

She explained that Clause 1 of the Bill provided for definitions which was aligned to the Electronic Communications and Transactions Act of 2002. Clause 2 provided for the development, establishment, and maintenance of the e-DRS. It provided the Chief Registrar of Deeds (CRD) to develop, establish, and maintain the e-DRS. Clause 4 provides for the authorisation of users. Clause 5 enabled the Minister to ensure regulations on recommendations by the Regulations Board. Clause 6 provides for a dual system of registration until the e-DRS is in place. Clause 7(1) provided for the e-DRS Bill to come into operation on a date to be fixed by the President by proclamation in the Gazette. Clause 7(2) provided for the President to set different dates for the coming into operation of the different sections of the Act.

On the socio-economic impact assessment, she stated that the DPME granted permission to proceed with submission of the e-DRS Bill to Cabinet on 8 September 2016. A summary of the main findings of the SEIA Report was the options for consideration were:
(a) Introduction of an e-DRS; (b) Do nothing; or (c) Introduction of a hybrid electronic-manual deeds system. Based on the findings of the SEIAS, the DRDLR supports Option (a) in order to provide for a deeds registration system to be able to handle the registration of large volumes of deeds as required by the Government’s land reform initiatives.

The Chairperson thanked the Department for clarifying the contents and asked if the Bill had any connection to previous White Papers published in 2007 and 2011.

Mr M Filtane (UDM) referred to the recently released Land Audit Report and said South Africa has been disposing land to trusts and questioned why the Bill overemphasized confidentiality. This would hamper transparency about land ownership. That if the confidentiality section was removed he would support the Bill. He asked if the Bill would improve the pace of transferring deeds. Delays were costly which resulted in revenue loss. In clause 6 he questioned what support would be given to conveyancers to accelerate transfers in terms of lawyers who could not access or manage the e-system. He questioned financially how ready DRDLR was for when the Bill would be implemented. DRDLR had a very important national function, despite having only 1% allocated to it from the National Budget. DRDLR had come up with a Bill which asked for more finances but had not justified why the Bill was needed.

Ms T Mbabama (DA) asked if the new system would assist in gathering accurate data on land ownership in South Africa. She asked what process the new Bill would play in expediting agricultural land subdivision and how the Bill would aid the process. On the topic of deeds offices, she asked if all provinces had one. The briefing said the Bill would enhance accuracy of registration and monitoring and she asked how the e-DRS Bill could help.

Mr N Matiase (EFF) questioned the purpose of the e-DRS and what it aimed to achieve. His second question focused on who owned South African land and where they were situated. He asked how the Department ensured that once land orders were given, they were implemented via the e-DRS. He stressed that a comprehensive land audit was needed before the Bill could be implemented.

Ms N Magadla (ANC) disagreed with Mr Matiase and stated that the Bill needed to move forward regardless of statistics. She asked if Act 37 of 2002 was operational. She asked about authenticity of the information stored within the current system. She requested DRDLR to submit the Bill as Parliament were waiting for it.

Mr Filtane asked about the possibility of messengers losing their jobs as they would be replaced by e-DRS.

Mr K Robertson (DA) asked how the Bill would have affected the results of the National Land Audit of November 2017. The need for this Bill indicated that the current system was flawed. He asked if the public could access the e-DRS to see who title deed owners were and how the e-DRS could be tampered with.

Ms Archary spoke on the improved Land Administration System. Deeds were one section of the Land Administration System. The Bill was one of the steps in allocating title and that the Bill was about the registration process thereof. On Mr Filtane’s question about confidentiality she clarified about the current Land Audit in which state land was estimated at 17 million hectares. The first step of the Land Audit was to determine state owned land. The second step was to determine private land ownership. Within this step, individual land ownership was estimated at 4%. The next phase of the audit was to audit trusts and funds to acquire statistics on individuals in trusts in relation to race classification. Race classification in this process was needed to achieve equity. The Bill would not change the information, but the process of acquiring such statistics. The Regulation of Agricultural Land Bill would create a land commission wherein all the bills later would merge into one document. The process would focus on farm land. On messengers losing employment, some employment would be lost, but other jobs would be created which are technologically based. The system would provide efficiency. On DRDLR’s readiness, the Deeds Office operated as a trading entity where they did not rely on DRDLR. The Deeds Office covered their own costs. The e-DRS would curb fraud which came with human error and manipulation as the e-DRS would install checks and balances. The e-DRS would assist in the subdivision of land and she explained that many systems would link to each other which would all be aligned to e-DRS. Every province would have such an office, except for the Eastern Cape which would have more. It was only North West and Gauteng where such offices have been implemented. The provincial offices would deal with their respective provinces. On the statistics of land ownership, the only problem was the information of the composition of trusts.

