DALRRD on unresolved land claim issues affecting Safcol and Alexkor; with Deputy Minister

Meeting report

Chairperson's introductory remarks

The Chairperson said the goal of the meeting was to receive a briefing from the Department of Agriculture, Land Reform and Rural Development (DALRRD). He welcomed the Department of Public Enterprises (DPE), which was expected to attend to give a short briefing regarding their meeting. The Portfolio Committee had undertaken an oversight visit to both the South African Forestry Company Limited (SAFCOL) and Alexkor, two of the state-owned entities falling under the DPE. Both companies had had complaints about unresolved land claim issues.

At Alexkor, the community had been unable to access R45 million due to a lack of community structures, or the DALRRD had not yet been able to identify relevant beneficiaries of the amount. The DALRRD had provided the Portfolio Committee with an update with timeframes, and had stated that the Committee wanted to know what progress had been made regarding the problems that had been identified.

At SAFCOL, more than 60% of the land that they operated on had been subject to land claims for over ten years. The Portfolio Committee had met with representatives of some of the claimants, some of whom were old aged, but most had died before they could realise land ownership. SAFCOL had been unable to expand and develop due to this particular impasse, and therefore they were expected to provide some insight and clarity so that the Portfolio Committee could respond to the pressure from claimants and beneficiaries.

The Ministry would first provide a political overview, which would be delivered by the Deputy Minister of Public Enterprises, Mr Phumulo Masualle, which would be followed by the presentation from the DALRRD.

Deputy Minister Masualle said that it would have been the responsibility of the Ministry of Agriculture, Land Reform and Rural Development to do the introductory remarks, and that the DPE had been trying to work with the Ministry to find solutions to the aforementioned matters. The presentations would provide insight into the progress on these matters.

Commission on Restitution of Land Rights on status of Richtersveld land claim

Ms Nomfundo Ntloko, Chief Land Claims Commissioner, said that the legislative mandate emanated from the Restitution Act of 1994, which came from the Constitution. The restitution process took place in four phases: lodgment, screening and gazetting, investigations, and negotiations with verifications and set-up of legal entities, such as a Communal Property Association (CPA). Conflicts were referred to the Land Claims Court.

Statistical information showed that a total of 79 696 claims were lodged country-wide. A breakdown of their business project focused on the extent of hectares and land use that was associated. 61% of SAFCOL plantations were directly affected by land claims. A total of 51 claims were determined where SAFCOL was affected.

The commercial forestry sector master plan for 2020-25 established two key deliverables. The Kaapsehoop community land claim in Mpumalanga had been identified to help coordinate the master plan. A potential model to be used for Kaapsehoop as part of the pilot for the forestry sector was presented, followed by a settlement model. A list of projects was submitted that had claims where SAFCOL was affected.

Mr Kgotso Moeketsi, Head of Department: DRDLR, Northern Cape, said that currently, the Richtersveld Communal Property Association (RCPA) was under judicial administration, based on a decision taken on 28 February 2020 following an application. A court order was required to ensure the RCPA underwent regularised running up to February 2023. The judicial administrator was on course to ensuring the court order was implemented.

A Deed of Settlement (DoS) had been signed by the entities, which had resulted in a total of nine structures being established under the Richtersveld Community Claim.  An elections agency had been appointed by the DALRRD. A CPA executive committee had been elected and was working with the administrator. Each of the entities was described in terms of the number of members, status, outstanding nominations and challenges.

Mr. Moeketsi said that the dynamics of the Richtersveld entities were one of the factors impacting the RCPA negatively. The Richtersveld project needed human resources to fulfil the needs stipulated in the DoS. An induction workshop had been hosted to train members of the entities on their roles. A CPA general members' meeting had taken place on 30 and 31 May 2022.

Discussion

The Chairperson noted that the Minister of DALRRD joined the meeting, in addition to the SAFCOL and Alexkor chief executive officers. He welcomed and invited them to provide an overview.

Mr S Gumede (ANC) said that the presentations provided a bit hope, but it had to be monitored closely. There was a possibility of all the set structures foundering, with a group contesting some people elected, or a dispute over the involvement of politicians, which meant tough calls that could disturb procedures. This could have an impact on the work of both SAFCOL and Alexkor. The aim was to see them go back and deliver the work that was expected of them. Politicians knew that once money was involved, communities would fight. There was R45 million involved, and now that the structures were in place, there was a high probability these amounts would go to the community. However, because some of the money may not reach the intended recipients, there needed to be a very serious discussion on examples of what was currently happening in the whole of the country. A constructive approach was needed when addressing these matters.

What was being said was that 3.3 million hectares would likely be in hands of the community, to which an amount of R4.2 billion had been allocated. Communities on the ground wanted to be included, leading to conflict between SAFCOL and the community, as well as Alexkor. He wanted to know about a move by politicians to try to resolve/ assist in these matters. What outcome had been reached? He referred to issues that were old and unresolved, and enquired whether there was a plan by the DPE to resolve outstanding issues and how long it would take.

He asked what was stopping the payment of R21 million to Kaapsehoop? If the land was not restorable, and valued at R21 million, did they have any inferences as to what had caused the delay in the process? He understood that the CPA had a poor relationship due to the outstanding money, but now that structures were there, he hoped that the outstanding money would be paid, and that the conflicts had been due solely to money. It was not an ideal situation that the CPA had been diminished by the entity. He appreciated the comment from Mr Moeketsi that the CPA had the power and the right to appoint and do what they saw fit.

He suggested that too many departments were involved in playing a role in all of the communities. Were they benefiting from all these departments, or did they need one plan that all departments followed? If the Department understood the dynamics now, and if the DPE was given an opportunity to gain a helicopter view, how would they approach the situation differently? The situation needed assistance to help the community to want to carry on with the work of the entities.

Mr G Cachalia (DA) said the SAFCOL situation had been going on since 1998. When was it envisaged that these challenges would be concluded? Had the effects of these claims been taken into account when considering SAFCOL’s balance sheet? With Alexkor, the situation also dated back to 1998, and the deal of settlement was signed in 2007. Could the situation with Alexkor be expedited and if any challenges arose, could the court to adjudicate them, since that was how things were concluded? The obstacles had been identified, but no solutions had been expedited that ideally involved an interdepartmental integrated approach. If the expedited solutions could be made clear in the future and presented to the Committee, they could be investigated and approval could be given. If by February 2023 matters were still not finalised, what would be done, as things could not continue like this.

Mr N Dlamini (ANC) asserted that the land claims created more problems than solutions. One hardly found a situation where everything returned to normal and the area functioned productively after a claim. He suggested that a way needed to be found to understand what the intention was in lodging land claims. Referring to Alexkor, he said if one looked at the situation in terms of the DoS, Alexkor had to pay the individual beneficiaries the R45 million, which could not happen until after the town was handed over to the municipality. Apparently, the municipality could not sustain or afford the expense of running the town. Although Alexkor was a state-owned entity, it was not government and could not run municipal affairs.

They were now faced with a situation where they needed to find a solution. There was an expectation of R45 million to be paid. How would this be dealt with? He spoke about meeting with the miners when the Committee went to the oversight at Alexkor. Miners had complained that they did not benefit at all from the financial operations at Alexkor. Miners had started arguing amongst themselves. One individual had received money and had gone around the world on an 80-day trip. When he returned, he had not recovered and was trying to shift blame.

What could they do with the legislative arm of government to deal with issue of Alexkor? In terms of the DoS, the R45 million was available, but it was inaccessible because the community was not ready to receive it. How could government get involved, bearing in mind that the people wanted to benefit, and not necessarily inherit the associated cost of the operation? A solution needed to be found; this DoS issue had been going on since 2007. He did not think that a solution had been proposed in the presentations. He did not have comments on SAFCOL, since the land claim issues would likely be similar.

If no solutions were found, problems would arise, with opposing parties trying to become involved with a lack of understanding, and possibly sensationalising the issues. It remained to be seen if a solution could be found.

Mr F Essack (DA) commented that in slide 13, it was mentioned the matter had been running for almost 24 years. Hopefully one would see a solution in near future. He asked if there were any concrete timelines towards the finalisation and settlement of the issue regarding restitution. He knew the Kaapsehoop area very well, and questioned the suggestion that the town was not restorable. It was a tourist destination, and what was happening to various small businesses and enterprises currently there remained a matter of concern. The Richtersveld issue was that the land claim had been hugely disadvantaged over time. An agreement had been signed in 2007, and he asked about the status of the investigation into the Alexkor and Scarlet Sky Investments that had disadvantaged and impoverished the Richtersveld community to a great extent. He knew his questions were difficult to answer immediately, but would appreciate concrete feedback in the next session.

He referred to the issue regarding directors still negotiating with Alexkor regarding the feasibility of transferring residential and business properties. How long was the feasibility study expected to take? Was there a solid timeline to bring matters to a conclusion? He referred to the challenges in disputes over membership lists that remained unresolved. What was happening there? His final question was about all the directors being appointed across various entities -- were they receiving payment? If so, where was the funding coming from?

Ms V Malinga (ANC) referred to the slide indicating all the 79 000 land claims since 1998, and asked how many had now been successfully resolved, especially in Mpumalanga? On slide 16, it indicated the total was 15, but only four had been settled, and none had been implemented. On slide 21, how has SAFCOL considered the managing authority, as they were a minority shareholder as noted by the footnote on slide 16? On the issue of Richtersveld, she welcomed intervention through judicial administration, but she was worried about all the vacancies and questioned whether these were causing a delay in the process. The board was supposed to have seven members, but had only four. The judicial administration and every process should be finalised by March 2023 -- how far were they in the process of appointments, and what was the community unhappy about, when politicians were nominated to have a seat in the entities? The politicians were elected by the same communities.

She referred to page 29 of the Richtersveld presentation, and commented that it had been very impressive. She wanted to know if all that had been achieved was due to what Alexkor had done. She questioned whether it was a true representation of what had been done. She said that given that the Kaapsehoop town was no longer restorable, whether the R21 million was a fair allocation? She questioned whether the R21 million was a claim or compensation.

Ms J Tshabalala (ANC) commented that the Richtersveld entities were characterised by inflated and complex structures created to protect the assets and interests of the beneficiaries, and this had been identified as one of the factors impacting negatively on the operation, survival and overall effectiveness of the Richtersveld CPA. What framework had been developed to address the bloated and complex structure of the CPA, which often led to conflict and dispute amongst the beneficiaries? Secondly, how would this framework reduce the negative effect of the lack of coordination between beneficiaries on the productivity of state-owned enterprises (SOEs) like Alexkor, in this instance?

Questions had been posed to the Commission on the Restitution of Land Rights because the DPE was not mandated to do anything on the land claims. She asked about the proposed potential lease-back settlement model designed to be used specifically for the Kaapsehoop land claim, and in what ways this model would limit the levels of conflict amongst beneficiaries so that it did not affect SAFCOL’s productivity and revenue generation. SAFCOL needed to be continuously self-sufficient.

The Chairperson said he wanted clarification on certain concerns, such as the prolonged process. He mentioned that Mr Cachalia had been very straightforward, and had asked to what extent the Department, with the assistance of the Portfolio Committee, could shorten the process to finalise the claims by the end of this month in Mpumalanga. It also had to conclude the problem in the Northern Cape. While the information was appreciated, he enquired whether a shortening of the process was possible. He did not want the people who would be taking over to be faced with the same issues, and wanted to fast-track the process so that the issues could be resolved. If there was nothing that could be done, they would have to wait for an unclear period of time.

Land Claims Commission’s response

Ms Ntloko said that in the context of claims in general, they had various types of claims and that these claims were settled according to the nature of the claim. Some claims were taken to court and therefore could not be finalised until the court determined it could. In the context of the SAFCOL and Richtersveld claims, the issues were not definitively the fault of the Commission or the Department, but related back to SAFCOL itself. She made an example of two claims in KZN which had been launched by President Ramaphosa. The claim had been settled and handed over in 2017, but there were obligations required from SAFCOL. These included dealing with associated shares. That was an example of a problem that lay outside the domain of the Commission and required SAFCOL to come to the party.

A lot of the delays and discomfort were not definitively caused by the Commission, but the other stakeholders that had to step in to ensure that there was meaningful beneficiation for the communities that the land had been taken from. Sometimes the claims process was accompanied by problems for state entities, and peoples' perception of the Commission was not fully correct because she saw it not only as an opportunity to redress what had been done, but also as an opportunity to collaborate with the relevant communities so that there would be meaningful benefits for them, and for the entities to grow. As long as there was conflict between SAFCOL and the community, caused by the expectation of the community from SAFCOL to cooperate and participate in the value chain -- which the community was not receiving -- the conflict would remain. It was important that once land had been acquired for the community, the state entities needed to be involved and ensure sustainability and cohesion where they were located, specifically because they were the experts.

On the subject of Alexkor and the Richtersveld community, she said the claim was settled in 2007 through a court order which had a DoS approved by Cabinet and implemented in nine companies that had created almost 50 directors. This process had been led by the DPE, and Alexkor -- as the people on the ground -- understood that this community had received the right to the mining, unlike other communities, because at the time of the dispensation they had already been identified as a community that mined. Alexkor had an obligation to ensure the communities were brought into the fold and make sure that the obligations of Alexkor and DPE were met. Unfortunately, a lot of things that were communicated had not transpired, and as a result the DALRRD now had to focus on what they were able to do and not do.

She said that it would have been helpful for Alexkor and the DPE to have given presentations on the status of the issues addressed. It was not the first time that they had needed to give a presentation on Richtersveld to the Portfolio Committee, and at some point, the DPE had a project laid out in an attempt to address the issues that were being raised, including the possibility of simplifying the structures, upon agreement that they were too complex for communities such as those of the Richtersveld. It was decided that the focus should be on trying to review the structures. It was a Cabinet decision led by the DPE, and had therefore had to go back to court for review. The duty of the DALRRD was to deal with the question of the stability of the CPA. This had now happened and the CPA had been placed under administration. For the operation to succeed, their partners' assistance was required to ensure that the commitments that were made involving the community in their obligations that were part of the settlement still continued.

On the subject of the number of claims that had been settled, 90% had been settled and Ms Ntloko said that she would forward this information to the Committee. There were now about 6 000 claims that were outstanding in wait of finalisation. There were approximately 1 000 claims that had been outstanding in the old order since 1998. The intention of lodging a claim in the context of Mr Dlamini's question was to try and attempt to redress. The Commission’s role was to acquire the land available for acquisition, or provide alternative redress. Then there were other role players that needed to assist the community to ensure sustainability. Land that they acquired could go for tourism, mining, or an area like District 6 in the Western Cape. Timelines could be given overall, but this needed to happen in collaboration with all of the stakeholders.

As indicated before, they were part of the masterplan with SAFCOL claims, and therefore were being guided by the Department of Forestry, Fisheries and Environment (DFFE). The commitment of the DALRRD was to identify exactly where they were in their process. Many of the claims had progressed to the point where they now need SAFCOL and other partners to inform them about what type of interface with the claimant communities was going to happen, and how they could assist them.

