Land Claims Commission Annual Report 2009/10

Meeting report

Department of Rural Development and Land Reform (DRDLR) Annual Report 2009/10: Departmental briefing
Mr Sibusiso Gamede, Acting Chief Land Claims Commissioner, Land Claims Commission, briefed the Committee on the programme performance in regard to land restitution.

He noted that the reconfiguration of the Department of Rural Development and Land Reform (DRDLR) had necessitated a new approach with regard to the implementation of the Land Reform programme, which made the Land Claims Commission (LCC or the Commission) review its approach to restitution and its strategic focus. The Commission’s focus for the coming year was on research, finalising outstanding claims, in accordance with the Comprehensive Rural Development Programme (CRDP) principles, and taking innovative approaches to the acquisition of land and settlement strategies. Statistics for settlement of claims showed a decline, because of the budgetary constraints in the year under review. National Treasury had been approached for additional funding of R3.5 billion but the Commission had received nothing, and this resulted in it having to prioritise a few claims that could be handled with limited funding. For this reason, 33 claims were finalised and 98 claims were dismissed.

The Commission had held regular meetings with the Department of Forestry, SAFCOL and other stakeholders, in a bid to finalise the claims. A model was developed with the Department of Public Enterprises (DPE) for the settlement of claims on forestry land.

Mr Gamede emphasised again the effects of the Commission’s budgetary constraints, which made it unable to settle a large number of claims that had already been researched. In addition, there had been an increase in the number of cases referred to the Land Claims Court by the land owners and the claimants.

Mr Gamede outlined the challenges experienced by the Commission. These included poor research, resulting in large numbers of outstanding claims that had not been properly researched, poor information management systems on areas of research, and questions around the validation of outstanding claims, relating to both gazetting and de-gazetting. There were also constraints imposed by exorbitant land prices and a shortage of human capacity, both within and outside the Commission. Community border disputes, the non-availability of land, people insisting upon the restoration of land rather than monetary compensation were further challenges. There was also an increase in court cases, and problems around betterment claims and group claims, together with poor communication with stakeholders.

The Commission had developed a turnaround strategy to deal with the challenges outlined. It would be focusing on litigation management and research, since most cases were lost as a result of poor research quality and poor capacity. There was also a need for verification of claimants to ensure that the people who received financial compensation were part of the land claim. In respect of settlement models, the Commission had discovered that the traditional settlement approach was not working. In most urban cases people had been opting for financial compensation, but that was now changing, and people were increasingly insisting upon restitution of the actual land. This was problematic, as most of this land was now situated within large sugarcane plantations, forestry areas, and national strategic assets. This development had compelled the Commission to review its settlement models. He added that most of the land was not only expensive but was already being operated as a going concern. Restoration of such land, without necessary post-settlement capacity for people, would become a huge challenge so the Commission was investigating a number of new settlement models and financing. The Commission also had to ensure that the budget was manageable. It was also focusing on developing an improved communication plan, to ensure that every person with outstanding or lost claims would be updated on his or her status and the possible way forward. Since information management and record keeping had posed great challenges for the Commission, this was also an area that needed to be dealt with. It was envisaged that this turnaround strategy should be rolled out immediately.

Mr Gamede said the total expenditure for 2009/10 was R2.3 billion. Because of higher land prices, more money was spent in return for lesser hectares of land for restitution purposes. Approximately 9 294 households benefited from the restoration of 145 492 hectares of land during the year under review. Mr Gamede noted that there were 3 852 outstanding claims, with highest number of 1 329 claims and 94 court cases being in KwaZulu Natal (KZN).

Mr Gamede indicated that of the R2.3bn allocated to the Commission, only R1.2 billion was used, with the balance being used to reduce the backlog of plans for business processes, and offers in terms of Section 42D that were signed but had not been finalised.

