The Department of Rural Development and Land Reform (DRDLR) presented the steps that will be taken to assist CPAs to acquire their land and/or title deeds in each of the provinces. It has made interventions in most of the CPAs but some interventions will be finalised by the end of the year:
• Eastern Cape has 45 CPAs without title deeds.
• Gauteng has two without title deeds.
• In KwaZulu-Natal has one still registered under the state.
• In Limpopo there are 42 CPAs without title deeds which are currently with the Regional Land Claims Commission in Limpopo awaiting collection from the CPA Executive Committees.
• Mpumalanga has only one CPA without a title deed.
• Northern Cape has five CPAs without title deeds
• North West has one without title deed
It did not receive any reports from the Western Cape and Free State on CPAs without title deeds.
Members asked about the Limpopo RLCC keeping the CPA title deeds; is DRDLR intending to take back the title deed from non-compliant CPAs; on what basis did DRDLR determine compliance; does it have a compliance checklist; is DRDLR not raising expectations through the registration of provisional CPAs; why cannot alternative land be acquired if DRDLR is unable to acquire the initially identified land; whether there is proof that DRDLR has trained the CPAs.
The Commission on Restitution of Land Rights (CRLR) gave a briefing on the MalaMala settlement to the N'wandlamharhi CPA. The MalaMala claim was lodged by 21 claimants in their respective capacity as individuals and also representing their own communities. Claims were lodged against 21 properties consisting of 63 portions, measuring 65 000 hectares in total. Properties claimed included 9 land parcels that used to be owned by the MalaMala Game Ranch, measuring 13 184 hectares in total. An offer of R751m was made in May 2008. The offer was based on R52 000 per hectare for 13 184 hectares. The offer was accepted by the land owners, however it was subject to Ministerial approval. This offer was rejected by the Minister on the basis that it was exorbitant and unaffordable for the state. After settlement negotiations collapsed, this matter was referred to the Land Claims Court for adjudication. The Land Claims Court accepted that the claimants had a valid land claim in a judgement handed down on 19 April 2012 that noted: It would not be in the interest of the public to pay such an exorbitant amount as the claimants have only been dispossessed of a living space, grazing rights and cropping land. Restoration of the property to them would amount to over-compensation. The claimants had sought leave to appeal the matter, which was declined and also failed at the SCA. They then approached the Constitutional Court
In terms of the intervention, Rural Development Minister Nkwinti requested that the matter be removed from the Constitutional Court roll, and the parties should settle out of court. Negotiations began immediately and were led by the Chief Land Claims Commissioner and legal representatives, the Minister's legal representatives, the landowners, and the claimants' legal representatives. The first phase of the negotiations mandate was to focus on the acquisition of land and improvements, and R101 billion was agreed to. In the second phase, they negotiated a co-management agreement between the claimants and landowners.
The report noted the benefits of a successful co-management agreement between MalaMala Ranch and the community as the seamless continuation of an internationally recognised brand and commercially sustainable business with a 50 year track record; Immediate financial benefit to the community through three revenue streams: rental of land, annual dividends and tourism levy; There would be no financial commitment or liability/debt for the community. The business has already made a profit of R46m after tax deductions and declared a dividend of 79%, whereby the community will receive an amount of R10m.
Challenges and lessons about the MalaMala settlement include: membership verification disputes; lack of accountability by CPA executives; lack of models for benefits-sharing; lack of skills; underhand deals by some community leaders without proper mandate from the community; separation of governance from business ensures sustainability of land restoration; CPA leaders are to be trained in corporate governance; and mandate of the CRLR is often clouded by matters beyond the legal mandate defined by the Restitution Act, for example CPA disputes.
Members asked about the composition of Mondzo Community Investment and the Management Committee; what the role of the CPA executive committee is; who takes decisions and who must implement those decisions; if they have happy land claimants out of this deal. Concern was raised that R101 billion was paid to the land claimants who have not been verified; what the reason was for government to acquire the land and why did government reach such a financially harsh agreement; had there been an investigation on the role of former SANParks CEO who personally benefitted millions from the deal; why had Minister Nkwinti withdrawn the court case and agreed to such a settlement.
The Chairperson noted apologies from Deputy Minister Skwatsha, Deputy Minister Mashego-Dlamini and Minister Nkoana-Mashabane who were attending a Cabinet meeting.
Mr K Robertson (DA) was concerned that MalaMala will be discussed while the Ministry is not present. Answers are going to be required and neither the Minister nor Deputy Ministers are present. There are certain questions that need to be asked on the deals that were done under former Minister Nkwinti and how he should have to answer to those deals. But the Ministry is not here which is worrying.
The Chairperson said that MalaMala is an old issue and agreed with Mr Robertson that the Ministers need to attend meetings but they have sent apologies. The Committee needs to proceed because the Acting Director-General and the Commission on Restitution of Land Rights (CRLR) are here and will answer some of the questions posed by the Committee.
