Mpumalanga CPA Amendment Bill concerns; Acting Director General replacement, with Deputy Minister

Rural Development and Land Reform

16 May 2018
Chairperson: Ms P Ngwenya-Mabila (ANC)
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Meeting Summary

The Mpumalanga Department of Rural Development and Land Reform reported on its interventions to remedy the concerns raised at the Mpumalanga public hearings about the Communal Property Associations (CPAs) in that province. Mpumalanga DRDLR said weaknesses were a result of the lack of capacity. Budget cuts have impacted badly on service delivery. Consequently, this left Mpumalanga DRDLR with limited capacity to have soldiers on the ground for Communal Property Associations.

The Committee heard that most CPAs were non-compliant. CPAs were not holding AGMs and not submitting annual financial statements to DRDLR. In one CPA, the chairperson opened a bank account and only his family was benefiting from the farm’s proceeds. Profitable CPAs were not making use of accountants though they have the right to appoint them. DRDLR does not have accountants to support the CPAs, but accountants would be incorporated in to the new model being developed.

DRDLR reported in-fighting is rife amongst CPA members. It is common to find CPA members would start fighting over funds and who was going to occupy the farm house. Some fights are caused by lease agreements where the farm is leased to another party and the beneficiaries complain of not benefiting from this. DRDLR employed Land Rights Management Facility attorneys to intervene in these disputes.

Some concerns at the hearings were not CPA related, but involved farm dwellers. Some of the farm dwellers qualified to be part of the CPA. Where farm dwellers were experiencing violation of land rights from farmers and threatened with eviction, DRDLR has intervened to ensure evictions were not carried out. Some of these have been resolved while others were sub judice.

The Deputy Minister informed the Committee about the replacement of the Acting Director-General with another Acting DG.

Members were not happy about the release of the previous DG and this sudden change within DRDLR. They asked why the former DG, Ms Leona Archary, was fired and they had learnt about via the media. Stability has been replaced by instability and it is not understandable why this was done at such a critical time.

Several Members asked if the country has the right model for CPAs, especially when one looks at their failure rate and the in-fighting and the lack of compliance. On the Mpumalanga report, Members asked about the appointment for CPAs; if holding an AGM helps to recoup lost relationships between CPA members; what DRDLR is doing about non-compliance by CPAs and why is it taking so long to develop a strategy for making CPAs compliant; what monitoring tool will be used to ensure non-compliance does not happen again. They compalined that it seemed as if there is no planning between the Land Claims Commission and DRDLR about what happens after the land has been transferred.
 

Meeting report

Ms Zanele Sihlangu, Chief Director for Mpumalanga Provincial Shared Services Centres: DRDLR, explained the interventions and plans to attend to community and stakeholder concerns about CPAs in Mpumalanga. Mpumalanga had held public hearings on the CPA Amendment Bill in the Gert Sibande District Municipality and at Ehlanzeni District Municipality were concerns about specific CPAs in Mpumalanga had been raised.

• In the Gert Sibande public hearings at Ermelo, the following CPAs had concerns: Ekuphumuleni, Nhlabathi, Ekukhanyeni, Ilangaliphuma, as well as farm dweller matters which were not CPA related.

Ekuphumuleni CPA
The properties were acquired through the Proactive Land Acquisition Strategy (PLAS) on 20 February 2007 and allocated to farm dweller families. From 2012 until 2016, the CPA was harvesting commercial timber and generating income from the farm. The challenge is that the commercial timber has all been harvested and the farm has no income. DRDLR is working with the CPA to link up with possible investors to partner with them to make the farm productive again. The Ekuphumuleni CPA is non-complaint and DRDLR is working towards making it compliant. DRDLR would work with the CPA to look at additional development including improved basic services and 1 Household: 1 Hectare.

