Electronic Deeds Registration Systems Bill: public hearings; Communal Property Associations Annual Report; Rural Development BRRR; with Minister and Deputy Minister
Rural Development and Land Reform
17 October 2018
Chairperson: Ms P Ngwenya-Mabila (ANC)
The Committee received submissions from various stakeholders on the Electronic Deeds Registration Systems (EDRS) Bill, the objective of which was to reduce the deeds registration time through changing from a manual to an electronic system.
The Law Society of South Africa (LASA) supported the Bill with a few amendments, saying it was an important step in modernising the land ownership system and addressing the socio-economic issues facing the country. They stressed the importance of electronic signatures, and explained the benefit of using technology to ensure there would be enough security systems in place to avoid the system being hacked by cyber criminals. A critical element was the mechanism used to deliver title deeds for a vastly increased volume of land parcels, as the industry was looking at dealing with 20 million land parcels in the most cost effective way.
The Members had questions relating to the legal definition of a title deed. How susceptible was the current system to cyber crimes and fraudulent activities? Did the proposed amendments increase or decrease the security measures? Was there a more cost effective model to deal with those title deeds?
The Banking Association of South Africa (BASA) in general supported the bill, but highlighted section 3 as an area of concern. The proposal that the deeds office retain the original document was a worry, and because of the issue of potential cyber crimes there was a high risk of exposure. They recommended that section 3 be amended to reflect that the property owner’s copy would be deemed to be a certified copy of the original document held by the deeds office, until the property had been paid off and then the individual could retain the original title deed.
Members questioned the commitment of BASA to supporting the Department with property loans through the banks. They asked why there were age restrictions, which affected those seeking second bonds. There were was also a request for an explanation on unauthorised deductions from peoples’ bank accounts.
The Department of Rural Development and Land Reform ( DRDLR) highlighted the need for the Legal Practice Council being the registration authority to issue digital certificates that enabled advanced electronic registration. It also dealt with the effects of the bill on conveyancers, the registration and deregistration of communal property associations (CPAs), the rights of traditional authorities, and back-up of data in the event of a fire.
The Communal Property Association presented its annual report for 2017/18, indicating it had registered 53 new CPAs during the year, bringing the county-wide total to 1 566. It provided details of its support for CPAs in all the provinces, but also highlighted problems in several associations, which often involved infighting and conflict over individual and group property rights.
The overall performance of the CPA was questioned by the Members, and the DRDLR’s political leadership was there to provide feedback on the various CPAs that were not functioning well. There was discussion on the configuration of the CPAs in their current form and whether or not they would need to be debundled, as they were causing tensions in certain sectors of communities. They wanted to know what resources were needed to make them function more effectively. Was the Department proactively engaging with traditional leaders to resolve some of the challenges?
The Committee reviewed the Budgetary Review and Recommendations Report (BRRR), and several amendments and additions were agreed upon. It also adopted the minutes of a recent meeting.
The Chairperson said the purpose of the meeting was to hear a presentation on the Electronic Deeds Registration Systems Amendment Bill, and representations would be made.
Mr K Robertson (DA) wanted to know if he could raise an issue that had not been reflected in the agenda for the attention of the Committee. He wanted to mention the issues of feedback to the Committee. It had taken a resolution on 23 June requesting that the MalaMala issue got handed over to the Special Investigation Unit (SIU) for further investigation based on the evidence presented by the Commission. He had made numerous phone calls to the Chairperson and the Committee Secretary and to the Chairperson’s own personal secretary regarding progress, and had received no response with regards to letters written or progress reports. The Committee had not received communication with regards to this issue, which affected 950 households that were not benefiting.
He said there was also an issue with the Department of Public Works (DPW), which had indicated that they lacked the resources to be able to give claimants additional land -- those that have been finalised around the Cape Town International Airport area. No communiqué had been received, and claimants had received no land or monetary compensation either.
Mr E Nchabeleng (ANC) responded that while Mr Robertson was away, the Committee had discussed this issue at length, along with other outstanding issues, and that the Committee was waiting for answers from the Department.
The Chairperson said they had asked for progress reports from the support staff and had written several letters to the Department with attachments, but to date there had been no response. As Chairperson, she was trying her best to deal with the issue, and had asked the Department to provide a progress report within 14 days. This, however, had not been successful. She requested that the Committee defer the item till the next meeting as it had to be included on the agenda, and she would request the Director General of the Department to follow up, including the Commission and the Department, but there was still no response.
Mr Robertson said he acknowledged the Chairperson was trying to follow up on progress, but he did not understand what the protocol was after taking a resolution of the Committee. Was it within their mandate to request information that could have been sent to the Department through written confirmation, especially on the Malamala issue? The Cape Town International Airport issue had been on the table since 2017, and the DPW had still not justified its rationale as to not to complete the project. What approach should the Committee take to put pressure on the Department to respond?
The Chairperson said one way to assist the Committee’s oversight role as Members was to raise questions for oral and written replies to the Department.
Ms N Magadla (ANC) said that at the previous meeting, the Chairperson had given the Department a timeframe of next week to deal with all outstanding issues, including Malamala, and proposed that the meeting proceed.
The Chairperson said she would request the Department to come and provide a progress report on the issues raised.
Mr Robertson said that on the Cape Town International Airport issue, oral questions had been submitted to the Department of Public Works and had not been responded to, specifically on the issue of claimants. His political party had asked oral questions at the beginning of the year.
The Chairperson responded that she did not know how that happened, as oral questions went through to the Minister and the Minister then responded to the House, as they were handled in a different way.
Mr Robertson said his colleagues from the DPW had asked questions on the issues raised, but had not received any responses till this moment in time. He wanted to know to what extent the Portfolio Committee was providing oversight, as it was a rural development and land reform issue.
The Chairperson asked him to re-submit the question to the Minister and await the response, as the Minister was obliged to respond to all oral questions in Parliament.
The Chairperson presented the minutes of 5 September, and 9 and 10 October 2018, which were adopted.
Electronic Deeds Registration Systems (EDRS) Bill
The Chairperson said there would be presentations on the Electronic Deeds Registration Systems Amendment Bill, which sought to fast track registrations in large volumes on electronic platforms.
Before any legislation was passed, the public needed to be consulted, and the Committee had been going through the Bill since it was referred to it on 6 December 2017.
The objective of the Bill was to decrease the time taken on the deeds registry system, as it used to be done manually. Most stakeholders had made written submissions, but two entities had been requested to make an oral presentation to the Committee.
Mr A Madella (ANC) introduced guests present, who were members of the Communal Property Association (CPA) in Elangsberg.
The Chairperson welcomed the guests and informed them that they may observe but not participate in the meeting.
EDRS: Law Society submission
Mr Mark Heyink, Director: Law Society of South Africa (LASA), introduced the Electronic Deeds Registration Systems (EDRS) as an important step in modernising systems and addressing socio-economic issues that were key to the country at this moment in time. An EDRS was not new in South Africa as in the late 1990s he had worked on EDRS in setting up the concepts, technology and systems, and the concepts from that time remained pertinent today.
The EDRS had been benchmarked against other EDRS systems in other countries, such as Canada and Australia, and there had been communication with other countries doing similar things. In 2016, a Bill was published and on behalf of the Law Society, the comment was adopted on the Bill, which had resulted in a new Bill in place.
However, there were current issues in the Bill that needed reconsideration, but they could be dealt with during that period and he believed there should be no delay in putting into place the necessary legislative processes to enable this project to go ahead. From the point of view of LASA, he ran a project relating to the use of electronic signatures, and through the presentation, the Committee would see how important it was from the perspective of EDRS.
He had been admitted as an attorney in 1980, later became a notary and public conveyancer, and in 1994 he had decided to focus on information security and studied Information Management at Wits Graduate School of Business. He had qualified as a certified information security systems professional, and became the ninth lawyer in the world to obtain such a unique qualification.
He had led a group of prominent thought leaders in 2002 that had provided comment on the Act on issues that needed to be addressed, and had represented more than 40 clients in Parliament to make representations on the Bill. In 2002, he was appointed by the Minister of Justice to research the Protection of Information Act, and had also provided comment and worked with Deputy Minister John Jeffery on the Cybercrimes Bill. He headed an expert team with a lot of technologists and was a member of the Cyber Security Advisory Council appointed by the Minister of Telecommunications and Postal Services.
Mr Heyink said the issue of land and means of dealing with title deeds was critical for the socio-economic wellbeing of South Africa. The Committee needs to note various mechanisms to deal with vastly increased volumes of land parcels. In the cyber security projects, they handled seven million land parcels in the deeds registry, and were looking at dealing with 20 million land parcels, which was a quantum leap compared to what was currently there at the time. The system needed to be more efficient and cost effective, as the current system was no longer cost effective for handling smaller land parcels.