Regarding the R21 million, the payment was currently underway. Depending on the number of households and beneficiaries that were involved, payment was done progressively because they had to verify individual households so the money could be paid directly to the correct person if they were not yet deceased. In the case of an individual being deceased, they had to understand the family tree in order to pay direct descendants thereafter. A lot of progress had been made, which meant it did not become an obstacle in trying to deal with aspects relating to the land. The issue of the R21 million was whether it was calculated based on the historic valuation at the time of dispossession, or a standard settlement that was based on the housing quantum. The amount was for improvements and the land that was going to be allocated. It was therefore a combination of financial compensation and land acquisition, so it was not merely about the financial compensation that went to the households.

She said some of the questions might have to be addressed by SAFCOL and Alexkor themselves. On the question of the potential lease-back models, some had worked and some had not. Some of the claims had been settled, but although they have been settled, part of the core settlement had not happened, and the community was unhappy. She suggested that the model needed to be upgraded by implementing this pilot so that the stakeholders could actually go to Kaapsehoop to determine how to avoid the conflict seen in other settlements, and how to ensure meaningful benefits. What usually created conflict was when communities were told the claims had been settled but the current landowner still benefited from the settlement, and they were not seeing meaningful benefit themselves. The DALRRD, in dealing with the SAFCOL claims as part of the project, gave timelines on how fast they would deal with the claims, which depended on how fast their partners were able to assist them and agree to release some of their shares that the communities had in the involved partnerships.

There might be forensic investigations ongoing around the Richtersveld issue, which had started as a restitution process in 2007. Although it was now an issue dealing with monies that were released at the time, and obligations, they needed to oversee the process because the communities largely had not received benefits. They were attempting to assist in the process of verification as to whether they were outstanding, and to support the Department on compliance.

DRDLR's response

Mr Moeketsi noted that the Commissioner had addressed some issues, and asked for the Chairperson’s permission for Mr Itumeleng Mashune, Deputy Director, DALRRD, who was directly involved in the process, to also delve into some of the issues.

He agreed that the issue of the prolonged process was a serious concern to everyone. Neither the Department nor the CPA could guarantee that everything would be in order within the particular time frame. The main objective was to ensure that the CPA was regularised, a process that had already started. The conflict within CPAs never really came to a conclusion, but he could guarantee within three months to a year, the disputes would be resolved. He also agreed that they needed to practice an interdepartmental approach. They had been working very well with the DPE, and had requested in the last engagement with the Committee that an invitation could be extended to the DG in the Northern Cape. The selected task team was focused on the transfer of properties from Alexkor to the Richtersveld local municipality.

He referred to Mr Gumede's observations of the issue of the council. For as long as politicians were there to represent councillors, disgruntled members would use the situation. It was the call of the CPA and the beneficiaries themselves, and the Department was there to ensure that the CPA complied with the Act and their own constitution. Some opportunistic elements in the community would use the issue of councillors participating in the CPA for their own benefit.

There was also an issue with the membership list. It was difficult to guarantee that the issue would be resolved within a particular timeframe. The Department supported the administrator to make sure the membership or beneficiary list of the Richtersveld community was up to date. One of the requirements in measuring the compliance of the CPA was to have an annual update of the membership list. Many times, this had been an issue because time was spent having to deal with the disputes over the lists. Currently, the list was still under dispute.

He said that before the CPA was placed under judicial administration, he had been with the Deputy Minister (DM) on four occasions attempting to resolve the issues of the CPA. One of the reasons why the DG had approached the court was to say that there had been intervention from the ministry and the DG, and both had failed. Even the executive mayor in the district of Namaqua had accompanied the DM, but their intervention had also come up short. However, was not implying that after the administration, the DM was there to try and intervene.

He then addressed Ms Tshabalala's issue regarding the framework. The Land Claims Commissioner had said at the end that when the issue was finalised, the community had opted for the CPA to be a legal entity. This was not in the hands of the Department. Instead, the community had taken it upon themselves to decide whether they wanted a trust or CPA. It was his understanding that the frameworks were also up to the community to decide on, because they were wary about meddling in the CPA’s affairs, and the Act stipulated clearly what the responsibility of the DG was. Some of the beneficiaries would approach the Department and say that officials under the DG were interfering, which was not desired. He said that their role was just to guide and ensure that the Act, as well as the constitution of the CPA, was being complied with.

