Provision of Land & Assistance Amendment Bill [B40-2008]: deliberations

Agriculture, Land Reform and Rural Development

26 August 2008
Chairperson: Mr M R Mohlaloga
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Meeting Summary

The Department of Land Affairs (DLA) presented the amendments that were to be factored into the Bill to the Committee for consideration and approval. In the deliberations that followed, the Committee was unhappy about the use of legalese in some of the amendments and preferred simple language that would be easier for lay persons to understand the legislation. Members expressed the concern that the re-definition of key terminology such as “property” had introduced specialist legal terms into the Bill and they would be difficult for ordinary people to comprehend especially wording such as “corporeal” and “incorporeal”. At the same time, the Committee was aware that the drafters faced enormous difficulty in ensuring that the public would easily understand the new legislation and that it complied with the requirements of the law and the courts. The Committee adopted the use of “corporeal” and “incorporeal” after it was agreed that the definition of these two concepts in the Property Act would be incorporated into the Bill to provide clarity. The definition of the phrase “previously disadvantaged” was also revised after concerns were raised about its validity. This was with reference to the question of who would be a ‘previously disadvantaged’ person in future and it was preferred to adopt the phrase “historically disadvantaged” as a more accurate description that could stand the test of time. The DLA had proposed the amendment of section 9 of the principal Act by inserting a new clause that would empower the Minister to exclude the provisions of section 17(1) and (2) of the Deeds Registries Act, 1937. This amendment did not sit well with members of the Committee who pointed out several unfavourable consequences that could arise in different marriage regimes since in effect it would allow only one spouse or partner to appear on the title deed in respect of land transferred for land reform purposes. The Committee was afraid of the dangers that the amendment posed as it opened up the possibility of abuse and corruption by allowing many loopholes the consequences of, which were immeasurable and too ghastly to contemplate. This amendment was rejected and the Committee requested the DLA and State Law Advisers to consider an appropriate draft of the provision to accommodate their concerns. When the DLA submitted its proposal to amend section 10 of the principal Act that governs the issue of provision of property for land reform purposes, a number of issues were raised about the implementation of the legislation. The Committee was highly dissatisfied with the implementation capabilities of the legislation with some members questioning its ability to alter the situation obtaining on the ground, whereby there were currently long delays in the procurement of property for land reform. The Committee felt that the beneficiaries of the land reform process were currently suffering losses and incurring debt as a result of bureaucratic intransigence and inadequate support to enable viable agricultural enterprises. There were also concerns that the procurement process itself was fraught with many dangers since there was no clear mechanism for determining the viability of commercial enterprises or “going concerns” and safeguards to protect beneficiaries from certain harsh economic realities. The procurement process also lacked safeguards to prevent abuse of land and property acquired for land reform once it had been transferred into the hands of a beneficiary. The Committee was also concerned that the DLA’s grant structure, which opted for a group structure in terms of individual grants being pooled together to finance property acquisitions was a recipe for economic disaster given past experience and the management problems that would likely arise. These amendments were therefore unsatisfactory and indicated poor and haphazard planning and would likely result in the failure. The DLA responded that its proactive land acquisition strategy had been curtailed by fiscal limitations imposed by Treasury. The pooling together of grantees was based on a system of co-operative farming that had proved successful in several economies in Europe and would alleviate overcrowding and land shortages in the homeland. In response, the Committee requested the DLA to present its overall implementation strategy at a subsequent meeting and to submit the Business Plan that it had forwarded to Treasury as motivation for its grant systems. Controversy had also embroiled an amendment to clause 5 of section 10 according to which anything to have been done or purporting to have been done under the principal Act as amended by the Bill would be validated. Members took exception to the introduction of retrospectivity in the legislation and demanded explanations from the DLA about the need for its inclusion. The Chairperson therefore requested parties to obtain mandates on this ‘limping’ clause and directed the State Law Adviser to clean up the draft Bill to enable the Committee to vote on the amended clauses in a subsequent meeting.