He had consulted with Ms Leslie Downie, author of a book titled “Pro Poor Legal Practice,” and in her book she deals with issues of land for the poor and how title deeds need to be handled. It was valuable to recognise that South Africa had other land information systems that were outside of the deeds registry system, and there were databases in the Department of Land Affairs which related to land tenure, which were important for EDRS.
There were other forms of tenures that need to be looked at, such as customary tenure, family titles and social tenures. The current system was no longer cost effective in the deeds registry system -- the opportunity was there to computerise the system to be globally competitive.
There were huge advantages in information communication technology (ICT) that could produce results that were set out in the purpose of the Bill. He wanted to check other records in the housing departments and other areas with evidence of title that were not at the deeds office, but needed to enable the technology for the information to flow freely in achieving the goals of land title.
With regard to security of title, Mr Heyink said it was important to note that South Africa had a good system of registration and if one had a registered title deed, one’s rights were secured, unlike in some countries around the world which had learned a lot from South Africa. The representatives of overseas governments had been very impressed with SA’s deeds system and security measures in place, and in some countries there was a mature industry for mortgage insurance, so security was important. The system had to be secure as cyber crimes happened on a daily basis, and there needed to be trust in the appropriate security or else the system would fail.
South Africa’s cyber security was quite poor, and according to sources, South Africa was the second most attacked country in the world from a cyber perspective. The protection against attacks required strong encryption. The General Data Protection Act was the “gold standard” benchmark of the European Union (EU) for protecting personal information and all information, and encryption had been introduced into law for the first time on a global scale. There were other areas where records were made public without being tampered with, through stringent cyber security systems.
A secure electronic signature, which was integral to what any registered conveyancer needed to do to ensure the integrity of the information provided, was beyond doubt in terms of being questioned. When the electronic signatures were on the original title deed and signed by the registrar, it could be trusted even to take to banking institutions.
The need for an electronic signature was recognised as a structural part of what conveyancers do in their professional practice. The Committee needed to acknowledge and recognise that there were also electronic signatures from other places, and not just within the deeds office. The system would operate in a way that there would be third parties available to feed information to the deeds office. Apart from anything else, the Bill expressly advocates for electronic signatures to be implemented across the system of title deeds in South Africa.
Mr Heyink said the Law Society supported the fact that electronic signatures were overseen by the Department of Telecommunications and Postal Services (DTPS) from a policy point of view. There was an entity called the Accreditation Authority, which ensures that all signatures used were based on best international practices, principles and standards. At the moment, there were only two bodies in South Africa that provide advanced electronic signatures, and they subject the electronic signatures to stringent audits.
The identification and verification system of the electronic signatory was protected, and a signature in electronic form could be traced by the chief registrar or a particular conveyancer of title deeds. There was also cross-communication between departments, so the deeds office could rely on a certificate from a local authority, such as a municipality.
There were already systems in place to enable local authorities to issue clearance certificates, and these were being certified in paper format at the current moment. The lodging of documents at this stage could not happen, as there needed to be third party integration prior to the documents being lodged, so there had to be proper consultation in this regard. The conveyancers were consulted in the deeds office. The Surveyor General was absent in the bill, and the monitoring of rates and taxes could be done more easily, including the SA Revenue Service (SARS) with transfer duties.
Consultation was critical and had to be multi-pronged in the approach. Currently, the Chief Registrar of Deeds could make regulations in consultation with the Regulations Board, which knows little about the type of electronic systems that should be implemented. The banks were also critical as part of the consultation process, as they keep original copies of title deeds. The Law Association of South Africa had an important role to play in preparing the profession and their clients on changes to come in terms of the electronic deeds registry system. Local authorities, SARS, other government departments should be providing input into other sectors. The other issue was on the Protection of Personal Information Act, which in the main requires that appropriate security was put into place and was subject to the Act.
As far as the conveyancers were concerned, they played a key role in orchestrating the transactions that finally reach the deeds office, so it was vital that they were part of the process of being included in information security affairs as their role was critical.
The Chairperson asked for clarity on the timeframe provided by the Committee for the written submission by the Law Society, and if they needed an extension prior to final arrangements being made.
Mr Heyink responded that he had been approached by the Law Society to represent them, and they had endorsed that input on the basis of the representations made.
Mr Robertson asked what the legal definition of a title deed was. How susceptible was the system now to cyber crimes and fraudulent activities, using technology? Were the proposed amendments increasing or decreasing the security measures? What were the chances of the conveyancer fees and transfer fees currently exceeding the value of the property, especially in rural parts of South Africa? Would the Law Society suggest a more cost effective model to deal with those title deeds that were still in the old format?
Mr T Walters (DA) wanted to know what the bottlenecks in the system were, and if one could make a comparison with other countries. Regarding communal land and family-owned households, could other people benefit economically from the proposed legislation in that sector of the rural economy?
Mr M Filtane (UDM) asked how the electronic process could be transferred into rural system of land ownership. Why should personal information be protected in the deeds office? Who should not have access to it? Would LASA suggest that the system be part of the conveyancer courses in higher education?
Mr A Madella (ANC) suggested the regulation board should be broadened, and not be the only entity to be consulted. It was not a firm recommendation, as there were loopholes in the multi-disciplinary approach. The board should include an information technology (IT) specialist – he asked for elaboration on that aspect, suggesting that perhaps one should rather get a conveyancer with a background in IT. What was the difference between an original copy and a valid document? Must provision be made that once one had acquired all the information one would get a copy, and that copy would be considered as an original? Could the registrar not forward the copy to the conveyancer?
Mr Nchabeleng said with IT there were risks related to people hacking systems and creating things that were non-existent, and this led to people clashing over deeds to one property. What would be the mitigating factors, and how would they be put into the bill? How did one define an electronic signature and how would the definition inform the perception of what it is?
Ms S Manama (DA) asked how this new bill would affect the title deeds that were already registered in the deeds office.
Law Society’s response
Mr Heyink replied that a definition of a title deed was that it was a written document which had been currently signed by a registrar of deeds, which indicated the right that a person had to a particular property.
In as far as security was concerned, South Africa was at a point in time when cyber security was of increasing importance. The SA Banking Risk Information Centre (SABRIC) had published figures relating to banking crimes which indicated that 55% of all crimes with banks were cyber related crimes, and had advised how institutions should combat it to ensure there was proper security. Regarding the bill, he said it was necessary to have consultations with experts to provide views on security, as security was always an inconvenience and there had to be a practical system that could protect one from reasonably identifiable threats, and the risks could be mitigated.
In regard to conveyancer fees, his view was that the problem was the sliding scale on conveyancing fees. As a conveyancer, it was easier to register a modest transaction, but the fees related to the bond may be high. However, if technology was used correctly, a lot of the transactions could be simplified. If the new system was used it may not affect conveyancer fees, so there needed to be more consultations in this regard.
There had been primary exchanges of land in the past, and assuming somebody bought a R500 000 property five years ago and assuming the cost of conveyancing was R10 000, in a lot of instances people took the title deed not realising it was not recognised by the chief registrar. This illustrated how the costs had inhibited the market.
As far as the bottlenecks were concerned, he mentioned several and said that the conveyancers needed to do a lot to ensure that the systems could talk to one another, especially when dealing with large volumes over some time.
Regarding personal information, the nature of the information in the deeds office made it personal, and there had to be a justification for accessing information. The information in the deeds office was public information, but if it was used for a completely different purpose, then regulators would disagree with using that information.
Mr Heyink said the regulation board was well versed in the law related to conveyancing, but they did not necessarily have capacity to make the transition from a paper environment to an electronic environment. The new proposed electronic deeds registry system required very strong conveyancers who were literate in IT, and it required more security and experts in this area to make progress.
On the issue of risk mitigation, he said that South Africa had physical security measures in place, but the novelty in the electronic world was not understood in great detail. South Africa had a capable system that had little fraud encounters, and the law against the theft of sky scrapers was difficult to grapple with. However, sky scraper information was compromised, and the actual owner would not know about it. If we were building a system with security in mind, we would be able to mitigate those problems.
The issue of electronic signatures had been addressed in the above examples provided earlier, as reflected in the presentation.
Ms S Mbabama (DA) asked about the impact of the electronic system on existing title deeds that were already in the old format?