Mr E Nchabeleng (ANC) said all questions will be answered by the DRDLR and if there are gaps, answers to those questions could still be tabled at the next meeting. It is not necessary to call Minister Nkwinti to come and answer to this Committee because he is no longer the Minister there. The current Minister has to take responsibility for everything including providing answers to those questions.
The Chairperson said if there are responses to questions that are not satisfactory to Members, Members have the right to ask the Minister to respond to those questions in the House or in writing. But for the sake of this meeting she hoped that the delegation will be able to answer all the questions provided and then they will take it from there.
Restitution of Land Rights Amendment Bill: public hearings programme
The nationwide public hearings on the 2014 Restitution of Land Rights Amendment Bill will take place during June/July recess following a July 2016 Constitutional Court ruling that Parliament rushed the law through without proper consultation and it needed to strengthen public participation on this Bill within two years. The Bill seeks to reopen the period for lodging land claims after the 1998 cut-off date.
The Committee Secretary said the public participation programme has been approved and is still with the Chief Whip's Office. However, the logistics for the public hearings are in their final stages. The programme is still the same as the one circulated to Members, but venues have not yet been confirmed by municipalities. Only Limpopo and North West have confirmed their venues.
Mr Madella said the support staff must ensure that the venues are in good condition and accessible to people with disabilities like himself. He asked if any changes were made by the Chair of Chairpersons to the challenging conditions that had been attached to the approval of their application.
The Chairperson said they had met with the managers to discuss the challenges of the conditions.
The Committee Secretary said the main condition that was approved is the Constitutional Court agreed to extend the deadline. Other conditions are about catering and support staff.
Mr P Mnguni (ANC) said that Parliament management must clear this up because there is no way that the Constitutional Court can authorise how long Parliament takes on this legislation. The other aspect was the concurrent Review of Section 25 of the Constitution political process which is also holding public hearings. The Land Access Movement of South Africa (LAMOSA) initiated the interdict on the Act before. They have since written to four parliamentary committees: Minerals Committee, the NCOP Committee, Constitutional Review Committee (CRC), and this Committee. All of a sudden LAMOSA is demanding that the Committee stop the hearings, the CRC must stop the hearings on Section 25, and the NCOP Committee must stop its hearings. The Traditional and Khoi-San Leadership Bill must also be stopped.
The Chairperson said the approval of the application has conditions and the first condition is that there will be no catering for participants at the public hearings. This means that they should not keep the participants at the hearings for too long as there is no catering prepared for them.
Mr Mnguni said DRDLR senior people must be deployed as DRDLR usually provides a briefing at the hearings that highlights the issues. Its legal team usually attends in case legal answers are required.
The Chairperson said they will check that to make sure. Translation of language is also very important as they will be going to different provinces and they are short of language interpreters.
The Committee Secretary said Parliament has a challenge with this and does not have enough interpreters to attend the public hearings. However, they have spoken to the provinces and will depend on them to get language interpreters.
The Chairperson said they had tried to meet with Parliament management to negotiate for catering but were told that due to budget constraints it will not be possible to cater for participants and this applies to all Committees. Therefore, none of the conditions have changed for the public hearings. What has changed is the Constitutional Court has approved the request for an extension. Therefore, the public hearings will go ahead and officials from provinces and municipalities will also be invited to those hearings.
Communal Property Associations without Title Deeds: DRDLR report
Ms Rendani Sadiki, Acting Director-General: DRDLR, introduced Mr Sebape to brief the Committee.
Mr Jeff Sebape, Chief Director: Tenure Systems Reform, DRDLR, gave background saying Communal Property Associations (CPAs) are established in terms of the CPA Act with the objective to acquire, hold and manage property in common on behalf of its members in terms of a written constitution. Thus CPAs without land pose a lot of challenges for a CPA and its members. The report presents the steps that will be taken by the DRDLR to assist each CPA to acquire their land and/or title deeds (see document for detail).
• Eastern Cape has 45 CPAs without title deeds. Seven CPAs sold their land. Four opted to register another land-holding entity (trust or close corporation) and transferred the land to that entity instead of the CPA. Ten CPAs and two Provisional CPAs never received land because the farm/property owners withdrew their offer to sell and no land was transferred to these CPAs. In terms of intervention DRDLR is in a process of de-registering these CPAs. Nqancule CPA lost their land due to fraud by the CPA chairperson. The matter is currently in court. Joe Slovo CPA: Part of the land that is to be transferred is registered with the municipality and some information could not be located at deeds office as there were a number of endorsements. DRDLR is investigating this. The land of ten CPAs is still registered under the state. The State Land unit is busy having this land transferred to the CPAs. DRDLR is facilitating the process to have the CPA converted to permanent CPA and to have the land transferred.
