Communal Property Associations compliance and intervention report

NCOP Land Reform, Environment, Mineral Resources and Energy

10 September 2019
Chairperson: Ms T Modise (ANC)
Share this page:

Meeting Summary

The Department of Agriculture, Rural Development and Land Reform (DARDLR) has the role of registering a Communal Property Association (CPA). The community must apply to the Director General who sends an official to sit in meetings when its CPA constitution is drafted and adopted. The CPA will qualify for registration if it meets certain criteria. DARDLR also performs oversight. CPAs are required to report to the Director-General annually and provide its annual financial statements, land transactions, list of committee members, minutes of meetings and membership list. Thirdly, the Department gets involved in dispute resolution. If a dispute arises the DG may ask a member of the CPA to undertake an enquiry into the affairs of the CPA and appoint a conciliator to assist in dispute resolution, even at a community level. Lastly, the Department reports to Parliament on the CPAs.

There are 1 599 registered CPA. The Eastern Cape has 215, Free State has 54, North West has 188, Gauteng has 35, KZN has 380, Northern Cape has 93, Western Cape has 32, Limpopo has 202 and Mpumalanga has 400. For the current financial year on national level, 211 CPAs were compliant.

CPAs face challenges at both establishment and post establishment phases. The CPA management model is unfamiliar or somewhat foreign form of land management in traditional communities. A substantial part of CPA membership is either illiterate or has no more than primary level of education. Constitutions of CPAs are sometimes poorly drafted, and generally written in a language that is not commonly used by CPA members. Insufficient time is spent on the design and getting members to appreciate the nature of the entity. Land restitution claims were consolidated resulting in more than one dispossessed community or person being restored land under a single CPA. Some CPAs receive highly sophisticated or diverse enterprises that require appropriate business leadership that is in short supply within CPA membership. The CPA as an institution is sometimes not the appropriate entity to run a business. There is considerable political and business interference in well-resourced CPAs, which destabilise such CPAs.

DARDLR has created various interventions such as reviewing its development support programme to land reform beneficiaries. An integrated financing / funding model for agriculture support which incorporates a producer support model is currently being finalized through the Inter-Ministerial Committee on Land Reform. Engagements are also being held with sector departments mobilizing for support to those CPAs that own land where the land use is not agriculture, such as forestry. Whist the funding strategy is being finalised support is provided to CPAs through developmental grants.

On financial sustainability of cooperatives, DARDLR is encouraging agricultural cooperatives to participate in the establishment of a cooperatives financial institution with the aim of establishing a rural development bank. A cooperative financial institution is a co-operative that takes deposits and issue out loans to its members and it is owned and controlled by its members with a common bond. A cooperative financial institution reduces dependency on state funding.

Members asked if there are figures that show how many CPAs are functional and how many are dysfunctional. Why is the establishment of an additional institution encouraged? Members of all parties questioned if CPAs are the correct vehicle to tackle land reform. What options do individuals have to take ownership of a part on the land that is owned communally? This group ownership system is problematic. Members asked why DARDLR has not been able to improve access to markets for cooperatives and if DARDLR has considered an alternative model to get legal secure tenure for individuals and families.  Are the human capital and financial resources required to administer CPAs available in DARDLR?  How do you deal with change of leadership in CPAs? How do you handle those traditional leaders who dispute CPAs? Do they get briefed when new CPAs are established because lack of knowledge causes conflict?
 

Meeting report

Adv Vela Mngwengwe, Acting DDG: Land Tenure and Administration, said that DARDLR has numerous roles when it comes to Communal Property Associations:
• The first is to register CPAs. A community that desires to register a provisional or permanent association must apply to the Director General who appoints an official to witness the drafting and adoption of the CPA's constitution. The CPA will qualify for registration if it meets certain criteria. The CPA has as its main object the holding of property in common. The constitution adopted by the community must comply with the principles set out in section 9 of the CPA Act. Upon compliance with the requirements, a CPA may be registered and from the date of registration it is required to reflect itself as such and its registration number on all correspondence and contracts.