Mr Gamede then tabled the financial statements. He indicated that although the Commission received an unqualified audit report, there were matters of emphasis noted in respect of the commitment of R7.3 billion, as noted in the DRDLR’s Annual Report. The R7.3 billion was part of the amount that had been disclosed over previous years, amounting to R7.5 billion in total, and reiterated that this also related to the Section 42D matters. He also noted that the Department had been struggling to recover interest from conveyancers, but a system had now been put in place to ensure that this would be recovered.

A further matter of emphasis related to the suspense account from which beneficiaries would be paid financial compensation. Money was being held in this account because some of the beneficiaries were not traceable, until they could be traced. The Commission and other institutions were making efforts to trace the claimants, yet at the same time proposals were being considered that might result in a policy whereby monies that remained unclaimed after the specific efforts could perhaps be forfeited to the State.

Mr Gamede said the Commission was working on the challenges to improve its reporting, to reflect how the allocated budget had been spent, to fast track the settlement of claims from research to the finalisation of claims (to reduce what sometimes had dragged on for five years), and to improve communication, to reduce the number of court cases, and to minimise risk of fraudulent activities, both internally and externally.

Discussion
Ms P Ngwenya-Mabila (ANC) sought clarity on expenditure figures, and the reasons for under spending on capital assets.

Mr Gamede explained that the under-spending on capital assets emanated from the Commission’s decision to re-engineer its plans, so that it focused on research. This was a decision taken and done internally, thus saving on consultants’ fees. Since the Commission at this time had insufficient money, it could not take new claims through the process of evaluation, which meant that the evaluation costs for those claims had been saved, a total saving of around R900 000.

Ms Ngwenya-Mabila asked how much interest was owed by the conveyancer.

Mr Gamede explained that the interest owed under the financial year under review by the conveyancer was R17m.

Ms Ngwenya-Mabila questioned whether it was reasonable for the Commission to be considering introducing a policy for forfeiture of uncollected money by claimants, when it was clear that the settlement process took long.

Mr Gamede explained further that the suspense account had resulted in the auditors giving a matter of emphasis. He assured the Committee that the Commission would embark on an awareness campaign to step up its efforts to trace the beneficiaries, and would use various channels of communication to ensure that the claimants or their families could benefit from the money. The Commission would also approach the Master of the High Court, who controlled the Guardians Fund, to make sure that people were put in a position to benefit from the money, instead of simply keeping it in the suspense account.

The Chairperson asked how much money was in the suspense account.
 
Mr Gamede said that he could not give the figure offhand, but would make it available to the Committee at a later stage.

Ms Ngwenya-Mabila asked about the monitoring of strategic partnerships.

Mr Gamede agreed that the Commission had experienced problems with its strategic partners, and said this development had led to a reformulation of its strategic partnerships. This had given rise to the programme of recapitalisation and development that was aimed at ensuring that it did have credible strategic partners. There was a system in place to ensure that the partnership worked and had monitoring and evaluation built into it.

The Chairperson asked Mr Gamede to clarify the discrepancy in figures, and to explain how the R1.3 billion was spent.

Mr Gamede explained that figures had been rounded up for the purposes of the presentation, but they were in fact as stated in the Annual Report. The total expenditure for 2009/10 amounted to R2.3 billion. He clarified that the amount questioned by the Chairperson had been spent on settling backlogs. It was not that poor reporting mechanisms resulted in incorrect accounting. This situation would be rectified in future reports.

The Chairperson was not satisfied that the money used to settle backlogs had been properly accounted for, saying that it was difficult to understand how the money had been spent. The Chairperson asked why a report was not available on the amounts spent on backlog settlements.

Mr Gamede explained that the report that reflected the total expenditure of the Commission had been included in the DRDLR’s Annual Report.

The Chairperson expressed concern that when the budget was approved in Parliament, it was supposed to relate to current expenditure and not backlog settlement. The Committee had not been informed of the readjustments that were submitted by the DRDLR to National Treasury. In addition the Committee was entitled to demand information. The working relationships between the Department, Commission and Committee should be improved, to avoid misunderstandings.