Mr Filtane asked if the electronic deeds registry system should be part of the conveyancers’ course offered at institutions of higher learning. He also appreciated the response on the personal information aspect. Could he make a suggestion as to how to phrase it in the bill -- information in the deeds office should be available to the public. It was not correct for an electronic deeds registry system not to be able to define property owners.
Mr T Walters (DA) said that the bill could have a positive spin-off, and wanted to know the value that gets lost, as research indicated that only 20% of the property was in the final trading. Was there any calculation of the economic loss, particularly to the poor? What would be the impact on the poor when the Department moves to fully utilising the electronic system?
Ms Magadla wanted to know when the electronic deeds registry system would be implemented and what it meant for ordinary citizens of South Africa.
Mr Nchabeleng said as a Committee Member who came from a village where the land stands were issued by the chiefs, and there were instances where one stand was registered by seven people, would the system be used by traditional authorities, and how accessible was the electronic system? Was it possible to manipulate the system that people could register online in disguise? How safe was the electronic system?
Mr Heyink responded initially about the academic course offered in institutions of higher learning, and said that conveyancers needed to be well versed in information technology (IT) which would be inclusive of that particular curriculum. In 1996, he had approached LASA to make it compulsory in law universities to include courses in IT, and in 2016 a decision was taken that from 2019 the degree would have an electronic course on IT included as part of the curriculum.
On personal information, he said one would need a public record of who owned which property. However, he disagreed with how the information should be used for other purposes. Information was in the public domain for a particular purpose and because information was in the public domain, people could use it. It was more than adequately addressed in the Protection of Information Act.
Responding to the issue of the estimated value of trade in title deeds, he said he was not sure if there were statistics in this regard because the system had not taken into consideration the commercial interests. He would ask Ms Leslie Downie to provide written input on that.
The poor were hardest hit by not having access to the electronic system. It was common cause to consider an electronic deeds registry system as an enabler of addressing socio-economic issues of delivery of title of land. If the bill did not use the expertise available, then the risks exponentially increased. In Johannesburg there were roads that had been constructed through an error in surveying, but this could not be allowed in electronic systems. He was concerned that we do 20% planning and 80% in trying to fix issues in delivering land parcels to a lot of people out there.
He said that the dichotomy of customary law had not been taken into account, and within government there was information that gave strong evidence for the title of Ms Downie’s book, including the effect on the wives of title deed owners, and perhaps the electronic system in the deeds office could be addressed.
On the risk mitigation, he emphasised that there needed to be a secure system in the electronic system, as it was better than the paper system. South Africa could create a better system in electronic form if done correctly, and there were technologies evolving that provided absolute certainty of records at a particular point in time.
The deeds office was a big record depository, and it could be done better electronically. The Bill empowered the chief registrar of deeds to develop an electronic system and at the end of the day pass legislation.
He ended his presentation by letting the Members know that he was readily available if more information was required.
The Chairperson thanked Mr Heyink for the presentation and thanked the Law Society for making the submission to the Committee.
EDRS: Banking Association submission
Mr Lee Mhlongo, Head of Legal: Secured Lending, First National Bank, said he was representing the Banking Association of South Africa (BASA) and making an oral submission with regard to the EDRS Bill.
The Banking Association of South Africa was an industry body representing all the banks registered in terms of the Banking Act, and had 35 licenced member banks operating in South Africa. One of the aims of BASA was to forge partnerships with relevant stakeholders and forge relations with banks to strengthen socio-economic growth. It was important to have an electronic registry system in a way that promotes international best practice, transformation sustainable growth and development.
In this regard, BASA supports the importance of having a world class electronic deeds registry system which includes the dematerialisation of the deeds registry. The mortgage exposure was approximately R1.6 trillion, which poses a system risk to the sector if there were security breaches. The Association was grateful to the Department for its inclusion of its previous comments in the new version of the bill.
Mr Mhlongo said the only concern highlighted by BASA was in section 3, that deals with the validity of the deeds and documents. It read as follows: “Subject to subjection 14 of the Electronic Communications and Transactions Act, a deed or document generated registrar and executed electronically and in any other registered or executed document scanned or otherwise incorporated into the electronic deeds electronic registration system by electronic means, was for all purposes deemed to be the only original and valid record.”
Their view was that deeds currently held by property owners was only a copy, with the original being held by the deeds office.
Currently, the credit providers retain the original deed that was registered in the deeds office and as a result one had a challenge as credit providers. When credit providers go to court to represent a client, one of the challenges they faced was getting the original deed to prove ownership of the property.
Furthermore, if the deeds office holds the original then they could be called to court processes or other litigation matters, while property owners do require the original deed which enables them to get finance and if there were any litigation matters. There were properties that were free of mortgage but property owners needed to keep the original document and produce it whenever it was required.
For the deeds office to retain the original document was a concern, and because of the issue of potential cyber crimes there was a high risk of exposure. Therefore, the recommendation of the Banking Association was that the section 3 be amended to reflect that the property owners copy would be deemed to be a certified copy of the original document held by the deeds office. This included that a copy held outside the property owner was deemed to be an original certified copy.
Mr Mhlongo said that they had met the Department earlier in the week and had been informed that they would now issue a certificate reflecting who the owner was and whether there were any restrictions. They would take physical documents and issue an electronic copy. There would be continuous feedback to BASA members to allay the concerns around section 3 the bill.
BASA was supportive of the bill and would be prepared to assist the Department where possible to enhance the deeds into a word class registry, and ensure that the security and safety of the electronic system was not compromised. There would be continuous engagement in setting up the system.
The Chairperson thanked BASA for the presentation and noted that they had a concern about section 3 of the bill, which suggested that the deeds office keeps the original copy of the deeds registry.
Ms Magadla said she agreed with BASA and supported the suggestion that the owner of the property keep a certified copy of the original title deed. She asked why BASA had a policy that discriminated on the basis of age, because when someone needed a second home loan while paying off the other home loan as a bank’s client, they would say he or she was a risk. Why was it like that?
Ms Mbabama said she was still trying to understand the statement that the copy that was in the deeds office would be the original copy. It would make sense when one had a bond, but once one had paid the bond, one should get one’s title deed. She asked what happened when a person had paid the bond and needed the document to receive other finance.
Mr Filtane said the Committee would like more information as to why things were being done they way they were, otherwise it would be an unfair question. He was happy that BASA had come forward with such a proposal.
Mr Madella said there was great merit in the recommendation by BASA, as presently title deeds were held by the deeds office, and one defaulted they could auction one’s house as they held the title deed. He asked why BASA did not protect account holders from unscrupulous people who deducted money from one’s account without permission. Normally it was not big amounts, but they made it account the bond holder’s responsibility. They must consult the clients first before giving authorisation. The Committee needs to explore more in this area.
Mr Nchabeleng wanted to find out what the commitment of BASA was in supporting the Department in providing property loans through the banks, as they were the ones who financed them. Was the Land Bank or VBS part of BASA, as he was from Limpopo. How far was BASA willing to share that information in doing the thuma mina (“send me”) by the banks?
Mr Mhlongo made a proviso that he was mandated to speak only with regard to the Banking Association. One of the reasons the age restriction on lending was based on the National Credit Act was that when BASA members grant credit to consumers, they always needed to ensure that all was above reproach when applying for finance, and not lend to people who could not afford it. Those mitigation factors ensured that the bank did not put creditors at high risk.
BASA was committed to supplying other responses in written form, as he was not mandated to respond and would relay that message.
BASA was committed to ensure the bill was successful. One of the issues was the long timeframe taken for the registration process, as it took an average of three months. If the electronic route was taken, it would quicken the process which could assist clients, government and all relevant stakeholders.
EDRS: DRDLR on written submissions received
Ms Mashile Mokono, Deputy Director General, Department of Rural Development and Land Reform (DRDLR), said that the written submissions received would be dealt with clause by clause in sequence, based on the six or seven written submissions submitted.
Ms Makaziwe Ntuli, Registrar of Deeds: Johannesburg, made the presentation on behalf of the Department, taking the Members through the comments made together with the recommendations and the response from the Department on each submission received.
The first comment received was from Mr M Heyink on clause one of the Bill, which was to highlight the necessity of the Legal Practice Council being the registration authority to issue digital certificates, to enable advanced electronic registration.
The Department responded on that comment to say the accreditation of the advanced electronic signature was regulated in terms of the Electronic Communications and Transactions Act (ECTA), and indicated that the Department could not have that in the bill. The Act provides that the Department of Telecommunications and Postal Services (DTPS) was the accreditation authority for the advanced electronic signature across all government information and communication.