Ms Antoinette Reynolds, Assistant Registrar of Deeds: DRDLR explained that the pace of registration of deeds would be increased with the e-DRS System. Currently deeds needed to be allocated in five to six working days. With the new system, it would be possible to register a deed within one business day. On the question of how conveyancers would be helped, with the system, lodgement could be done online.

Ms Carlise Knoesen, Chief Registrar of Deeds, DRDLR stated that the Department had a budget available which would cover costs of the e-DRS. It would be a 2 to 3 years project where DRDLR would use their own resources and not external contractors. Staff would be reskilled to be able to work on the e-DRS.

The Chairperson stated that in-depth scrutiny of the Bill would be done by the Committee. The Committee appreciated the appointment of female leaders in DRDLR, but that they were majority white. Transformation would be discussed on a later occasion.

Mr Mcebisi Skwatsha, Deputy Minister of Rural Development and Land Reform, stated that the role of white woman was not on the agenda. He referred to nationalisation saying the Democratic Alliance would want to believe that there would be no nationalisation of land.

The Chairperson thanked DRDLR for the presentation. He stressed the issue of transformation to the Deputy Minister and questioned how urgent the Bill was. He asked how soon DRDLR wanted the Bill to be passed.

Ms Carlise Knoesen, Chief Registrar of Deeds: DRDLR stated that they had wanted the Bill passed in the previous year and ascribed the delay to systems being down.

Ms Archary apologised for the down time of the systems and that DRDLR was working with SITA and Telkom to fix the problems.

Mr Filtane asked again about confidentiality in the Bill and said a crucial element was being missed and that DRDLR had not answered him.

The Chairperson questioned if Mr Filtane had to powers to dictate legislation in the manner that he was doing.

Ms Magadla stated the acting Director General had apologised for delays in the system. She questioned how long it would take for the acting Director General to be permanent.

The Chairperson added that the appointments within DRDLR would be reviewed by the Committee. He questioned where the Ingonyama Trust Board was as they were not present. He questioned their absence as they had to be prioritised.

Eastern Cape: Nqancule Communal Property Association
Ms Peliwe Njemla-Mntukatandwa, DRDLR Head of Programmes: Eastern Cape Land Reform Office, stated that the Committee had been briefed on the matter in a previous meeting. DRDLR bought land for the Nqancule CPA members to graze livestock. The land was registered in the CPA name. In 2008 the CPA chairperson sold the land without consent of the CPA members. The land was 817 hectares and was sold for approximately R500 000. The CPA members only found out about the sale in 2009 when they were evicted by a court order. The Department appointed a lawyer to represent the CPA members to challenge the sale. The Elliot Magistrate court ruled that the sale was legal. However an appeal was made to the Grahamstown High Court citing that the magistrate did not give the CPA members an opportunity to prove their case. The Grahamstown High Court has referred the matter back to the Elliot Magistrate Court for arguments. The matter was currently being pursued by DRDLR to acquire the land for the CPA.

The Chairperson asked if a recent evaluation of the land had been done.

Ms Njemla-Mntukatandwa replied that a recent evaluation had not been done but estimated the value of the property had quadrupled since the initial sale.

The Chairperson asked when last the former CPA chairperson has been contacted.

Ms Peliwe Njemla-Mntukatandwa replied that he was in hiding in the Western Cape but was not traceable.

Mr Matiase stated that it was a criminal case and asked if the Committee was the appropriate platform to pursue the matter. He implored for guidance from the Chairperson and Department. That land should be adequately managed and not be part of “get rich quick” schemes.

Mr Robertson stated that the presentation was worrying and asked how often such events occur. He asked how long ago the property was sold.

The Chairperson answered that the property was sold in 2008.

Mr Robertson said the property had been sold ten years ago and questioned why it was bought to the Committee ten years later. The hectares worked out to R505 per hectare on the original selling price and the value had quadrupled since then. Since 2008 resources had been added to the property increasing its value even more. He asked if the current owner would be compensated if it were to be taken back by DRDLR? He also asked if the CPA chairperson had been contacted and if the 870 hectares was redistributed.