Mr Gamede accepted this comment, and assured him that this would be rectified in future.

The Chairperson commented that the Committee had requested an operational plan from the DRDLR, but had not received it, and had this been received, then the Committee would have picked up changes in the operations. This Committee did have the responsibility and ability to demand the information, to enable it to perform its oversight function properly.

Mr B Zulu (ANC) asked how the targets would be met, in light of the budgetary constraints that had been reported.

Mr Gamede responded that the Department had engaged with National Treasury and had, over the years, disclosed the commitment of R7.5 billion and had indicated that it required more funding to deal with backlogs. He said the Department was working on its turnaround strategy to develop systems required by National Treasury and would be able to meet the targets, if the turnaround strategy could be properly implemented.

Mr Zulu asked why KZN had the highest number of court cases at 94 and highest number of outstanding claims at 1 329. Again, he wondered how the Commission would pay, given its budgetary constraints. He further noted that farms that had been acquired were not productive because the occupants had not been given money to develop them.

Mr Gamede acknowledged that KZN had the highest court cases, saying that this was linked to the fact that it also had the highest number of claims. Many of these claims related to land now situated within large sugarcane plantations. The current landowners were challenging the validity of the claims. In addition to that, there were conflicts within the communities in the traditional institutions. He added that landowners had placed an interpretation on the law that once the farms had been gazetted, the landowners were not obliged to make any improvements, and that the Department would be obliged to purchase their land. This contributed to the increase in the court cases. Poor communication between the farmers and the Commission had created uncertainty. He conceded that there was a need for improvement.

In regard to the claims, Mr Gamede said KZN also had the highest number of outstanding claims because it had in the first place recorded the highest number of claims. of the number of claims received. He admitted that farms were collapsing, through lack of post-settlement support, but added that the CRDP principles now demanded that before settlement was done on the farm, post settlement issues should be addressed. The farms that had not succeeded were analysed, to identify their status before the involvement of Social, Technical, Rural Livelihoods and Institutional Facilitation (STRIF) and Recapitalisation and Development units.

The Chairperson asked how the Department would deal with the challenges that arose from the delays in settlement of farms that it had bought, which resulted in them falling derelict before transfer to the Department, and that fact that the farmers were suing the Department because of their delay in paying the amount that the farmers demanded by way of compensation. He asked whether the Department had made its decisions on the basis of poor research information supplied by its service providers. The Chairperson also observed that the settlement of claims received before 1998, which had not to date been settled, presented future challenges, because these were tied in with the backlog, which had been estimated at $7.5 billion.

Mr Gamede acknowledged that the Department had had shortcomings in its claims settlement chain, and that it had not had timelines set out, which was not good for its business processes, as it had impacted on the price that had to be paid to the farmers.

The chairperson asked Mr Mdu Shabane, Acting Director General, DRDLR, whether the Commission had any set targets, and why it took ten years for claims to be settled.

Mr M Shabane said that Mr Gamede had correctly pointed out the weaknesses in the system. During 2009/10, there were targets that should have been settled within a specific period, but, due to the various reasons outlined by Mr Gamede, these targets were not met. As a result, only 33 claims had been settled. Mr Shabane added that this problem was not going to be handled by the Commission alone, because it also had financial implications on the Department as a whole.

The Chairperson was not satisfied with the response on the inability to pay the claims on time.

Mr Shabane responded that this problem had to be looked at in the context of a number of claims that were lodged until the 1998 cut-off date. The Department acknowledged that it had solved 75 000 claims, and that perhaps it had erred over the last 16 years in focusing on these claims, perhaps to the exclusion of the remainder. The Department acknowledged the need to find ways of expediting the settlement of the remaining claims.

The Chairperson expressed concern about the pace at which the claims were handled, and said the Department needed to formulate a strategy that covered the bigger picture.

Mr Shabane noted that the Department acknowledged the challenge, and added that the turnaround plan of the Commission was a sub-plan of the broader strategy of the DRDLR, which had not yet been tabled. The turnaround plan was not going to focus only on the Commission in isolation from the entire land reform programme, but would look at the totality of the mandate of the Department.

Mr S Ntapane (UDM) requested details on the litigation management plan that the Commission had developed; and asked what process had been formulated to deal with complex claims.

Mr Gamede promised that the requested plan would be made available to the Committee.

Mr Ntapane asked why the Commission dismissed some claims, when it was aware that its research standard was questionable. He asked whether there was not the possibility that some valid claims had been dismissed because of insufficient research information.

Mr Gamede said Section 2 of the Restitution Act provided guidance on what should be taken into account when assessing the validity of the claim, and that this was not based on research. The types of matters that required research, after it had been established that a claim could be entertained in the first place, would then include the farm ownership details, whether claimants were indeed removed, and when that had happened. Claims would not have been dismissed based on insufficient information.
 
Mr Ntapane asked what strategy had been formulated to collect interest owed by conveyancers.

Mr Gamede said the strategy to collect the R17 million owed by the conveyancers was part of the Department’s litigation management plan. He added that that the Fidelity Fund and the Law Society of South Africa were included in the Department’s partner lists, and there was a statutory obligation on the part of the conveyancers that this interest should be paid to the Department.

Mr R Cebekhulu (IFP) commented on the continuous change of officials who handled claims, which he feared led to many claims not being considered valid because of lack of proper filing, resulting in claimants losing trust in the office of the Land Commissioner.

Mr Cebekhulu sought clarification about claims lodged by local people, and indicated that when settlements were done, it was often not the local people who had been forcefully removed who ultimately benefited. He cited examples of areas in Kwa Mbonambi and Sokhulu. He asked whether the land was privately owned.

Mr Gamede responded that a strategy had been developed in terms of settlement of forestry claims, which involved not only the Forestry Commission but also a number of other government departments. Because of the cost of the forestry claims, the Department could not physically restore the land to the communities, but would restore the title, after which it would set up settlement models like co-management, so that even if people could not physically live in those areas, they could certainly work there, and benefit from the forestry. In terms of benefits, he said that wherever there was a land claim, the claimants would benefit, including those who had been removed.

Mr Gamede said he would submit a more detailed report on Kwa Mbonambi to the Committee.

Mr S Ntapane (UDM) asked where the litigation budget would emanate, and how much it would cost.

Mr Gamede responded that in respect of litigation, the Department would refer matters to the State Attorney, whose was then responsible to appoint independent lawyers or advocates. The Department would pay for assisting claimants, in terms of Section 29 of the Act. The money would come from the goods and services budget allocation. In the case of a court order, the money would come from capital transfers as this was an acquisition.

Mr Ntapane also wanted details on monitoring the partnership with Mondi.

The Department noted that it had in place a dedicated unit, the Recapitalisation and Development Unit, to ensure that the strategic partnerships worked.

Ms P Ngwenya-Mabila (ANC) asked whether the settlement strategy was still functional, or whether it had been replaced by the turnaround strategy. She requested deadlines for the land parcel project, Pheletso, and added that there was a need to track the progress of the projects.

Mr Gamede responded that the settlement strategy informed the way in which the Department would operate in future, and how it would conduct post-settlement support for all the restitution projects. He added that the turnaround strategy had nothing to do with the settlement and support, but addressed issues of efficiency and effectiveness.

The Chairperson advised Mr Gamede that in the future reports and strategic plans, it would be prudent for the LCC to separate out the figures in respect of the backlog from those required for the operational plan of the current financial year. This would enable the Committee to measure the two separately, and to take account of the fact that backlogs also concerned court cases, claimants occupying land, and the possible alteration in the value of land, whereas the financial year ahead would essentially need to deal with current situations. He noted that specific areas of interest were Western Cape and KZN.

