Communal Property Associations performance; Constitutional Court judgment: implications for Commission on Restitution of Land Rights; with Deputy Minister

Meeting report

The Chairperson read apologies from Deputy Minister Candith Dlamini-Mashego and Minister Gugile Nkwinti who had some responsibility to attend at a Cabinet Committee.

Communal Property Association (CPA) performance: DRDLR briefing
Mr Jeff Sebape , Chief Director: Tenure Systems, DRDLR, briefed the Portfolio Committee on the CPA performance for 1st to 3rd Quarter 2015-2016.He said 1 483 CPAs had been registered since the passing of the Act and 48 were registered in 2015/2016. The CPAs had been afflicted by a number of problems and the Department had taken various steps to address these challenges such as the establishment of Communal Property Association District Fora to serve as a platform to share experiences. A forum of tenure implementers had been established to capacitate new officials. An Advisory Committee on Judicial Administration was established to see if there were alternatives to a CPA being placed under administration.138 CPAs received training during this period and the scope of the LRMF had been extended to include support and regularisation of the CPAs. The Barolong boo Seitshiro CPA was placed under administration due to the failure of the previous committee to exercise its fiduciary duties and its bank accounts had been frozen. The Khomani San CPA was characterised by gross dysfunctionality while the DRDLR instituted proceedings against the Rama CPA Executive Committee for lack of accountability and misuse of finances. He said the APP indicated that 200 CPAs would be supported towards compliance for the year 2015-2016 which translated into 50 CPAs per quarter. No CPA was regularised in the 1st quarter; the DRDLR achieved half its target in the 2nd quarter and exceeded its target by supporting 100 CPAs in the 3rd Quarter. The summary of National Compliance trends were 2009-10 (100); 2011-12 (158); 2012-13 (209); 2013-14 (171); 2014-15 (284) and 2015-16 (208). Some of the challenges that led to the loss of land were disputes amongst community members, sales concluded without proper consultation and in some instances without the knowledge of some community members. Where CPAs have validly sold land, those CPAs must be deregistered. There are 18 provisional CPAs in the country and processes were under way to turn them into permanent ones.

Discussion
The Chairperson said the report did not show any costs involving the activities that were performed with regards to the CPAs

Mr Mduduzi Shabane, Director General, DRDLR, replied that in future the Department would include information on the financial performance in the report.

Mr M Fitane (UDM) asked if there were personnel who were experts in conflict resolution to give guidance at the CPA District Forum meetings.

Mr Sam Mogaswa, Acting Director: Communal Property Institutions, DRDLR, replied that CPA members, departmental officials and municipalities were part of the fora. Before now, the DRDLR had a workshop on the operations where Members were trained on the operation of the Act and their responsibilities on the mandate of the Fora.

Mr Fitane asked what impact did the frozen bank accounts have on the Barolong boo Seitshiro CPA.

Mr Mogaswa replied that the CPAs were not involved in the business operations. The members were leasing without a formal lease agreement. The Chiefs were allocating land and there was no accountability. This had since been addressed by the drafting of a formal lease agreement and freezing of accounts. The money was now paid into a designated account managed by the Administrator. The operations of the CPAs were not negatively affected because it was carried out by individuals who were leasing out the land.

Mr Fitane asked if there were plans to go back to the court for a more expansive order to give the auditors access to any new account in the name of Rama CPA.

Mr Mogaswa replied that the auditors had lined up a schedule to interview signatories to the accounts that were in the name of Rama to determine the motivation for the transfer into the new accounts so as to necessitate a further court order or to draw conclusion from the interviews that had been held. The Department was also having a meeting with the legal representative of Rama in this calendar year to look at the current status and the way forward.

Mr Fitane asked what sort of rights did CPAs have in places where land was sold? Did they own the land or was it a permit to occupy (PTO)?

Deputy Minister Mcebisi Skwatsha replied that if land was given to CPAs and it had to pay rents and taxes to municipalities, it presupposed that there were some income streams that flowed but communal property institutions (CPI) were not meant to be running farming businesses. CPIs should perform land administration to safeguard the assets of the people and the business operation must be performed differently so that there would be no conflict of the two.

Mr Fitane replied that the Department should have a system of regularly checking so that it would know if some community members were going to sell the land. There should be a reporting system or regular visits as these communities then fall back on government for assistance.

