The Select Committee convened on a virtual platform for an update by Alexkor on the stabilisation of the Community Property Association (CPA) leadership and the completion of the implementation of outstanding matters arising from the Deed of Settlement (DoS). Teams from the Department of Public Enterprises (DPE) and the Department of Agriculture, Land Reform and Rural Development (DALRRD) gave presentations. The Ministers were absent.
Members raised concern that the Minister and Deputy Minister were not present in the meeting considering the issue of absence of political leadership had been consistently raised in previous meetings. The Chairperson said that these concerns would be addressed to the Ministers in writing.
The DPE highlighted challenges facing the Richtersveld community in terms of the DoS. Out of all the companies and trusts that were to be established by the DoS, only the Richtersveld Investment Trust was fully operational. The rest of the companies did not have active directors elected by the community. Importantly, the DPE noted that R50 million in funds had “vanished” from Richtersveld Agricultural Holding which had since been liquidated and that these funds had yet to be recovered. In February 2020 the Richtersveld Sida! Hub Communal Property Association (RCPA) was placed under administration through a court order.
The DALRRD provided an overview of their objectives in relation to the implementation of the court order and highlighted the issue of CPA’s membership register, which needed to be updated in compliance with the CPA constitution and the CPA Act. The Department noted practical problems with the updating of the list but assured that it was an ongoing process that the appointed administrator was assisting the Department with. It reassured that it was in the process of bringing financials up to date. Elections of the CPA committee took place on 6 November 2021 but only three entities managed to elect a full body of committee members.
Members expressed concern over the board of Alexkor RMC PSJV not being properly constituted and the CPA not functioning in the way it was intended to. The length of time it had taken to address the various issues plaguing the RCPA also raised concern and members’ asked for timeframes in which these issues would be resolved. A Committee member was troubled by the fact that the DPE did not know what happened to some funds, particularly those relating to the liquidated company and wanted clarity on what efforts the Department was making in this regard. A recurring concern related to the establishment of structures in the CPA which were either non-existent or falling apart as well as the need for reconciliation amongst members within the community who were regularly in dispute with each other.
The DPE said that the PFMA allowed for the CEO to act as the board of the PSJV until such time as a board was appointed. The CEO was also occupying the role of accounting authority of Alexkor. The DALRRD said that since the CPA is a juristic person, the Department was limited in its ability to intervene in its daily running hence the delay in addressing the issues in the community. However, it said that the Deputy Minister had gone to the community at various times to try and resolve issues, particularly disputes between members of the community, with little success. For this reason, the matter has been referred to court and the CPA has been placed under court-ordered administration. Even so, the Department was still dealing with practical challenges and disputes around the membership lists.
Further outstanding matters, including those relating to the finances would be responded to in writing.
The Chairperson welcomed Members of the Committee, Alexkor and the teams from the Department of Public Enterprises and the Department of Agriculture, Land Reform and Rural Development.
Before the first presentation by the DPE, Mr M Nhanha (DA, Eastern Cape) said his conscience would not allow him to keep quiet. He said, “you teach a person how to treat you, and when that person treats you exactly in the manner in which you have taught him or her, you start complaining”. He said that the Committee has been complaining about the Minister and Deputy Minister’s absence. He understood that Wednesdays were Cabinet meetings and the Ministers had to be there. The Committee had proposed that these meetings be changed to later times so that the Minister or Deputy Minister could be present. He expressed his disapproval that the Ministers were not present as everyone else in the meeting had made an effort to be present on time. He found it astonishing that the Chairperson did not have comment in this regard.
The Chairperson noted Mr Nhanha’s concern and stated that he needed the Deputy Minister to come into the meeting first so that the comment could be directed at him. In the last meeting, he said that the Committee was going to request that their meetings be from 15:00-18:00 to accommodate the Ministers. This was changed due to afternoon plenaries. However, the Committee’s request was made, and he hoped that they would be accommodated even where plenaries are planned in order to avoid habitually holding meetings without ministers. He said that the issue would be raised once the Deputy Minister arrived in the meeting.