• Secondly, DARDLR performs monitoring and oversight. The oversight functions are set out in section 11 of the Act. The Director-General is required to monitor compliance with the constitution of a CPA, the Act, the Regulations through the inspection of documents, affairs, and information submitted in terms of the Act. CPAs are required to report to the Director-General annually and provide annual financial statements, land transactions, list of committee members, minutes of meetings and membership list. The DG can remove anyone for copying documentation and can subpoena anyone who may have information to appear before the DG. If one fail without lawful excuse, that is a punishable offence.

• Thirdly, DARDLR gets involved in dispute resolution. If a dispute arises the DG may ask a member of the CPA to undertake an enquiry into the affairs of the CPA and appoint a conciliator to assist in dispute resolution, even at a community level.

• DARDLR reports to Parliament. The DG shall each calendar year submit to the Minister a report on associations and provisional associations and the extent to which the objects of the CPA Act are being achieved. The Minister is required to table the report in Parliament.

Statistical Information
There are 1599 registered CPAs:  the Eastern Cape has 215, Free State has 54, North West has 188, Gauteng has 35, KZNA has 380, Northern Cape has 93, Western Cape has 32, Limpopo has 202 and Mpumalanga has 400. For the current financial year on national level, 211 CPAs were compliant.

Challenges
During the CPA establishment phase, numerous challenges are encountered. The CPA management model is unfamiliar or somewhat foreign form of land management in traditional communities. A substantial part of CPA membership is either illiterate or has no more than primary level of education. Constitutions of CPAs are sometimes poorly drafted, and generally written in a language that is not commonly used by CPA members. Insufficient time is spent on the design and getting members to appreciate full the nature of the entity they are about to get registered. Land restitution claims were consolidated resulting in more than one dispossessed community or person being restored land under a single CPA.

During the post establishment phase, some CPAs receive highly sophisticated and diverse enterprises that require appropriate business leadership that is in short supply within CPA membership. The creation of separate CPA business ventures and joint ventures tend to create conflict because of general lack of understanding of institutional relationships that should exist, inability to manage such relationships and lack of clarity about the sharing of benefits. The CPA as an institution is sometimes not the appropriate entity to run businesses that get conducted on its property and so they get stretched beyond their institutional capacity to manage.  There is considerable political and business interference in well-resourced CPAs, which destabilises such CPAs through the sponsoring and creation of concerned groups.

There are also regulatory challenges such as administration of the CPA Act not being funded from the commencement of the Act up to April 2015 when some skeleton capacity was approved. This has resulted in the ordinary support functions being performed through the Land Rights Management Facility (LRMF).

DARDLR has various interventions such as reviewing its development support programme to land reform beneficiaries. An integrated financing / funding model for agriculture support which incorporates a producer support model is currently being finalized through the Inter-Ministerial Committee on Land Reform. Engagements are being held with sector departments mobilizing for support to those CPAs that own land where the land use is not agriculture such as forestry. Whist the funding strategy is being finalised, support is provided to CPAs through developmental grants via Section 42C of the Restitution of Land Rights Act, Section 10 of the Land Reform: Provision of Land and Assistance Act, Section 4 of the Extension of Security of Tenure Act, and Section 26 of the Land Reform (Labour Tenants) Act.

On financial sustainability of cooperatives, DARDLR is encouraging agricultural cooperatives to participate in the establishment of a cooperatives financial institution with the aim of establishing a rural development bank. A cooperative financial institution is a co-operative that takes deposits and issue out loans to its members and it is owned and controlled by its members with a common bond. A cooperative financial institution reduces dependency on state funding for enterprise development by issuing out loans in a reasonable manner compared to commercial banks. The cooperative financial institution model is building on the tradition of self-financing, self-helping and self-sustaining cooperatives and communities.

CPAs and cooperatives require support from the whole of government, not just DARDLR. Each of the three spheres has a role to play in ensuring that CPAs are functional.

Discussion
Mr C Smit (DA) stated that page 20 lays out the CPAs per province. One of the reasons we are here is because there is a problem with CPAs as well as cooperatives. Are there any figures that show how many are functional and how many are dysfunctional?