Meeting report

Provision of Land and Assistance Amendment Bill: Department of Land Affairs (DLA) presentation on amendments, and deliberations
Mr Thozi Gwanya, Director-General, DLA, presented the amendments made to the Bill following submissions that were made at the public hearings. He noted that submissions were made on various clauses, and whilst some of the concerns of the stakeholders had been accommodated already in the Bill others had been responded to during the public hearings, or had been outlined to the Committee.  Changes had been made therefore, in the Bill to factor in some of the comments that were made during the presentations by stakeholders.

Definitions clause
Mr Gwanya noted, in respect of the definitions, that one of the matters had been addressed in an amendment to the definition of “property”. It now read that property included movable or immovable, corporeal or incorporeal property, and included shares, rights, title or interest in or to a juristic person, other entity or trust.

Mr S Abram (ANC) asked for clarification on the meaning of “corporeal” and “incorporeal”.

Ms B Thompson (ANC), Mr J Bici (UDP), and Ms C Nkuna (ANC) concurred that there was a need to explain these terms in simpler language.

Ms Nkuna observed that one of the things that caused reluctance to go through this Bill was the language used; although lawyers and drafters might have to use certain words the way it was written did not take into account the people who would have to use it. She suggested that perhaps a summary of all the Bill’s clauses in simple terms would remedy the problem.

Mr Sunday Ogunronbi, Director, Land Planning and Property Law, DLA, responded by distinguishing between movable and immovable property. Immovable property referred to land and the assets that were fixed on to it. Movable property would therefore be any other thing that was not fixed to the land.  Corporeal and incorporeal property related to the holding in that property. The main thing was the distinction between registrable real property and non-registrable property. He explained that a person could register a physical property or a bond or other forms of security. Incorporeal property was something that could be registered, but did not have a physical form; such as a security interest like a bond or loan that would encumber the property.

Ms Thompson requested the wording to be changed, emphasising that this Bill must be able to be understood by those who were not learned. It was important therefore to use simple language that could be understood.

The Chairperson asked the DLA if it was possible to get similar words that were legally acceptable.

Mr N Singh (IFP) said that whilst he understood the need for simplicity, there were certain legal terms that many people would not understand. However, these words had a certain legal meaning that could be understood by lawyers. If deeds and other legal documents incorporated certain words, or relied upon well-established principles, it would not be possible simply to remove all “legal language” and put in something else.

A State Law Adviser offered a definition of the terms, and warned that removing these words would substantially alter the meaning of the Bill by limiting the scope of the definition. The terms were used regularly in the courts and in other legislation.

Adv S Holomisa (ANC) commented that the terms had a bearing on some of the issues relating to property such as shares. If they were to be removed, arguments could emerge later during the implementation of the Act since its application would have been limited to what would have been stipulated. He agreed that in order to encompass the widest possible scope, these were the terms that could best assist the Bill’s objective to empower the Minister. It could therefore do an injustice to the objectives of the Act to remove these terms. He agreed that they were in standard use in the legal field.

Mr Abram pointed out that the suggestion had been that the Committee should be given clarity about the meaning of the terms and not that they should be removed.

Mr Abram also said that the Bill was not intended to serve a sophisticated society and that an ordinary citizen should have no problems understanding it. A definition of what is “corporeal” or “incorporeal” was for this reason needed, bearing in mind the society that it would be serving. He asked for a further clarification of immovable and movable property. There was a need for the country’s laws to be ‘people-friendly’ to avoid legal action, which was of high cost. Complex legal language had become a thing of the past, as evidenced by the discarding of many Latin expressions in legalese.

Mr Gwanya responded that it was very difficult to find a balance between the needs of communities that had to experience the legislation, as well as the lawyers who dealt with litigation in the courts, especially when litigation arose as a result of the legislation. If the terms were defined in the Bill, it would become necessary to make consequential definitions, since most people were not familiar with processes such as the registration of deeds. In any event, when litigation arose, the legal definitions as they pertained in property law were the ones that would take precedence.