Mr Filtane asked if a handwriting expert had been approached to confirm the fraud regarding signatures. He asked if the CPA was technically and legally compliant at the time of the alleged forgery. If the CPA was not compliant, the CPA chairperson could claim innocence. There should be strong business element to the CPAs. He asked if civil action was to be started against the former CPA chairperson. He stated that DRDLR did not display agency in pursuing action to approach the magistrate to resolve the matter.

Ms Magadla questioned if there was proof that the land was acquired by the DRDLR at R440 000. She questioned the withdrawal of the Land Rights Management Facility (LRMF) during course of the sale.

Mr Nchabaleng stated that the document of purchase was faulty if it did not display how much the land was bought for. The presentation showed that no agency was shown from the region to deal with the matter. It was a matter of theft where the rich stole from the poor and DRDLR had failed to pursue justice. He asked if there were similar cases in the region and what was being done?

Mr Robertson said he was confused as it took ten years for the matter to appear before the Committee. He questioned what DRDLR had done in prior years.

The Chairperson clarified by explaining that the case had come up in the recent public hearings on the CPA Amendment Bill.

Mr Mcebisi Skwatsha, Deputy Minister, stated that the concerns raised by the Committee about the years of delay was accepted and recognised by DRDLR. The current Departmental seniors were not there at the time of the event. The current Committee had the same questions as the Provincial Legislature Committee. The ten-year delay was unacceptable. The Deputy Minister clarified that the matter was relayed to the members as they needed to know about such issues. On the question of whether the Parliamentary Committee was the competent body to deal with the matter, he responded by saying yes and no. He explained the Committee needed to know. However, the Committee was not the correct authority to approach. The Special Investigating Unit (SIU) had to be approached to deal with the matter. He confirmed that this was not the only matter in the Eastern Cape and that DRDLR had great challenges. The name of the CPA chairperson needed to be known to gather street-wise information. The CPA chairperson who was alleged to own a taxi industry in the Western Cape needed to be found. As to the resignation of the LRMF lawyers, DRDLR had also questioned this.

Ms Archary, Acting DG, said that this case was not the norm for DRDLR. The matter was not bought to DRDLR by the CPA members who were being evicted. It was not a restitution project but a redistribution project. The matter had been escalated to a national priority level. In relation to the person who purchased the land, she added that compensation would need to take place and that a legal route was to be followed. A recent valuation had not been done on the property as a legal process was under way. No improvements were made to the property after the purchase by DRDLR. Many times CPAs keep quiet where such cases occur. By amending legislation such as the e-DRS Bill, such instances would be limited. A legal team had been appointed where the lawyers were problematic as they were not competent, and DRDLR is working with the SIU. The community had also opened a criminal case and the criminal justice system did not act satisfactorily. Civil proceedings were under way and DRDLR believed the land would be returned wherein compensation would take place. Regarding proof of the land purchase by DRDLR, she stated there was proof and proof of the subsequent sale. The DRDLR legal team had been allocated to aid the provincial team to ensure a successful outcome. On the compliance of the CPA, at the time of the sale the CPA was not compliant. However this did not detract from the criminal act of the illegal sale. The CPA members asked for the land to first be acquired and then to work with DRDLR. She added that all CPAs had business plans but that the quality was not up to standard.

Mr Filtane remarked that the business plan needed to include ten years of plans and projections to be able to make civil claims. He stressed agency and asked if the relevant authorities have been contacted.

Mr Robertson said that DRDLR became aware when people were evicted which was in 2009. He asked why nine years had elapsed. He questioned if the national level was keeping the provincial levels accountable. He asked why the Committee had heard about the matter only via the public hearings. He asked if departmental accountability would take place. In his personal capacity he would follow up on the matter and present findings to the Committee.

Ms Archary clarified that the matter was not bought to DRDLR upon the evictions but agreed the delay was unacceptable. She confirmed that the matter has been reported to SIU and DRDLR was actively working with SIU. A central litigation register had been set in place to keep provinces accountable.

Ms Magadla stated that the time gap and delay in Department action was still unexplained.

Ms Archary replied that in 2009 systems were not in place. This was why DRDLR was focusing on improving monitoring and communication systems. All land acquired by DRDLR was under audit and it would indicate if the correct people were on their allocated properties.