Mr Mashune emphasised that as far as the CPA was concerned, they were in order as per the obligations of the Department. However, they had now realised where the problems relating to the structures such as the trust and the companies stemmed from. What could be done in light of the fast-tracking of the process? The Department of Justice’s involvement with assistance to fast track the registrations of the trustees, and the assistance of the Department of Trade, Industry and Competition (DTIC) as far as registration of the directors after the elections, would be helpful, so that the responsibilities were not just on the DALRRD and the DPE.

On the question of compensation for directors, they were expecting to receive sitting allowances, but the challenge was that the court order had not accounted for this, which had resulted in the structures being so complex. Some of the structures did not possess their own bank accounts, and were expecting to receive sitting allowances from another entity. If that entity was not fully constituted, problems arose because of the fact that the people came from four different towns, and transport and accommodation could become a challenge. For them to convene, they were faced with the challenge that they were not receiving sitting allowances or accommodation, in order for them to attend the meetings.

Alexkor had also been exposed to issues of state capture and there was a perception around some of the members that were now the current councillors, that they had gone to Dubai and now owned the structures, so there was a back and forth on allegations. It was situations like this that could lead the community to be unhappy. As had been reported before, they were dealing with perceptions, and conflict was inevitable, but it was the perceptions that needed to be dealt with.

The Chairperson said a point had been raised that to her sounded like shifting the blame to the DPE, but according to her limited knowledge, the finalisation of the list of beneficiaries was solely the responsibility of the DALRRD, not necessarily the DPE.

Deputy Minister Masualle was called in. He said that in the DPE's delegation they had the CEOs of SAFCOL and interim CEO at Alexkor. It struck him that as the time for questions was opened and the initial set of responses, it could be beneficial for the Committee if they could involve the two departments, and perhaps the Department of Forestry, Fisheries and Environment as well, particularly on the forestry side, because he was aware from engagements with this department that they would be responding to a certain extent on behalf of the claimants in so far as the forestry packages whose matters had been resolved, and SAFCOL was a management company that had the responsibility to pay the community via the structure that was supervised at the DFFE.

Referring to matters relating to Alexkor, he said it was clear that the institutional arrangements envisaged as part of the DoS were very comprehensive and complex, and it could serve the Committee well if the Department could come back timeously to present a uniform presentation on their experiences and challenges experienced, as well as solutions to the problems. There was a temptation to come into a meeting like this and finger point, but this would not serve any purpose. There was an urgent need to resolve some of these issues so that there was certainty on the part of both the beneficiaries and some of the state institutions that were still operating in such environments. It would serve the Committee well to work together to come up with a collective solution. Their duty would be to create an opportunity for the different entities of government to come together first and make a single presentation to the Committee on the concerns it had expressed. He thought that if the CEOs were there, they would have wanted to say something in light of their experiences. In his view, it would still be one view opposing the others presented here.

Concluding comments

The Chairperson thanked DM Masualle, and said he thought that a session was needed with both departments presenting something to indicate they were on the same page in understanding the content/context.

Mr Moeketsi felt that his colleagues had covered the issues and also provided guidance for the next processes. He confirmed what the Department would do regarding the timelines committed to, and this would be shared with the Portfolio Committee.

The Chairperson thanked everyone from the DALRRD for their positive responses to their questions, and hoped to meet again at the session proposed by the DM. He said their intentions were not just to go and make their presence known at the SOEs and not assist them to achieve their objectives. They did not want to see as Members of Parliament moving around and turning up empty-handed without solutions to the problems of the communities.

He extended appreciation and thanks to the Minister who had attended, but had been unable to interact. The CEOs of Alexkor and SAFCOL were thanked for their presence.

The meeting was adjourned.