In answer to the question requiring clarity on the distinction between movable and immovable property, Mr Gwanya pointed out that there were decided cases that had established the principle that if anything was fixed on to the land it became part of that property, notwithstanding the fact that they may be capable of being removed.

The Chairperson asked Mr Gwanya if it was possible, given that he had mentioned that the two concepts were defined in the property law, to simply transfer those definitions into the Bill.

Mr Gwanya agreed and said there was no problem with that if the Committee wished. The Department had not thought it necessary to repeat those definitions, but could do so.

Amendments to the Objects of the Act
Mr Gwanya noted that submissions had been made, during the public hearings, about the need for capacity building and skills development and empowerment. This was addressed in amendments to the objects of the Act, which now included references to promoting economic growth and empowerment of the previously disadvantaged. It was thought that this would address the concerns that had been raised.

Adv Holomisa (ANC) asked whether the addition of “empowerment of the previously disadvantaged” incorporated capacity building and skills development, since he understood the addition as referring to economic empowerment. He asked if there was anywhere where the phrase “previously disadvantaged” was defined.

The Chairperson requested the DLA to check if there was a definition in the Constitution.

Mr Gwanya answered that this matter had been dealt with in a broad manner in the Objects of the Act but was more specifically attended to in clause 3 (iii) of the Bill, in further elaboration of clause 2 (d).

The Chairperson replied that this answered one part of the question. The second part related to the definition of “previously disadvantaged”. He noted that there was no definition in the Constitution although reference had been made to it.

Ms B Ntuli (ANC) commented that whilst she was in agreement that the phrase should be defined, it was important to ask whether that category of person was not disadvantaged at present. There were persons who were still disadvantaged at present.

Mr Abram added that another problem was to try and see where the Bill would be in ten to twenty years time, and trying to consider, in the future, who “previously disadvantaged” encompassed could be extremely difficult. He cautioned that legislation could not be easily changed, nor in a hurry and there was a need to  reflect on how the Bill would impact on future generations. Careful definition of the phrase was required to avoid all sorts of interpretations that could arise.

The Chairperson asked what wording the Constitution used to describe previously disadvantaged persons.

Mr Ogunronbi read from Section 9(2) of the Constitution and the Chairperson was satisfied that the phrase, in the form it appeared in the Bill, had not been used in the Constitution.

Adv Holomisa suggested that “historically” would be a better term than “previously”, since it spoke about those people who were disadvantaged because of South Africa’s history.

The Committee accepted the word “historically” and substituted it for the term “previously”.

Amendment to Section 9 of the principal Act
Mr Gwanya went ahead to the next amendments, indicating that the proposed section 9(8) in the principal Act would now be deleted, and a new amendment inserted to the effect that the Minister could exclude the application of sections 17(1) and (2) of the Deeds Registries Act (DRA), 1973.

Mr D Dlali (ANC) requested that when Mr Gwanya was presenting the amendments he should provide a motivation of why changes were being made, and what the effect of the changes would be, so that the Committee would understand better.

Mr Ogunronbi apologised for the omission of a motivation for the changes.  He explained the changes to clause 3, which was amending section 9, by saying the reference to the DRA provided for a situation in respect of the registration of property and the relationship of spouses who were married in community of property. This section of the principal Act, as originally worded, had stated that the provisions of the DRA would not apply in certain instances. In particular, if spouses were married in community of property, there was no need to register property in the names of both spouses, as the effect would in any event be that the property would be jointly owned. Instead of completely removing sections 17(1) and (2) of the DRA, the DLA had considered that there were certain deserving cases that would necessitate a case-by-case consideration of whether it should be excluded. The original provision was modified therefore to allow the Minister to exclude the provisions of 17(1) and (2) of DRA, regarding the procedural requirements in the Deeds Office. This was a clause that spoke to procedure and not to substance.

Adv Holomisa (ANC) requested clarity on why sub clause (8) had been deleted.

Mr Ogunronbi responded that the substance of this subclause would in actual fact be retained in the amendments to Section 10 of the Act. In essence, all that had happened was a re-arrangement of sections.