The next comment was based on clause 2.1 of the bill, where Mr M Heyink said that the Act was not entirely prescriptive; while it provides guidelines, some of the details on applications and technologies were to ensure there was an equivalent function to what was currently achieved. The Department replied that the chief registrar of deeds would adhere to the guidelines of the Act, and recognise that the Act was not prescriptive and allowed for an opportunity to create an improved registration system that leveraged on technological advancements.
The Department also received a comment from Lightstone Property, which was based on clause 2.1 of the Bill, where they made a submission that the EDRS system should be designed in an integrated approach on each stage of the transaction, from cradle to grave -- from offer of purchase accepted by the seller, to clearance certificate. The Department said only the functions were addressed in the bill for now, as the intention was to move from manual to electronic. The intention was to provide electronic performance and the system would be designed in such a way that it interacts with all relevant stakeholders, such as local authorities and banking institutions. The incorporation of each stage of the transaction would be discussed when there was an integrated land administration process.
On clause 2.2, Mr Heyink had said that in as far as integration with other systems was concerned, the chief registrar of deeds should be able to consult with parties other than the regulation board. The Department replied to say they had a communication strategy in place for that, and the position of the composition of the regulation board was under review. Experts and all relevant stakeholders would be consulted during the development of the system prior to the Department implementing any policy.
The other comment on clause 2.2 had been on the interface between the electronic deeds registry system and any party in the electronic deeds system. The Department had replied to say it would comply with all legislation around technology.
Further input from Lightstone Propertiy on clause 2.2 stated that the bill does not provide any detail in regard to data security or the prevention of cyber crime, and details of prevention measures should be included in the directives of the bill. The Department replied that the system would be developed in compliance with all legislation and policies governing Information Communication Technology (ICT) security and would have measures to address property fraud challenges.
On clause 2.2 -- retention of protection of personal information and subsequent production of documents -- Lightstone Property said that the Protection of Property of Information Act (POPI Act) provided protection of personal information for secure retention. The Department agreed, and indicated that one of the mandates of the deeds office was to keep public information for public access, as it was a public office, but should take cognisance of the POPI Act.
The next comment was on clause 3 by BASA with regard to the deeds office keeping the original title deeds, and not being with the client. The Department replied to say the financial institutions would always have access to the original registered title deed through the biometric banking interfacing of the system.
What was happening currently was that the title deed was issued to the client after full payment, but with the new system a certificate would be issued to the client of ownership, and where there was a bond the banks would keep the original title deed, but the summary would be issued with all security features. In case a client needed a bond, then that certificate would be issued. In case of litigation, that document could stand in a court of law.
The system of registration with paper was being discouraged, so now when one issued the certificate it would be given to the banks, and the conveyancer could have that type of certificate, and all critical information would be in the certificate issued after registration.
The next comment based on clause 3 said that it does not reflect section 14 of the Act. The Department agreed in principle with minor amendments in wording, to an extent that it was applicable.
Mr Heyink had commented on clause 4 of the bill, and said the use of the advanced electronic signature would facilitate the access control process. The provision was very wide and the relationship with third parties must be facilitated. The Department replied that the registration would be subject to the conditions based on the role of other users, and would be based on a directive from the chief registrar.
The other comment was from Lightstone Properties on clause 4, where they indicated that the user of the EDRS must be registered in a prescribed manner, but there should be no further information in relation to the use of data, so other users may access data in the EDRS with more certainty. The Department said the purpose of the bill was to provide administration functions electronically, that access to data was regulated by the Deeds Registry Act, and the bill had no impact in that regard. Clause 4 does not deal with access to data electronically, but clause 5 does make provision for the regulations board to make provision with regards to access of data electronically.
Mr Heyink said clause 5 on the regulations board, as currently constituted, does not have appropriate expertise to address technological challenges. The Department indicated that the composition of the regulation board was under review, and the Department would consult experts and all relevant stakeholders prior the system being finalised.
Mr Heyink, on clause 6.3 referring to a conveyancer, said a notary must continue with the manual documents until regulations and electronic provisions were in place. The Department said a project of this nature must be phased in, and provides for a phased-in approach at first. It would be a dual manual and electronic system for registration up until the chief registrar to issues a directive.
Ms Ntuli said there were also general comments that were raised in the written submissions. One referred to clause 1 with regard to the unstable power system that was normally experienced, especially in Johannesburg, and queried how the system would deal with the challenge. The Department said there would be an Uninterrupted Power Supply (UPS) system as back up, and there would be generators to address power shortages.
There was no indication had been provided on when the EDRS bill would come into play, as it would have serious financial implications for many conveyancers, whose main source of income was to transact on behalf of other conveyancers in a particular office. The Department said it would provide sufficient notice and training, and the system would provide opportunities to extend their own practices and re-skill their personnel.
The other comment was on clause 3. According to the bill, the chief registrar would issue directives on interfacing with authorised users on any specific software and licence fees that would be required and costs involved, especially for smaller attorney firms. The Department said that the system would be web-based, and no licence fee would be payable to give the users sufficient time lead time to prepare.
On clause 4, there was no indication on how the system would be able to deal with the system, with notes raised by the deeds office examiners. The Department replied to say the interaction with access to examiners would remain. Some would be done online and telephonically, and where they could come to the deeds office, they could.
There was also reference made about transaction through the system, but conveyancers would be notified in time about changes in the transaction. The Department said the new system would not have a negative impact in this regard -- it could be done online, telephonically and in person.
On clause 6 on the security of the electronic signature, currently conveyancers had to sign an attendance register and entering the deeds office. The Department said access would be in accordance with conditions of registration as a user.
With regards to clause 7, which deals with challenges of incorrect office records, if there was a data capturing error currently, the conveyancer could take the mistake and amend it. However, how would it be done on the electronic system? The Department responded that there would be a platform to pick up information, and a section dealing with correcting records through various communication modes – online, telephonically or face to face.
The other comment was based on clause 8, in respect of accessing physical records. The Department said that access to records would be possible until all records had been back cleared, so all information on microfilm would be available electronically when the system was implemented. All information would need to be digitised.
On clause 9, with regard to the turnaround time of approximately seven working days from the date of the lodgement, this was sometimes delayed. The Department said currently it was done manually with messengers and examiners, and the introduction of the electronic system would lead to more efficiency, especially the turnaround time it takes to register a deed.
The next comment was based on clause 10, when the registration of a matter takes longer than anticipated. Currently it was able to follow up manually, but what would happen with the electronic system? The Department said the system would identify the examiners, and if there was no movement then the matter would be directed to the next level supervisor.
On the issue of the conveyancers being able to assist clients under exceptional circumstances to have the matter addressed quickly to acquire finance from the banks, they needed to supply reasons for expediting. With the electronic system, how would the Department deal with that? The Department responded that under the new system, there would be no need to expedite as the new system would ensure a shorter turnaround time.
The Department also received a comment that focused mainly on governance, accountability and irregularities from Ms Ntomfundo Njabulo Zwane, who asked if there would be a platform for reporting irregularities; the building of an ethical culture within society; partnership between the state and civil society; traditional leaders being given powers to investigate and prosecute on land governance; access to information transparency provisions; EDRS premised on data security and data governance to safeguard the system from hackers; and also the electronic deeds registry being declared as a critical structure.
The Department replied and said they would develop an integrated land administration system, and the provision of access to information was contained in the Act. The system catered for the provision of information, and regarding items 8 and 9, these would form part of the directives to be issued in terms of clause 2.2 of the bill.
DDG Mokono added that the current bill was really enabling legislation for the deeds office to create a system and roll it out as and when the Department was ready, so engagement with all relevant stakeholders was important. The Department would engage with BASA, especially on clause 3, as they would offer their own technical expertise, and would consult extensively over the system development, as the bill was meant to develop the system. The Department did not have the system as yet and would engage thoroughly in this regard. All security issues and interactions with relevant stakeholders would be taken care of.
Mr Nchabeleng mentioned that he was worried about the banks capturing other institutions that carried support services, as many institutions providing one with support created a platform for them. At a previous meeting, there was a clause on establishing a registrar of Communal Property Associations (CPAs). With the introduction of the electronic system would there be a system where one could deregister, or was it for registration only?
He asked about the design for helping to interface with local authorities. Who were these local authorities? Did they include traditional authorities that had rights to register a “Permission to Occupy” (PTO) as an advanced form of land ownership going forward? Was there any role for traditional authorities? And on the electronic capturing of data in the Department, what if there was fire? The Committee should be concerned about the archives and information not being kept for as long as possible.