• Gauteng has two CPAs without title deeds: It is alleged that the Rama CPA has sold its land. An administrator is to be appointed soon and will be in place until 31 December 2018. Wallmannsthal CPA: Two CPAs were registered on this land. Some of the members belong to both CPAs, while others have opted for financial compensation. The Regional Land Claims Commision (RLCC) is assisting with verification and other matters related to the claim.
• In KwaZulu-Natal the KwaXolo CPA land is still registered under the state. The Regional Land Claims Commissioner has appointed a conveyancer to facilitate the transfer of the properties to the CPA and this will be done by 30 September 2018. Amakhwabe CPA: This is a Plaas project with labour tenants as well as restitution claimants. There was an agreement in principle to transfer to both groups under one legal entity hence the registration of Amakhwabe CPA. However, there have since been conflicts around the usage of the resources on the farm to be transferred to Amakhwabe CPA. There are also some restitution claimants now wanting financial compensation rather than land. The RLCC has to conduct a verification exercise and commence the transfer by 31 December 2018.
• In Limpopo there are 42 CPAs without title deeds which are currently with the RLCC in Limpopo awaiting collection from the CPA Executive Committees. The RLCC undertook the measure to keep these title deeds and only give them to compliant CPA Exco members due to the large number of fraudulent acts individuals committed once they collected these title deeds on behalf of the CPA without the knowledge of the CPA beneficiaries.
• Mpumalanga has only one CPA reported to be without a title deed, Jabulani CPA. Forestry land was bought in 2016 for the CPA. This land however could not be transferred to the CPA due to the owner's demand to endorse the title to secure the trees on the land. The seller wanted the trees to appear on the title deed. They could not agree with the PSSC hence the property was transferred to the state pending negotiations on the trees. DRDLR is still in negotiations and it will be finalised by 31 August 2018.
• Northern Cape has five CPAs without title deeds. Land could not be transferred to the Pniel CPA, as the matter is still before the court. Registration and transfer of the property will commence after the court has adjudicated on the matter. Daniel Albertus Mouton CPA: It has one title deed under the CPA name and the outstanding portion is subject to subdivision of the land. DRDLR appointed a service provider in January 2018, who indicated that it will take 18 months for the subdivision to be concluded. Sydney On Vaal CPA: This CPA was non-compliant and has been regularised. Conveyancers have been appointed and transfer is projected for 30 June 2018. Gong-Gong CPA: This CPA has one title deed under the CPA name. However, claimants are contesting the manner in which the claim was settled, hence the delay in transferring the outstanding two portions, and have refused to sign the settlement agreement. The facilitator who conducted regularisation of the CPA is assisting in mediating with the aim of signing the settlement agreement by 31 July 2018. Meyers/Grootfontein CPA: DRDLR is planning a handover celebration for the CPA in June 2018. The intervention is that the RLCC will communicate this plan to the claimants.
• In the North West, the Molokwane CPA has title deeds to the portions claimed except for the game farm which has ruins on it. The ruins will form a heritage site intended for the Bakwena Ba Modimosane community as a whole, of which the CPA is part. Consultation is still ongoing with the Bakwena chiefs and will be finalised by 31 March 2019. Bakgatha Ba Kgafela CPA: This CPA land is vested under the Department of Public Works (DPW). Legal Services are in the process of transferring properties that have been resolved. The power of attorney was submitted to the State Land Unit for approval.
Ga Habedi CPA: Here land was rejected twice because there are two endorsements; properties are held under a trust and the former Bophuthatswana government . The matter was referred to the Public Disposal Committee to resolve before DRDLR can transfer the land to the CPA. S/Jobe CPA: Here some properties for the CPA were registered under Limpopo province. This matter was referred to the State Attorney to uplift the endorsement and amend the boundaries and transfer will take place. Mokopole CPA: There are outstanding valuations and withdrawals of the conveyancer which caused delay of the transfer of the land. However, DRDLR is currently in the process of transferring. Monamaladi CPA: The land is vested under the DPW. The refusal of the DPW to release this land is causing this major delay. This matter has been escalated to the Public Work Minister and Director General for intervention.
Mr Sebape said they have not received any provincial reports from Western Cape and Free State on CPAs without title deeds.
The Chairperson asked why the Limpopo RLCC kept the CPA title deeds - this intervention by DRDLR is confusing. Why issue a title deed to an individual instead of issuing it to the CPA itself?
Mr Robertson asked why the state withholds the title deed when it is restoring land rights. If the CPA is non-compliant, is DRDLR intending to take that title deed away from the CPA?
Mr S Matiase (EFF) asked why DRDLR was withholding the title. On what basis does DRDLR determine compliance - does it have a compliance checklist?
Mr Madella asked if DRDLR is not raising expectations through the registration of provisional CPAs. He asked why alternative land cannot be acquired if DRDLR is unable to acquire the land that was initially identified for acquisition.
