Restitution of Land Rights Amendment Bill: Departmental briefing; Audit outcomes of Department of Rural Development and Land Report Annual Report for 2012/13

Meeting report

The Chairperson said the Committee would be dealing with only two of the items on the programme and the minutes for the previous meeting would be discussed the following day.

The Chairperson called on the Department of Rural Development and Land Reform (DRDLR) to make its presentation.

Ms Nomfundo Gobodo, Chief Land Claims Commissioner, thanked the Committee for allowing it the opportunity to present and apologised on behalf of the Director-General, who was unable to attend the meeting.

Department of Rural Development and Land Reform: Restitution of Land Rights Amendment Bill
Mr Themi Mdontswe, Deputy Land Claims Commissioner, presented the Restitution of Land Rights Amendment Bill, 2013 and stated that the land restitution programme was one of four elements of land reform, with the others being land redistribution, land tenure reform, and development. One of the current challenges facing the Land Reform Programme was its restrictive restitution model. An evaluation of the programme had been carried out by the DRDLR and the evaluation had revealed restrictions in policy, in that deserving persons could not participate in the programme if they did not lodge claims before 31 December 1998, if they had dispossessed of their land before 19 June 1913, and if they had been dispossessed by Betterment Planning policies. Reasons given by those who did claim stated that the research methodology that informed the design of the restitution programme was poor; the window period that was provided to lodge claims was too short, the communication campaign informing the public about the restitution programme was not far reaching to other areas of the country, verification systems of the Commission on Restitution of Land Rights were poor and communities dispossessed because of Betterment Planning Policies in the Eastern Cape had been excluded.

A Regulatory Impact Assessment (RIA) was conducted and two options were identified as potential solutions in addressing the challenges raised during the evaluation of the programme.  The options were to retain the 1998 cut-off date for restitution, or re-open the restrictive timeframe to allow for the submission of new claims by the various categories of persons and communities excluded from the current programme.

The RIA recommended the reopening of lodgement of claims as a more favourable option, and estimated that with the reopening of the restrictive timeframe, 397 000 valid claims would be lodged, and that it would cost between R129bn and R179bn, depending on the options that would be selected by claimants, and if those claims were settled in 15 years. The Restitution of Land Rights Amendment Bill proposed that the amendment of the Restitution Act provide for the reopening of lodgement of claims for a period of five years; similarly, a policy on the exception to the 1913 Native Land Act cut-off date was being developed.

Provisions of the Bill spoke to:

• clause 1, which sought to amend section 2(1) (e) of the Act, which would extend the date for lodging claims for restitution to 31 December 2018;

• clause 2 sought to amend section 11(1) of the Act, to provide that the details of a claim needed to be published in the media circulating nationally and in the province in which the land was situated;

• clause 3 was a consequential amendment of section 12(5), which referred to the cut-off date for lodgement;  

• clause 4 sought to amend section 17 of the Act to create new offences, where a person unlawfully prevented a claimant from pursuing his or her rights provided for in this Act; and lodged a claim with an intention to defraud the state

-clause 5 sought to amend section 22 which stated that the Courts would consist of a Judge President and as many Judges as may be determined by The President, Judges would be appointed from Judges of the High Court, Judges would be appointed for a period fixed by The President for as long as they remained Judges of the High Court, acting Judges would be appointed by the Minister of Justice and Constitutional Development and current Judges of the Land Claims Court would remain as they were

• clauses 6, 7, 8 & 9 deleted sections 23, 26 and 26A, as they were already covered in clause 5;

• clauses 10, 11, 12 were consequential amendments of sections which referred to the cut-off date for lodgement;

• clause 12(2) required the Minister to consider factors affecting feasibility for restoration when setting a claim in terms of section 42D;

• clause 12(3) provided for the extension of the Minister’s power of delegation;

• clause 13 contained the short title of the Bill.

The Department noted that it needed to increase its current administrative capacity, and the preliminary estimation was that it needed to take the following steps:

• establish 52 lodgement offices located across South Africa;

• employ 304 additional staff members to assist in the lodgement of land claims;

• use trained youth from the National Rural Youth Service Corps; and

• establish 5 mobile units that could process claims.