Ms N Mashabela (EFF) asked about capacity and resources, questioning whether, with the history of the Department, they would make the seven-day turnaround time. When was the Department migrating the manual title deeds to reconcile the two systems, or were they focusing on new lodgements and the past would remain? Did the Department have measures in place to ensure that the system was not easily hacked?
Ms Magadla said she wanted to put an emphasis on submissions by Ms Zwane, and said access to information was key with the electronic deeds registration system, as there had been instances where bonds had been paid up, but the bondholders did not receive information.
Ms Mbabama said she was concerned about citizens not having access to title deeds. Though they would not have it on paper, people would have a certificate that would be provided as proof. How secure would the certificate be -- would it not be easy to forge the signatures? What security features would there be? If one had the electronic system, how would the land claimants prove that the property belonged to the owner, or were we falling into the EFF nationalisation language with the electronic systems bill? What would happen 50 years from now when one had to prove that the piece of land belongs to one?
Mr Filtane asked about clause 3. He was feeling confused by the statement that says the document held by the deeds registry was deemed to be the certified copy, and further down it says the copy held outside the deeds registry was a certified copy -- was there no contradiction in those statements? On clause 4, the issues could be covered by regulations. In clause 7, the deeds office should be given the power to prosecute, investigate and judge on the matter. Was that possible from a legal perspective?
Ms Ntuli began her response by saying that the Department took note of the point raised by Members about not being captured by the banks.
Regarding the registration and deregistration of CPAs, in terms of the current status quo, the title deed cancellation could be made in terms of the Deeds Registry Act through a court application. Any transaction could be cancelled and there must be a court order indicating this to the registrar of deeds.
Municipalities were part of the land administration value chain, and if there was a legislation to register PTOs, it would be taken care of. However, the bill deals mainly with the migration from manual to electronic registration.
The backup of data was done in the deeds office through microfilms stored offsite, out of the building. Microfilms were external, and there was sufficient backup for archives. Electronic backup was available and was stored electronically, and the Department was looking for backup with the new EDRS.
With regard to the seven workings days’ turnaround time, with the new electronic system it would be less than seven days, but there would be a need to go through capacity building and re-skilling. Plans were in place with the current establishment of the deeds office when it came to staff training.
The Department would need to back scan all that was on paper to be able to begin the migration process. The information currently on paper would need to be scanned electronically before it could start and only then could electronic registrations take place. In the meantime, there would be directives to indicate when the electronic registration would be implemented, with a timeframe.
There would be extensive consultation, especially on security issues, as it was one of the most critical issues that had to be implemented to ensure that the system was properly secured for successful implementation.
With regards to access to information, currently the deeds office was available to the public and it would need to be incorporated to ensure that people were able to get and receive access to information.
On the certificate having security features, she said whatever certificate was issued would have all the security features to avoid it being forged, and in 50 years time the certificate could be used as proof of registration of the transaction from the deeds office.
The same way that registration had been recorded, the certificate would not be different from the system. As was the current arrangement with the banks, all the critical information would be in the certificate and would summarise all the critical factors that were contained in the title deed. In cases where there was a bond, that certificate would be issued to the banks until it was fully paid up, and one got a title deed, including the restrictive conditions on the property. That information would be in the certificate which was a one page document. The certificate would be issued with all the critical information that was in the title deed, and its intention was to limit the number of documents.
She said that when reading the comments on page 8, it sounded like a contradiction, but the Department was saying it would keep the original in the deeds office, and the person would have the original certified copy. The contradiction was due to the way it was being read.
There were some issues under general comments that would be covered by regulations, and the regulations would incorporate all elements that would be there. Even before regulations were published, all the relevant stakeholders would be contacted.
With regard to the deeds office being able to be a referee and a player, there had to be proper forums for that, but the Department takes note of the input.
The Chairperson then thanked the Department for the presentation and asked the legal team from the Department of Rural Development and Land Reform to comment on the draft bill.
EDRS Bill: Legal Advisor comments
Mr Nathi Mjenxana, Parliamentary Legal Advisor, said the DRDLR were the implementers of the legislation, and they agreed with the Department on the draft bill. On the procedure, he said they had advised that it should be processed in terms of section 75 of the constitution, as the bill did not affect provinces.
The one issue was on public consultation, and the communiqué to the law society to withdraw the letter had been done, therefore there was no need for the law society to be given more time, as Mr Heyink had clarified the issue and the Chairperson would need to respond.
On the issue of the principal legislation providing for the broad framework and detail in subordinate legislation, the detail was best provided in the regulations. The bill in clause 5 provides detailed clauses on the kind of regulations that needed to be made, and the role of the legal unit was to support the process.
Ms Lisa Naidoo, Senior State Law Advisor, said the bill focused on consultation and from their perspective, prior to submitting the bill, the Department had indicated that they had followed that process and this had been extended to the regulations. Currently the system was that one could access information regarding title deeds, and this bill was not going to change that. It was merely being put into an electronic system and they were willing to assist the Committee to go through the submission with the assistance of the legal unit.
The Chairperson then thanked the presenters and said the Committee would still look into the submissions with the assistance of the legal team.
Communal Property Associations: Annual Performance Report
Mr Sam Mogaswa, Deputy Director: DRDLR, said there were 1 566 Communal Property Associations registered, and 53 new CPAs had been registered in 2017/18. Of these, there was one each in the Eastern Cape, Free State, Gauteng, Limpopo and the Western Cape, 22 in KwaZulu-Natal (KZN), 12 in Mpumalanga, three in the Northern Cape, and 11 in North West.
Regarding performance against annual performance plan targets, it had supported 304 CPAs to achieve compliance against a target of 256, outperforming its goals significantly in Mpumalanga and the Northern Cape. With the exception of the Eastern Cape and Mpumalanga, the CPA forums lacked resources and experience to operate optimally. The main challenges were:
- Incomplete verification and settlement of claims
- Consolidation of communities
- Lack of operating capital (start-up capital)
- Unaccountability of CPA committees
- Lack of transparency by CPA committees
- Political and business interference
- Disputes with traditional leaders
There were concerns that CPAs that were not functional could lead to a lack of food security and productive land could lie fallow. However, there were CPAs that were functioning well, such as Thengindlala in the Eastern Cape, Ingalo in Gauteng, Amandla in KZN, Ezemvelo, Mfuleke in Limpopo, and in North West there were some engaged in game farming. There were also CPAs that were under administration in North West because of infighting and maladministration. The Moloto CPA was under administration because of infighting and maladministration which was instituted in September 2018 was to end in December 2018, and the Komani Sun had been under administration from 2014.
With regards to the recapitalisation project in the 2016/17 annual report, the Department had indicated changes in the way it was done, and had said that only CPAs that were compliant should be recapitalised. The majority were recapitalised prior to the decision being taken.
The Department was developing an integrated information management system to ensure the uploading of relevant documentation, and was mapping CPA properties. It could generate reports, for instance, to check on which CPAs were producing crops, as the system would be able to detect that.
Mr Mogaswa gave details of how problems at various CPAs were being resolved, and referred to the steps being taken at the Komani Sun, MxaThule, Rama, Walmensdal, Bakgata Bamphahlela, Opperman and Atlantic CPAs.
The CPAs did not have separate budgets for operations, only for compensation of employees and other things. Expenditure in relation to intervention at CPAs in the past financial year had amounted to R13 million, with a further R213 000 for mediation, and R19 000 to deal with a request for auditing.
The Communal Property Asociation Amendment Bill was with the National Council of Provinces (NCOP), and the Department had been invited to attend briefings in all nine provincial legislatures except the Free State, where the briefing had been cancelled at the last minute. Public consultations on the bill were now taking place.
There were 83 officials working on the CPAs and other programmes, such as the communal tenure and tenure upgrading. Regarding legislative capacity, there were four officials dedicated to work solely on CPAs.
The Chairperson said that the CPAs were guided by the CPA Act to consolidate all the work of the Department and table all consolidated information, and the Department was highlighting specific CPAs with challenges. The operation of CPAs in 2017/2018 was being dealt with, but not all issues had been addressed.
Mr Nchabeleng said when the meeting started, Mr Robertson had asked about Malamala and said that there were outstanding issues that the Department would need to engage on. The Committee had raised issues to the Department about people who had been evicted from land and not compensated properly, and people with individual titles had become part of the CPAs, and that created tension in the community. He said expecting the Democratic Alliance to support the individual occupation of land, as there were people with title deeds, but were removed, and as a family they needed a title deed individually. He asked if it was possible to unbundle CPAs and give people individual title deeds?
Those with individual title deeds must be given those title deeds as rightful land owners, and as communal land was a very difficult space to contest, they would need to solve the issue of communal land. Land owners should be given back their land.