Mr Madella asked if there is proof that DRDLR has trained the CPAs and if there is compliance on this.
Mr Nchabeleng asked why a case cannot be opened against the person who sold the Rama CPA land in Gauteng. What role does the administrator play if DRDLR appoints an administrator to take over the affairs of Rama CPA?
The Chairperson asked what the turnaround time is for registration and deregistration of CPAs. The presenter said if the CPA decided to sell the land it takes time to deregister. What makes it so difficult to deregister the CPA?
The Chairperson asked why the starting dates of the DRDLR interventions are not indicated in the report. They are quick to noted the planned dates for finalising their intervention. Some cases date back to 1999 or 2000 but are still being processed in 2018.
The Chairperson asked why CPAs were treated differently when it came to deregistration of CPAs as the report states that the CPA chairperson sold the land without consulting the CPA. What is the turnaround time for provisional CPAs to become permanent CPAs?
The Chairperson asked how far is the Molamaladi CPA intervention in North West because this matter has been escalated to the Minister and Director General of Public Works and DRDLR. Who is refusing whom? Is DPW refusing to give land to DRDLR?
Ms Sadiki replied about Limpopo not handing over the title deeds. They have a schedule of them through the Minister's Office and will hand over those title deeds to the CPAs. she is not too sure if they will be finished by August but they will try by all means to hand over these titles ASAP.
Ms Sadiki replied about North West. They are in the process of arranging a meeting with the DDG of North West to sort out the land that is currently under the custodianship of the Department of Public Works (DPW)
Mr Sam Mogaswa, Deputy Director: Communal Property Institutions (CPI), DRDLR, spoke about arriving at the date of 15 December 2018 to issue all title deeds. The challenge those CPAs are experiencing is internal conflict. What they intend to do is to try and resolve the internal conflicts and stabilise the situation before title deeds can be issued to those CPAs. Otherwise they will be fuelling fire by giving title deeds to members of communities whose legitimacy is contested and who in most instances are unable to comply with their corporate governance responsibilities in terms of reporting to the general membership of the CPA. They intend to facilitate stabilising internal processes in those CPAs prior to issuing out title deeds to the structure that enjoyed legitimacy from membership of these CPAs.
Mr Mogaswa replied about the state withholding the title deed. As already mentioned, they are trying to ensure that the structure they are giving the title deed to enjoys the legitimacy of the CPA membership before they can give the title deed to it. In the event that CPA gets into a state of conflict again, DRDLR cannot go and take back that title deed. This is just an initial precautionary measure. It is better to give the title deed to a structure that enjoys legitimacy from its members rather than issuing title deeds to people that were elected 10 years ago and no longer enjoy legitimacy.
Mr Mogaswa confirmed that DRDLR does have a compliance checklist which is basically what is required in the legislation that the CPA has to do these each financial year and if an election is due, it must hold the election. Each financial year there must be an AGM. In that AGM the CPA must produce financial statements. It must produce minutes of meetings and all the other things required in the reporting obligations.
Mr Mogaswa replied about DRDLR raising expectations through the registration of provisional CPAs, saying a provisional CPA by its nature is temporary. It is established to put the members together in preparation for registration of a permanent CPA. They have had various land reform programmes in DRDLR such as Land Redistribution for Agricultural Development (LRAD). Most CPAs were registered during that period and when the LRAD programme came into being some of the CPAs were left just hanging because land could no not be acquired directly from private individuals under the former LRAD programme. Then they had the Plus programme where land is acquired and is held by the state for purposes of availing it to the people that need to engage in agriculture. So, those are some of the considerations they need to make and assessing why these entities are there in the first place. Some could not be proceeded with because the programme under which they were supposed to be acquired then ceased to exist in DRDLR.
Mr Mogaswa replied there are various challenges experienced by DRDLR in trying to intervene at Rama CPA. These challenges have been presented to the Committee in the past and the frustrations vented. One of the main frustrations hindering DRDLR to move forward is the lack of cooperation by Rama CPA members. A number of decision meetings were called and still members were unable to come to those meetings mainly out of fear due to the threats made to members.
It became incumbent to come up with a plan to bypass the need for members to meet in the form of an AGM. It meant getting someone vested with the necessary powers to take decisions that needed to be taken as the general membership is too afraid to come to the meeting. If they get an administrator in place, the administrator will be carrying all the powers and functions that are supposed to be exercised by the executive committee. An administrator will also be in a better position to undertake whatever intervention is needed, which is currently not possible due to the fear within the general membership of Rama.
Mr Mogaswa replied that the duration of the CPA registration process is determined by the planning processes that go into it. Once a membership list and the necessary documents have been compiled, and the memorandum and attachments have been signed, the registration takes 24 to 48 hours for a certificate to be issued. Deregistrationof a CPA is where they experience a bit of a challenge because there are certain requirements that must be met. These are the same challenges such as not being quorate and not having a formal meeting and not being able to pass a resolution. Those dynamics also prolong the deregistration. But where CPA members are generally available, it is an easy process because once a resolution is passed all the other processes follow through to deregister the CPA.