Page 37 speaks to encouraging agricultural cooperatives to establish a cooperatives financial institution with the aim of establishing a rural development bank. Is there a difference between the rural development bank and the current Land Bank? Why is the establishment of an additional institution encouraged? Are CPAs the correct vehicle for land reform?

What options do individuals have to take ownership of a part on the land that is owned communally? This group ownership system is problematic. On funding of these interventions and spending on CPAs, which policies and regulatory frameworks are used?

Mr A Cloete (FF+) asked why DARDLR has not been able to improve access to markets for cooperatives. On CPAs, have you considered an alternative model to get legal secure tenure for individuals and for families? For expropriation of land without compensation to happen, Section 25 of the Constitution has to be struck out. Have CPAs been informed of what will happen if it is struck out because no one will have property rights.

Ms W Ngwenya (ANC) asked if DARDLR has plans to address its challenges and if not, why that is. Can you expand on the rationale for the Land Bank because it seems like a vehicle to simply give out loans?

Mr A Nyambi (ANC) stated that slide 20 is the only slide that appreciates the distinctive provincial nature of the Committee. Our interests are provincial interests and only slide 20 captures that. We need more details because lack of information will make it hard for us to represent our provinces. Is the human capital and financial resources required to administer CPAs available in DARDLR?  How do you deal with change of leadership and are CPAs the correct avenue to tackle land reform?

If there is a breakdown of relationships in CPAs, they cannot work but they are still entitled to the very same land; what happens then? Documents such as the CPA's constitution should be translated to accommodate the language that dominates each province. For example, documents in the Eastern Cape should be in IsiXhosa. There is a need to implement best practice.

Ms L Bebee (ANC) said that KZN has many CPAs and some are disorganised. What is the role of the province since this is happening within provincial jurisdiction?

Ms N Ndongeni (ANC) spoke about these associations not submitting the required documents. What has DARDLR done to help them? What is the developmental strategy moving forward?

Mr T Matibe (ANC) stated that 900 CPAs out of 1599 are being trained, how did DARDLR prioritise these? On traditional leaders, how do you handle those who dispute CPAs? Do they get briefed when new CPAs are established because lack of knowledge causes conflict?

The Chairperson said that slide 20 shows that the North West has 188 CPAs but only ten comply, what is being done about that? DARDLR must intervene between traditional leaders and CPAs.

Mr Smit asked how many court cases involving CPAs are there. He requested a list of cooperatives in writing.

Response
Mr Mgwengwe replied about access to markets saying the challenge is quality standards because cooperatives cannot meet these.  This happens for both national and international standards. The problem is that the government does not provide adequate support. The solution is to strengthen support from government in each province. Another challenge is that cooperatives struggle to meet volume requirements as required by the market. They produce without the market in mind.

Mr Mngwengwe replied that when land reform started the only form of ownership was commercial or registered trusts. This needed to be democratised hence the CPA Act. When land reform started, it was funded through limited grants of about R16 000 and as people had to provide 20% of the land cost, they needed to club together to buy land and thus a CPA was needed. That is the history of CPAs. When land is bought under any land programme, it is done to discharge a constitutional obligation to settle a land claim. What the Department had not envisaged is that by virtue of being a member of a CPA, it has the capacity to dismiss you as a member and your security of tenure then becomes compromised. Looking at the nature of CPAs today, an alternative is required and there is a case for looking at different types of ownership such as a household model but we have not done much work on that but we need alternative which is not necessarily about the CPA.

On spending, he was unclear which spending was being referred to as there are two types of spending. One is as the result of a land reform / restitution project for the development of the land acquired by the CPA. The second form of funding is for the support provided to make the CPA functionally compliant.

He replied that CPA court cases are not tracked for the purpose of creating a database. There are cases in litigation which DARDLR is not able to track because it was not directly involved. It is information that the Department can collect for the Committee.