The estimated budget for the above interventions was projected at R549m over the Medium Term Strategic Framework Period

The Department had established that it needed to implement a comprehensive communication plan which would be aimed at ensuring that all affected parties were informed of the extended date for the lodging of a claim for the restitution of a right to land. Central to the communication campaign would be the distribution of the citizens’ manual on land claims which would be translated into all official languages and those languages spoken by the Khoi and San Communities, and in Braille. The manual would be distributed by the National Rural Youth Service Corps (NARYSEC) and the campaign would ensure the collection of oral history from those who had lived through the catastrophic effects of the 1913 Native Land Act.

It had noted that consultative workshops undertaken on the Bill were meant to inform the public and other stakeholders about the Bill, engage them, and obtain their inputs and comments on the contents of the Bill. Through such workshops, 70 individuals and organisations had submitted written comments, which had been collected, resulting in the Bill in its present form.

Discussion
The Chairperson thanked the Department for its presentation.  He said that although the Department was attempting to pass the Bill by December 2013, the processes leading to the passing of the Bill needed to be interrogated before the Bill could be given approval for passing.  It was important for the Department to refer to successful claimants in order to measure how it would proceed in the future, when dealing with how to process the lodgement of incoming claims.

The Chairperson said the result of unresolved claims affected the productivity of land, and this affected food production for market purposes.  He asked how the Department would ensure productivity and land values were not affected during the process of amending the Bill. He asked whether it was possible to make the assumption that once a claim had been finalised or settled, it could no longer be reopened.

It was in the government’s interest to deal with the matter of lodged claims and have closure on it.  Other policy issues could be used to deal with matters that may accompany lodgement claims.  Such issues needed to be dealt with incrementally and a long-term approach needed to employed as well in resolving such matters.

He asked the Department if the Committee could get the Regulatory Impact Assessment (RIA)report to go over.

Ms P Xaba (ANC) said she had not seen anything mentioned about old claims in the report.  The Committee was due to receive statistics on how many claims had been finalised and how many were not. She said she was confused about the RIA’s estimate that 397 000 valid claims would be lodged, which would cost between R129bn and R179bn -- she did not understand how it got this number.

Ms N November (ANC) asked where the 52 lodgement offices would be located in the country. She said in employing additional staff members at the newly appointed offices, it was important to employ people from the same provinces where the offices were located, because they would understand the unique issues arising in their provinces. She hoped the Department would have enough money to conduct this work, and was interested in the exact date on which these processes would take place.

Mr S Ntapane (UDM) said the lack of capacity was among the reasons why previous claims had not been finalised. He asked how many claims had been lodged or anticipated to be lodged in the previous period, and what the budget for that was. In reference to the five mobile units that would process claims, he asked if those would be moved around the country or stationed within particular provinces. He asked how the Department would inform the population about its comprehensive communication plan.

Ms P Ngwenya-Mabila (ANC) asked why a policy on the 1913 Native Land Act cut-off date was being developed and dealt with separately. She asked what the role of municipalities would be in the lodgement of claims and whether the R549m indicated as the estimated budget to increase the current administrative capacity, was part of the overall estimated project budget of R129bn to R179bn. She asked when the Department was planning to implement this Act and how many claims it was trying to finalise each year, while dealing with its backlog of claims at the same time. Did it consider the issue of financial compensation instead of land restitution to beneficiaries, and did it provide alternative relief if beneficiaries were not accommodated in land restitution?

Mr M Swathe (DA) asked if there were mechanisms in place to prevent a repetition of mistakes that had been incurred during the first wave of lodgements. He asked if the Department was sure that extending the restrictive timeframe to five years would cover the process of lodging a claim. He asked how the Department would ensure that the new lodgement system would be corrected and monitored, and whether the Department had the capacity to ensure that this took place. With the reopening of lodgement claims, he asked how the Department would prevent confusion with the regard to the already lodged claims that were still under investigation.