The Chairperson asked if the land owner has withdrawn what is needed, do they still need a community resolution when the owner has withdrawn.
Mr Mogaswa replied once the owner has withdrawn after the registration of a CPA, they will still have a challenge of having a juristic person in place. Whatever happens has to be guided by legislation that created such juristic person and they will still need those resolutions. They have to comply with the CPA Act.
Mr Sebape replied that there is proof that they have trained CPAs. Normally every year they train CPAs. If proof is needed, it will be made available to the Committee. There are training manuals and the dates of people attending the training. They are also embarking on training continuously as CPA members keep on changing. He acknowledged the omission of the starting dates of the interventions by DRDLR in the report, and that information will be forwarded to the Committee.
Ms Vuyiswa Nxasana, DRDLR Acting DDG: Land Tenure Administration, replied that a provisional CPA is created by the Act for a period of 12 months. It is to allow for the verification of claimants, for transfer of land and conveyancing and all those processes. In the current CPA Amendment Bill, the Committee will notice that provisional CPA is done away with because of the realisation that it takes longer than the 12 month period in some instances.
On training , Ms Nxasana said there are three major processes in the establishment of the CPA. First, training happens at the time of the establishment of the CPA as communities must choose their legal entity. They have to be facilitated and trained to choose the legal entity of their choice, which can be a close corporation, a trust or a CPA. There is training on what should be contained in the constitution, what are the provisions that should appear in the annual reports and what constitutes an AGM. There is ongoing training of CPAs in all the provinces and district municipalities in the country.
Ms Nxasana said they are trying to perfect the database in terms of an electronic database that will be able to give them information at the touch of a button in identifying where CPAs are situated because currently they have only a manual database of the existing CPAs. They are developing a strategy that will be comprehensive which will enable them to deal with the problems of CPAs. That strategy will be available by the end of June 2018.
The Chairperson thanked the delegates for the presentation and responses. Any further information can be provided in writing.
MalaMala Game Reserve land settlement: briefing
Ms Nomfundo Ntloko-Gobodo, Chief Land Claims Commissioner, presented the MalaMala Report on behalf of the Commission on Restitution of Land Rights. Claims had been lodged by 21 claimants in their respective capacity as individuals and also as representatives of their own communities. Claimants have lodged claims against 21 properties consisting of 63 portions, measuring 65 000 hectares in total extent. Properties claimed included nine land parcels owned by the MalaMala Game Ranch (Pty) Ltd, measuring 13 184 hectares in total extent, which are the subject of this presentation. After the Regional Land Claims Commissioner (RLCC) was satisfied that these claims meet the requirements of the Restitution Act, he published a Gazette Notice which was made known to the land owners. As a result there were no objections received disputing the merits of the claim.
Ms Nthloko-Gobodo said in terms of the negotiations in May 2008, an offer of R751m was made including improvements to the value of R66m. The offer was based on R52 000 per hectare for 13 184 hectares. The offer was accepted by the land owners, however subject to Ministerial approval. This offer was rejected by the Minister on the basis that it was exorbitant and unaffordable for the state.
After settlement negotiations collapsed, in 2009, this matter was referred to the Land Claims Court for adjudication. The Land Claims Court accepted that the claimants had a valid land claim. The only issue to be determined was whether restoration was feasible within the meaning of Section 33(C) of the Restitution Act. Determining feasibility was based on the landowners demanding payment of R989m as compensation for the land, excluding improvements valued at R66m, whereas the state was prepared to pay R460m as compensation for the land, arguing that anything in excess would be unfeasible.
The judgement was handed down on 19 April 2012 by Judge Gildenhuys noting that: It would not be in the interest of the public to pay such an exorbitant amount as the claimants have only been dispossessed of a living space, grazing rights and cropping land. Restoration of the property to them would amount to over-compensation. The court argued further that the claimants did not have the requisite capacity to manage the land, and as a result restoration would be unfeasible. The claimants had sought leave to appeal the matter, which was declined and also failed at the Supreme Court of Appeal. They then approached the Constitutional Court seeking leave to appeal against the judgment and the order of the Land Claims Court.
In August 2013 the Constitutional Court set the matter down for hearing. The first respondent, Minister of DRDLR filed an affidavit to the effect that he was no longer opposing the application but, instead, was willing to purchase the land on behalf of the claimants. The matter was then removed from the court roll and the first respondent was required to file a report with the court by November 2013, on the progress made in settling the land claim. The Minister said the parties should settle out of court. Negotiations began immediately and were led by the Chief Land Claims Commissioner, including the Minister's legal representatives, Commission's legal representatives, the landowners, and claimants' legal representatives. The parties had finally settled the claim on these properties for an amount of R939m for acquisition of land, calculated at R71. 250 per hectare to acquire 13 184 hectares (noting 2008 versus 2013 values). Acquisition of the improvements was R73m and R7m for movable assets. The total was R101 billion.