Nhlabathi CPA
CPA members claimed the former Gert Sibande District Mayor, Mr Nhlabathi, the chairperson of the CPA, had opened a bank account with his children and that family only is benefitting from the proceeds of CPA land. The CPA members are not informed of progress and there is a fight between them and the chairperson. They requested DRDLR intervene and the timber production be stopped. The District Office engaged with the chairperson and disgruntled beneficiaries. A firm of attorneys was appointed through the Land Rights Management Facility (LRMF) to represent the beneficiaries who were interdicted by Mr Nhlabathi from entering the farm. The mandate of the attorneys was extended to include the lodging of an urgent application in the High Court to interdict the chairperson from harvesting timber on the CPA property and to compel him to call an AGM to account to the beneficiaries, and to suspend the CPA bank account pending the regularisation of the CPA.Mr Nhlabathi has filed papers to oppose the application. The attorneys will file a responding affidavit and await a court date. Engagements were ongoing with members. They have been informed that DRDLR is considering seeking an order to place the CPA under administration. The Nhlabathi CPA is non-compliant and the court process would inform regularisation. There is no harvesting happening on the farm until the matter is resolved by the court.

Ekukhanyeni CPA
The complaint was that DRDLR bought the farm and implements but the farm owner took all the assets and the farm was sold. The land was acquired through the Settlement Land Acquisition Grant (SLAG) on 12 December 2000. The property was then sold and transferred on 25 November 2012. The District Office heard about the sale in 2015. The Land Bank was contacted and it confirmed it had received the CPA resolution signed by the beneficiaries and the sale agreement. Ekukhanyeni CPA is non-compliant and DRDLR is working towards supporting them to be compliant. Investigation into the sale would be instituted by DRDLR. A development plan for the 25ha including basic services and 1H-1H would be done. The farm has been sold back to its previous owner.

Ilangaliphuma CPA
Mr Esau Mnisi from Ilangaliphuma CPA raised a concern they had received land from government in 2002. The CPA chairperson never informed the CPA that he had borrowed money from the Land Bank. In 2006 the Land Bank issued summons to sell the farm. The CPA members do not have the money to settle the loan. They have paid R32 000 only and R340 000 is the balance. DRDLR is investigating a way to assist the CPA. DRDLR policy does not have a provision to settle debts on behalf of beneficiaries. Engagements have been initiated with the provincial Department of Agriculture to consider the CPA for support in 2018/19 to increase production in order to service the loan. Engagements with Land Bank are taking place to ensure restructuring of debt while a development plan is put in place with support.

Farm dweller matters
A concern was raised that district officials were not doing their work and responding to the farm dweller  concerns. There are lessees from Gauteng and they are paying rental to officials. DRDLR is busy investigating the matter. The property is registered in the name of the state. It is true the farm has been leased to a person based in Gauteng and he is sub-leasing the farm. Mr Sibusiso Perry Parirenyatwa signed a lease agreement from 1 January 2012 to 31 December 2016. The lease has since expired. It was discovered he did not have any livestock on the farm nor mechanisation to plant the arable land. A letter of demand was issued to him but he failed to respond to the findings and comply within 14 days of receipt of the letter. As a result, a portion of the farm has been given to the District Land Reform Committee for re-allocation and to look after the needs of the farm dwellers.

In another farm dweller matter, Mr Mtsweni requested assistance against land rights violations by the farmer. The matter was also reported to the Premier’s Office. The land owner refused development and fixing of their dilapidated houses, and the municipality could not install electricity. The matter is known to DRDLR which has since appointed attorneys to interdict the land owner from threatening eviction and to pursue reinstatement and reallocation of the land rights arbitrarily curtailed by the land owner. The land owner was arrested and the matter is going to High court. DRDLR would look at acquiring the land to secure tenure.

• At the Ehlanzeni District Municipality hearing held at kaMhlushwa, concerns were raised about these CPAs: Endlovini, Sisonke, Matsamo, Mawewe, Siphumelele Trust, as well as farm dweller matters.

Endlovini CPA
CPA members claimed 52 farms but only two have been settled. They want an enquiry on the partially settled claims. Endlovini CPA farm has a lessee, a white farmer, who has leased the farm for 10 years. An official had called an AGM instead of letting the CPA do it by itself. The CPA complained it has not received the S42C development grants.