Mr K Mileham (DA) said the in the past 15 years, the Department had received 80 000 claims and had been able to resolve only 60 000.  With the reopening of lodgement claims, it was estimated that it would receive 400 000 new claims.   He asked if the Department had the organisational capacity to handle the lodgement of such claims.  Why was the Department doing away with the time restrictions put in place for acting judges, and why clause 7 deleted section 23(c)(2), which spoke to the qualification of the Judge of the High Court?

Nkosi Z Mandela (ANC) said he applauded the Department for accommodating claims by the Khoi and the San,,but asked if it was exploring claims that were made before 1913.  Why were traditional leaders in their entirety excluded from this exception?

Ms H Matlanyane (ANC) asked how the Department was going to deal with the overlapping of claims on the same land, as well as the invasion of land claims. How was the Department going to deal with land that was going to be claimed, but was also in the process of being sold privately by a municipality?  What preventive measures were being put in place to ensure that successfully claimed land was not hijacked?

Mr Mdontswe thanked the Committee for its questions and responded that the outstanding claims commission would continue with the processing of outstanding claims. Previously, claims had been recorded manually, but with the new lodgement system developed by the Commission it would capture claims as they had been lodged.  Information relating to the claims would be uploaded, which would reduce the risk of overlapping claimants. The Department was in the process of communicating with claimants and owners of land, reassuring them that if claims were reopened, claims to their land would be prioritised.

In these processes, the Department had noted that its research element was its weakness. It had entered into partnerships with universities and other research institutions that would provide support to the Commission in the investigation of claims, and skills would be transferred. Currently, a district-based system was in the process of being employed that would assist in dealing with overlapping claims.

The Regulatory Impact Assessment indicated that a projected budgetary estimate was a requirement when legislation was being proposed.  The Department needed to provide figures on the number of claims that were likely to result from the reopening of the lodgement of claims and the financial assessment of those. These budgetary projections were only estimates which were limited to a time frame of 15 years. In actuality, the Department could not indicate what the actual figures of implementing the Act would cost.

The 52 lodgement offices referred to the current offices of the Department, established around the country.  As municipalities had the capacity to withhold offices, additional connection lodgement stations would be rolled out further. The additional officials that would be employed would follow the same recruitment policies as the NARYSEC programme.  Officials would be brought in and trained to assist in the actual lodgement of claims, with the necessary supervision.

In regard to affordability, the Department had engaged with the National Treasury and consulted various clusters of Director Generals. Finding an exact date to implement programmes within the Act depended on the processing of the Bill.  In trying to capacitate the Department, it had looked at various ways to supplement the capacity of the Commission and Department, and attempts had been made to integrate the Department with other branches.

In an attempt to streamline backlogged claims, claims would be processed simultaneously. There was a prioritisation process.   Those within the cut-off date in 1998 would be processed first and, as a Department, if it could get its research correct, it would be able to deal properly with competing claims. Also, instead of five mobile units, the Department had nine mobile units -- one per province -- that would assist in reaching the most remote areas.

The Department noted that properly implementing its communication strategy and informing people was going to be the key to ensure that it did not repeat what it had done in the past. It had been instructed by Cabinet that together with the Government, a comprehensive communication strategy was essential. Although there were exception to the cut-off date to accommodate claims by the decedents of the Khoi and San, this exception would also cover heritage sites and historical landmarks, which would extend to everyone.

When it came to the lodgement of claims, the Department had to assess whether municipalities had the capability and capacity before it could establish offices. The R549m estimated to increase the Department’s administrative capacity was not included in the overall R129bn- R179bn. He noted that alternative relief referred to anything that was not the restoration of land, and stated that municipalities who sold private land needed to be sensitised to the issues related to the restitution of land. The Department was also ensuring that current owners of claimed land were engaged on a continuous basis, Every policy developed they were consulted on. The Department was engaging with banking associations so that banks could support the restitution of land programme and treat the land better than it was being treated currently. He clarified that in regard to doing away with the time restrictions placed on judges, it was important that one need not limit the acting period of a judge, since a normal restitution case took three years to resolve.   If  a judge was working in an acting capacity, it did not mean the post was permanent.