Ms M Mokause (EFF, Northern Cape) said she also thought the Chairperson would have a reprimanding comment in relation to the matter of absence of the Ministers because the Committee could not continue to be undermined. The matter had been raised continuously and it looked like the DPE was the only Department that did that to the Committee. She requested that these reprimanding comments be made to the Deputy Minister because it was the Committee’s constitutional obligation to perform oversight over the Department. If there was no political will, then the Committee would just walk in circles and whatever issues they were raising would never be resolved. She said that the Ministers should not be treated with “soft gloves”, and they should apologise to the Committee or tell the Committee the real reason why they are being undermined.
The Chairperson thanked the Members for their comments and reiterated that the Committee would wait for the Deputy Minister to join the meeting to express this issue.
Presentation by the DPE
Ms Morongwa Mothengu, Senior Mining Specialist in the DPE, presented on the status of implementation of the Deed of Settlement (DoS) obligations.
• In 1998, the community of Richtersveld Community filed a claim against the Government for dispossession of land and following the protracted court proceedings, the Constitutional Court awarded the land and mineral rights to the community.
• The DPE represented government in the settlement negotiations. The DoS was signed on 22 April 2007, between the Richtersveld Sida! Hub Communal Property Association (RCPA), the Government and Alexkor and on 9 October 2007, made an order of court.
• The DoS signed by the parties in 2007, directed that at least two Trusts and eight companies must be established to manage and operate the assets of the RCPA.
• In terms of the original statutes more than 50 directors are required to oversee the interest of the community.
RCPA structures (slide 4-5)
• Slide 4 of the presentation illustrates the Community Trust Structure and the Investment Trust Structure
• There were challenges in relation to some of the companies, some which were left unattended and therefore not operational for some time.
• The only company that was and still is operational is the Richtersveld Investment Trust.
• The rest of the companies are not fully operational; some do not have active directors. i.e. elected by the community.
• Richtersveld Mining Company has three court-appointed directors to look after the mining interests of the community. They are not elected by the community.
• The Richtersveld Agricultural Holding has been liquidated; R50 million in funds had “vanished”. The DPE has been working on resuscitating these funds.
Status update on provisions of settlement (slide 6)
Eight obligations including:
• Establishment of ten community entities—February 2020 RCPA placed under Administration.
• Transfer and restoration of portions of land by the State and Alexkor to Richtersveld Property Holdings Company and National & Provincial Governments.
• The transfer of Alexkor’s land mining rights to Richtersveld Mining Company. Setting up of Alexkor RMC PSJV (Pooling and Sharing Joint Venture)—PSJV established in April 2011 and R200 million disbursed for establishment of PSJV.
• Transfer of Alexkor’s Farming and Mariculture Assets to Richtersveld Mining Company. This was done and the agricultural company was liquidated in 2012. There was also a payment of R50 million which had disappeared, and no one accounted as to how the funds were utilised. Forensic investigation ongoing.
Funds Transferred by state (slide 7)
• A total of R 1 billion transferred by the State between the 2004-2012 financial years.
Status update on the transfer of properties (slides 8-9)
• Richtersveld Property Holdings Company transfer of approximately 500 residential and business premises delayed pending the outcome of administrative processes. However, twelve farms have been transferred.
• Richtersveld Local Municipality— Management of cemetery, refuse collection, public places commenced on 1 July 2020.
• Northern Cape Municipal Provincial Departments—The State Attorney and Office of DG: Northern Cape are attending to the matter.
Presentation by the DALRRD
Mr Kgotso Moeketsi, Chief Director: Provincial Office of the Northern Cape, DALRRD, briefed the Committee on the RCPA in the Northern Cape. He introduced his three colleagues:
• Ms Batlang Lekalake, Director: CPAs
• Mr Itumeleng Mashune, Deputy Director: CPAs
• Mr Donovan Majiedt from Honey Attorneys, appointed by Director-General (DG) to be the administrator of the Richtersveld CPA
• RCPA was placed under Judicial Administration through a court order granted by the Northern Cape High Court on 28 February 2020.
• Prior to court order, there were interventions made by government. Between January 2018 and February 2019, Deputy Minister Mcebisi Skwatsha went to the community to try to intervene with no success. Department did everything they could to ensure stability within CPA but with no success.