Mr Mngwengwe colleague continued the response. On functional and dysfunctional CPAs, there are certain documents that a CPA is expected to submit to the Department but does not. It will then be called dysfunctional even if agriculturally or operationally it is functioning well.

When an individual wants to continue with a CPA even when the rest of the group is slacking, the CPA is required to be democratic and pass the rights to anyone who wants to operate individually. The decision is taken by the CPA. The draft Amendment Bill talks to a model similar to a sectional title model. There is a possibility that a family will be able to function in its own right under the CPA.

On the question of capacity building, institutions of higher learning are being asked to assist with capacity building and other stakeholders will be harnessed.  On the need to look at good practice, that proposal is welcomed. There are instances were CPAs co-exist with traditional leaders, the strategy they use is looked at and implemented to CPAs that are struggling.  There are also cases were traditional leaders are members of the CPA executive but that is not an issue. In 2017 the National House of Traditional Leaders took a resolution that CPAs should not exist in areas under the jurisdiction of traditional leaders. A summit with traditional leaders is planned in October to update them about developments in amending the law to outlaw CPAs within their jurisdiction and this will have constitutional implications.

Some CPAs could survive through training but that should not only be provided to the executives, it must be throughout the whole entity.  We have engaged with universities in areas where there are CPAs to develop a curriculum written in the languages used in the area that the Department can fund.

We do not have the capacity to monitor CPAs. At the moment there is no capacity to monitor CPAs but it is still being built. The Amendment Bill has set this up and it is decentralised to the Office of Deputy Registrars of CPAs in provinces but it has not been written into law yet. The Bill went through the National Assembly in the Fifth Parliament and he is not sure what has happened with it now.

Mr Smit stated that when DARDLR replied on whether CPAs are working or not, it acknowledged that the current model is not working but not much has been mentioned that it has looked at alternatives and that family-based or household ownership can be explored. Are you planning to explore this? It is important as the current challenges are contributing to frustration of the people. It is important that you state that the Department is giving attention to this. One would love to have a commitment from the Executive on this but unfortunately they are not present at the meeting. Do people who want to opt out of CPAs have that option without losing land? It seems quite rigid at the moment. If there is no option, how will the Department ensure that that option is opened up? What of people who want to opt in? Tribal leaders have roles and responsibilities according to the Constitution. What is their role and responsibilities in line with land and land ownership?

Mr Nyambi noted that there is to be a summit to deal with the challenges and asked that MPs be invited. He said that lack of capacity is probably the reason why there are these very many challenges. It would be advisable to have the Executive present at the meeting to deal with the ideological questions.

Mr Smit asked which policy regulates spending for CPAs and cooperatives. You must have a framework to know how and on what you spend the money.

Mr Mgwengwe replied that there is agreement with the Minister that we have to look at those alternatives. However, we need to look at the immediate future and part of what can be done is recommendations for conflict management, for example, in Mpumalanga and Eastern Cape where people cannot work together.  The President appointed the Presidential Advisory Panel on Land Reform and Agriculture in July and the decision was that the parties who were affected by the Panel's recommendations should be given time to consider which ones are actually actionable. A policy on tenure reform is being worked on and alternatives will be reflected on.

On opting in and out of a CPA, Mr Mgwengwe replied that CPAs provide for members to opt out when they want to leave the area but not still stay. Opting in is applicable in two instances: when verification of members has not yet been completed when the CPA is formed and when there is general growth, for example, when people become of age.

On roles and responsibilities of traditional leaders, that is within the political sphere. Traditional leaders want to amend Chapter 7 and 12 of the Constitution on the role of traditional leaders and local government because they feel that they were cheated. They see the need for an expansion of their role and demand that the Land Use Management Act be repealed or amended so it does not apply to their land. It is accepted that they have a role in land administration but that role cannot be absolute. This is policy we are developing through discussion.

On spending on land development, we cannot answer about the land development policy as it is another branch that deals with it but that fund allows for the possibility of a CPA to utilise that funding for a land development venture.

The Chairperson reminded DARDLR to send a list of CPAs and cooperatives and state which are functional.

Meeting adjourned.



 

Share this page: