Update on deeds of settlement obligations: DPE & DRDLR briefing; with Deputy Minister

Meeting report

The Chairperson said that the Committee would be dealing with issues around Alexkor. It had received a request from members of the Richtersveld community to address the Committee. They would explain who they represented and what the issues were. The Northern Cape Department of Rural Development had also been invited to join the meeting. Along with the Department of Public Enterprises (DPE), they would respond to the issues raised by the Richtersveld community. An interpreter would join the meeting to translate the community members from Afrikaans to English.

The Committee Secretariat said the Richtersveld community requested 30 minutes to speak, and Mr Willem Cloete would lead them.

(The report below was based on translations by translator Archie Groener.)

Richtersveld community submission

Mr Cloete thanked the Chairperson for allowing his community to speak in Afrikaans. The actual language he and his community spoke was Nama. The members of the interim committee would introduce themselves.

Mr Gert Cloete, Ms Anne Vrietberg and Mr Ralph Cloete greeted the Chairperson.

Mr Cloete said that the interim committee existed because there had been no representation from the community. The members had not been elected. They had been asked to step in. in 2007 the community went to court about the settlement obligation. There was also a problem from the community because there was no communication or messages about whatever was happening. The interim committee had gone to the community, and the community had given the committee a mandate to represent them. The committee was trying to sort out what was happening and to make sure that the community got the necessary information. Trans Hex was also involved. What the committee really wanted was to get information about what was happening so that it could inform the community.

The interim committee had received the information and dealt with other parties to receive information so that it could communicate this to the community. In 2019, the community got to a stage where they thought they could finally have a legal or legitimate election so that the committee members could be elected to represent the people, but then there were some problems with the member list and certain old members’ names were not on the list. This was picked up while the committee was busy with the election procedure. That was why the community decided to stop that.

The Department of Land Reform had taken the matter to the courts in Kimberley on 18 February 2020 so that an administrator could be appointed to see to the matters of the community and to sort out whatever problems they had been having.

The committee had agreed with the Department going to the courts so that an administrator could be appointed, because it fell under the Consumer Protection Act (CPA) rules and it was in the Constitution. The community had been very disappointed when, four months later, the administrator had come to introduce himself, but as yet, the community had not seen any progress. The community was feeling very disappointed.

With the appointment of the administrator, when the community received the letter of appointment, one of his first functions was supposed to be to sort out the members’ list -- the ones of the old members as well as the members of the community who were 18 years old or older -- so that the community could have an election in November 2020. However, this was not sorted out and now it was a year later and it was still not sorted out. The community was sitting with problems -- it did not know what developments were taking place, or what was happening at Alexkor. Poverty was continuing, especially amongst the community’s young people, because these matters had not been sorted out. The committee was very grateful that the Committee was listening to the community and what its challenges were.

The community was still waiting to find out what was really happening because every time the community heard that there was a new body in place or a new company that had come in, the community was yet to be represented. The community was very disappointed that a legitimate election had not taken place so that they could have a legitimate body to represent them. Six proposals had been laid on the table, and the community had felt optimistic, thinking that it was moving in the right direction so that things could be sorted out. But the community was very disappointed when nothing really came of this. The proposals were made in May last year. The community was suffering and not developing because of the challenges it had.

The committee would like to know what had happened since the decision of Parliament in May 2020, because the shareholders had not been getting anything from the mines. What the committee had asked was for a part of the profits – 10% - to be paid out monthly to the community so that the community could at least start with projects and do something to alleviate the poverty. The committee knew that a number of things had taken place. It wanted to ask whether Redelinghuys and the administrator could see to the matter of the money being paid monthly to the community so that they could continue with work and poverty alleviation.

It would mean a lot to the community if there could be some progress on this matter, because community members were the owners and holders of the mineral rights of Alexkor, but they had not yet received any benefit. It was of cardinal importance that if the DPE had gone and made a decision about this, that the community could at least see that there was some progress and the community could start with projects so that its members, as owners and mineral rights holders, could get some benefits from this. At the moment, that was not happening.

The community had been very surprised to learn about the Boegoe Bay project because nobody had consulted with them. They had had to see some of the information in the media. Boegoe Bay was one of the areas that the community had laid a claim to. Despite the Departments being involved, the community had not received information, other than that the community had to go to the Nama Khoi district offices to find out. The people at the offices had been very surprised when the community came to ask them about it, because they did not know about it either. The community would very much like to know what the progress was around the Boegoe Bay project, because they were not consulted about it and it was a part of the land that the community had claimed.

