The Select Committee on Public Enterprises and Communication convened virtually for a briefing by the Department of Public Affairs (DPE) on the progress regarding the implementation and completion of the Deed of Settlement between Alexkor and the Richtersveld Community.
The Richtersveld Community won the right for the return of their land and mineral rights which were expropriated by the previous government. In terms of the 2003 Constitutional Court Order, the government was ordered to compensate the community for the loss of economic benefit and to bear the cost of restoring the mined land to its original condition. In 2007, the government and the community agreed on a Deed of Settlement, stipulating the terms and conditions of the property transfer and payment arrangements. The Committee welcomed the improvement in the financial position of Alexkor but was concerned that the delay in the handover process was negatively impacting the well-being of the Richtersveld Community. The reasons for the slow pace of the implementation of the handover process were unclear.
Representatives of Alexkor attributed the slow progress to the complex nature of the settlement agreement, which required the establishment of more than eight companies and 50 directors. The dynamics of the established entities resulted in the dysfunction of the Communal Property Association (CPA) which led to the delay in executing settlement obligations. However, in terms of a ruling on 2 June 2023, the court-appointed non-executive directors to facilitate the handover process. Although the intervention contributed towards solving problems and establishing good relations with the community, the new CPA still needs to be properly constituted before the handover can be executed.
Members noted that time was running out and resolved the Committee had to ensure that the matter is finalised before the end of the Sixth Parliament.
The Chairperson remarked that the briefing by the Department of Public Enterprises (DPE) was the main item on the agenda. He invited the Deputy Minister to give his political overview.
Deputy Minister’s opening remarks
Mr Obed Bapela, Dputy Minister of Public Enterprises, said the management and board of Alexkor took an interest in the presentation and would be participating in responding to questions from Members. The DPE is the shareholder of Alexkor on behalf of the government and the people of South Africa. The entity has an interim board and management team for known reasons, i.e. the effects of state capture and corruption. Since the appointment of the new board, the financial situation has improved and the entity has been operating as a going concern. A permanent management team would soon be appointed to ensure stability. Alexkor is viewed as an SOE that would help to fulfill the development goals. The Richtersveld Community had been awarded a successful land claim but some challenges needed to be resolved to fulfill the land claim. Alexkor had commissioned a study on the future of the entity. Once ready, the results and recommendations of the study would be shared with the Committee.
The Chairperson encouraged speakers to make themselves visible because the SABC was connected as the discussion was a matter of national interest.
Ms Kubeshnie Bhugwandin, DDG: Energy Enterprises, DPE, presented the status update on the settlement provisions. The responsibility of the DPE, as carried by Alexkor, was to ensure the following:
1. Transfer of land-based mining rights and establishment of Pooling and Sharing Joint Venture (PSJV);
2. Transfer of Alexkor’s mariculture and agricultural assets;
3. Transfer and restoration of portions of land by the Stated and Alexkor to the Richtersveld Community;
6. Transfer of residential properties and R45 million upfront payment for occupation of properties;
7. Environmental rehabilitation; and
8. Establishment of the township of Alexander Bay.
Alexkor has fulfilled obligations 1 to 3 while obligations 6, 7, and 8 remain outstanding.
The reparation payment of R190 million to the Richtersveld Investment Holding Company (RIHC) is the responsibility of National Treasury and the Department of Agriculture, Land Reform and Rural Development (DALRRD); and
The R50 million development grant is payable to the RIHC by the DALRRD.
DALRRD is in the process of appointing a company to assist the Richtersveld Community to simplify the structures with a view to establishing an effective governance structure.
Ms W Ngwenya (ANC, Gauteng) observed that every time when progress is reported, the information remains unchanged. In June 2022, the Committee was informed that the settlement was almost complete and the R45 million transfer was to be paid to the Richtersveld Property Holding Company (RPHC). She found it unacceptable that the same information from more than a year ago was being presented as progress. Someone must take responsibility for the slow pace of implementation and the impact thereof on the well-being of the Richtersveld Community. On 3 May 2023, the Committee was informed that the Communal Property Association (CPA) had been equipped to control its affairs and implements its responsibilities. To speed up the process, she proposed the following recommendations:
The DPE must furnish timelines to ensure that Alexkor implements all its responsibilities as per the Deed of Settlement in compliance with the 2007 court order;
The outstanding obligations 6, 7, and 8 of the agreement, as stipulated in the Deeds of Settlement, must be completed on or before 21 August 2023; and
The Committee is to invite the DPE, Alexkor, and the Office of the Premier in the Northern Cape between September and October 2023 to report on the impact of the progress on the Richtersveld Community.