The Director General replied that the Department and the Deeds Office would explore the possibility of tracking disposal of land by monitoring sales of land

Mr Mosagwa added that there was going to be a provisional enactment that would give the Department the first right of refusal. In any CPA that wanted to sell land, it must first inform the CPA. The DRDLR would decide whether the process had been followed2) whether the Department wanted to acquire the land itself or give the CPA the green light to sell the land.

The Deputy Minister added that the best monitors were the communities themselves. People were allowing CPAs to do things on their behalf without monitoring.

Mr T Mhlongo (DA) said that he had assumed that after the amendment, there would be a better way of reporting. How was evaluation monitored as the CPAs were not properly functional? The report said some CPAs had been given to Provinces. What was the time frame for such CPAs to come to the National Government?

Ms Nomfundo Gobodo, Chief Land Claims Commissioner, CRLR, replied that cases of CPAs where the land was not registered was as a result of the conflict on the land and in such instances the land was transferred to the state. The Commission was interdicted from transferring the land back to the CPAs until the resolution of the matter." We hold on to the title deed until there is a resolution".

Mr Mhlongo said there were only examples of three CPAs under judicial administration? What about Malamala CPA? What were fora? The Department was playing with words.

The Deputy Minister replied that he did not think that the CPAs were in a serious challenge. There were instances where some CPAs were dysfunctional but it was not 100%. The country had a young democracy and there was lack of activism among the people after the 1994 takeover. A thriving democracy was not one where people folded their hands and looked unto the Government for everything. The CPAs were holdings that were administered on behalf of the communities. There was a lack of activism that waited on the South African Government to do everything and the problem was that the Department or Government was not in every community to see what was going on.

The Director General noted that Mr Mhlongo wanted the Department to cover all the CPAs that were functional and successful. There were some that were dysfunctional and caused the Department to intervene in the manner it had.

Mr T Walters (DA) said efforts had been made to deal with CPAs that were dysfunctional. A more thorough review of the system was needed on why it failed and how it could be made beneficial. A new model was required to make sure the land was utilised properly for the beneficiaries, businessmen and entrepreneurs. There were concerns about the Land Rights Management Facility and its capacity to do what it was meant to do. Was it something that had been capacitated properly?

Mr Mogaswa replied that were people working with tenure that were transferred from other components within the Department. The establishment of the many structures referred to were to ensure that services needed by the community were provided where the communities were in order to save costs to access the services. In relation to the Tenure Forum, some of the people reassigned to the Tenure office did not have experience on prior pieces of legislation. The purpose of the Tenure Forum was to provide solutions to matters that were discussed and ensure good services were being provided and standardised across the country.

The Director General replied that the Department had expanded the scope of the LRMF and provided it with additional resources to function effectively. The Department had advertised for additional families to be part and parcel of LRMF to be able to deal with the area.

Mr Walters asked if there were fora in the Land Reform space. Was there communication taking place at the moment?

The Director General replied that the District Reform Committee had different roles from the fora of the CPAs. The CPA owned land and had full title unless they were endorsed. It was the CPA’s full property rights unless there was a condition registered on the title deed that said the CPAs should first consult with the Minister before disposing of the land. Some were not endorsed and this was the reason for the leakage in the system. He agreed that there should be some working relationship between the two.

Mr K Robertson (DA) said the he was worried about the constitutionality of the CPAs which could have contributed to the CPAs not working properly. There were two groups of beneficiaries in the Malamala CPA issue and one group had not received a cent from a R100m deal. There were challenges of CPAs selling land. At what point did the government intervene? Was land sold to cover the debt or was government resources used to cover the debt.

Mr Mogaswa replied that the challenge was that the motivating factor behind the non compliance to the Constitution was greed as a few individuals wanted to benefit at the expense of community. In any community there will be good and bad people. CPAs would always mirror what was happening in the society.

Ms N Magadla (ANC) said there were many CPAs that lost land due to factors other than conflict among CPA members.

The Director General replied that the Department had to look at the root causes. It was true that conflict among the members was not the only reason. Resources were also an issue. Using the report generated by the LRMF through the regularisation process, the DRDLR would be able to say what were the many problems facing the CPIs The Minister had asked the Department to convene a meeting of the Trust and the CPAs on how best to tackle the challenges afflicting the CPAs.