One the community’s constant problems was that there was no progress, and they had not received any information. The community was still waiting for answers, especially since the decision taken by Parliament in May last year, as nothing had been seen to be happening there. The committee knows that if there was anything to do with prospecting rights or anything, the community -- according to the CPA Act and the Constitution – had to be consulted on all of these matters.

There was a company – Vast Minerals – that had applied to get some prospecting rights, but nobody had come to speak to the community about it. Some prospecting rights had been sold for about R80 million, and the community was not going to get a cent of that money. What had happened to this matter, where the community was supposed to be consulted about all these things that were happening? The committee knows that the administrator was most probably dealing, or should have been dealing, with these matters, but the administrator, or someone who represents him, was supposed to come and inform the community. Now there were a number of situations where the community had not been consulted at all and the community just wanted to know what was happening.

There had been a declaration by the Richtersveld group about development. The committee said that it recognised there was an agreement, or some type of relationship, between the people and the community’s land. The community could not be removed from its land. That was why the community understood that there was a necessary development process that must take place with the following principles:

The natural resources – land, water and minerals – must be used fully.
The land must be used to its maximum potential.

Development actions must be focused on the people, and the people should play a part in this. This would then lead to development that would be lasting. There should be a better working relationship with the community. Community development must be a long-term plan, so that the community’s culture could also be looked after in a way that would recognise the rights of future generations so that they could also profit from this. The development should be done in a responsible manner and there should be good leadership.

The committee understood a number of things. When it came to giving consent, it must be informed, had to be obtained beforehand from the community and the people who were the rights holders. This was part of the principles and also part of the community’s rights -- that no property or rights may be sold or hired out without the community first being consulted.

There were a number of other matters. One of the most important ones was that with co-ownership and co-management, jobs should be created and there should be training. This was very important in a partnership. However, this did not mean that those who were shareholders should bear the biggest risk but never see any profits of dividends. What did each of the partners bring to the table? What would the production and the profits be? The 5-10% of the gross income should be negotiated regularly, and the community should be approached first. The community wanted to be heard.

The Chairperson commented that Mr Cloete had exceeded the 30 minutes he had requested and been allocated for his presentation. He said that Mr Cloete could summarise anything else, but ideally he would be done.

Mr Cloete asked for the Chairperson’s indulgence. There were two members who wanted to still speak. One wanted to speak about how women should be involved and the other wanted to speak about the values that were mentioned in the last part of the presentation.

The Chairperson rejected Mr Cloete’s request saying the request for 30 minutes to speak was Mr Cloete’s idea in the first place. Mr Cloete had covered almost an hour, which was 20 minutes extra. There were time constraints, because the Committee had to respond to what had been tabled. He and the Departments had captured the essence of the presentation in their notes. He suggested that the Departments share their thoughts.

Departments’ response

Mr Phumulo Masualle, Deputy Minister of Public Enterprises, said that he supported the Chairperson’s approach that the Departments should share their understanding of the situation. There was still a need to fully understand from the community what the areas of concern were, and therefore the areas that required intervention. The community felt marginalised.

The Chairperson called on the Department of Rural Development.

Ms Morongwa Mothengu, Director: Mining, DPE, said she would not make a long presentation, but would address some of the issues highlighted by Mr Cloete. In terms of the DPE’s responsibilities with regards to the settlement, the Department had executed all its obligations except for one. One obligation to the community was to transfer the properties and a payment of R45 million. That payment was an upfront payment to secure the accommodation for Alexkor employees.

That rental was not meant to be distributed to individuals. It was supposed to ensure that the community was able to maintain the houses. In 2016 the community had resolved that they had not seen the fruits of that settlement, therefore both the DPE and the Department of Rural Development were given consent to amend the deed of settlement so that the payment to the different beneficiaries could be allowed. However, that process fell through because of in-fighting and litigation among members.

Currently, the R45 million was in Alexkor’s attorney’s trust account. The process of the transfer was on hold, pending the regularisation of the CPA. Mr Kgotso Moeketsi, Chief Director, Department of Rural Development, Northern Cape, had also showed the different structure that the CPA had. One of them was a property-holding company, so the transfer of those houses and other properties, as well as the payment of R45 million, was supposed to go to the Richtersveld property-holding company, which was under the CPA and was currently dormant. So the DPE could not do much until the CPA was regularised.

On the issue of the proposals that were presented in May 2020, the DPE did acknowledge that it proposed six options. However, after some consultation both internally and externally, there was one option, which was to consolidate the state-owned mining companies. However, after extensive consultation, the DPE resolved to look at an alternative option. So there were two options currently under discussion. The DPE was currently drafting a memo which would reach Cabinet soon.

There was also the issue of the 10% income payment. Unfortunately, the deed of settlement did not make provision for such payments, so if that was what the community required, the deed of settlement needed to be amended.

Discussion

The Chairperson said the presentation had been very comprehensive.

Mr Lemogang Pitsoe, Chief Executive Officer (CEO): Alexkor, said that he was not aware of any mining rights being sold, as mentioned by Mr Cloete. It was not really an issue of the DPE.

Mr S Gumede (ANC) thanked the Chairperson for the opportunity and the submissions from the Richtersveld committee. He said the matter was complicated, but simple. What he realised was that the community did not have legitimate structures. On the other side, the Departments had made a decision that they cannot interact with illegal committees. The Departments were developing programmes on the basis that they should set up legitimate structures that they would then begin to formally interact with. This meeting should not have even happened.

What did the community representatives say about the programme? Apparently, the program had begun to address some, if not all, of the concerns that the community had raised. It was only that no one had shown anything, because the community was not even happy with the administrator. The community had said that the administrator was not consulting with them. The administrator had introduced himself and then disappeared. However, the administrator was dealing with an illegitimate structure. The interim committee was not the right committee. The committee only recognised the CPA.

He appreciated the confusion. The representatives were representing all the areas that were in the discussion. The Chairperson had wanted to know who exactly the committee members represented, but that question was not properly answered. It was a good initiative for the community, but the committee had not been ready for all this work before them. He was unsure that the committee had enough skills to manage.

He had calculated that each person was to receive about R15 000 of the R45 million, as there were about 3 000 people in Richtersveld. However, the R45 million was meant to run and maintain the area of Alexkor, and was not meant for individuals.

The Chairperson said that there was a problem of divisions in the Richtersveld community, so forming a representative group was going to be challenging.

Mr G Cachalia (DA) said that this situation was most untenable. His heart went out to the community, as they had been sold down the Orange River. Alexkor was central to this. Alexkor’s mission said it was to operate a growing and sustainable mining operation that contributed to the development and needs of the community. The identification of that community needed to be done by the parties concerned who were central to driving this, not by Alexkor and not by the Departments.

To say that there was confusion in the community was actually a result of bad mismanagement over a lengthy period of time. He was astounded by the “buck passing” that was going on when a poor community suffered while diamonds were being sold below price by people who did not have the requisite skills or valuation qualifications. This situation was not new. It was pre-Gupta. It was now, and it had to be dealt with. The buck passing, despite court orders, could not continue. If no contempt of court had been stated, that may well be, but there was contempt of morality. The Committee had obligations to the community and to the company, versus the obligations that the various Departments that put this situation into play, had to the community.

The committee had said that there had been no representation and that an administrator had been appointed but there had been no progress. What progress had there been? The community was in the dark. The Committee was in the dark. People had made a killing in the meantime. How had community representation been determined in the Pooling and Sharing Joint Venture (PSJV) board? Who had been appointed and on what basis? These were the things that led to confusion. In terms of Alexkor secretary, Raygen Phillips’s, resignation, what had been done to address the various concerns which he had raised and which covered all these areas?

In terms of representation in the company, how did Deon Bowers get appointed as acting manager? He was Mervyn Carstens’ brother-in-law, and when Mr Carstens was suspended he was suddenly appointed. How was this done? These were the things that led to considerable confusion. New committees had been appointed. Who had been appointed and on what basis had they been appointed? What prospecting rights had been sold, and why had there been no involvement in the community? Surely it was incumbent on the parties involved to determine who they were speaking with?

It was not the first time in a mining community that the people had been constituted as beneficiaries. How this was constituted was not rocket science. This could be dealt with fairly effectively, but it had not been done effectively. In the interim, while it had not been done, there had been wholesale theft and mismanagement. The Committee would hear about a plan that the administrator was putting in place, but that plan required consultation. This was a chicken and egg situation. The administrator says that he does not have the requisite bodies to consult with… well, he must get off his chair and ensure that that body was in place and that it was properly constituted. That needed to be done immediately. It was the first course of action. One could then talk about the returns that needed to be paid on a monthly basis, and to whom, on ring-fenced amounts of R45 million, which was not inconsiderable for a community that was so poor.