DRDLR reported that it had bought two farms out of the 52 farms. It released the Recap grant but kept it because there was infighting within the CPA and funds were embezzled by officials who have been dismissed. The fight has been going on for three years. The bone of contention is around the 52 farms. Claims have been consolidated on the two farms. The matter was investigated and the perpetrators were found guilty and are awaiting sentencing. The CPA Act requires the CPA to hold an AGM and to provide reports and financial statements to DRDLR on an annual basis. DRDLR undertook to conduct a forensic audit into the elective AGM and the outcome is awaited. In the interim, the elected committee continues to run the business of the CPA which included entering into the 10 year lease agreement. As a CPA is a private legal entity and can enter into business arrangements, DRDLR cannot prevent such agreements.

DRDLR requested the current executive committee to provide reports and financials for their term of office, and none were submitted. There are faction groups within the CPA. DRDLR has appointed an attorney from the Land Rights Management Facility (LRMF) to assist the CPA to mediate disputes and bring harmony amongst the faction groups. A meeting has taken place with the CPA members. The CPA was due for elections in February 2018. The LRMF is in the process of updating the beneficiary list, which is taking longer than anticipated. Elections are anticipated to take place in June 2018 because the updating of the beneficiary list is a time consuming process. Development support would be dealt with after the elections have been concluded. The matter is planned to be finalised end of June 2018.

Sisonke CPA
A concern was raised that the CPA farm is a game reserve which is not fenced due to delays by the municipality and Sanparks. There is a co-management agreement with Sanparks, but there is no consultation with the beneficiaries. There was a request that the CPA needs training.

DRDLR reported that the property is state land. The Department of Environmental Affairs has given the reserve R60 million for fencing and a tender was advertised to procure a professional service provider to expand infrastructure. The appointment has been made and the project is awaiting the CFO signature so that it could start by 1 June 2018. DRDLR has provided training to the CPA executive committee members on compliance and policies and to ensure information is communicated to the communities.

Matsamo CPA
A concern was raised that Matsamo CPA is worth R1 billion in assets and they got into a partnership which required investment from the CPA. The other challenge relates to SARS taxes. The CPA requires seed investment from government, and it has challenges from labour tenants. Another beneficiary complained that executive committee members were enjoying the proceeds by themselves. The farms started renting out some of their properties in 2010, but the beneficiaries only started benefiting in 2013. They were given R3000 per beneficiary. R8m was received but only R5m was distributed. The CPA owes SARS R9m.

DRDLR reported that the challenge is to get audited financial statements from the CPA in order to regularise it. A LRMF attorney was appointed to assist the CPA. The current executive committee would not have their appointments confirmed until the audited financial statements were received by DRDLR. The Commission on Restitution of Land Rights has a commitment of R33 million in development grants which would assist the CPA redevelop their sugarcane fields. The CPA has an attorney and an accountant who are assisting with the tax issue because it is making a lot of money. On the labour tenants, one portion of the farm handed over to the CPA was already encumbered as there were labour tenants. These people were not considered when the claim was settled and they refused to vacate the farm. They have accumulated ESTA rights and others have claimed labour tenancy rights and LRMF was assisting in this regard. The matter is sub-judice and DRDLR is waiting for a court ruling.

Mawewe CPA
The concern was the land transferred to the CPA has a lease expiring only in 2020 and a DRDLR official had forced them to enter into a partnership with the lessee The former Department of Agriculture MEC, Mr Mandla Sibitane, invited them to a meeting and told them there is R100 million RADP funding but they must take on Chris Theledi to work with them. Chris Theledi and the MEC approached the traditional authority to negotiate. Sibitane was disrupting operations. There are outstanding properties that have not been transferred.