Ms Magadla asked what the meaning of provincial CPAs was.

Mr Mogaswa replied that provisional CPAs were entities established pending the registration of a permanent CPA. It meant that certain issues were still being finalised. This CPA went through the process of converting to a permanent one. It would not affect its current assets and operations.

Mr A Madella (ANC) said a total of 125 CPAs were regularised in the first three quarters from a target of 200.Would the Department be able to achieve the remaining 75 target. Were the 138 CPAs that received training part of the 200 targeted for regularisation? In National Compliance Trends, from 2009/10, there was significant growth in provinces like Limpopo and Mpumalanga whereas in Western Cape and Free State, there was a drop from 2013/14. This was a concern.

Mr E Nchabeleng (ANC) said the Department was going to table the CPA Amendment Bill some years ago. How far was the Department with drafting that as it would help to shape the CPAs? The Committee wanted a list of CPA names and their areas that had not received their land and the reason for it.

The Deputy Minister replied that the Amendment Bill had gone through the Cabinet Committee and this was to ensure it was the best tool for advancement.

Mr P Mnguni (ANC) said there were National Treasury regulations about reporting format. The CPA Report was no financial report. It was just a narrative. There should be targets and performance against targets as well as variance figures and reasons for variance. Teach the Committee something. Let it be seen from the report that this was the cream of the crop. The Report was just an overview as to what should be a report. When the term started, five items were expected to be presented. Only one had come and at the end of the term. The Committee would be pushed into a corner where it would not be able to comply with its cycle. The Committee would not want history to judge it as a failure.

The Director General replied that the Department had acknowledged the gaps and the emphasis on format. The reason for framing the report in that manner was that the DRDLR had to respond to specific questions from the Committee.

Mr Mnguni said when the legal team took up the Rama CPA case, it must close up all possible loopholes. The thieves were running away with people’s money because the accounts were changed. This should have been foreseen. There was a decline in the National Compliance Trends. The notion of CPAs as a conceptual tool was conceptualised in the second more radical phase of economic transformation. What was the radical economic transformation? How could it apply to the modules of the CPAs? Overall, was there advancement? There was a need for a change in the mindset of the people that govern the CPAs. It was communal and therefore there was equality amongst the people. It was an opportunity to build a co-operative mind.

The Deputy Minister replied that the CPAs were a brilliant notion that needed loopholes to be closed here and there. As the nation proceeded in its democratic dispensation, there were tools that needed to be sharpened. Most of the questions by Mr Mnguni required that the Department took these questions and made sure it did the right thing.

Mr Sepabe added most of the CPAs were not problematic, only 10% to 15 % were. As a result of their challenges, the DRDLR had put all the efforts into those and ended up not talking about the successful ones.

The Chairperson asked why some CPAs had not yet received their land.

Mr Mogaswa said the Department would provide a report to state the circumstances of each.

Mr Robertson asked if communities could benefit twice in terms of restitution.

Ms Gobodo replied that the Commission relied on whether the facts were correct as well as the verification by the communities through the elders about who the beneficiaries of the land were. She added that it had happened in the Eastern Cape.

Mr Mogaswa added that there will be more information around this when the DRDLR gave its annual report

Mr Mhlongo said he was disappointed. The Committee loved the people to benefit. The DRDLR are not committed to the course. The Department could not say the number of land parcels that were untraceable.

Mr Fitane asked what made it illegal for the people to sell the land. Was it the process that was followed?

Mr Magaswa replied that it became illegal if it was executed contrary to the provisions of the CPA  constitution and the Act. For instance there were certain provisions of the constitution that required the CPAs to have a certain quorum for certain transactions. Transactions that were done contrary to these provisions were illegal.

Mr Fitane said when the Marolong CPA leased out land, monies were paid. Was it the account that was frozen? How did it impact the intended beneficiaries?

Mr Mogaswa replied that the Administrator was a practicing attorney who opened a trust account. The rental money went into the trust account.

Mr Fitane said the Department was unable to say if the skills for conflict resolution were there or not. He could say that most of the people in the District Fora had never opened the door to acquire the skill. This should be part of the training as it helped. How did the Department intended closing this gap and by when.

The Director General replied that the Department had 300 officials and also panellists on the LRMF across the country. Some of these people were mediators. Not all the officials had the requisite skills but the tenure was meant to build them up.