The Committee needed to know who exactly the administrator is, how he was appointed, what he was being paid, what the terms of reference were and what he was doing to resolve these issues. A community had come and made a very measured presentation to the Committee, and if he were in the community’s position, he would be spitting given what had been stolen, how it had been mismanaged and how the community had been sold down the river.

The Chairperson reminded everyone that this was not the first time the Committee had met with a community. It had met with a number of community representatives that were having issues relating to Alexkor at Parliament pre-COVID-19. Let the Committee not contribute to the divisions in the community. Let the Committee help the community to unite so that at the end of the day there was one representative of the entire community.

Ms C Phiri (ANC) agreed with the Chairperson saying that the Committee should not take sides but rather unite the community. In the end, there should be a proper structure to represent the community. She appreciated the Department of Rural Development’s plan that it had presented. Let the Department stick to its plan so that the community could have a proper structure. The Committee had planned to go to the Richtersveld at the end of the month. The community should appreciate what the administrator had already done and they should try to find it within themselves to resolve the issues.

Ms M Clarke (DA) said she was mostly covered by Mr Cachalia. Did Centaur still have the marine concession from the PSJV? This issue had been going on for a long time. Since the court decision in 2007, what benefit had the Richtersveld community actually had? How many times had the community been consulted during this period of time? It was ironic that COVID-19 was blamed once again, since this issue had been going on for a long time. What had been done since 2007 in order to bring the community on board and to ensure it benefited as it rightfully should?

She said that her heart went out to the community, and she was happy that the Committee would be doing oversight there. Communities like the Richtersveld had been oppressed for many years during the apartheid era. The Richtersveld really needed this type of investment to make it work. There was a lot of sympathy to be had for the community.

Mr N Dlamini (ANC) said he understood that the process had started as a land claim process, but issues of beneficiation should involve the Department of Energy and Minerals. Why was that Department not part of this meeting?

Ms J Tshabalala (ANC) said that the Committee’s role was to listen to the two sides and then suggest what should happen moving forward, notwithstanding that the Committee had already planned to go to the Richtersveld. The Committee had to note what it had received, as well as the Departments’ responses.

From the Department’s point of view, especially that of the Deputy Director-General (DDG), what were the softer issues that could be resolved? Some of the issues were just a matter of communication, and sometimes the government was slack in putting an effort into communication. What were the issues that the community thought it could cover and be able to respond to speedily?

She asked the Richtersveld’s representative if mining was still going on. The Committee was responsible for making sure the business was lucrative and self-sufficient and that the community was benefiting. The business was not looking good. What would happen if the business closed? What was the community doing to assist the process of business? Was the business worth saving?

She suggested that Committee Members be given something like three minutes each to speak to save time.

Responses

Mr Moeketsi said the administrator could answer the question relating to progress to date, because he dealt with issues directly.

Regarding the softer issues raised by Ms Tshabalala, the presentation was very clear. As soon as the committee itself adopted the membership list, everything else would be done. Dates would be brought forward. The main issue was the adoption of the list. The committee should come into office by June then it could work hand in hand with the administrator.

He said that he had noted all the constructive inputs by Committee Members.

Mr Donovan Majiedt, of Honey Attorneys, thanked the Chairperson for allowing him to speak on the progress made by the administrator. Honey Attorneys had been appointed around February and March 2020. Ms Clarke had said let one not blame COVID-19 this time, but the reality was that he had been able to visit the community only in October. It had been a very fruitful visit in that he could familiarise himself with the four communities and with Alexkor.

As far as progress in concerned, the finalisation of the list was a priority. Unfortunately, because of the fact that he could not timeously visit the community, he could start working on the finalisation of the list only in October 2020. The list had now been finalized, and would be presented at the annual general meeting (AGM). The hope was that the list would be adopted at the AGM in order to finalise the preparation for the elections. The notices for the AGM had already been distributed. Elections would then be held in terms of the supply chain process. The Department of Rural Development could comment more fully in this regard. The intention was to hold elections for the executive committee of the CPA, as well as for the directors and trustees of the various other entities.