The landowners requested that they be allowed a transitional period which its term as approved and signed, would expire on 31 January 2015, with a monthly rental of R700 000, in order to allow enough time on the second phase negotiations around co-management agreement.
The co-management future structure is composed of: MalaMala Ranch (Pty) Ltd; MANCO as the management company, Community Equity Trust, Community CPA - N'wandlamharhi; Monzo (Pty) Ltd, which all will have co-management of the MalaMala Game Reserve. The co-management proposal noted that the shareholders in MANCO would be MalaMala Ranch (Pty) Ltd and the community. The shareholding would alter progressively over time, ultimately resulting in the dilution of the MalaMala Ranch (Pty) Ltd stake in favour of the community until such time as the community holds a majority share. It was proposed that the dilution takes place over a period of 25 years on the following basis: 0 - 5 years, MalaMala Ranch (Pty) Ltd holds 70% shareholding and 30% for the community. From 5 - 10 years, 60% for MalaMala Ranch and 40% for the community, and from 11 - 20 it will be 50% each for both parties.
The claimants have formed a Communal Property Association (CPA) called N'wandlamharhi CPA, which has been registered in terms of the CPA Act. The CPA would function as a governance structure responsible for land administration and is composed of 15 Committee Members. In support of the CPA, there are 4 sub-committees - Social Cohesion Committee, Technical Committee, Economic Committee and the Governance Committee. Each committee consists of four members. The CPA is experiencing internal strife and tensions around leadership, the beneficiary list and financial accountability. However, the joint venture business is operating very well.
In summary, the benefits of a successful co-management agreement between MalaMala Ranch and the community include: the seamless continuation if an internationally recognised brand and commercially sustainable business with a 50 year track record. Immediate financial benefit to the community through three revenue streams: rental of land, annual dividends and a tourism levy. There is no financial commitment or liability/debt for the community. The business has so far made a profit of R46m after tax deductions and declared a dividend of 79%, whereby the community will receive an amount of R10m, this is in addition to the R12m which it received for rentals for 2017/18. 15 students have been admitted to various institutions through bursaries which are funded by the community levy that is paid by each guest. A total amount of R5.7m in community levy has been allocated since March 2016.
Ms Nthloko-Gobodo said the duties of the Vumelana Advisory Fund is to assist the N'wandlamharhi CPA to negotiate agreements for the management, marketing and operation of the MalaMala lodge, and to establish the organisation structures and build capacity needed to manage its affairs effectively. The goal is to establish the necessary operating entities (including a vehicle to manage the joint venture with prospective managers of the lodge for the co-management of the lodge); policies, and systems.
Ms Nthloko-Gobodo noted that 84 community members are permanently employed at MalaMala. Since November 2014 up to December 2017, the CPA has received R36.2m in lease of rentals. Since November 2014 to date, the community has received R5.5m in community tourism levy. 15 community members have been enrolled at various education and training institutions so far. In its first year of inception, the MalaMala joint venture paid a dividend of R40m equivalent to 83% of 2017 financial year's profit after tax. R12m of this amount which constitutes 30% was paid to the community company, Monzo Community Investment (Pty) Ltd. Monzo has since paid out R6m of the R12m to the CPA.
Ms Nthloko-Gobodo said challenges and lessons include: membership verification disputes; lack of accountability by CPA executives; lack of models for benefits-sharing; lack of skills; underhand deals by some community leaders without proper mandate from the community; separation of governance from business ensures sustainability of land restoration; CPA leaders are to be trained in corporate governance; and mandate of the CRLR is often clouded by matters beyond the legal mandate defined by the Restitution Act, for example CPA disputes.
The Chairperson said it is clear this person called Derick Mthabile is running the show at the MalaMala Game Ranch which is not really good for business. She asked for the composition of Mondzo Community Investment and MANCO. What the role is of the CPA executive committee? Who takes decisions and who must implement those decisions?
Mr S Matiase (EFF) said it is clear that there was a specific objective and intention for this exercise and what the Committee wants to achieve. In the absence of the specific objective, the exercise is meaningless. The research report from the Committee researcher is revealing a lot and there are more questions than answers in that report. And that report mirrors what is presented by Ms Ntloko-Gobodo.
Mr Matiase asked if they have happy land claimants out of this deal just as they have happy sellers. This demonstrates what all along has been assumed as the policy of government in terms of willing seller willing buyer. On the basis of that logic, once a willing buyer, willing seller is found, the logical conclusion is that there should be happy claimants and happy sellers.
Mr Matiase said the Land Claims Court adjudicated on this matter and found in favour of the state. The conduct of the Minister and government borders on criminality because they allowed the previous landowners to dictate the terms and a transitional monthly rental of R700 00 was approved and signed. What was the moral dimension on which the Minister based his judgement?