The Chairperson stated that DRDLR needed to be on the side of the people. He questioned who of the CPA members had died and implored that those living should have their signatures compared to when they had allegedly signed the fraudulent document of sale. To have a case, a current valuation of the property was needed. The withdrawal of the Land Rights Management Facility (LRFM) was also worrying. The capacity of their legal teams was limited. The LRFM was wasting DRDLR money. He asked the DG to show the Committee the success of cases prosecuted by the LRFM and stressed that they needed lawyers who could win cases. The failure of the LRMF reflected negatively on Parliament.

Afternoon session

Communal Property Associations Amendment Bill: proposed Portfolio Committee Amendments
Mr Nathi Mjenxane, Parliamentary Legal Advisor, explained the drafting changes to the proposed Portfolio Committee Amendments.

Clause 9
The addition of “immovable” was made.

Clause 19
This clause was about regulations dealing with immovable property. The only addition made was (c) which was a new addition to the categories of property.

Clause 12(1)(b)
This clause was focused on moveable property which should be dealt with by majority.

Clause 21
This clause was previously rejected by the Committee and only item 13 was left of the schedule. The only addition was that of the five-year term for CPA Committees. Currently the term had no restrictions for CPA Committees.

Mr Filtane stated that the word “regulations” was distasteful and asked the legal advisor to find another way to express the intent of the clause.

The Chairperson supported Mr Filtane. He proposed that a section be formulated that states, “and thresholds thereof”. The adoption of the Bill would take place the next day.

North West public hearings concerns on CPA Amendment Bill
Mr Lengane Bogatsu, Chief Director of Land Reform in North West: DRDLR briefed the Committee on progress made since the last engagement with communities and questions asked by the CPAs. He also explained the process of regularising the CPAs using election agencies and the State Attorney's Office. This process of regularisation was undertaken to minimise contestation of election results and contestations in courts such as with the Barolong boo Modiboa ba Matlwang case.

The Chairperson stopped the presentation due to the lack of a problem statement by DRDLR. The Committee did not know what DRDLR was talking about. He wanted to dismiss the North West DRDLR delegation so they could formulate a proper report.

Mr Filtane agreed with the Chairperson. He asked if a more substantive version of the presentation was sent to the Committee. He was worried that costs would occur for their extended stay as they were not from the Western Cape.

Mr Robertson supported Mr Filtane.

The Committee Secretary stated that perhaps the presenters were responding to the concerns given to them by the Committee.

Ms Magadla said the presentation needed to be reworked and presented to the Committee.

Mr Robertson agreed but proposed that the presenters provide a verbal problem statement.

The Chairperson stated that DRDLR needed to be clear on what it was discussing. The officials should have higher standards when presenting to Parliament. 

The Deputy Minister asked if it was possible to dismiss the officials for 20 minutes to draft an alternative document, whilst the Committee continue with other agenda items.

The Chairperson agreed.

Auditor General South Africa review of Annual Performance Plans of DRDLR and its entities
The Chairperson noted that the Auditor General could not report on the Inyonyama Trust Board APP as they did not submit the requested documents. 

Ms Karabo Komape, AGSA Business Executive, began by speaking about the proactive review of departmental annual performance plans so as to ensure that ambiguity is avoided in them.

Ms Leona Archary, Acting Director General: DRDLR, clarified the timeline of tabling the APP as contained in the presentation. A complete version of the revised APP had been tabled separately.

Mr Eugene Southgate, DRDLR Deputy Director General: Corporate Services, confirmed this.

The Chairperson asked for the two dates by which the APP was supposed to be tabled.

Mr Southgate replied that the first AGSA letter informing DRDLR about their APP findings was delivered on 8 March. Another letter stated that they needed to submit their corrected APP by 12 March.

Ms Archary explained that the date set within DRDLR was 14 March as the first letter did not contain a submission date for the corrected APP. It was only the second letter which stated that they needed to submit by 12 March.

The Chairperson asked if all the AGSA review findings were corrected.

The Chairperson then asked if the Minister had sent an apology for this Committee meeting.

The Committee Secretary replied that the Minister had and that she was in a Cabinet meeting.

The Chairperson stated that the Minister needed to be accountable. There was malicious compliance with the moving of dates within DRDLR when tabling the corrected APP. It was a very serious matter. He questioned if there was a strategic manager within DRDLR.

Mr Southgate confirmed that the strategic manager reported to him but that he was not present. Ms Archary added that the strategic plan was not amended.

The Chairperson said that everything contained within the strategic plan was important as it helped shape the APP. He asked DRDLR when their strategic planning was done.

Mr Southgate replied that the strategic plan was done in the latter part of the previous year and beginning of the current year.

The Chairperson rejected their explanation.

Mr Filtane added that the Committee could not sit comfortably without the Minister. The current Minister’s duties did not differ from the previous Minister. The Minister had a constitutional mandate and she was setting a bad example. The Minister had not even spent 10 minutes with the Committee since her appointment which affected the portfolio and Parliament’s efficiency. The portfolio needed to be accountable to the public and that she was hampering this.

The Chairperson stated that it was unacceptable that the final APP was drafted only the previous week and did not correspond with the one that was sent to the Committee. DRDLR should have requested an extension.

Mr Southgate agreed that an extension could have been requested.

The Chairperson stated that the Committee support staff had worked from an APP document which was not completed or correct. This hampered the Committee’s research work.

Ms Archary stated that it was not malicious compliance on the part of DRDLR. She had asked for extensions for the Ingonyama Trust Board (ITB). She said that if she had known the impact she would have asked for an extension. She added that the document sent to the researchers was correct but had minor errors.

The Chairperson stated that the strategic manager was the driver of the strategic plan which is broken down into an APP.

Mr Southgate noted that they have had several planning sessions.

The Chairperson stated that the Committee noticed problems and that it was wrong to have the committee researchers work though false documents. It was an issue of principle. He could not allow the Auditor General to continue with that presentation as it was not correct. The other section of the AG’s presentation could commence.

Mr Brink Grobler, AGSA Senior Manager, provided background on the role of AGSA when it reviewed the annual performance plan (APP) of the Department which covered performance indicators and targets. The purpose of such a review was to provide feedback to the Department on the areas that required improvement and to offer the Portfolio Committee insights into the interim review of the Department's APP to add value to oversight.

The focus of the review was the measurability of the indicators and targets of the APP to determine if they were in line with the requirements of the Framework for Strategic Plans and Annual Performance Plans. A review was performed on the draft APP for 2018/19. From this the following observations were not resolved: Programme 5 (Land Reform) performance indicators did not show a split between the indicators and targets for the DRDLR and the Agricultural Land Holdings Account (ALHA). This amounted to non-compliance with National Treasury regulations which require separate identifiable targets for the trading entity. He also noted that there were several requests for deviations from normal procurement prescripts and extensions to existing contracts sent to National Treasury as DRDLR deviated from normal procurement processes. This displayed a risk of increase in irregular expenditure by DRDLR. Recommendations on key matters for the Committee were the possible impact of the non-compliance with Treasury Regulations to split ALHA targets from DRDLR targets. The issues identified could negatively impact the 2018/19 audit outcomes.

The Chairperson remarked that the role of the Auditor General in providing audits that were helpful to the Committee, was well explained.

Mr Filtane referred to slide 11 and asked what the overall impact of the performance of DRDLR was.

Mr Matiase spoke about the internal control environment and progress made in addressing the prior year audit findings. He asked why DRDLR has had issues of non-compliance. AGSA findings were very important in monitoring DRDLR actions and to keep them accountable. It was not AGSA’s responsibility to answer to the Committee about DRDLR non-compliance.

Ms Magadla was happy with AGSA’s presentation as it was very detailed. The Committee did not want clean audits that were bought.

The Chairperson asked if there were any investigations on internal appointments within DRDLR. He asked if there were discrepancies. The other issues would be dealt with when DRDLR presented its APP the following day.

Ms Komape replied that when analysing the usefulness of DRDLR’s indicators, these were in line with what was promised to the people.

Mr Brink Grobler, AGSA Senior Manager, replied about procurement, stating that monitoring was essential. The internal appointments were not part of the interim audit but would be part of the final audit. He explained that the Office of the Valuer General (OVG) has been listed as a public entity so AGSA has not seen its APP.

The Chairperson said that AGSA should not negotiate with departments which could tint the results.

Ms Archary clarified that deviations were not about non compliance. The nature of what was being requested was that if another department was worked with, it was considered as a deviation that needed to be requested from National Treasury.