• Honey Attorneys were appointed as judicial administrator, represented by Mr Don Maiiedt, for a period of three years, in line with Section 13(2) of the CPA Act.
• The administrator has met with representatives from all the areas of Richtersveld and developed a work plan which has been approved (as part of the court order).
Highlighted objectives of work plan and progress of implementation of the court order (slides 4-10)
Review of the Deed of Settlement:
• An attorney has been appointed and is currently looking into the matter. The attorney will report to the administrator very soon.
Ensure that the membership register of the CPA is correct and updated in compliance with the CPA constitution, the CPA Act and the order of the Land Claims Court and that a membership list is updated and adopted by members:
• This is an ongoing process, but the current membership list has been accepted although there are certain practical problems with regards to it. The administrator with the help of the Department is attending to it.
Ensure sound financial management:
• The necessary authority from the relevant officials has only been received recently and immediately forwarded to the CPA’s bankers with the specific request to indicate the way forward. This matter will therefore soon be finalised.
• Accountants appointed who are currently in the process of bringing the financials up to date.
Ensure payments of dividends from entities to members:
• This will be done once the new Trustees to the Investment Trust are appointed.
• Elections will take place during November 2021 and new board of Trustees will immediately attend to this issue.
• Conduct Elections of CPA Committee in terms of clause 13 of the constitution
• Service provider (IEFSA) appointed to attend to the elections
• Process started on 30 September 2021.
• Elections took place on 6 November 2021. Only three entities managed to have full committee members.
• Other six entities elections need by-elections.
COVID-19 Regulations impeded the possible meetings that had to take place in order to resolve on the following:
• Membership list (most of the activities of the CPA rely on the membership being agreed upon by the members)
• Adoption and Submission of the Solar Panel development application
• Boegoebaai Development
• Beauvallon Farm
• Elections in relation to the different structures (trust and companies).
• Old committee members not willing to cooperate with the administrator.
• Task team (illegal) representing the community—meetings being called outside CPA structures and demanding information and shared thus creating more perceptions between government structures and the community of Richtersveld.
Ms C Labuschagne (DA, Western Cape) said she had previously referred to the unanimous resolution and gave a written question on it but never got a clear answer. The Select Committee had not seen the document either. What she got from submissions to the Zondo Commission was that the unanimous resolution provided a governance framework for the PSJV board and how it should be constituted. According to that, what would be the impact of this board not functioning in the way it should be on the CPA, which needed to be established? For years the CPA could not be established because of all the things that have been mentioned and a lot more. This Committee and the previous Parliament said that they would like to have a full report on the functioning of that board and also why the CPA could not function. The Department had taken a step in the right direction and went to court on the issue of the CPA. She asked what the impact of the board not functioning correctly was. The last time she checked, according to the unanimous resolution, the Alexkor part should have three members of the board and the PSJV should have three members on the board. She wanted to know what the exact composition of that board was at that moment. She also wanted to know what the impact of the functioning of that board on the CPA would be specifically, because the board deals with the business side of this agreement and the CPA deals with the community side. Because there is beneficiation involved, in her mind, the effective functioning of the board would have an impact on the CPA. Therefore, she wanted clarification on this issue.
Ms L Bebee (ANC, KZN) asked whether diamond production capacity improved in Alexkor or had it worsened since the last time it was reported to the Committee. If it had worsened, where did it take the future of Alexkor going forward? Regarding the R45 million that had been put in a trust fund, had the money accumulated in interest? If yes, what were the estimated amounts? If no, what were the reasons for the lack of interest accumulation?
Ms Mokause said it took the Department a very long time to act on everything that had happened in Richtersveld. She asked for clarification on why it took so long for the matter to be addressed. She noted the existence of a national office in Kimberly to monitor situations and expressed her dismay at structures falling apart and money being spend without government’s oversight. She said there needed to be accountability and that the Committee could not simply be told that the Department did not know what happened. Regarding the liquidated company and the money spent in that regard, could the Committee be told what were the efforts made from the Department to find out what led to this liquidation and what led to the whole collapse of the structures there? What had it done so far to remedy the situation? She said that the Committee had to be listening to progress, not complaints.
Ms W Ngwenya (ANC, Gauteng) thanked the presenters. She raised the concern about the long period it had taken to address the issue of membership and the establishment of the structure of the community which had caused a delay in people receiving dividends. She said this delay had also caused in-fighting in the community. The CPA Annual General Meeting (AGM) was held on 23-24 March 2021 and it was decided that the membership list must be finalised and adopted by end of May 2021. She asked whether there were still outstanding challenges on the membership list. If yes, what were timeframes for the Department and administrators to resolve these practical outstanding challenges? She asked whether there was any conflict between members of the RCPA and different Departments which had affected them from working together. If yes, what was the cause of the conflict? What were the reasons for old community members not willing to cooperate with the administrators? Had Alexkor improved security in the mine by installing advanced surveillance and cameras to control the theft of diamonds? She asked whether the office of Alexkor is located in Pretoria. If yes, what was the latest update on relocating offices to Alexander Bay?
Mr A Arnolds (EFF, Western Cape) noted the progress made in terms of the implementation of the court order in respect of the CPA administrative process. He said he hoped that the three-year administration period would resolve the ongoing challenges because it is a sad state of affairs that the Richtersveld community at large cannot enjoy the benefits of their own community. He asked whether the Committee could get feedback regarding the investigation of unauthorised use of assets. What accountability was there? He said that the Committee was aware that since 2018, there were many attempts to organise the election of the new CPA. So this was a long-standing matter. He noted the newly scheduled date of 30 November and asked why it had taken so long. He emphasised the importance of the election process for the CPA structures and asked why they put the date at the end of the month. Was the administrator getting the necessary cooperation and support from the Department in terms of driving the process faster so that members of the Richtersveld community can benefit, considering it has been 20 years since the process started?
Mr Nhanha asked the Department how it would rate itself out of ten insofar as its performance was concerned on the issue of Richtersveld? He noted that he did not have issues with the Department obtaining a court order. His concern was that courts can only do so much. He emphasised that they were dealing with individuals and communities. What other measures was the Department putting in place to ensure reconciliation amongst the warring factions in Richtersveld? Post-implementation of the court judgment, he said he thinks that the community does require some level of assistance in at least pulling together the warring groups in those communities.
On the issue of the liquidated company, he got goosebumps when Ms Mothengu said money was unaccounted for, which ran into millions of rands. He said that the money was meant to benefit the poor people of Richtersveld. It is known that if somebody is a director or senior manager in a company, those people are enjoined by fiduciary duties, and they cannot do as they please with the money entrusted unto them. Had the Department bothered to seek recourse and get back the money? Had it bothered to approach the courts to actually declare those directors as unfit to hold further office in so far as directorships are concerned? Had the Department checked whether these directors were not serving in other companies that might be linked to the state?
Ms Labuschagne wanted an update on what was being done to prevent theft generally. Had Alexkor or the PSJV initiated polygraph tests again? If not, why not? Would the DPE give the Committee a clear explanation as to why Alexkor was exempted or were not complying with the Public Finance Management Act (PFMA). According to her knowledge, the agreement is a 51% to 49% which makes Alexkor the shareholder in the DPE, which is a government shareholder, so that makes it a section 2 company. She noted that other state-owned enterprises had to follow certain financial guidelines and could be held accountable because of those. Here there was no accountability because the accountability rested on certain people being appointed or elected in certain positions. Therefore, they had witnessed fights, threats, anger, fear and job losses amongst other things in the community. None of those problems could be pinpointed because there were certain financial procedures that the Committee could not hold people accountable to. What was the Department’s reason for the inapplicability of the PFMA to Alexkor?
She frowned upon the mention that the administrator had access to the bank accounts of the Department because there was no accountability and no structure. She asked for a full report on the financials and how they would be brought up to date. It was vague to simply state the words “access to a bank account” and “the financials will be up to date” and she asked for clarification in this regard.
Mr C Smit (DA, Limpopo) said when the Committee visited Richtersveld in the previous term, there was mention of a lawyer that was sitting in Gauteng that had got control over the finances of funds. He said there were some dodgy things happening there. He wanted to know what the status of that specific lawyer was and had any criminal cases been opened against any individuals. Could the Committee get details on these, such as case numbers and reasons for each of the cases being opened?