Mr K Robertson (DA) said he is worried that one land claim was prioritized more than the others because DRDLR spent its entire annual budget to finalize only one claim. It is a concern that R101bn was paid to land claimants that have not been verified. It is also a concern that there was an increase in the handling of this one claim from 30 000 to 50 00 hectares, and costs escalated from 2008 to 2013.
Mr Robertson asked what SANParks evaluation is of what happened. The internal audit of SanParks revealed that former SANParks CEO, Mr David Mabunda, personally benefited up to R81m. What has DRDLR done about that? Parliament must do its own audit on the MalaMala deal. Is there any money that has been misspent in this MalaMala deal? When Minister Nkwinti changed his decision, was that to the benefit of the community?
Ms C Matsimbi (ANC) said this report is very much frustrating because it states on page 14 that the N'wandlamharhi CPA was experiencing internal strife, there were tensions around leadership, beneficiary list and financial accountability. She asked why government had to pay a rental of R700 000 per month. She asked if the communities had to create businesses with those that were not benefiting. What was the reason for government to acquire this specific land and why did government reach such a hostile agreement.
Mr A Madella (ANC) said it would be unfair to expect the Commission to respond to what was on Minister Nkwinti's mind with this the settlement. No one knew then what Minister Nkwinti thought was correct in terms of the settlement.
Mr E Nchabeleng (ANC) said that government should rescue the people of MalaMala from this Derick person as the beneficiaries conditions will be worse off than before. The allegations that Mr Mabunda benefited R81m should be investigated by the Committee. They must ensure that if there is corruption, the law must take its course and deal with those corrupt individuals.
Mr P Mnguni (ANC) replied to Mr Matiase asking the purpose of this exercise, saying that there is political will to fast track land reform and land restitution. Perhaps the Committee should visit MalaMala Ranch and see how they can turnaround that project to the benefit of the people. The 50% shareholding after 20 years is a concern. Can they have a judicial review on this 50% ownership?
The Chairperson asked what made DRDLR and the Commission relax on the MalaMala settlement terms.
The Chairperson asked what else the tourist levy does other than paying for bursaries. What developments have been made with the money generated from the MalaMala project?
The Chairperson asked who pays the Vumelana Advisory Fund, who the director is and salary level and if it is still involved. How was the R6m dividends divided amongst the claimants?
Ms Tloko-Gobodo replied that values per hectare differed from region to region, and the evaluations are conducted mostly by independent evaluators. The Commission would then negotiate based on the evaluation by the independent evaluator, as in this situation. The evaluation depends on the area and the nature of the property. The exercise is outside their domain, but they operate based on what the evaluator gives them. Now the Evaluator General conducts the evaluations and even he uses private evaluators. However, they have to apply Section 25 principles as opposed to the evaluators before who focused on market value as the main principle.
Ms Tloko-Gobodo replied the land claim was not prioritised from the list of claims. It was a court process that determined that they had to table the claim at that point in time as in June 2013 the matter was in the Constitutional Court. When the Minister instructed the Commission to remove the matter, the Constitutional Court wanted a progress report on how best they negotiate the claim amount going forward. The matter was immediately pulled out and they were given a timeframe by the Constitutional Court to give a progress report by November 2013.
Ms Tloko-Gobodo replied why some beneficiaries were not benefiting. There were two groups, the Mafuraga and Mhlanganisweni, but when they related their story they said they come from one unit and were legally represented as one. The Commission cooperated with them as they were. When the negotiations were happening they were legally represented and the settlement agreements were signed, and when the verification was done it included both parties. When the settlement was done, there was a list and the list incorporated both Mhlanganisweni and Mafuraga. There was no point where they have not seen them as one. It was only after the settlement was done and it was time for the money to come in that it suddenly arose that they are two separate groups and not together as one. And she could say that the person that was driving that agenda was Derick and she could say that in front of him. When they were negotiating with the community, Derick was the lead negotiator on behalf of the entire group, not just for one group. Therefore, it was only after the settlement was decided, his interest is in one group and that is the Mhlanganisweni group, which is why only that group is benefiting and the other group is not benefiting. So, the evaluation was done and the settlement was done which included verification. However, the Commission has undertaken to review the process and deal with whatever issues arise on verification to resolve the entire impasse.
Ms Tloko-Gobodo replied that unfortunately she does not have any forensic report on SanParks. In fact, she was not aware of this and only found out about it now. When they were negotiating in 2013, Mr David Mabunda did come to the meetings and he was representing the landowners at that time. All the other stakeholders including Derick came with their representatives, and so they could not say to Mr Mabunda he was not representing the landowners, and he was there in all the negotiations on behalf of the landowners. But at some point in time they became aware that he was a member or a director of the old MalaMala group when they were negotiating. He was one of the leading negotiators. She is aware that Mr Mabunda had since moved to be Ezemvelo KwaZulu-Natal Wildlife CEO, but is no longer there either.