Mr Matiase stated that the Acting DG was trying to defend the indefensible action of non-compliance. The AG findings reflected harshly on DRDLR. The Department should be modest by accepting its mistakes. The final responsibility lay with the delegating authority and others should not be blamed.

Ms Magatla supported Mr Matiase.

The Chairperson asked that AGSA continue its presence at Committee meetings and Ms Komape replied that it would do so. Mr Mnguni stated that the Committee would communicate with AGSA to help the Committee researchers with other matters.

Ingonyama Trust Board (ITB) Annual Performance Plan
Judge Sipho Jerome Ngwenya, ITB Chairperson, introduced Ms Thembeka Ndlovu as the acting Chief Executive Officer and Mr Amin Mia as the Chief Financial Officer.

The Chairperson asked why Ms Ndlovu was the acting CEO.

Judge Ngwenya clarified that the CEO position was a contract position. The contract had expired with the previous financial year. The position of CEO was currently vacant and being advertised.

Ms Thembeka Ndlovu, Acting CEO for Inyonyama Trust Board, began the presentation on page 25 which dealt with the strategic objectives and targets for their three programmes. On Programme 1: Administration, ITB had reworked 70% of the policies they intended to focus on within each quarter. ITB had also adopted a corporate governance approach to improve efficiency. The vacant posts have been advertised. In terms of policy development, they were working towards being compliant with their financial statements. Compliance and timeliness was important to the ITB. The Board was having a meeting with AGSA to improve compliance. Programme 2: Land and Tenure Management, the focus was on commercial property. Though property development they achieved almost 30% of their annual target. Revenue collection was estimated at R500 million. Programme 3 was about proactive land planning. Consultation with the traditional council was underway. The traditional council consisted of 200 members. There were many human settlements on strategically located land. Many of these settlements have been targeted to ensure further development in these areas for job creation. She then moved on to public private partnerships.

The Chairperson asked if DRDLR had been consulted about public private partnerships.

Ms Ndlovu replied that they have. Hullet was approached for sugar cane plantations in KwaZulu-Natal. The focus was on the communities. Hullet had been developing property on their sugar cane plantations to which local communities could start to plant their own sugar cane on ITB land, where after it could be sold to Hullet. Another company with whom ITB was working was Adamopix. A needs assessment was being drafted for communities to ensure productivity within local production. ITB was also collaborating with Merensky.

Permission-to-Occupy conversion to Long-Term Leases
Judge Ngwenya focused on the transferring of Permission to Occupy (PTO) to long term leases. In prior engagements with the Committee, specifically 7 March, the Committee asked the ITB to stop the conversion process. On the Committee’s request, the following was done. A consultation between ITB and DRDLR had taken place. It was agreed that programmes could not be implemented without presenting it to the Committee. Thereafter there has been no convergence between DRDLR and the ITB. In relation to estates to be settled, many estates have not been settled.

The Chairperson asked ITB to continue with the final presentation.

Ingonyama Trust Board Budget for 2018/2019
Mr Amin Mia, ITB Chief Financial Officer, referred to slide 21 where the planned expenditures were captured. The 2018/2019 budget estimates were shown. This budget covered two programmes: Administration and Land and Tenure Management.

The Chairperson thanked the ITB and said that the APP would be dealt with later in the discussion.

Mr Filtane asked which policy informed the leasing of premises and land. He raised this question in the context of the APP as it would impact the lease situation. He referred to slide 31 and asked what investment did the ITB hope to attract. The partnering companies were not made known to the Committee or to the sector. On human settlements, an objective of four was put next to it. He asked if it was four houses or four communities. He asked what contribution was envisioned by the board to attract investment.

Ms Mbabama referred to slide 30 that stated that the ITB strategic plan aimed to empower the rural people of KZN by providing maximum security of land tenure. She questioned what that meant. Another question was how the ordinary person accessed the transformed rural economy. She asked how illiterate people accessed information about their rights. On page 21 an amount of R29.24 million was allocated to community beneficiaries. She asked who or what this was. On page 30 the content dealt with secure tenure rights under commercial property. She did not understand what that meant and asked ITB to clarify. On the PTO conversions, she asked why ITB did not provide a deed of sale to widows instead of long term leases.

Mr Robertson asked if ITB had done a land audit. Generational wealth was denied in the apartheid past to some groups. He asked why this was being continued in current policy as title deeds were not given.