Mr Swathe asked if the Department had transferred information from its manual forms on to the electronic system.

Mr R Cebekhulu (IFP) asked what the Department had done to address claimants that had lodged claims on land by other communities.

Ms S Berend (COPE) asked if the Department could provide Committee members with a breakdown of claims that had already been dealt with. She said that in the sentence which stated the Department was “exploring an exception to accommodate claims by descendants from the Khoi and San”, the word “exploring” did not sound right. Depending on when the Bill would be implemented, some of the people affected may not be able to participate fully within the five year period.

Ms Ngwenya-Mabila asked if this amendment was only responding to issues of people who had missed the deadline of December 1998.  She thought the Department was supposed to present policies also to deal with exceptions.

The Chairperson asked what the relationship was between the Restitution of Land Rights Amendment Bill and the Property Valuation Bill.

Ms Gobodo responded that around the issue of exceptions anything which spoke to heritage sites and historical landmarks were exceptions to the June 1913 cut-off date.  This would address issues of land held by traditional leaders and councils. The Department, through the leadership of Ministers, had decided to divide the process in two. The Department was also ensuring that old claims were being captured on the electronic systems and was engaging with the deeds office and Home Affairs to ensure that the system was up to date.  The Department acknowledged that a lot of work needed to be done in the provinces and it also acknowledged that interaction between the Department and its clients was positive at all times. The new system would allow it to monitor how provinces were lodging claims, and ensure that there were standard operating policies that were employed which would enhance communication amongst stakeholders.

Ms Tsepo Mahloele, Chief Director, Legal: DRDLR, responded that the Property Valuation Bill was ready for processing.   The expectation was that it would be tabled for approval next week Wednesday.

Mr Thapelo Motsoeneng, Acting Chief Financial Officer, stated that the Department did not know the exact amount the state would incur once programmes under the Bill started to get rolled out. The projected estimates were only giving a sense of much the cost may be.

The Chairperson said the Committee should accept the Department’s presentation. He noted that traditional leaders had had an important role to play in South Africa pre-1913. It was important for Government and Parliament to work together and forge a final resolution on the matter of land restitution, because there was a correlation between the issue of land and poverty alleviation.

The Chairperson called on the Auditor General South Africa (AGSA) to make its presentation.

Auditor General on audit outcomes for DRDLR and its entities
Ms Meisie Nkau, AGSA Business Executive presented the audit outcome of DRDLR and it entities. The annual report of Department of Rural Development and Land Reform comprised of three sets of annual financial statements:

• Department of Rural Development and Land Reform;

• Deeds Trading Account; and

• Agricultural Land Holding Account.

Also included as part of the DRDLR, was the Ingonyama Trust Board.  AGSA had focused its efforts on identifying key focus areas which were impediments to clean audits, and which had been communicated to the departments for them to improve on. These focus areas were the supply chain management; human resource management; information systems; service delivery; and quality and credibility of information.

Mr Eugene Haan, AGSA Senior Manager, presented the key findings and recommendations made by the AGSA.

Predetermined Objectives
In respect of the DRDLR, AGSA found that performance indicators were not well defined. The National Treasury Framework for managing programme performance information (FMPPI) required that indicators needed to have clear, unambiguous data definitions so that data was collected consistently and was easy to understand and use. A total of 21% of the indicators and significantly important indicators in relation to the overall mandate of the entity were not well defined in that clear, unambiguous data definitions were not available to allow for data to be collected consistently. The root cause was found to be that the Department did not exercise oversight responsibility in ensuring that the indicators and targets set in the strategic plan and annual performance plan were in compliance with the requirements of the National Treasury Framework for Managing Performance Information and the National Treasury Framework for Strategic Plans and Annual Performance.  AGSA recommended that the Department needed to ensure that the Strategic Plan and Annual Performance Plan submitted to Parliament were reviewed, to ensure that they were compliant with the requirements of the Framework for Managing Performance Information and the Framework for Strategic Plans and Annual Performance Plans issued by National Treasury.