Ms Tloko-Gobodo replied she is not aware of any funds being misspent in the process. All she could say as a the team that negotiated, they were given an instruction to negotiate a settlement and at that point in time they did the best they could, especially as the focus then was on market value. Even though the judgement spoke about "just and equitable", the end of the judgment went back to "market value". Therefore they had to negotiate based on that environment at that point in time and that was the best they could do in that context.
Ms Tloko-Gobodo replied that the CRLR legal unit will answer on whether the accounts can be frozen, especially the CPA grant because in terms of the CPA Act, the Minister can place an entity under administration through the Office of the Director General.
Ms Tloko-Gobodo replied that the R700 000 rental is not paid by government. It is the new company which is running the business on CPA land that is paid to the CPA. And the rental was transitional from October 2013 to January 2015. It was agreed by the transactional advisor to be an amount of R700 000 per month, which was a reasonable amount pending the finalisation of the negotiations. Once the negotiations were finalised the value was R560 000 plus an escalation each year.
Ms Tloko-Gobodo replied about the shareholding, saying they were negotiating on the understanding that they did not buy the business. They bought the land and improvements and then negotiated a share in the business that was owned by a third party. Supposedly they can look at how the community can buy a bigger share in that business. In their last meeting with the community, Mr Derick did not come to the meeting but sent his brother instead. If one looks at the structure of the CPA, Monzo (Pty Ltd) and the Community Equity Trust, Mr Derick sits on all three boards. CRLR has written to him telling him that he cannot sit on all the boards in terms of Commission policy. However, he continues to do so. They have also made him aware that he has flooded the Trust with his relatives as trustees.
Mr Isaac Peter, CRLR Director: Legal, replied that there have been two court cases about MalaMala. There is the one case where the community was robbed of R50m and that matter collapsed and could not be proved in court. The claimants agreed to be paid R500 000, which mostly covered the legal fees and they never got anything for the community. The state never demonstrated anything to try and pay that R50m.
Secondly, there were 960 households supposed to benefit from this project but only 250 household are benefiting from the list of 960. The community brought the matter to court as a concerned group to challenge the decision by the Executive Committee.
Lastly, on 4 and 5 May 2018, the matter was heard in the Pretoria High Court, and since the matter was settled the CRLR was not part of this case, it was only the CPA and there was no case for DRDLR to answer in court papers. The attorneys for the group concerned felt very strongly as they were trying to challenge how new members are brought in into the CPA to replaced deceased ones. However the CRLR on behalf of DRDLR said they have supported that process and appointed a person to assist the CPA in removing deceased people from the list and assist them with disputes about the people on the beneficiary list. They could not go to court on their part as a Commission. They have been advised that the judgement is pending and will be delivered in three months time by the Pretoria High Court. This matter was between the Monzo, CPA and the Trust, and Mr Derick is the representative of the CPA but he has since resigned as the CPA Treasurer. He is now a director in both Monzo and the joint venture between MalaMala Ranch (Pty) Ltd and the community. The Commission is trying to resolve problems between the CPA and the Executive Committee as the current CPA chairperson is the older brother of Mr Derick, but their colleagues in the province are following that to resolve those things. That report should go to the DG to highlight what is currently going on in the CPA.
Mr Peter said that the R700 000 monthly rental was paid as a transitional rental for a certain period of time. Now that the CPA is a business owner, the rental is no longer R700 000. It was reduced to R516 000 because they had to take into consideration their contribution share in the company since the joint venture also has to pay rent to the CPA, which is not participating in any form in the business
On Charleston Hotel, that hotel is supposed to be a 100% owned joint venture. It should be remembered that in the joint venture there are four directors. They need to review the shareholding of that company to fast track processes.
Mr Rirhandzu Shilote, Director Quality Assurance: CRLR said he sits on the boards of both Monzo and MalaMala on behalf of the state in terms of the framework agreement entered into with the previous owners to ensure delivery on the terms and conditions. The arrangement for shareholding is that from year 6 the community share will increase to 40%, from year 11 it will own 50%. After year 20 the community will own 100% shareholding.
The Chairperson thanked the CRLR. CRLR has to look into two matters going forward. Verification should be done because at the beginning there was one group of claimants and later after the claim was settled, Mr Derick decided to split the group into two. The people who formed the first group must be entitled to benefit from this deal and verification should start there. All the people on the list must get their dividends. Secondly, the Minister must institute a forensic investigation into MalaMala, and be able to call for new elections for the CPA executive committee. The questions that have not been answered should be responded to in writing.
Due to time constraints the Committee deferred the briefing on the Waalmansthal Restitution Status Report.
The 6 June minutes were adopted.
The meeting was adjourned.
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