A summary of this committee meeting is not yet available.
AGRICULTURE & LAND AFFAIRS PORTFOLIO COMMITTEE
9 November 1999
LAND BANK: BRIEFING
Documents handed out
Land Bank presentation to Parliament Standing Committee
Land Bank Black Economic Empowerment Initiative (November 1998)
Land Bank Annual Report 1998
Delegates from the Land Bank indicated that they were in the process of transforming the Bank to enhance accessibility to farmers at all levels (from commercial farmers to farmers only starting out). It was indicated that, while there was still a great deal of work to be covered, they had thus far, been very successful in their efforts.
Related to this process of transformation, was the matter of the Land Bank Act. It was considered both outdated and non-aligned with other Acts and, it was felt that it should not only be amended, but rewritten completely.
When asked about the allegations which had been laid against the Managing Director (MD), Ms Dolny, it was noted that she was currently on a leave of absence. They added that an internal disciplinary process was underway but that this did not affect the process of executive management in manner. All indications were that the Bank was in a strong financial position.
Delegates from the Land Bank were there to make the presentation to the committee. They included, Ms Totsie BJ Memela (executive director and acting MD of the Bank), Mr Adrian Toms (executive director and head of finance), Mr Masiphula Mbongwa (non executive director who is also a member of the Department of Agriculture), and Ms Sharon February (non executive director).
A presentation was made regarding the current financial situation of the Bank and an exposition was given regarding the various loan packages which the Bank has to offer. It was indicated that they strove to provide service to all kinds of people, from the poor farmer who is only starting out all the way through to the successful commercial farmer.
Allegations against the Land Bank Board and Ms Dolny
At the end of this presentation Mr Mbongwa added a few comments regarding the allegations against the Board and the MD, Helena Dolny. On 6 September a report was received from Professor Katz regarding certain allegations. The Board sent this report, together with a report of its own, to the Minister. The Minister then sent this report to the President.
According to Mr Mbongwa, an investigation is currently being carried on regarding the allegations against the MD and the Board, to establish the truth. The Board's program of action regarding these allegations consists of a disciplinary process against Ms Dolny. It was noted that further elements which the Board needs to address (as mentioned in the Katz report) are, corporate governance, operations, transformation, and certain pockets of racism which still exist.
These matters were described as being internal to the Board and that it was ensured, throughout, that the process of executive management was not disturbed in any way. Financially, the Bank was considered to be in a good position and it was desired that this position be maintained. The primary point that the Board wanted to make was that all the fundamentals in the institution were firm, in place, and could not be disturbed. Mr Mbongwa ended the presentation with a resounding, 'All is okay.'
Questions and comments by the Members
Mr Botha (DP) commented that the presentation painted a good picture of the Bank, but that it, considering the allegations against the MD, seemed to contradict the reality of the situation. He asked for specifics regarding the investigation.
The reply was that there was in fact no contradiction. It was admitted during the presentation that there were certain areas that required attention and that more work remained to be done. It could however be said that the work which had been covered was 'good work'.
Regarding the investigation, the Katz report made certain recommendations. One of these relates to the governance issues between the Ministry, the Board, and the executive. This was noted as being part of the Board's programme of action. It was added that the operation of the institution was sound.
Mr Schoeman (NNP) asked for an indication of bad debts and the present position of Ms Dolny. He wondered if she was under suspension with a full salary and if she was, whether it was costing the Bank money.
It was answered that the Board granted Ms Dolny a leave of absence so that she could prepare for her court case which opens on Thursday, 11 November 1999.
Regarding the bad debts, it was noted that the figures reflected in the presentation had taken these into account. The percentages which were quoted by the Bank were determined by external auditors, having considered risk management factors.
A member asked how effective service delivery was in rural areas?
Ms Memela replied that in certain areas the delivery was slow but that they were putting structures into place to improve this. Whenever such areas were identified the issue was addressed by putting intermediaries in place. It was noted that the change was dramatic.
The Chairperson followed up the question by asking whether there was some kind of complaint system to which people had recourse if they had not received satisfaction.
It was stated that if a complaint was made to a branch then that branch would have to report it in terms of their operational structures. It was added that if the member wished, details would be given to him after the meeting.
Mr Botha asked for details regarding the actions taken by the Board to address the allegations against the MD and also for a list of the people serving on the disciplinary board.
The Chairperson added that if there was a report on this matter then it would have to be presented to the committee.
Mr Mbongwa replied that there was a report which the Bank was circulating on request. He noted that the charge of racism which had been laid against the MD could not be proved and existed only at branch level. This was something that would have to be dealt with.
The only information which was given in respect of the list, was that the person presiding over the disciplinary proceedings was Advocate Khomotso Moroka.
Another member noted that he had heard that new branches were opening in the Western Cape and wondered whether the one in Cape Town would be closing. He further indicated that the interest on their step-up loans was 7% more than other banks and asked for comment on this.
The reply was that the Cape Town branch was in the city centre. A problem experienced in this regard was that there was no easy access for people who were involved in agriculture. This office would now be used as a back office (which was practical considering that the Deeds Office was in town) and six smaller branches would be opened in other areas of the Western Cape. It was added that the Northern Province was also being addressed.
Regarding the interest rate, it was noted that the reason for this was that money was lent on a wholesale and not a retail basis. The purpose of the extra interest on the step-up loans was to 'break even' as there were administrative costs which had to be covered as well as a premium for risk.
Mr Masithela (ANC) suggested that they loan the money retail and not wholesale. He noted that he did not expect an answer now but that it was something which the Bank should look into.
In response to a question by a committee member it was noted that the Land Bank Act was both outdated and non-aligned with other Acts. Having appointed a team to examine the Act, it was considered that making amendments would not be enough, and that, in fact, the whole Act may have to be rewritten.
The Chairperson thanked the delegation for their presence and the meeting was adjourned.