Mr Dlali requested that whenever there was a re-arrangement of sections there was a need to clearly explain this so that the Committee could follow.

Mr Singh remarked that cross-referencing presented some problems. He noted for instance that there was mention of stamp duties, which was dealt with under revenue laws that were themselves currently under review by Parliament. He also requested clarity on the issue of marriage in community of property and registration of only one name on the title deed, since he had thought that the law required both spouses were required to sign such documents.

Mr Ogunronbi responded that at the time that this provision was crafted in 1995, there had been a fear that there were certain marriages that could not be proved in a particular way. That had been the reason for the wording of the original provision.

Ms Ntuli asked for an explanation of what was meant by the submission that marriages could not be proved.

Mr Ogunronbi said that he meant that sometimes the documentation that proved that a couple was married was not available.

Ms Ntuli asked whether the DLA had looked at the new Marriages Act, which was in force at present, as opposed to considerations of what the situation had been in 1995. It was not possible to continue referring to old laws when new laws had been substituted. The old laws had been very discriminatory against women and there were now new laws that accommodated everyone, so she did not see the need for the old references.

Mr Ogunronbi responded that the DRA would not, and had never purported to regulate the substance of marriage. Sections 17(1) and (2) of the DRA only stipulated the formalities to be completed for property registration where people were married in community of property. The Matrimonial Property Act governed the legal consequences and property rights of spouses. The idea behind the exclusion of these sections from the Bill was not to exclude either spouse from the ownership of property. It was rather to allow for joint-ownership, even in the instance where only one spouse’s name might appear on the records held at the deeds registry. It therefore sought to exclude the formal necessity for registration in both names. It did not exclude the effect of property registration. Nobody was substantively excluded from ownership. This would allow persons with certain types of marriages not to be disadvantaged simply by reason of the fact that they did not hold certain documentation.

Mr Singh commented that whilst he understood what Mr Ogunronbi was saying, property was, nonetheless, a sensitive issue. He therefore suggested that perhaps the DLA should stipulate exactly why it was wanting to have this exclusion.

Mr Abram wanted an explanation as to what would happen in connection with polygamous marriages or other forms of religious or customary marriages. At some stage it was necessary for the legislation to be clear, considering that it was meant to ordinary citizens who had no knowledge of the intricacies of the law.

Mr Ogunronbi attempted a further explanation. He said that the present situation in regard to the application of the exemption was that it occurred mandatorily, which meant that it was not necessary for both names when registering property in the names of spouses married in community of property.  If this was to be left as it was, it would mean that it would be possible to register property in one name, even if the estate was to be jointly owned by a couple. The amendment sought to introduce a situation where this would not be the case automatically, so that sections 17(1) and (2), that did required recordal of both names to vest joint ownership, would therefore apply, subject to the Minister’s discretion. This would cater for exceptional circumstances where there might be a need to register property in one name only, although the normal case would be to follow sections 17(1) and (2) and register in both names. In essence, section 17(1) and (2) would apply, except where the Minister exempted someone from these requirements because the parties were unable or incapable of producing documentation evidencing the marriage. Therefore a Ministerial discretion to exclude was being proposed, in place of an automatic exclusion.

Mr Ogunronbi said that Mr Abram had also raised a matter in relation to succession laws. A number of Constitutional court judgments had established the principle that a person could not be excluded from inheritance on the basis of custom or religion. These issues had been adequately dealt with in recent amendments to succession laws.

Mr J Bici (UDP) was concerned that if only one name was recorded on the document, this could lead to misunderstandings. The excluded spouse would be entitled to ask why his or her name did not appear. He asked if there would be aproblem, in terms of any other law, if both names were always to be required.