Ms Mothengu apologised for the CEO’s absence. She said that the issues relating to the PSJV would be addressed in full in writing to Ms Labuschagne. In terms of the status of the board of the PSJV, she said that the CEO is currently the board of Alexkor i.e. there is no full board. Section 49(2) of the PFMA allows for the CEO of a public entity to be the accounting authority until such time that the board is appointed. Currently, the CEO occupied the role of the executive, the board and accounting authority of Alexkor. That role further extended to the Chairperson of the PSJV. Therefore, by virtue of the clause in the unanimous resolution, the CEO represented Alexkor as the accounting authority and this entitled them to the three votes on the board of the PSJV. The board was functioning in terms of this composition. There were three members from the community that were court appointed and on the side of Alexkor, the CEO was representing the Department in that respect.
On diamond production, unfortunately in the past two years, production had been quite poor, that is below 30 000 tons. Previously in 2016 and 2019, production was well-above 50 000 tons. This was an issue and they have challenged the PSJV management to improve production. There was also the issue of funds to undertake exploration which the PSJV does not have. The Department has challenged that in the next three years, the entity must look into increasing production to over 60 000 tons.
In terms of the R45 million put in a trust, interest had accumulated. The amount was standing over R50 million, with about R5 million in interest having accumulated in that account.
In response to Ms Ngwenya’s question, she said the offices of Alexkor were in Woodmead, Johannesburg. There was also the intention to move to Kimberly. However, this was still being discussed and they were looking into beneficiation, and together with the Northern Cape Government, they were looking into how they could resuscitate the cutting and polishing industry with the participation of Alexkor. She said that Alexkor was required to have an office in Johannesburg because of sales and marketing functions.
She said that the Department was aware of the issue of theft. In 2020, there was an incident where diamonds were stolen and the people who were responsible were dismissed. There was a case in that regard. The Department was also trying to assist the PSJV to address the challenges in the value chain. The PSJV had also been challenged to look into the control of diamond theft.
On polygraph testing, some of the employees of the PSJV were subjected to the test. This was limited to those employees close to diamond handling. She also followed up with De Beers and other diamond companies operating in the area. They also do not conduct polygraph tests on all their employees, only those close to diamond handling. The PSJV had also been looking into the issue of how they can strengthen or introduce polygraph testing to other sections, but it was a contentious issue.
In response to Ms Labuschagne, she said that in terms of the PFMA, Alexkor was a Schedule 2 company which is bound by the PFMA. However, Alexkor RMC PSJV was not listed as a Schedule 2 company and therefore was not bound by PFMA provisions. This did not mean that Alexkor must not ensure that the operations of the PSJV comply with the PFMA. The DoS intended to separate the control of government over the assets since some of the assets had been given to the community. So, if the PSJV would remain PFMA compliant, it would not address the independence of the community who are the rightful owners of the land-based marine assets. She said she could provide full details on the PFMA compliance in terms of Alexkor versus the RMC PSJV, which would also address some of the questions in terms of accountability.
In the meeting chat, Ms Labuschagne asked whether the PFMA was applicable for the composition of the board of the PSJV.
Mr Moeketsi said that the administration process is for a period of three years. It started last year February and would end in February 2023. That was the period within which the administrator was expected to conduct their activities. Other issues, such as the issue of the election of the executive committee of the CPA, was something that the Department was working to address before the end of the administration process.
In response to Ms Labuschagne’s question on the functioning of the CPA, he said the CPA was established. The only issue was the executive committee, which from time-to-time, ordinary members of the CPA would elect it to manage its own affairs.
On the problem of the in-fighting within the CPA, his observation was that one of the sources of conflict concerned the issue of mining activities, the R45 million story and the Boegoebaai Development Project. There was a task team established outside of the CPA structures claiming to represent the community of Richtersveld. He said the Department indicated that it did not recognise this task team. This was very clear to the community. He said that all these groups concerned were eyeing one goal because they see opportunities for themselves. The only legal structure that represented the community was the CPA, which was unable to execute responsibilities in terms of the CPA Act and its own constitution. The DG of the Department was responsible for the CPA and if the it was non-compliant with both the Act and the CPA, then the DG had no options available through their regional office in Kimberly to try and intervene in their affairs.