Ms Magadla asked about the forums that lacked resources, and wanted to know what resources were lacking. Who were the owners of game reserves? On the strategy of the CPAs, the Department was talking of nine agri-parks instead of 44. Why was the CPA amendment bill briefing cancelled in the Free State, and when would the public consultations be finalised?
Ms Mbabama asked if there was a valid reason why the Free State was not complying. One of the challenges had to do with traditional leaders -- had anything pro-actively been done by the Department to talk to traditional leaders regarding CPAs? What was the measure of success for the CPAs? What happened to the CPAs that were being recapitalised? Was the information management system part of the strategy? Which of the challenges would be directly addressed by the new strategy? On the court cases, she asked for and update on Inqatsule being challenged in court.
Mr Filtane congratulated the Department on exceeding its overall target of support for CPAs. What prospects were there for the settlement of claims that were a hindrance by 31 March next year? Were the CPAs with no serious disputes functional, because based on the list of complaint CPAs presented, functionality was what was being looked for. He asked the Department about the possibility of reviewing land reform through the CPAs.
Mr Robertson referred to the 100% of CPAs functioning well in Mpumalanga, and wanted to know the difference between the CPA and the CPA forum. The presentation indicated the number of compliant CPAs in Mpumalanga had plummeted over the past year, so he asked the Department to clarify the contradiction? What was the purpose of the Vumelani Advisory Fund in giving advice to CPAs? On private individual rights in the CPAs, as we were entering an era where people did not want to work together anymore, and with the possibility of claiming as a community, the prioritisation of rights should be instilled within the CPA. He supported Mr Nchabeleng on unbundling CPAs to address the lack of functionality in the current CPA system, and asked for input into how the CPAs could become more efficient.
Mr Madella said he was concerned that there were 1 566 CPAs across the length and breath of the country involving many people, but after looking at the key identification of weaknesses, there were only having four dedicated people to deal with CPAs. Why was this the case? There had been commitments at public hearings to provide more human resources to service CPAs to ensure they function properly. Less than 105 of the current CPAs were compliant. The best year was in 2016, where 20% were compliant. This indicated that the Department was still giving selective attention to the importance of CPAs. The coordination of CPAs at the provincial level was a good intention, but the report indicated that it was not visible in all provinces, which was a concern. One of the critical challenges was also infighting amongst CPA members, but this was not listed as a key challenge? Why was this?
Mr Nchabeleng, followed up saying there was a CPA launched this financial year in Limpopo, and wanted to know the names of the CPAs and when exactly they were launched. He still believed that the land should be owned by those who worked on it, but one could not bundle issues that did not require to be bundled.
The Chairperson said after meeting various CPAs, there were allegations on the ground about corrupt officials, although it was not noted in the report. She asked why. On the Rama CPA the Committee had requested the Deputy Minister to meet with the Premier of Gauteng.
The report also did not reflect the CPAs that were deregistered this year. Were no CPAs deregistered? Were there challenges with title deeds? There had not been feedback on the issue of Malamala, and the Minister had been requested to call for a forensic investigation of Malamala, as there were issues there that remained unresolved. She also asked if there was any value from the spending of R13 million.
There was no update on some of the CPAs. She wanted an update on the Pennylle CPA and a follow up on an Mpumalanga CPA whereby an individual and another group had lodged a claim for the same land, and they had advised them to forge a partnership.
Mr Mogaswa said that the Committee had engaged with the Department on developing a strategy, and he suggested that they return to the Committee to present on the CPA strategy.
He said that land reform started through the Department getting redistribution of land for farm dwellers through direct access, and the administration of CPAs was never identified as a specific task of regulating CPAs. There had been many years of trying to build the credibility of CPAs which had suffered through unfortunate neglect.
On individual and group rights, it was an issue that the commission would need to take into account. Commissions had claims that had been consolidated, and the Department encouraged the consolidation process. People without common values and suddenly being grouped together, would result in challenges. The Department agreed with the chief land claims commissioner, and the unbundling process would take place, but the Department would need to look into each CPA on its merits.
Regarding the lack of resources at CPAs, he said that in the execution of their mandate, sometimes they were required to make phone calls, travel and write up reports on matters that needed to be attended to. They had indicated that they couldnot travel from CPA to CPA and did not have office equipment to assist them to execute their functions properly.
On the question of the ownership of game reserves, he said that the ownership resides with the community, and the owners of the land where the game was situated would reside with the title holder.
On the relationship between agri-parks and game reserves, he said the agri-parks were to assist farmers in having a point to trade commercially. The game reserves were more for tourist operations and keeping game.
Regarding the compliance of CPAs, regulation 8 clearly states what the content of the CPA’s report to the Director General should be, for the CPA to be compliant. This involved submitting information requested by the DG on an annual basis, especially rent transactions, new members admitted, members whose membership had been terminated and various other aspects. Only then was the CPA regarded as being compliant.
With regards to the Nxathule matter, there had been court papers on the details of the matter which was still being heard, and the Department would be in a position to provide an update to the Committee at a later stage.
Mr Mogaswa said that the Department had made attempts to get to the Free State for a briefing on the CPA bill, as there had been no quorum. They were going to write an apology to the Department and come up with a day.
One of the challenges of CPAs was that it was difficult for the Committee to receive timeous information, and the Department needed a mechanism for registering the CPAs electronically so that it can retrieve reports. The Department was at an advanced stage of implementation, and would start with the Western Cape so that reports may be generated electronically.
On the district forums not being functional, they had been established but because of certain challenges did not operate. The Department had had to revive the forums, and would report on this in its next report.
Regarding not receiving information from the Free State, it was unfortunate that it related to the past period, and some of the challenges were from outside the timeframe. The reason for problems in the Free State essentially related to the capacity of the officials. There were issues that still needed to be clarified in this regard.
The issue of CPA disputes involving traditional leaders was about the role of the institution in relation to communal tenure. The Department had not thoroughly engaged the traditional leaders. However, the traditional leaders had taken an initiative with all stakeholders and made resolutions, with government in attendance, to abolish CPAs. Thus the level of engagement had been elevated to a point where the traditional leaders wanted to talk only to the President. They do not want CPAs in certain areas. At a meeting with Minister Mkhize, the traditional leaders had said they would not have CPAs in their jurisdiction. The issue had been elevated to the Minister’s office, but the issue extended beyond the CPAs.
He said certain questions went to the heart of the problem. When land reform communities were given a grant, the price of land was high so members of the public could not afford it as individuals, thus CPAs were formed. The model of CPAs was then formed, but the regulations and capacity to support CPAs was not done, and it may well be that group farming may not be the solution, even with the capacity to service, regulate and manage. However, work still needs to be done on regulations. The Department had not yet looking thoroughly at the concept of CPAs, and its conclusions may not be accurate as not enough regulation work had been done.
The forums were still a challenge. When one had a structure, it needed to be serviced with resources, office equipment and capacity. There were still discussions on the future of forums to the extent of addressing the matter by the Department.
Regarding the issue of corruption amongst officials, he said the Department at some point got the president SIU to intervene and some corruption was found, however there had not been investigations done in relation to CPAs and would be looking into that. The value for money issue, he said that the Department had observed that when one identifies CPAs they need to be regularised, but without capacity support they fall away. There was not enough capacity and the value for money was lacking in building internal capacity in relation to what was entailed in the strategy.
Ms Rendani Sadiki, Acting Director General, said that on the issue of Malamala, the Department had not yet received written communication to conduct an audit, and the legal services would issue a letter. The Department could not proceed pending the written notice.
On the update on the Rama CPA, the Department had submitted the report on 1 August to the Committee, and was awaiting an updated list of what was still outstanding for the report.
The Chairperson said the report submitted in August needed to have a progress report with different information.
Mr Mcebisi Skwatsha, Deputy Minister: DRDLR said that on the issue of traditional leaders, he agreed with the Department. They had engaged traditional leaders on their moral role in forums in Limpopo and the Eastern Cape, but the issue was more than just about CPAs and traditional leaders, as there was tension between the traditional leaders and the democratic dispensation.
The former president had been criticised for drafting the report on CPAs, but the experience of the High Level Panel (HLP) versus traditional leadership was an issue. Traditional leaders always have tension. There had been a comment by Ingonyama Trust that it was difficult to tell traditional leaders the truth, as traditional leaders were at liberty to say anything they wanted. The meetings would continue with traditional leaders.
The Deputy Minister said that policy review on CPAs was an ongoing process, and may not change prior to the elections, but there needed to be a relook at the model of CPAs, as it caused internal conflict amongst communities. Corrupt officials had been arrested through legal processes, but sometimes communities and CPAs had a defence mechanism, including blaming each other, or not providing information when requested to do so.