The Chairperson asked whether the Department meant that if no proof of marriage could be produced, then it would be presumed, from the registration of one spouse’s name on the property, that the marriage existed

Mr Ogunronbi responded to both Mr Bici and the Chairperson by stating that the amendment was saying that, despite the fact that the property might be registered in the name of one person only, this was not to be taken as proof that the property fell outside the joint estate. There could be instances where the party had not disclosed the fact of the marriage, or where there was no evidence of marriage through production of the usual documents. The property might then have been registered in the name of one person only. However, the fact of the marriage meant that this property was part of the joint matrimonial estate. This amendments was dealing with the formality.

Mr Gwanya gave a hypothetical example of the Minister buying a property and wanting to transfer it to a couple. There might be no marriage certificate, and the property might be registered in the name of the wife only. When the wife died, the husband, despite the fact that his name did not appear on the title deed, and despite him not having a marriage certificate, would not necessarily be precluded from claiming title to the property as part of the joint estate.

Adv Holomisa asked, if one spouse’s name did not appear on the Title Deed, if there was anything to prevent the other spouse from selling the property.

Mr Ogunronbi replied that when it came to disposal, the conveyancer or the Registrar of Deeds would still ask questions around marital status. If the spouse whose name was on the Deeds lied, then it was possible for a property to be sold without the other spouse knowing about it.

Mr Singh commented that this seemed to be a protection clause for the other partner and that was what the Department was trying do. This clause protected the one partner for example if the other went and obtained land from the Minister, and had not disclosed that they were married. If it was then discovered that the parties were married, the Minister would be protected as the unnamed spouse would, notwithstanding the fact of not being named, still also have a right to the land that had been transferred.

Ms Nkuna (ANC) asked what would happen in a situation where property had to be sold and there were, for instance, a number of wives whose names did not appear on the title deeds. She asked how they could be made aware that the property was being sold.

Mr Abram added that he would like to know what would happen if there were five wives and three of them objected to the alienation or sale of the property. He thought that this clause could open up the whole process to abuses such as favouritism or preferential treatment by officials who could make decisions. He noted that this property was received as a grant. 

Mr Abrams further enquired whether the grants that were made available to the beneficiaries were adequate to cover the full costs of the procurement of property. If the grants did not cover the full cost, then he wished to know what loans would be needed to make up the difference. At the moment, grants only covered a fraction of the cost of property and the larger chunk of the cost had to be financed by loans taken out by the farmers in order to finance their agricultural activities. He asked if this situation would also occur under the new Bill.

Mr Abram asked that a copy of sections 17(1) and (2) of the DRA should be made available to the Committee.

Mr Abram furthermore enquired about the cost of implementing the Bill. Although the memorandum to the Bill stated that there were no financial implications, it appeared to him that this was not the case.

The Chairperson said that the issues that arose from the amendments should be dealt with one after the other, and the questions he had raised would be addressed in the same manner.

He asked the Committee to agree, firstly, to the amendment to section 9 of the principal Act.

Mr Singh recommended that it would perhaps be useful to advertise or gazette information relating to the transfer of property by the Minister to an individual or a couple, to deal with the danger of excluding a partner. There could be some way of formally notifying people that the Minister had provided a grant of property.

Mr Ogunronbi responded that the present Act allowed for what Mr Singh had raised. This information went into a public gazette.

Mr Ogunronbi agreed that the issue raised by Mr Abram was important. It was a reality in the housing sector that people could obtain houses free of charge from the State, and then sell them for considerably less than their value.  The losses that were incurred by the State as a result of such abuses were very high,  and persons who needed such assistance could be prevented from accessing it.

Mr Singh suggested that it might be possible that a person would receive a grant of property from the State and would then, two weeks later, sell the property to another party for even half the price. He said that there should be consideration of the suspensive or pre-emptive conditions that could prevent the disposal of such property within a stipulated period after transfer by the Minister to a beneficiary. He also said that perhaps, if a beneficiary had to dispose of a property, then it should be sold back to the State. This kind of protection was necessary otherwise the State and taxpayers’ money would be used to acquire a ‘going concern’ only to see it resold at a fraction of its value.

Mr Ogunronbi responded that the Minister was empowered to impose conditions in respect of such land and property.