Ms Magadla commented on the working relationship between ITB, Merensky and Adamopix. There was no reinvestment within the communities, especially roads. Merensky was neglecting KZN. She urged that they assist the surrounding communities on socio-economic issues in their areas of operation.

Mr Nchabaleng questioned the six policies listed on page 22. On page 29 it stated that 16 policies were going to be amended. This was not in line with the target which was to develop one policy per financial year. He asked where DRDLR and ITB had the capacity to develop excess policies. It was very strange.

The Chairperson said that Mr Mia seemed to ignore the financial segment of the APP. There was not a page dealing with income in the presentation. The Committee could not see if ITB had budgeted for a deficit. He referred Mr Mia to the National Revenue Fund (NRF). Regarding Hullet, he stated that Hullet was not planting more sugar cane fields but was converting them to developments. ITB claimed that Hullet was rolling out a sugar cane field project. The Committee went to visit KZN during a drought in which the sugar cane farmers were suffering. There were small scale growers supported by Hullet who were financially struggling. On projections, he said ITB was going to be monitored in future reports to the Committee. He questioned why quarterly financial projections were not included in the presentation. There was no budget breakdown. He questioned why Mr Mia proposed the budget be passed when there were no monitoring instruments in place. There was an increase in expenditure on rates and provisions from R10 million rand in the previous year to R69 million in the current year. He asked what was meant by the R69 million rates provision. There was a total budget spike from R118 million to R187 million. That was almost an 80% increase in budget. He questioned how this was possible when the Acting DG complained earlier about the unsatisfactory budget allocation. If ITB takes funds from the NRF they should return those funds to the NRF.

Judge Ngwenya explained that trust money or property was money not held by the state but held by a trust on behalf of other people. The income of ITB trust was money that was held in trust. Some of the financial question were issues the ITB was currently discussing with the National Revenue Fund. ITB was only able to get R25 million from the national fiscus. Whether the Committee passed the proposed budget, the Committee needed to make funds available for ITB to function as this would affect ITB’s accountability. The shortfall within the budget has been provided by the trust income.

On Ms Mbabama’s question on issuing of title deeds, he asked why DRDLR has not started such a process when it had more money than ITB. Title deeds meant paying municipal rates. The beneficiaries were refusing to pay for full title on land as it encapsulated responsibility. Should subdivision of land in the allocation of deeds take place, ministerial consent and funds would be needed. Reaching out for title deeds was not financially possible. In ITB’s dealings with local councils and customary law, the reaching out of title deeds was also difficult. He noted a case where an RDP house was bought for one crate of beer. Within African customary law, if the head of the family is dead someone must fulfil his responsibility. Under customary law, the reaching out of title deeds implied imposing Roman Dutch law on Africans. People on the ground did not have the need for title deeds. PTO provided for some payment. The ITB dealt with local authorities on which policy could not imposed. The local authorities decided who had access to land. ITB could only do so much and that without political will and government they could not do anything. There were many complexities in the reaching out of title deeds.

Regarding Hullet, he acknowledged there was some deficit in the conversion of sugar cane fields into residential properties. ITB and Hullet were therefore making small scale farms available. There were many challenges in reaching out to local communities in KZN. On the question of crafting sixteen policies, he stated that ITB was expanding its capacity from 60 to 200 staff members. On paying municipal rates, he said that ITB never refused to pay rates. There were rating categories and the people who owned the land were responsible for paying. If rates were to be paid by ITB, the committee needed funds. ITB was in an inter-departmental debate about the paying of rates which had accumulated to R600 million.

The Chairperson asked if he understood correctly that the ITB was asking the Committee for the outstanding amount of R600 million.

Judge Ngwenya replied that ITB has never refused to pay rates and they have engaged with the municipalities.

Ms Mbabama noted that the commercial leases were not spoken about. She asked about the conversion of residential PTOs to long term leases. She understood the situation was about rural homesteads who paid for long term leases. She asked what ITB’s understanding of secure tenure rights was as the long-term leases escalated rates for residential people. She asked how residents got access to quality information on their rights and the local rural economies. People did not need leases that escalated at 10% per annum, rather they needed ownership.

Mr Robertson stated that a comprehensive land audit would be the first step for ITB to acquire profit. On the long-term leases, costs would need to be paid, regardless of whether it was a title deed or a lease.