At Rama CPA , there was a bigger problem than the brief report in the presentation. He had been assigned by the Minister to meet the Premier and officials in Gauteng, and they had presented their case, but it was observed that there were two different understandings. The premier had mentioned that the project was for a huge value and had said that the Department was mistaken as they were not meeting with the beneficiaries. There was confusion on the identification of the beneficiaries between the national and provincial government, but he said that the Department had observed that a certain individual had threatened people and moved them to another area. The confusion on who were beneficiaries would lead to further altercations. The issue was that the Gauteng leadership would wish that the Department was wrong in their beneficiary identification, as they would like to continue with the project.
This had lead to a discussion on a way forward, by having a list of beneficiaries. If the Department identified the correct beneficiaries, they may agree to issue the land to the rightful owners. There was a court battle pending against the provincial government, but the Department had signed an affidavit to support the beneficiaries identified.
Ms Maite Nkoana-Mashabane, Minister, DRDLR, said land reform was a critical element in the dawn of South Africa’s freedom, and said in her first meeting she had learned of the concept of groupism. She had spent a day in the Free State discussing cooperatives, and women were leading in that regard and were celebrating their own success, and seeking further support.
The Minister said there was no one-size-fits-all to land reform, as in many instances people who were disposed of their land were still trying to settle issues. The land restitution process was a difficult one that people were dealing with. In her own assessment, she said that in the Western Cape there were many companies that would offer to sell the land on business risk, and black farmers were buying such land, and more needed to be done.
Regarding traditional leaders, the arrangement of Cabinet was that traditional leaders reported to the Department of Cooperative Governance and Traditional Affairs (COGTA), and the DRDLR was also part of the delegation.
The President had handed over a title deed and witnessed that traditional leaders sought their own income. Capacitating CPAs should not be on small matters, like airtime, but more importantly to empower CPAs on conducting meetings and taking resolutions -- that was where the Department should intervene. The Department was lacking on post-settlement support, and she had been pleading with Treasury to offer more support for the Department for post-settlement engagement to ensure land did not become fallow. They had requested R500 million, and R300 million more for redistribution, as there was government-owned land that communities should benefit from.
Land tenure was critical, as in some instances cooperatives received a plot from government to start up a business and would be supported in every regard. Communal land was another way of finding solutions, and she likes going to the village where her mother lives. The CPA handover could not happen overnight.
There had been some requests to municipalities to pay rates to the trust from the CPA on their behalf, as the municipality was also an entity of government and CPAs could not receive money from municipalities. Land was a highly contested terrain, and besides the hearings and submissions on expropriation without compensation, there were instances where the Department had powers to expropriate.
She said that there was still a long road of land reform. The Department would not cover up on corrupt officials and would ensure that the Department would remain within the law in terms of land redistribution and would not support land grabs. The Minister concluded that she was waiting with eagerness for the outcome of the Rama CPA meeting with the provincial and national governments.
The Chairperson said that the Department needed to note all issues raised by the political leadership.
She then requested the Department to submit the names of the CPAs across the country, as Committee Members were from different provinces and could provide oversight. The Department should include the integrated support plan, and the training plan for CPAs needed to be a part of that.
The Committee was awaiting further progress reports on the Rama issue, and asked the Deputy Minister to let the meeting continue with the real beneficiaries as the national Department collected the information. There was tension with the lawyer of the Rama CPA, and only the provincial government knows the real beneficiaries.
The Deputy Minister said that he was convinced the Department knows the beneficiaries, and would like to invite the Committee. The provincial Department may or may not know the real beneficiaries.
The Chairperson said the Deputy Minister should fast track the meeting and also have a meeting with Malamala CPA to attend to the real beneficiaries.
The Minister said that she was willing to accompany the various structures to the CPAs, and the Committee had to instruct the Department to follow up on the CPAs that had tension.
The Chairperson said that the Department should visit Malamala to gain trust from the local community, and requested that the Minister go with the team to meet the claimants so that all may be aware of the progress on the situation.
The Chairperson said that the Deputy Minister would be visiting De Doorns in the Western Cape to convene an Imbizo on the community not being happy with foreign nationals being hired for jobs. She then requested Members who could avail themselves to participate.
Mr A Madella (ANC) said there was an issue of farm workers and farmers on the land. There seemed to be conflict between the people working the land and the ones in charge of the land in the De Doorns area, which had also resulted in racial conflict in the area of Nirvana. The name of the entity was the Big Five Cooperative.
The Chairperson said she would follow up on the matter and report back to the Committee.
Draft Budgetary Review and Recommendations Report (BRRR)
The Chairperson said the purpose of the session was for Members to go through the draft report, look at the recommendations and that the intention of the report was to advise the Minister of Finance on all the entities that report to the Department.
Where there was a need for a financial boost, Members would need to look at them in detail. Most of the issues were raised by the Department. She requested a two-page recommendation, rather than re-writing what was in the Departmental report.
She asked each Member to read the recommendations.
Mr Filtane read the recommendations as follows:
The Committee recommends to the National Assembly:
7.1 The Minister of Finance should assist the Commission on Restitution of Land Rights (CRLR) to develop and implement strategies for settling its commitment register of R5 billion within the medium term expenditure framework (MTEF) period. The strategy should also deal with the suspense account of the Commission.
7.1.2 Support the Commission meeting the criterion for a national public entity in terms of Section 1 of the PFMA to become a fully autonomous entity as envisaged in the Restitution of Land Rights Act No. 22 of 1994. This would help the CRLR to comply with all the requirements of an entity. Therefore the Minister of Finance working together with the Minister of Rural Development and Land Reform and the Chief Land Claims Commissioner should consider making budget allocations that would allow the CRLR to be an autonomous national public entity accountable to the Minister of Rural Development and Land Reform, as well as Parliament.
7.1.3 Assist the DRDLR and the Department of Agriculture, Forestry and Fisheries (DAFF) to finalise comprehensive integrated policies on land reform in line with the blended financial model. The Minister should support a report within three months of the report submitted.
The Chairperson then asked the Members what they wanted to do with the recommendations.
Mr Filtane and Mr Madella suggested a couple of wording changes.
Ms Mbabama asked for clarity on 7.1.3 on the blended financial model, as there was support for land beneficiaries now. Was the statement saying the issues should be included?
The Chairperson then said 7.1.3 had to do with the recapitalisation programme of an unfunded mandate, so the Department should develop an integrated development plan only to strengthen the post-settlement support, which was a current challenge.
Ms Mbabama then asked if the word ‘finance’ should be changed in the blended financial model.
Mr Robertson 7.2 as follows: “With regard to the CRLR, the Minister of Rural Development and Land Reform should assist the CRLR to develop and submit a business case for an autonomous CRLR with all funding requirements. These must be submitted to Parliament before the Committee deals with the budget vote for 2019 and 2020, and this report should include details of business process mapping, institutional structure and a business re-engineering approach. This report should also include most implications for the project.
7.2.2 “Conduct analysis of all untraceable land claims (both researched and settled claims not yet finalised) and submit a report that details the types of claims, hectares claims and the total cost of research or resettlement and strategies used to trace the claimants.
7.2.3 “Table a comprehensive report on commitments in the form of grants approved in terms of Section 42 C of the Restitution of Land Rights Act before 2009, and further outline a realistic plan in line with budget allocation. This plan must be submitted to the Portfolio Committee on Rural Development and Land Reform for oversight.”
The Chairperson requested the Members to comment on this section.
Mr Filtane said the total cost of research was not the main concern, but the total cost of post- settlement support was what the Committee was more concerned with.
Ms Magadla 7.2 needed a correction to the grammar.
Mr Robertson said that 7.2.2 was for both research and settlement.
Mr Filtane said the concern was on the settlement aspect, as research was an operational cost item.
The Chairperson said that settlement was when the Minister signed, but there was no cost with regard to settlement and said that the total cost of research went with a package as restitution, and had not been broken down into the different activities of research, negotiation, settlement and finalisation.
The definition of untraceable claims was claims that were lodged but the people who lodged the claims could not be traced. In 7.2.2 “untraceable” was linked to the claims that were meant to be traced in this financial year. The Chairperson said there should be a rephrasing of 7.2.2, because there were other untraceable claims that had not yet been researched.
Mr Madella asked if the claimants should not be identified, as that complete information might assist.
Mr Nchabeleng asked what was meant by untraceable land claims, or claimants.
The Chairperson said that untraceable claimants was the correct answer.