Mr Robertson said the Department had said that a lot failure in CPAs was due to contravening the CPA constitution and active greed. What was the intervention strategy and had it been implemented?

The Director General replied that the Department had tried to list the different intervention to strengthen the capacity of the CPAs. The issue of awareness was very important. If the CPAs were aware of their fiduciary duty, it would approach the Department, who would then when necessary appoint forensic investigators and attorneys to interdict the looting of accounts.

Mr Madella asked when the Committee could have the report on the socio-economic impact assessment.

The Director General replied that the socio-economic impact assessment was on its way to the Cabinet together with the CPA Amendment Bill. It was done in support of the Amendment Bill and would be available next week.

The Chairperson asked for how long will CPAs be provisional. There was a time frame which the Department should stick to as it should not be provisional forever. If the people were given land and then it was sold again, was the aim not defeated? What did the Department do when there were sales without proper consultation and in others without the knowledge of the members?

The Director General replied that the DRDLR had taken note of the concerns raised by the Chairperson and would provide an age analysis of the CPAs that were under administration and the reasons for that. As regards sale of land and its impact, he said it was a policy issue that must be dealt with. Should this be allowed and under what the conditions? These were the questions the policy should answer and provide guidance on.

The Chairperson said what the financial implications were of overachievement of targets to support CPAs in the 3rd quarter.

The Director General replied that in the 1st and 2nd quarter, the targets were not met. The money came from the same programme

The Chairperson said how would the additional responsibility given to the Land Right Management Facility to work with the CPAs be managed. What were the Fora going to do to avoid duplication as there were already different committees handling similar issues.

The Director General replied that the Department had to streamline the various structures as the structures came thick and fast in the last nine months and were going to be operating in the same space. The structures would require administrative and technical support from the Department.

Implications of Constitutional Court judgement on Restitution of Land Rights Amendment Act
Mr Thami Mdontswa, Commission on Restitution of Land Rights Deputy Commissioner, explained the implications of the Constitutional Court judgment on the Commission's operations. The immediate effect of the order is that from 28 July 2016 the Restitution of Land Rights Act, 1994 must be read as though the Amendment Act was never enacted. Potential claimants who had not lodged claims by 27 July 2016 may no longer do so as the claims lodgement deadline of 31 December 1998 had been reinstated. The Commission could receive and acknowledge receipt of pending new claims that had been lodged but had not yet been acknowledged by 27 July 2016. The Commission was interdicted from processing any new order claims unless by a parliamentary enactment reopening the lodgement of claims or all claims lodged by 31 December 1998 had been finalised. If the Parliament did not re-enact legislation to re-open lodgement of claims by 27 July 2018, the CLCC would approach the Constitutional Court for directions on how the Commission would process pending new order claims. The Commission would shift the resources for the lodgement of claims onto the research and settlement of claims lodged by 31 December 1998 as these should be researched by 31 March 2017. As at 31 March, 2016, there were 7419 outstanding land claims and 2763 of them still required research. Total staff was 751.The 99 lodgement staff members shall be re-deployed, and where necessary reskilled. Of the 14 lodgement offices that were in place 10 were existing offices of the Commission and four were opened specifically for re-opening the claims process. The offices were kept open to inform potential claimants who had not lodged claims by 27 July 2016 that they may no longer do so. As at 13 July 2016, a total of 161 052 lodged claims had been completed. There were 1 842 incomplete claims as not all the information was provided.

Ms Gobodo added that the CRLR had received the Constitutional Court judgment and tried its best to interpret the judgment and the court order with the aid of consultants. The Commission would continue to experience new things that had not been anticipated. The CRLR was confident that it would be able to adhere to the court order.

Discussion
Mr Mhlongo welcomed the resource allocation. More information was needed on the 1 842 incomplete claims. Were they from which date? Do you have enough budget? After 24 months were they going to adhere to the court judgment?

Mr Mdontswa replied that the CRLR would do an age analysis of the 1 842 incomplete claims and provide it to the Committee.

Mr Walters asked if the proposals were going to be included in its presentation for the MTSF processes.

Mr Mdontswa replied, yes, as this would help them to do the mediation part of the settlement of the claims.

Mr Robertson said it was mentioned that resources will be shifted to finalise the claims. How much was that?

Mr Mdontswa replied that at the most the resources to be shifted would be the 99 staff. There was some money set aside for reopening of the communication campaign and logistical arrangements for staff.

Mr Fitane welcomed the intervention of the Constitutional Court judgment which was always what was wanted. When would the relevant information be communicated to the claimants. Would the CRLR be able to submit to the Committee the cost of the new claims? The judgment referred only to clause 72(1)(a) which spoke of NCOP as being different from National Assembly. Would the National Assembly have to repeat its public consultation or was it only the NCOP that would do that. Should the Commission not rather go to the Constitutional Court for an accurate interpretation of the judgement and court order?

Mr Mdontswa replied that the CRLR had been have been communicating with the public for the last two years about claims for the restitution of land and it now had to ask the claimants not to come. This would continue until a new law was passed and the CRLR could ask the claimants to come. The Commission was a statutory creation and could only do what the Restitution Act said.

Mr S Matiase (EFF) said the court had exposed the political expediency of the ruling party and that there could never be any shortcut. One had to go the full circle. This was an electoral bribery of the rural people by the ruling party in 2014. This had brought us to the root consciousness of greed. Parliament should go back to the basics and ensure that all stakeholders were taken on board.

Mr Nchabeleng said what made the Commission sure it could complete the process within 24 months and at what cost. Was there a budget for that?

Mr Mdontswa replied that in the response to the BRRR process, the Minister of Finance had said Treasury was reviewing the funding model. The Commission would prepare for settlement of the claims so that the only outstanding aspect would be the money to pay financial compensation and to buy land. The model of Road Accident Fund was to approve claims and there was a waiting period before money was collected. The Commission was looking at various models without committing the state.

Mr Madella said the Constitutional Court had said go and correct the deficiencies. It never said do not come back. The message that should be taken to the communities was that the decision was not against correcting the injustices of the past but a decision that sought to correct some administrative deficiencies. It was his view that there would be further re-openings. We cannot address the injustices of the past 364 years in 22 years. The lodgement offices should be converted to communication desks where claimants would receive the relevant information.

 Mr Mdontswa replied that there had been discussion on having a rural desk, taking the offices to the people. The Commission was also finding a way for the busses to be used.

Mr Mnguni said it was important when there were visitors to assume the Committee and not individual party mode. There are two Houses of Parliament. When one leg of the Parliament made an error, it was the two houses that had to deal with the matter as it was like a house with two rooms. When there were successes, it was the success of the Parliament but when there were losses, it became that of the ruling party. It was a game and the Constitutional Court was the referee. ANC was the leading team in this game. The budget for the broad restitution process must always be there. Priority was an English word that meant sequence. The leader of the Portfolio Committee will forward the road map on how Parliament should move forward

Mr Fitane said what was most appropriate here was a legal based answer and not to say that Parliament was one.

Mr Mdontswa replied that preparation for settlement of 4 276 claims, how much does it take to settle them? To get to that point, the CRLR would gazette the claims and have engagement with all interested parties, and establish which ones were for financial compensation. The settlement requires funding and if the CRLR had the details the National Treasury would look at it differently .The Constitutional Court said the reopening of claims was a good thing but only that there were challenges involved.

Ms Gobodo said the Commission was prepared to move all claims towards settlement. The CRLR could only do that with the resources that were available and if there were no impediments such as conflicting claims that could end up in court. The work to be done in the next twenty four months would not be easy. 1 842 were incomplete claims. These were already in the system before the judgment. Until all the documents were submitted, they could not be termed fully lodged claims in terms of the internal policy of the CRLR. The Commission used an electronic lodgement system to minimise the risk of fraud. The manual forms used were audited. The communication campaign was ongoing to ensure the clientele was aware it could not lodge new claims.

The Chairperson said it should be noted that the Committee was awaiting CPA Amendment Bill. The Bill must be processed and tabled on time. Reports of CPAs that did not own land should be submitted to the Portfolio Committee’s Secretary within 14 days. The Cons Court supported re-opening. There must be clarity on outstanding claims lodged before 31 December 1998.It did not mention ANC but the Parliament. There was need for the Committee to take responsibility and craft the way forward. Communication that no new claims can be lodged must be strengthened.

The Committee Secretary announced that permission had been granted to conduct public hearing on the Extension of Security of Tenure Amendment (ESTA) Bill in KZN from 14-16 September.

The meeting was adjourned.