On the question of why it took so long to intervene, he said that the CPA is a juristic person. The role of the Department was very limited in that it was not expected to interfere in the day-to-day running of the CPA but rather, as the Act stipulates, it must provide support and only when necessary, intervene. That was why when there were serious conflicts and in-fighting, as part of the intervention, the Department requested the Deputy Minister to go and bring together all the warring groupings to resolve the issues. The Deputy Minister was there between January 2018 and April 2019. He was there four times, but he could not succeed in reconciling the groups. Therefore, the Department was left with no option but to refer the matter to court. Fortunately, the court agreed with the Department in that there was no other way but to be placed under administration. So even if a CPA was placed under administration, certain things needed to happen because of membership. This led to the question by Ms Ngwenya on membership. Even if the administrator consulted everybody to make sure that the membership list was updated, the Department was still dealing with challenges and disputes about the list. There would be other members who are not even members of the CPA but would claim they are members but not on the list. Therefore, the administrator could not call an AGM to elect the executive if the membership was not in order because that membership list was going to be used for members to elect the executive committee. The administrator would elaborate further.
On the issue of the old committee, the old committee was fully aware that they were not compliant with the CPA constitution and the Act. They had enlisted the services of a lawyer from Gauteng. As a Department, they were never involved with the appointment of that attorney. The old committee appointed this attorney and at some point, the attorney harassed the Department’s then-DG. It came to a point where the DG said he would no longer interact with the CPA’s office. He said that the DG relies on the office because it is the eyes and ears of what is happening within the CPA in the Northern Cape. The accountants report would reveal what had happened and that report would be shared with the committee. The Department’s suspicion on why the old committee is not cooperating with the administrator is that the previous committee was fully aware that some of the things that they did were unlawful and therefore they were unable to cooperate. For example, the administrator did not have access to the Department’s bank account, hence the DG had to go to the relevant bank to confirm the administrator’s authorisation. He said that the Department was providing everything they could to ensure that the administrator executes the court order. As a Department, it was expected at any given time to go to court at report on its progress. A further written report would be provided to the Committee on the issue of the bank accounts.
Mr Majiedt said he was getting the full assistance from the Department in his functions as administrator. As Mr Moeketsi pointed out, he was appointed in February 2020. He only received his certificate from the Department in June which was in the midst of the Covid-19 period which complicated the execution of his duties as administrator. It was actually the firm that was appointed as administrators, and he was appointed the responsible person dealing with the administration. Elaborating on the question of the membership list, he said that the updating of the list is an ongoing process because each year some children would turn 18 and become adults and they were supposed to be added to the membership list. Some people would also pass on and have to be removed from the list. There was a procedure in terms of its constitution of which new members were being added to the list. This process allows for objections against new members.
There is an objection period, and the objections were dealt with by the administrator assisted by sub-committee or volunteers from the communities who avail themselves to assist in that function. The list had been updated and based on that membership list, the elections took place recently and had been finalised.
On 30 November, there will be a meeting with the newly elected members of the CPA committee and on 1 December, a meeting will be convened to introduce these members to the community. In this meeting, questions will be answered in relation to the newly elected members. From Mr Majiedt’s point of view, the elections were successful notwithstanding certain challenges that they had. In the past, there were a lot of attempts to derail the holding of these elections and they had until now gathered that it was a certain grouping from the CPA members who were behind the disruptions of the elections through the bringing of urgent interdicts to prevent the elections from taking place. He was very glad that they were not surprised by urgent court applications during the latest elections, and he commended the Department and the service provider the Department had sourced for the professional rendering of the elections.
Mr Mashune said that the monitoring and compliance of the Richtersveld project was versed in different Departments. There were nine entities that were established and one of them was the CPA. They had placed the CPA under administration after the community was continuously in dispute. Their last resort in terms of their alternative dispute resolutions is the administration in terms of the CPA Act. Within this process, there are two trusts. The monitoring of the trusts rests within the jurisdiction of the Master. There are also six companies established to run some of the developments within the community and those were the responsibility of CIPRO insofar as dealing with the Companies Act. The main challenge that the CPA had was that it was meant to oversee that all the other entities were functioning properly. This was because all the elected members were all community members and sometimes there was a lack of cooperation among them. Hence there is the administration process and the review of DoS and trust documents including the CPA’s constitution. The Department would like to begin the process of linking all these elements together and that is what they were working on during the administration process.