She stated that time was running out and the Committee had to ensure that the matter is finalised before the end of the Sixth Parliament.
The Chairperson said Ms Ngwenya was voicing the concerns of all Members regarding the issues. The same matters were raised in 2022. The management team should indicate by when they would be able to finalise the matter. He asked if the structural arrangements were not too complex for the community and whether the arrangements were resonating with the nature of the community. He enquired about the difficulties which contribute to the slow process. The Committee was taking pride in the financial performance of Alexkor but was concerned about the delay in implementing the Deed of Settlement, which is an area that must be prioritised. The Committee was thankful for the progress but did not want the implementation to remain a work in progress. The handover process should be completed to capacitate the Richtersveld Community.
Ms Trish Hanekom, Chairperson, Alexkor Board, said the board was shocked by the institutional arrangements and lack of governance when it was appointed. But the turnaround over the past year and a half was good news. The Chairperson’s comments were addressing the heart of the matter. She found the arrangements unnecessarily complex but on 2 June 2023, Alexkor had a favourable courting ruling. The court appointed non-executive directors to replace the CPA-elected members. This was a huge step forward in establishing good relations with the community and resolving problems. The CPA was still in the process of establishing different companies in a proper manner. She was keen to work with the CPA representatives but one of the impediments was that handover cannot be made to an entity that is not properly constituted. No effort is spared to ensure progress.
Prof Trevor Fowler, Chief Executive Officer, Alexkor Board, stated that the relationship between the Northern Cape Provincial Government, Alexkor Community, and Project Steering Committee has improved after several meetings that were held this year. The municipality had applied to NERSA for the handover of electricity services. The R45 million upfront payment for the occupation of properties would be released once the services had been transferred. To assist the municipality, the Alexkor Board appointed an engineer to take responsibility to facilitate a speedier handover process of services. Since the establishment of the CPA, a working relationship had developed for people to participate in mining operations. He was in communication with the Chairperson of the CPA about the handover of services. The Alexkor Board was investigating the establishment of facilities, e.g. the reviving of the oyster farm and other activities that had collapsed 13 years ago. The CPA is collaborating with farmers to activate operations in the community and is working closely with Transnet and the Northern Cape Development Agency (NCDA) to establish the Boegoe Bay Port. The NCDA is supporting local businesses, including contractors, to accelerate mining operations that would contribute to economic activity.
Ms Leilani Swartbooi, Environmental Manager: Alexkor Richtersveld Mining Company, confirmed that progress is being made. A meeting is planned for the following week with the municipality about the electricity handover process. Some municipal services such as refuse removal had been partially handed over. Further meetings are planned with the district and local municipalities, and the Northern Cape Provincial Government about the facilitation of the handover process.
Deputy Minister Bapela noted the request in terms of the timelines for finalising the handover process. But he cautioned the Committee to be mindful of other actors such as the Northern Cape Government and the Richtersveld Municipality, who need to be on board on certain aspects of the land claim, not only on the transfer of assets but also the maintenance thereof. The assets are not in good condition and need to be improved before it is handed over. Non-action by the provincial government and the municipality was contributing to the delay. He was planning to visit Alexkor at the beginning of August 2023 to engage all role players. The CPA had not had a general meeting, which might also impact on the deadline. He was hoping the forthcoming annual general meeting would bring leadership that would stabilise matters. He would return to the Committee to report on progress as well as external matters and obstacles that might hinder progress. The Department would be working hard toward meeting the deadline.
The Chairperson welcomed the commitment to complete matters. The Committee would be monitoring progress on the initiatives. He appreciated the work of the board and the management team and offered support should the intervention of the Committee be needed. He wished the board and management team well in the work to add meaningful value to the developmental state.
The Committee adopted the minutes dated 15 June 2023. No amendments were required.
The Chairperson thanked Members for their commitment to doing their work and wished them well for the period of constituency work. Members would be meeting on oversight visits intended for the Northern Cape Province. He advised Members to be on standby for a study tour. Documents for the study tour are being finalised.
The meeting was adjourned.
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