DRDLR reported the claim was being settled in phases with the property transferred on 14 May 2014. The Regional Land Claims Commission is currently in the process of transferring the last phase. The land parcels were with the conveyancer for transfer. When the Mpumalanga Land Claims Commission acquired the properties previously owned by the Croocks Brothers, DRDLR entered into a deed of lease with them from 1 July 2010 to 30 June 2015. The lease gave the lessee rights to further renew for another five years. The former Agriculture MEC was unknown and DRDLR could not respond to this. It should be noted that Mr Sibitane resigned in 2016 and what he communicated was unknown to DRDLR.

Siphumelele Trust
The concern was that the CPA got the land in 1998 and R24 million for development in a the joint venture with TSB. The money was used by the traditional leader. Another complaint was some of the properties were not transferred due to internal conflict within the CPA and DRDLR promised to get a mediator.

DRDLR appointed an administrator (Sizwe Ntsaluba Gobodo) to look at the finances and SARS matters. The financial administrator managed to stabilise the finances. The Land Claims Commission appointed a mediator to resolve the conflict within the communities and each community was legally represented. The conveyancer was appointed to transfer the properties to the respective claimants.

Farm dweller matter
The concern was that the farm dwellers were moved from Waaikraal in1993 by the then land owner. The farm was then restituted to the Schagan CPA. The farm dwellers requested government assistance to return to the land. DRDLR found that the complainants had waived their rights as occupiers after moving out of the farm in 1993. The complainant lodged a claim in terms of the Restitution of Land Act and an acknowledgement letter was issued to him which requested supporting documents for the land claim. The complainant and others currently graze their cattle on private property which they claim is their forefathers’ land. The claimant does not qualify under ESTA and LTA. A claim is possible in terms of the Restitution Act provided the requested documents are submitted. As the land was restored to the CPA, the complainant was requested to make an application to the CPA to be verified and admitted as a member because the land is now privately owned by the CPA.
 
Appointment of another Acting Director-General
The DRDLR Deputy Minister, Mcebisi Skwatsha, informed the Committee changes had been effected in the Department and that Ms Rendani Sadiki has been appointed as the Acting Director-General to replace previous Acting DG, Ms Leona Archary.

Discussion

Mr M Filtane (UDM) remarked that this was a serious concern for the Committee as stability has been replaced with instability just as in other departments. He was not happy with the release of the previous Acting DG. It is not understandable why at a critical time another Acting DG because that position has become so critical these days. DRDLR should inform the Committee when to expect a permanent DG.

Mr P Mnguni (ANC) commented that the Committee is not privy to the circumstances that led to the release of the previous Acting DG. The timing is bad because it is just before the elections. The new Acting DG must be given a chance because the Auditor General has indicated there are improvements in DRDLR.

Mr K Robertson (DA) said it was important for the Committee to know what happened to Ms Leona Archary, former Acting DG. The Committee needs to be given reasons for her release and to be given an indication of when the new permanent DG would be appointed.

The Deputy Minister replied that the new Acting DG was the DRDLR CFO before she left last November 2017 and joined the Department of Public Works. When the new Minister came in, Acting DG Rendani Sadiki came back as a permanent CFO because there was an Acting CFO. The Minister has then appointed her as an Acting DG and this was done in front of Ms Archary. It is the Minister who would be able to engage with the Committee on her appointment. He noted the feature of rotating Acting DGs. There is a feeling that DGs in acting capacities should be rotated.

Mr Filtane pointed out that the reason they are in this situation is because no one would go want to fill a position knowing very well there will be a new government next year. In SA, it is done the wrong way because each new minister comes in with her/his own entourage and baggage. He said there were no problems with Ms Archary’s expertise.

Mr Robertson said it was vital that the Committee discuss the sudden changes within DRDLR to know what happened.

Mr Mnguni remarked that rotation of Acting DGs is influenced by the circumstances and personnel problems, but the Committee wanted an explanation for the sake of fairness. Personally, he would not take a 10-month appointment knowing very well there would be a new minister coming in after that. This was a political issue.

The Chairperson stated that acting positions cause instability in a department and changes cause disorganization because the implementation of programmes gets delayed.

Mr M Nchabeleng (ANC) said the Committee wanted to know why the DG was fired because they learnt about her release in the media. He asked if she had committed any wrong and if there was a disciplinary case against her.