Mr Singh asked what these conditions were and whether the Committee was aware of them. The Section stated that the Minister could make conditions for the use of land, but id did not specify whether this included conditions for the sale of land. He reiterated that he would like to see protection of taxpayers’ money.

Ms Ntuli warned that the new clause carried the potential for abuse, and corruption was a possibility if the officials administering were not upright in the conduct of their duties. The clause that had said that two people should sign was relevant. There were dangers that girlfriends of the male spouse fwould also lay a claim to land in this way.

Mr Abram said that after reading sections 17(1) and (2), he was in agreement with Ms Ntuli. This clause would set a dangerous precedent because it was open to all forms of abuse. The Minister was given the power to suspend a particular provision. He was not sure whether this had passed the constitutionality test. Sections 17(1) and (2) were a safety valve that ensured that the person who was the beneficiary would clearly and truthfully indicate who his partners were. The amendment as proposed would allow a loophole, and this could have immeasurable consequences. Most people could usually claim that they had a relationship worthy of recognition, therefore it would be dangerous to allow this. He was worried that there might be over-use of the discretion.

Adv Holomisa (ANC) seconded Mr Abram’s statements, and said that the more this matter had been discussed the more he questioned the need to exclude the operation of sections17(1) and (2). He did not understand the logic behind this, since even in customary law unions there were stipulations as to how the marriages would be recognised as valid and recorded.

Mr Gwanya said he would accept the Committee’s direction regarding the amendment.

Mr Singh commented that that it would not be ideal to put the drafters under pressure, and thought that it would be fair to give them an opportunity to apply their minds and attempt a re-draft, having heard the Committee’s views.

Mr Singh further enquired whether there was any need to have the Bill finalised for the debate on 22 September. He thought that there was plenty of time for it to be debated in another session in October or November.

Adv Holomisa was in agreement with Mr Singh and conceded that there was a need to give the legal drafters time to consider the Committee’s views. There could be legal reasons that required this particular clause to be amended.

The Chairperson responded that there was no particular rush to finalise the Bill. He therefore requested the State Law Advisers to apply their minds to whether this clause should be removed or if it should be further amended.

Amendment to section 10 of the Act
Mr Ogunronbi pointed out the substitution of section 10 of Act 126 of 1993, by section 5 of Act 26 of 1998. He explained that although the present provisions had allowed the Minister to do a number of things, they had been inadequate insofar as post-settlement care was concerned. There was also a need to factor in consequential amendments because of the re-definition of “property”. This amendment therefore included post-care issues such as capacity building, skill development, training and empowerment. During the public hearings it had emerged that the powers of the Minister had not been clearly articulated enough to indicate whether they included expropriation. This point had been taken into consideration by the DLA, which now proposed that amendments should be effected that would separate the acquisition processes from the disposal processes.  Amendments were also effected to bring in skills development and empowerment for clarity, since initially it had been assumed that these concepts were covered under the term 'development'.  

Mr Abram(ANC) commented that the process of providing property to beneficiaries of land reform was currently unsatisfactory, as evidenced by lengthy procurement procedures. This proved to be detrimental to the economic well being of the persons who were meant to benefit from land reform. In practice a farmer would identify a property for purchase and approach the Department for assistance. The seller would lose patience with the bureaucracy involved, and entertain new offers from other buyers who had the necessary finance for the sale to be concluded immediately. This would result in frustrations building up in the community, as many possible properties were seen as being snatched away. Mr Abram therefore requested what the practical effects of the new arrangement now proposed by these amendments would be.

Mr Abram repeated his earlier question whether the intended beneficiaries of land reform would be provided with a grant that covered more than a mere fraction of the cost of land and property that was to be acquired, and whether beneficiaries would be required to get the balance by taking out loans.  The current arrangement did not benefit the ordinary people on the ground, and was on the contrary quite detrimental to them, as many of them became involved in debt. The Committee had witnessed the large number of people who were unable to repay their Land Bank loans, which financed the portion not being covered by the State grant.