He provided context on why the administrator needed access to the Department’s bank accounts. He said an accountant had also been appointed and the administrator did not have free access to use the money as they wish. The activities of the CPA were mainly to organise general meetings as needed and they could also appoint auditors. All the payments of service providers needed to come from the money of the CPA. Therefore, only if the administrator has access to the bank accounts insofar as implementing what the community resolved during the general meetings would they be able to achieve their goals.
Regarding the question on why the Department took long to provide oversight, he said it had been trying to engage with the community, but they experienced issues of conflicts, one of the elements being that the communities are still not yet trained to adhere to the principle of majority decision. He said that in a community meeting where there are 50 people and 30 were agreeing on something, 20 people would be aggrieved and then complain to structures that deal with conflicts like the Public Protector. These people would even approach the Committee to state that they were not happy with certain issues. But because the Department was guided by the CPA Act to work within the principle of majority decision, it was monitoring these meetings to ensure that decisions taken are within the law. The Department also endeavours to train members to adhere to the principle of majority decision.
In terms of the issue of the agricultural company that was liquidated, there was a joint venture where the community had entered into an agreement with a private company called Richtersveld Growers as a way of resuscitating the whole agricultural project. However, the investigations were continuing. The DALRRD the DPE had written a joint submission to request that the SIU investigate all the monies that were paid. The reports received last month reflected that they were awaiting the gazette signed by the President that confirmed the start of the SIU’s investigation. This point also addressed the issue regarding the protection of assets.
On the question of membership, he highlighted that the difficulty within the CPA was that there is a clause in their constitution that says a person must be “woonagtig” and must be a permanent resident of the four towns, for them to be on the membership list. The Department is experiencing a challenge in that one day a person may be residing in a town but in a few months’ time, they are appointed in Cape Town. So, in terms of the clause, the person will have to be removed from the list because they are no longer “woonagtig”. The Department, through negotiations, compromises and conflict resolutions with the community was trying to address this challenge.
On the issue of the outstanding elections, the elections were held on 6 November and the elections were for nine entities. But three entities have full committee members that were elected by the community. He said that in some towns only one member was elected because no one was nominated. So as a Department it had to hold a by-election to finalise all the other outstanding elections. There were ongoing disputes that the Department was receiving, and it was going to meet the community at the end of the month to find a resolution. He said that in all these disputes, people were being personal with each other and there was no substance. These were complaints that fell outside of the regulations of the election process that the administrator had approved.
Ms Lekalake on the issue of post-settlement support said that once the Department had finalised the elections for the other six entities, they would then continue with providing the necessary training for them. As part of the ongoing process, the administrator would continue working with the elected CPA members as part of capacity building so that by the time the administration period had been finalised, there was a proper handover.
Ms Labuschagne said she did not understand how the PFMA was applicable to the composition of the PSJV board yet earlier it was stated that the PSJV need not comply with the PFMA due to the need for independence. She requested for clarity as to how the PFMA was applicable to one thing but not the other. She said that the PFMA’s goal is to ensure financial accountability. She noted that R1 billion was said to have been spent on the PSJV and asked what it was spent on exactly. Through the Chairperson, she requested a report with a breakdown of the R1 billion that was spent on the PSJV and exactly what the money was spent on. She also wanted clarity on what was being investigated in the SIU investigation. She acknowledged the progress of the CPA but stated that she was still in the dark about other outstanding issues. She suggested a parliamentary enquiry into the functioning of Alexkor. The only way to do this is to establish an ad-hoc committee that has to be agreed upon by all the parties in the Committee. She said Parliament cannot go on for 10 years having an oversight role but accomplishing nothing. Alternatively, the Department must be prepared to have another forensic investigation into the total functioning of Alexkor and the PSJV.
Ms Ngwenya thanked the Department for its response. She said she could see that there is a big challenge with the issue of membership. She said the Committee needed a report that outlines the plans the Department has in terms of solving this problem because, although she accepted its response, what it had reported was not enough considering this problem has been outstanding for so long. Could the Department tell the committee how it was going to come up with a timeline to resolve this problem? What were they doing at that moment to solve the problem?