One of the biggest concerns right now was what was currently happening at Alexkor. The representatives of the community had outlined their problems. Hopefully, if the elections were successful, a new board for the Richtersveld Mining Company (RMC) could be constituted. The other entities would also be able to address their barriers, concerns and problems. Unfortunately, that was not the responsibility of the administrator.

The administrator was determined to have the elections as soon as possible and also to allow the various entities to attend to all the outstanding problems in these entities. Honey Attorneys would also be having special general meetings in April with the community. He was not sure if the notices for these had gone out yet. A lot of the issues that Mr Cloete had brought up would be addressed at these meetings and further information would be provided to the community. Other outstanding aspects and questions would also be addressed at the AGM.

A colleague of Mr Moeketsi, listed as “IBM 2” on the meeting platform, said that Mr Madjiedt had covered the important parts, but that the Department was given a chance to implement the plan as it was presented today. The plan would be presented to the community on the 23rd and the 24th. The community would be given an opportunity to give its inputs. The Department could definitely improve its communication. Rather than waiting for general meetings, as required by the Constitution, the Department should develop something like a monthly newsletter as a way of improving on communication. Most of the work had been done, but it was not yet visible to the community.

Even when the administrator started, there had been no handover from the previous committee, which was a challenge. The community must accept the plan as presented.

Ms Mothengu highlighted that the community had over R350 million in a trust account. Those funds were supposed to assist the community in projects. However, that money was not being utilised. The trustees were drawing funds for management. There were funds, therefore, in addition to the R45 million.

Mr Pitsoe responded to Ms Tshabalala’s question, and said that he had not initially been involved in PSJV, but had then become involved. Alexkor had a debt of R120 million, but as of January it was down to R55 million. There were a lot of companies working there. There were a lot of employees who were not paid. Retrenchment had taken place over 2018, 2019 and 2020. That was a backlog from the previous management. They had been paid. Because there was animosity over not being paid, the community was now not teaming up with management.

Alexkor was operating even though it was tough times. He would admire it if the community put positive energy into the process. Even without the administrator, Alexkor was still helping the farmers with the little money that Alexkor had so that the farming activities did not stop.

There had been a question about the members of the general board. Because of the non-legitimate members of the CPA, Alexkor and the PSJV board had decided to go to court so that they could appoint three PSJV board members to represent the community. It would not necessarily mean it would be people from the Richtersveld. The previous committee had expired in 2019. The current committee’s position was extendable on a year-by-year basis, pending what happened between the CPA and the administrator. It was in the court order that once the CPA was fully functional, the community had the right to appoint its own people to the board. The only recognisable route for communication was through the administrator. There were no community structures that Alexkor could talk to. Maybe things would change after the AGM.

There was a question about how Deon Bowers had been hired. He had married the younger sister of Mervyn Carstens. Deon Bowers was a qualified geologist, and Mervyn Carstens was not a mining person or engineer. People had accepted that a non-specialist was in the role. Deon Bowers worked for Alexkor between 2011 and 2016 before Mervyn Carstens actually expelled him from the team. All the skilled people who were running the mine had been retrenched by the previous management. Alexkor wanted to be sustainable, and hoped the community would come on board instead of criticising each and every move it makes.

On the question of the softer issues that could be tackled now between Alexkor and the administrator, Alexkor had engaged the provincial government on everything that was not mining-related, and those properties were currently in transition. Because of COVID-19, the state attorneys and the property sections of government were not functional until late 2020, which had delayed the whole process, but the conveyers had now been paid.

Mr Moeketso said he was glad that Mr Pitsoe had raised the issue of provincial government. He thought the Committee should invite the provincial government to a meeting.

Deputy Minister Masualle said that the priority was to resolve community representation.

The Chairperson thanked the Deputy Minister. He said the Committee should assist both the Departments and Alexkor in order to unify the community. The community was supposed to know exactly what was happening that affected them. The Committee could be updated on a daily basis. In the next Committee meeting, the Committee and both Departments could give the committee feedback. He said the committee’s issues had been understood and taken into consideration. The community deserved to know what was happening at Alexkor.

Mr Cachalia asked the Chairperson if the administrator could be asked some questions, as he had tried to interject earlier. He noted that the time was 12:15 and the next sitting was only at 15:00. He said he thought it was important.

The Chairperson said Mr Cachalia could write down his questions and send them to the administrator.

The meeting was adjourned.