Mr Matiase asked about rural industrialisation stating that property investment remained within city centres. Colonial and apartheid forms of land ownership retention should be stopped. Capitalist forms of land ownership gave rise to notions of private property ownership under Roman Dutch law. A constitutional review of Section 25 was needed to revise capitalist sentiment. He asked how government or Parliament could help ITB.

Evening session

Mr Filtane stated that there were many complexities in the redistribution of land which required a broad consultative process. As per legislation, traditional leaders are subservient to ITB. The ITB did not need consent from traditional authorities to implement policy. The Act was poorly drafted in terms of traditional law. There must have been a way to rectify this problem. By implementing long term leases, the ITB did not promote land ownership.

The Chairperson interjected and asked Members to limit their responses.

Mr Filtane continued and referenced Section 26(3) of the Constitution which read “No one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances”. ITB’s conversion of PTOs to long term leases was structural eviction as rates would increase at 10% per annum – which over a long period, residents would not be able to afford.

Mr Nchabaleng spoke to Section 25(6) of the Constitution which stated, “A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to tenure which is legally secure or to comparable redress.” Moving from PTO to a long-term lease meant rent would increase. The price increases could lead to eviction in which residents could lose everything including security of tenure which the Constitution provided for. He said that it was easier to convert a PTO into a title deed rather than a lease.

The Chairperson thanked Members and asked the ITB to answer the unanswered questions.

Ms Ndlovu started to explain the process followed within ITB.

The Chairperson stressed that Ms Ndlovu needed to listen as she was not answering the questions.

Ms Ndlovu responded about the PTO tender process.

The Chairperson stated that this had already been discussed and that she needed to focus as her response would be on record.

Ms Ndlovu spoke about the breakdown of the R29 million as asked by Ms Mbabama. The money would be used on agricultural projects as recognised in the APP.

Judge Ngwenya spoke to the context of the number four being listed in the presentation to display Human Settlement targets. The number four referred to four areas wherein Human Settlements as an integrated area was developed by the ITB.

The Chairperson stated he did not need to elaborate and asked him to answer the next question.

Judge Ngwenya said that rural did not mean poor. He referred to a case which the ITB had taken to the Equality Court.

The Chairperson asked about systematic evictions as raised by Mr Filtane. He suggested that the Committee internally prepare a position on leases and PTOs which would be discussed when the Minister was in attendance.

Ms Mbabama stated that she was not answered.

The Chairperson said that Ms Ndlovu had not yet finished answering and that Ms Mbabama could pose her question later.

Judge Ngwenya stated that the PTO conversion had not yet taken place. The ITB had met with DRDLR but that the conversion was not discussed. He asked that perspectives be exchanged between all stakeholders.

The Chairperson said that Judge Ngwenya should deliver bullet point responses as it was late in the evening. The meeting was no longer an APP discussion but an indaba on PTOs. He asked ITB to discuss its APP.

Mr Amin Mia, Chief Financial Officer, Inyonyama Trust Board responded that the deficit was funded by the ITB due to investment and rental income. The expenditure in the presentation was based on the APP.

The Chairperson stated that Mr Mia needed to admit that the presentation was flawed as it did not include income streams.

Mr Mia replied that the information could be made available. The trust funds were made available to communities via the funding projects. On the development of a policy for monitoring and prescribing rates, a proper analysis was to be done which would take more than a year. The reason for the 80% increase was due an infrastructure project which was to be undertaken along with a sub programme. It was due to land planning projects.

Mr Filtane asked if there was a policy that regulated the proposed conversion of PTOs to long term leases.

Mr Matiase stated that no legislation empowered ITB to do conversions from PTOs to leases.

Judge Ngwenya replied that there was a conversion policy in place and that he disagreed with Mr Matiase.

The Acting Chairperson stated the Ms Ndlovu had a long background in pubic administration. The APP was poorly planned and presented. Quality assurance was lacking, and the Committee did not accept that standard of work. He proposed that questions by Members be put aside until an official position on PTOs could be discussed. This discussion would take place when the Committee Chairperson was back. He told ITB to rework all aspects of the APP along with informing DRDLR about the five senior members who had been suspended from the ITB. He asked what the cost of the suspensions would be for taxpayers. The reasons for their suspensions should be shared with the Committee. He questioned if suppression was taking place within ITB. The Chairperson said that additional questions from Members could be communicated to the committee secretary for a written response from ITB.

The meeting was adjourned.

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