Ms Mokause reiterated that the matter had long been outstanding. The Committee was still not hearing anything that was taking them forward terms of how the issues would be resolved. The Committee needed to derive a means to make recommendations on a way forward and even do some sort of a physical oversight on Richtersveld. She said the presentations were not going to assist the Committee. She asked the Department to enlighten the Committee in their final remarks on their final steps and how they were resolving matters. Monies were spent and it could be said that people are not obliged to account to public monies. It was incorrect to even suggest this on a public platform such as this meeting.
Mr Smit seconded the recommendation by Ms Labuschagne that an ad-hoc committee of enquiry be established into the operation of Alexkor. It was clear that issues were still outstanding and there was some very questionable activity taking place at Alexkor.
Mr Nhanha agreed with the proposal by Ms Labuschagne that a proper enquiry was the way forward. He asked the Department again how it would rate itself out of ten given that the matter has been lingering and unresolved for over 20 years. He acknowledged that the Department was waiting for the President to sign a proclamation so that the SIU can investigate. On the issue of the directors of the company that was liquidated and their role in the disappearance of funds, what actions was the Department planning on taking?
Mr Moeketsi said on the request for the Department to rate itself, he recommended that the request be directed to the DG, who is the relevant person to respond to that. He did not feel he was in the appropriate position to give a rating and said he hoped he was not putting the DG in a corner.
Mr Mashune, on the issue of directors that were disqualified or those that were implicated, said the Department held a special general meeting with the community before the recent elections took place; so there were criteria determining who did and did not qualify. One of the criteria that the community had agreed on was that any other person who had been in the structures before and had never reported to the community could not qualify to be nominated or elected. The community maintained this stance even though the forensic report was not presented to them. These directors were not nominated nor elected. The CPA structures allowed the community to play a central role in decision-making. The administrator does not have the sole discretion to take some decisions without consulting the community.
He said the membership list that was agreed on in April 2021 was the membership that allowed the Department to reach the elections and hence they held the elections on 6 November. The Department had updated membership insofar as removing people that have moved out of the towns, those who were deceased and even amending the listing insofar as the identity numbers that were incorrect.
The second step the Department was engaging in was where there was a dispute about people on the membership list from 2014 until 2021. It engaged in a process that closed that list in the previous week and the newly published list only showed the new applications of 2014 until 2021. The Department would be meeting with the new committee that was appointed and will conclude a final list to be given to the investment trust, which is where the dividends are being declared. So, the trust that deals with paying people dividends relies on the CPA insofar as the list is concerned. But as the administration team, the process closed on 19 November and what they need to do now is meet with the newly elected committee to check all the objections that they may have received so that the list can be given to the investment company. If there were any other applications submitted, they would deal with them next year because in terms of their schedule, people can only for apply for membership in Richtersveld during the month of October so that during November and December, the Department is concentrating on the adoption of such lists.
The Chairperson noted Ms Labuschagne’s proposals and said that she had an advantage in that she has been in this Committee for the past years. He recommended that the administrators in the committees facilitate the oversight to Alexkor, which the Committee had postponed in the previous terms. He said that this should be prioritised in the next term and be the first thing that the Committee does. He added that the administrator together with the CPA and the Department should provide details in relation to the issues regarding financials because those details have yet to be provided to the Committee. All issues that were raised but not answered were expected to be given to the Committee in writing so that before the Committee conducts oversight on Alexkor, all the members were satisfied in terms of the issues that remained outstanding.
He recommended that the Committee secretariat give a snapshot of the Ministers’ attendance to provide to the Department. He noted that the previous week they had the Minister of Communications attend the Committee meeting despite the fact that she had to also attend a Cabinet meeting. The Committee would write to the political leadership and indicate their displeasure and also expected a written apology so that whatever they had raised was taken very seriously by the Department.
Minutes dated 17 November 2021 were adopted.
The Chairperson said it must be indicated to the Committee secretariat that it should commence its facilitating a visit to Alexkor as it was urgent and must be prioritised by the Committee.
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.