Mr Gwanya responded that the existing instruments of land reform were applicable; namely the LRAD and the Settlement and Production Acquisition Grant that assisted people to buy land. These instruments would apply before the legislation was passed. The fact that people could get loans after receiving assistance would still also pertain, whether this was through the Land Bank or any other institution, if they wanted to improve on their agricultural activity.

Mr Abram asked if Mr Gwanya was saying that a person would receive only the grant, and nothing else besides. He was worried about the extent to which the State would contribute to burdens being imposing on the beneficiaries of land reform and land restitution initiatives. He wanted clarity on what would happen where the grant did not cover the full costs. People were being put into debt from which they could not recover. If they were given too small a grant, it would be difficult to convince them not to sell the property to get themselves out of debt. If the loans were not serviced, mortgagors could also not be told that they could not sell the property to recover the debt.

Mr Gwanya responded that the Department did not intend to driveland reform beneficiaries into debt through the land acquisition.  They would not be indebted for the grants received from the Department. Whether or not to take out a loan, over and above the grant, was a business decision that the farmers must take, and they must fully recognise the consequences of such an action. If a large loan was taken out, this should be done with a reasonable expectation of being able to service the debt. The Department's grant package did not have a product that financed the purchase of a farm for a large amount. Each individual would receive a grant of about R111 000. The number of recipients qualifying for the grant and pooling their money would determine the value of the land that could be purchased.

Mr Bici (UDP) queried how many people would the Department put on a small piece of land that was worth a lot of money.

The Chairperson was surprised at this explanation, since the Committee had been under the impression that individuals qualified for the grants.

Ms Ntuli expressed her dismay about the grant structure. She commented that if this structure was allowed it would be counter-productive. The Committee had, during its oversight in the Free State,  seen that 200 people had been put together and given a piece of land with assets, including movable assets. No production had taken place and the scheme was a total failure. It seemed that this proposal would be heading for the same situation, and land reform as a whole would fail.  She cited a farmer in Mpumalanga who had identified a suitable farm for acquisition, and had bought some of the cattle from the farm-owner. He had then approached the Department for assistance and was told that he alone could not get that grant and he must find other people to come in with him into a group. He was still struggling to try to arrange this.

Ms Nkuna seconded Ms Ntuli’s concerns and reiterated that this would be a retrogressive development.

Mr Dlali pointed out that previous research done by the Department showed that these schemes had failed. It was not practical to group ten or twenty families, and tell them to run a farm as if it were a factory. Those groupings would range from good farmers to bad ones, and this would result in disagreements. Group operations did not work.

The Chairperson commented that the registration of property in that group scenario would prove to be cumbersome.

Mr Abram observed that what was being placed before the Committee evidenced poor and haphazard planning. It was important to revisit the objectives of land reform against the goal of empowerment. It was necessary for debate between Parliament and the Department. Once these objectives were clear, then it would be necessary to have the correct mechanisms to achieve the desired results. The policy now suggested by the Director-General and the Department could not be followed as a model for land reform, as it had been proved to fail. This Bill would only serve to exacerbate that failure. Individual land ownership in rural areas had been prevalent ever since 1912 when the colonial government provided support and subsidies to white farmers. He appealed to Mr Gwanya to undertake a re-draft, since the Bill in its current form would not bring any progress. He reiterated again that the grants were inadequate, considering the costs of agricultural implements.

Mr Gwanya responded that his Department had not lost the vision of empowerment through land reform. It was unfortunate that when the Department had approached National Treasury to argue for the adoption and implementation of the 100% grant for the support of land reform, this had been rejected. The current grant structure was a compromise, to revise the grants from R40 000 to R111 000. He agreed that this was not be the ideal scenario, but the truth was that there was still some way to go before reaching the ideal. The Department, when making this presentation, did not focus on the tools for implementation. The grant system belonged to the policy discussion and debate, which was linked to the implementation of the objectives of the Act. The Department was trying to do its best within the available means. The Department had focused on the enabling legislation. Even if there were to be 100% grants, the amendment would still be necessary. Individuals were still able to access the grants. The same rate and structure still applied. If the principles of co-operatives were adopted then, in order to try to address the current fiscal limitations, it would be possible for people to pool their grants to buy sufficient land to subdivide. If people were educated around the principles of the co-operatives that had helped Europe and the United Kingdom to drive their economies, this would give them collective purchasing power to acquire land.