Ms Mbabama read 7.3 as follows: “With regard to the Department of Rural Development and Land Reform:
7.3.1 “The Minister must finalise the national survey of farms acquired through all land reform programmes from 1994 to date. The survey which focuses on the assessment sustainability of farms and the socio-economic impact on land reform on beneficiaries must be tabled in Parliament for further debate to inform policy and legislation development.
7.3.2 “Complete a policy consultation process to develop a white paper on land reform which would give direction to South Africa’s land policy. The white paper would become a useful tool that Parliament could use to oversee the DRDLR and all the relevant entities.
7.3.3 “Finalise all investigations, internal and external, including forensic investigations in order to deal with all the allegations of corruption and maladministration. Critical areas of concern relate to the Agricultural Land Holding Account (ALHA), Strengthening of Relative Rights (SRR) of those working the land, and Agri-Parks initiatives.
7.3.4 “Noting the slow pace to table bills in line with the legislative programme, ensure that the DRDLR must adhere to the revised legislative programme as agreed with the office of the leader of government business.
7.3.5 “Continue to coordinate Agri-Parks interventions with the DRDLR and the DAFF, and further engage the Department of Small Business Development and the Department of Trade and Industry to maximise the use of limited resources and avoid duplication of government services, and enhance the capacity to coordinate expertise elsewhere in government and non-government entities. Such coordination should be strengthened at both the policy and implementation levels.
7.3.6 “Submit a progress report on the implementation of the Cabinet decision to transfer the administration of the Spatial Planning and Land Use Management Act (SPLUMA) to the Department of Monitoring and Evaluation (DPME) in the Presidency.
7.3.7 “Ensure that the DRDLR builds internal capacity to carry out the mandate for tenure reform and land administration; this was particularly urgent for the provision of support to CPAs and the processing of labour tenants’ applications. Further, submit a status report on the processing of labour tenants’ applications by the end of 2018/19 financial year, including but not limited to the total applications received by provinces, and the extent of land, budgetary costs and timeframes.”
The Chairperson said the Auditor General’s (AG’s) report spoke of the failure of the Department to settle invoices within 30 days, and that should be in the recommendations. She also referred to the issue of fruitless and wasteful expenditure with the Community Residential Unit (CRU) programme, the wasteful expenditure for the Department to comply with the prescripts of the Public Finance Management Act (PFMA). The Department needed to develop a policy on a programme before it could be initiated. The other issue raised by the AG was on the new premises, which was a R1.6 billion project, and the Department had to contribute R600 million. The Committee should comment on that partnership.
Mr Nchabeleng said there had been a meeting to explain other alternative mechanisms. On 7.3.5, he had missed the correction.
The Chairperson asked what the Committee was recommending.
Mr Filtane asked if the Department could come and brief the Committee on the projects before implementation.
Mr Madella said referred to the issue of the white paper on land reform, called the white paper on South African land policy from 1997, from the Ministry of Derek Hanekom, and suggested that one should rather review that document. The Green Paper of 2011 had been developed, but one would have to clarify the document analysis with a researcher.
Ms Mbabama asked if there was a national survey going on, and if there was a budget to conduct such an exercise.
The Chairperson said there was a current audit on land farms, and she wanted to know what the land claims were about. There was one on nationality and gender.
Mr Madella said there was a survey between the DAFF and Stats SA identifying the number of farms and their commercial viability.
Ms Mbabama asked the Committee to follow up on the recommendation for a national survey with a budget.
The Chairperson said she would check with the content advisor. The other recommendation was for the Department to fill all the strategic critical vacant positions, and reduce the number of personnel that were in acting positions.
On the declining revenue, she said that there were people who did not pay the leases for farms, resulting in the revenue to decline. She also said there was an issue of the debt book that would also need to go into the recommendations.
Mr Filtane said there was a grammar issue in the second sentence of 7.3.7. It should read ‘submit a status report.’ Also delete the semi colon and insert a comma after the word ‘including.’
Mr Madella said on post-settlement support, there was a blended finance model which involved other stakeholders such as the Land Bank and other Departments. Did it mean the Department was no longer responsible for post-settlement support, as part was in grant form and the other in loans, and it does have implications for the poorest of the poor?
The Chairperson said that the Acting Director General of the Department would present a report on this.
Ms Mbabama said the Department should call the Land Bank soon to table a presentation on the blended finance model.
Ms Magadla read clause 7.4 as follows: “With regard to the office of the Office of the Valuer-General (OVG), the Minister should ensure that management implement proper processes, policies and procedures and appoint huge staff to enable the OVG to function and comply with the relevant laws and regulations.
7.4.2 “Facilitate discussion between the CRLR and the OVG to avoid counter accusations of OVG stalling the process of restitution, further clarifying all the policy requirements as well as timeframes. This would alleviate the perceived tensions arising for reasons cited for the failure of the CRLR.”
The Chairperson said that 7.4.2 needed to be written in a better language and grammatical form, with the correct wording emphasising the ‘no delay on land restitution.’
Ms Mbabama said that the word ‘failure’ in 7.4.2 was a bit harsh, implying that the CRLR had failed.
Mr Madella said that the language would be addressed. He then asked about land redistribution through expropriation without compensation and the role of the Valuer General. He said the CRLR spoke to restitution and sought clarity.
Ms Mbabama said there needed to be an agreement between the CRLR and the OVG in terms of turnaround time taken between the two entities.
The Chairperson said there was an issue of a panel of independent review which needed to be fast tracked and included in the recommendations.
Ms Magadla said there was an issue with the OVG on the submission of the annual report. Had they submitted it?
The Chairperson said in 2017/18, the OVG had been audited for the first time, and the formal annual performance plan would be presented in the 2018/19 financial year. One of the recommendations was to provide a budget for the OVG to be capacitated and getting an organogram.
Mr Filtane said that the Minister needed to clarify the position regarding the independence of the OVG, as there was a clear division on the understanding between the CRLR and the OVG. In spite of the fact that they were independent, the current Minister and the Deputy did not seem clear on the issues.
The Chairperson said that the Department would be invited to clarify the positions of the OVG and the CRLR.
Ms Mbabama said the OVG and the CRLR should have a service level agreement (SLA) in place.
Mr Nchabeleng said that there were questions related to the autonomy and independence of the OVG within the Department, and requested the Department to also clarify the position of the Commission.
The Chairperson said that the AG had reflected on the autonomy of the entities, but would need to report to the Department. She would note that the Department would be called.
Ms N Mashabela (EFF) read the clause on the Ingonyama Trust Board (ITB) as follows: “With regard to the ITB the Minister should:
7.5.1 “Consider the facilitation of engagement between the ITB, National Treasury and the Auditor General, together with the Accountant General by the end of 2018/19 in order to address the perennial non-compliance of the ITB with the GRAP standards in relation to the evaluation of land and royalty revenue entitlement.
7.5.2 “Consider the request for mediation between the AG and the ITB to resolve the current impasse, as suggested by the Ingonyama Trust Board.
7.5.3 “Conduct together with the ITB, the likely impact of the programme of the ITB and act with a focus on land tenure and administration of a leasehold tenure system and the protection of customary land rights of traditional communities.
7.5.4 “Having concurred with the recommendations of the AG, the Committee recommends that the Minister should develop action plans that outline how the DRDLR and its entities plan to resolve the queries from the AG. Further, the Minister should submit the report to the Committee for future oversight and accountability.
The Chairperson asked for recommendations on the ITB.
Mr Filtane said he was happy with how the points had been articulated.
The Chairperson then asked, according to the AG’s findings, if the ITB had moved from an unqualified to an adverse finding, saying they needed to improve their financial management and controls. She said the issue of royalties and the evaluation of land needed to be attended to by the ITB.
Ms Magadla said the role of the AG was covered in the recommendations.
Ms Mbabama asked about the filling of vacancies.
The Chairperson responded that it had been covered in the recommendations section that would apply to all the entities, including the ITB.
She requested the adoption of the report with the amendments, and then requested the Committee Secretary to send all the relevant information on the planned Imbizos that were to be hosted.
Adoption of minutes
The Committee considered, reviewed and adopted the minutes of the meetings held on 5 September, 9 October and 10 October.
The meeting was adjourned.
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Ngwenya-Mabila, Ms PC
Filtane, Mr ML
Madella, Mr AF
Magadla, Ms NW
Mashabela, Ms N
Mbabama, Ms TM
Nchabeleng, Mr ME
Nkoana-Mashabane, Ms ME
Robertson, Mr K
Skwatsha, Mr M
Walters, Mr TC
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