Mr Mnguni said this matter should be left to the Minister to brief the Committee about it.

Ms W Magadla (ANC) said it was not good to personalise the matter because the Deputy Minister has explained the matter and the new Acting DG will feel belittled as if she is not good enough for the job.

The Chairperson suggested the matter be left for discussion with the Minister at their next meeting. The Committee got to know of Ms Archary’s release from her duties through the media. The Committee wanted to hear the story from DRDLR because it has a mandate to account before the Committee even though the Committee does not make any appointments.

DRDLR Presentation
Ms S Mbabama (DA) asked for clarity on what is meant by non-compliance by CPAs. She asked how much DRDLR initially paid for the Ekukhanyeni CPA. How was the Department official related to the strategic partner of the Thembanani CPA. She asked if the land owner, Mr Barnard, had been arrested for the farm dweller evictions. She requested more details on the Sabban CPA because no non-money interventions were mentioned to solve its problems. Does the rental money from the Wales CPA goes to the beneficiaries or the Department?

Ms Sihlangu explained that the Wales CPA rent money goes to the claimants. The Wales matter has been taken to court and it has found that the lease is valid until 2020. She said money has been thrown at the Sabban CPA though it did not have a business plan. DRDLR has taken note of the situation and would try to remedy the problem. DRDLR bought Ekukhanyeni for R255 100 and it was sold for R265 000. Mr Barnard was arrested, but is no longer in jail. DRDLR does not know when he would appear in court again. The strategic partner of the Thembanani CPA once worked for the provincial Department of Agriculture and worked with the provincial director of DRDLR. They know each other and the person was known by many officials. She noted that strategic partners come and present what they do to the DRDLR and, sometimes, they come with the beneficiaries and get registered in the database. The director came and implemented the tranche. Lastly, she stated that compliance is defined in the CPA Act. It includes the timeous submission of financial reports and the holding of AGMs for feedback to DRDLR. These are some of the basics that should be complied with.

Mr Robertson asked why the Ntlabathi CPA is named after its chairperson, Mr Ntlabathi, who is accused of embezzling funds. He asked if the appointment of attorneys for CPAs goes through a three-quote process or if it is preferential appointment. He asked if beneficiaries of the Ebodweni CPA could be condemned for renting out some of the properties on their land to generate money. He wanted to establish if the country has the right model for the CPA, especially when you look at their failure rate and the in-fighting that is happening. He asked if holding an AGM would help to recoup lost relationships between CPA members

Ms Sadiki replied about the appointment of attorneys, saying they were engaging the Justice Department to take over their Land Rights Management Facility which helps with legal resolutions. In the coming months DRDLR would concentrate on developing a CPA model that would try to solve these challenges.

Ms Vuyiswa Nxasana, Chief Director for Tenure System Reform: DRDLR, added that since 2011 the CPA model was never discussed. The legislation is there to be amended to correct the challenges raised by the Committee. This matter was never dealt with. The Department had never asked about when it would like to see stability in the CPAs.

Mr Sam Nkosi, Regional Land Claims Commissioner for Mpumalanga, explained that Mr Ntlabathi is the leader and former mayor in the Gert Sibande District. By virtue of his status, he managed to influence the naming of the CPA.

On the leasing of properties by Ebodweni CPA, Ms Sihlangu explained there has not been an agreement between CPA members about that. It must be remembered that a CPA is not an individual. On resolving conflict through an AGM, she pointed out that an AGM is sometimes held for fighting parties to elect committees that would represent both their interests. There is always an appointed mediator to reconcile the differences between the fighting parties.

Mr M Filtane (UDM) asked if a support package was given to Ekuphumleni to harvest before time. He asked why the district office only heard about the sale of Ekukhanyeni in 2015 yet the property was transferred on November 2012. It is unfortunate that DRDLR is dealing with people who are not clued up to run the CPAs they way they were expected to although they have got accountants. He asked if DRDLR got value for money in fencing and expanding the infrastructure at the Sisonke CPA to the tune of R60m. He wondered whether South Africa has the right model for the CPA based on the DRDLR experiences with CPAs. It needs to do some soul searching to see if it has the right model. People get chunks of land and they experience encroachment. Perhaps the country is doing the right thing the wrong way. Giving an individual a piece of land is the right thing, but it is done the wrong way. DRDLR needs to do a serious rethink about the CPA.