Mr Singh suggested that every acquisition should be linked to a business plan. If the entire acquisition was to be financed by a grant, then he asked if there would be a list of the beneficiaries. In Zimbabwe the noble objectives of land reform had been abused by Ministers, allowing them and their friends to receive land, and this had resulted in total disillusionment with the land reform programme. It was important to be extremely cautious as to who could benefit and to avoid the domination of this list by a small group of elites. He asked, for instance, if the State could also consider imposing a condition whereby a beneficiary would sign an agreement of indebtedness to the State to the value of the land acquired, but that this would be reduced for every month that the land was farmed. If the beneficiary decided to sell the land before the stipulated period- such as five years - there would be an obligation to pay back the State or for the State to take back the land.

Mr Gwanya responded that the Department believed that the grant system was the most suitable, given the type of clientele with which the Department was dealing, as opposed to putting people under indebtedness. He agreed that this approach had been used by the previous government, but only in respect of a category of people who had satisfied certain basic requirements.

Ms Nkuna wanted to know the meaning of post-care and what exactly it was that the Minister would do.

Mr Dlali requested clarity on clause 10(1)(b) and the comments that the Ministerial declaration would apply to disposal as opposed to declaration.

Mr Singh observed that despite the fact that the Memorandum to the Bill had said that there would be no financial implication, it now appeared that there would be several implications, with the Minister now empowered to buy land as well as going concerns. He asked if there was any budget or projections or any indication of how many hectares of land would be purchased. Considering that clause 10(1) spoke about money appropriated by Parliament for the purposes of the Act, would more money be appropriated for such purposes? If land was bought, who was going to determine that it was a “going concern” or an “economically viable” entity? Where there any safeguards to protect the eventual beneficiaries from receiving land that turned out not to be economically viable for a previously disadvantaged. Mr Singh also enquired if this was where the issue of a pre-emptive clause could apply.

Mr Gwanya (DLA) responded that there was a pre-emptive clause in the Department's policy document but this had not been replicated in the legislation. The Department had debated a lot on the issue of the constitutionality of stopping people from selling land. There were no laws that precluded the Minister from making conditional grants. The Department's policy contained conditions such as the right of first refusal; absentee landlordism; a use-it-or-lose-it principle in terms of which one would have to forfeit the land if they were not using it and a mentorship lease condition dictating the manner in which the land could be leased. These conditions sat in the Department's policy as conditions for the grants but were not included in legislation.

Mr Singh (IFP) pointed to clause 5 which stated that anything purporting to have been done by the Minister before the commencement of the Act and which could have been done under the principal Act as amended by the Bill would be validated. As Parliament deliberated on the new law, if the Minister or the Department could have acquired property in the meantime and this would be validated later on by clause 5. Was this not a dangerous thing for Parliament to allow that to happen if post facto approval would be given for something that was not yet in the law?

Mr Dlali (ANC) added that this clause introduced an element of retrospectivity to the legislation. He asked the Department to divulge whatever it was that had been done to necessitate the inclusion of the clause. Retrospective legislation would set a wrong precedent.

Mr Gwanya responded that what had been presented by the Department had not been calculated to mislead the Committee. The Department had followed recommendations by Auditors who noted that the Department had made certain acquisitions of property that were not provided for in legislation.

The Chairperson requested mandates to be provided to parties on clause 5 which he described as a limping clause. The Committee also directed the Department to present its grant policy, and LASA, that had been tabled before Treasury. The State Legal Adviser was instructed to clean up the draft Bill. The meeting was adjourned and further deliberations on section 17 (1) and (2) and voting on the Bill clause by clause would continue on a date to be advised.


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