The Chairperson asked the Surveyor-General to comment on three areas of concern. These were the responsibility to survey South African Land, the Ingonyama Trust Board’s report that it required R50 million to do this work for the Department, and also to comment when that survey would be done, following the disbanding of the Task Team that included National Treasury, Department of Public Works, the DRDLR, and the Auditor-General.

Mr Mmuso Riba, Chief Surveyor General, DRDLR, responded that he had not been aware of the comment by Ingonyama Trust’s report and the cost of surveying Ingonyama Trust land. He pointed out that surveying was not the responsibility of municipalities, because they had no capacity to do that. He added that Ingonyama Trust would be engaged with, to determine how it had calculated the cost and to determine how the two parties could assist each other in dealing with Ingonyama Trust land.

Mr Riba confirmed that the task team that was formed between the Department and National Treasury, Auditor General and Public Works had disbanded. However, there was still a need to determine how much land had to be surveyed. A desktop analysis was under way and was due for completion in November 2010.
Once complete, it would be easy to determine how much land government owned, and then to use patterns and determine the land that still had to be surveyed. Land in former homelands had not been surveyed because of the previous apartheid regime’s laws. The biggest challenge was the shortage of professional land surveyors, as most were operating in the private sector, and there was thus a need to increase the number of land surveyors.

The Chairperson asked whether the Deeds Office worked with the Surveyor General’s office.

Mr Riba confirmed that the two parties worked together in the desktop analysis.

The Chairperson asked about the allegations that records in Deeds Offices across the country were falsified, which raised the question of authenticity of the records kept in those offices. He gave an example of Coega Municipality, and the areas in Jeffrey’s Bay, Eastern Cape, where the municipality sold land to private owners in 1995, which was now recorded as private. He acknowledged that the Bantustan matters had created a huge problem, and therefore it was important for the Committee to see the strategy in November.

Mr Riba responded that a report on the status quo and recommendations would be tabled in November, reflecting the information from the Deeds and Surveyor General’s Offices. The Department was currently engaged in a programme to create a security system that would be put in place to extract intelligence information from a title deed, so that history could be recreated, and to be able to pick up challenges where State property had been transferred to private hands.

The Chairperson asked whether this would enable identification of land owned by foreigners.

Mr Riba responded that the Green Paper that the Department was dealing with would address these concerns on foreign land ownership. The Chief Surveyor General and the Chief Registrar of Deeds would be part of the group that would be dealing with the Green Paper.

The Chairperson asked whether the November report would reflect the strategy that would deal with that issue.

Mr Riba responded that the report would not be able to reveal foreign ownership. It would check how much land was owned by the State in different categories.

Ms L Mazibuko (DA) commented on the audit of State land and noted that there was lack of knowledge about how much was held in the State’s hands. She asked whether the technology mooted by the Surveyor General’s office would enhance the audit process.

Ms Mazibuko asked how the report commissioned by Thoko Didiza in 2004 on ownership of land by foreigners was compiled, if this kind of technology was unavailable then, and why it had not been updated.

Mr Riba responded that the State land audit was a huge exercise, and a report was tabled in Parliament mainly for land parcels that were under the then-Department of Land Affairs. This, however, had related to about 220 000 land parcels, not the entire State ownership. The desktop analysis would enable the Department to make recommendations to different departments. He noted that although recommendations were made on the report commissioned by Hon Didiza at that stage, nothing was actually done in the Deeds Office to enforce the identification of foreign land buyers.

Mr Shabane reiterated that the recommendations of the report were not implemented because it would have required everyone who owned land to declare their nationality. The flaw in the current system in the Deeds Office meant that no such identification was required. This would need to be corrected by legislation and in the registration system. The reason why this was not done was linked to the fact that after 1994 there was a requirement for the removal of racial classifications from the Deeds system.

The Chairperson said the Committee would invite both the Chief Surveyor General and the Chief Registrar of Deeds to attend a further meeting.

The meeting adjourned.