Mr Nkosi replied that DRDLR was not privy to the procurement process for the Sisonke infrastructure to determine the value of the R60m. They would try to get specifications and send a detailed report to the Committee.

Ms Sadiki reported that Ekuphumleni was not allocated any form of support to harvest before time. On the Ekukhanyeni three-year time lapse between the sale and the Department learning about it, she said as an Acting DG she has asked many question on the matter and she would compile a report in writing for the Committee. DRDLR does not have accountants to support the CPAs. The CPAs have got the right to find their own accountants for the compilation of financial statements. Accountants would be incorporated into the new model that is still going to be developed.

Ms C Matsimbi (ANC) asked what DRDLR is doing about CPA non-compliance and what monitoring tool is used to ensure it does not happen again.

Ms Sadiki replied that as a Department they are very thin on the ground. The people who deal with CPAs are also the ones that fight land rights violations. There is no dedicated unit to monitor CPAs due to capacity challenges.

Ms Magadla asked for clarity on the role of DRDLR in the three-year lapse in the Ekukhanyeni CPA case.

Ms Sihlangu replied that the CPA land was acquired in 2000 but then sold in 2012 but DRDLR only got to know about it in 2015. DRDLR does not have a dashboard on land sold to the state. That piece of land was a private asset at that time.

Mr A Madella (ANC) said it appears as if there is not good planning between the Land Claims Commission and DRDLR. For instance, restitution happened after 10 years for the Mahlangani CPA. One would assume that once restitution is finalised, the land would be transferred. There must be a plan for what is going to happen to that land after transfer. It looks as if there is a delay and DRDLR gets notified very late after the transfer. The Recap programme is a stop gap measure, but there are lapses there. He asked why farms are left to collapse if land reform is allowed to happen.

Ms Sadiki replied that grants were never provided to support the Recap programme when it started in 2009. Nothing happened after that going forward.

Mr Nchabeleng said he does not understand why it takes a long time to work on a strategy to make the CPAs compliant because DRDLR is dealing with people and it has to explain to them about what is expected of them and be given timelines. To allow a CPA, like the one in Bushbuckridge, to solve its own problem without sending an official from DRDLR to observe is not the right thing to do. He further wanted to establish why DRDLR could not claim against the estate of the chairperson of the Ilangaliphuma CPA because the chairperson has borrowed money from the Land Bank.

Ms Sadiki replied that when they talked of a strategy, they were referring to a plan they were formulating to intervene or hold a workshop. Already, some CPAs have been work-shopped and provided training to executive members of the CPAs on how to run these enterprises. She also noted DRDLR has got no right to chase the estate of the CPA’s chairperson because it is not a state land. The CPA has been violated, but has got the right to chase after the estate of the deceased person.

The Chairperson said the Committee must get a detailed report on the Siphumelele Trust. She said she knows the conveyancer concerned, but the conveyancer does not have documentation on the matter.

The Deputy Minister asked DRDLR to comment on the Siyathuthuka CPA.

Ms Sihlangu explained they are caught in a situation where there are white farmers who are under Siyathuthuka, but are unknown to The Department of Trade and Industry. When the TSB was asked about this matter, it said these groups of farmers were members of the CPA Board. The farmers were then advised not to sign anything business related from TSB and it was discovered the farm was not productive because it did not have farmers. TSB is adamant that it done nothing wrong. TSB was then requested to submit its financial statements to check any anomaly in terms of transactions. DRDLR met the farmers and they want a forensic investigation done on the transactions they had with TSB. They said they do not know Siyathuthuka. The farmers were back home and not working on the farm.

The 3 and 9 May 2018 minutes were adopted

The meeting was adjourned.

 

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