In respect to the Agricultural Land Holdings accounts, it found that those findings were not applicable. It found that The Deeds Trading Accounts had similar findings. The FMPPI required that it needed to be possible to validate the processes and systems that produced the indicator. A total of 100% of the indicators were not verifiable, in that valid processes and system that produced the information on actual performance did not exist. This was due to the fact that the nature and required level of performance for the output was not achievable in the current financial year, and project management processes over the E-cadastre payments and deliverables were not effective. The causes were found to be the lack of review processes in place that would ensure that only achievable indicators and targets relating to predetermined objectives were recorded on the manual performance plan. AGSA recommended that controls and monitoring procedures needed to be designed and implemented to identify and capture pertinent information in a form and time frame to support performance.

In respect to the Ingonyama Trust Board, no material findings were made.

Compliance with Laws and Regulations
In respect of the DRDLR, the AGSA found that there was a lack of compliance with applicable laws and regulations. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 40(1) of the Public Finance Management Act (PFMA). Material misstatements of operating leases, commitments, contingent liabilities, investments, cash and bank and bank accounts payable identified by the auditors in the submitted financial statements were subsequently corrected. but the uncorrected misstatement of immoveable assets had resulted in the financial statements receiving a qualified opinion. The accounting officer did not take effective steps to prevent irregular, fruitless and wasteful expenditure as required by the PFMA. The AGSA found that the root cause was that management did not monitor the implementation of controls to ensure compliance with legislative requirements when goods and services were procured. It recommended that management needed to monitor the controls implemented to ensure that procurement of goods and services were in terms of applicable legislation.

In respect to the Agricultural Land Holdings account it found similar findings -- that compliance with applicable laws and regulations were not reviewed and monitored. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of the PFMA. Material misstatements were identified, for lease revenue, prepayments and deferred expense by the auditors. It noted that the root cause was management’s lack of monitoring the implementation of controls to ensure compliance with legislative requirements when goods and services were procured. It recommended that management needed to monitor the controls implemented to ensure that the procurement of goods and services were in terms of applicable legislation.

In respect to the Deeds Training Account, it found that compliance with applicable laws and regulations were not reviewed and monitored. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework, supported by full and proper records as required by the PFMA. It noted that the root cause was management’s lack of monitoring the implementation of controls to ensure compliance with legislative requirements when goods and services were procured. It recommended that management needed to monitor the controls implemented to ensure that the procurement of goods and services were in terms of applicable legislation.

In respect to the Ingonyama Trust Board, it found similar findings, in that compliance with applicable laws and regulations were not reviewed and monitored. Management did not exercise oversight over the funds disbursed to Traditional Councils to ensure compliance with the operational policies of the Trust, required by the PFMA. It noted that the root cause was management’s lack of monitoring the implementation of controls to ensure compliance with legislative requirements when goods and services were procured. It recommended that management needed to monitor the controls implemented to ensure that the procurement of goods and services were in terms of applicable legislation.

Supply Chain Management
In respect of the DRDLR and the Agricultural Land Holdings Account, there were no material findings.

In respect of the Deeds Trading Account, it found that goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury regulation. It noted that the root cause was management’s lack of monitoring the implementation of controls to ensure compliance with legislative requirements when goods and services were procured. It recommended that management needed to monitor the controls implemented to ensure that the procurement of goods and services were in terms of applicable legislation.

In respect to the Ingonyama Trust Board, there were no material findings.

Human Resources
With regard to Human Resources, AGSA found that there was a lack of effective HR management.  This failed to ensure that adequate and sufficiently skilled resources were in place and that performance was monitored. Some members of the Department lacked performance agreements and certain employees did not sign performance agreements in the current performance period, as required by the Public Service Regulations and the Employee Performance Management System (EPMS) of the Department. It noted that the root causes was ineffective leadership and recommended that the Department needed to implement controls to ensure compliance with the requirements of the Public Service Regulations with respect to the monitoring of performance, by ensuring that all staff sign performance agreements as per the required deadlines and disciplinary actions were taken against employees that had not complied with the requirements.

In respect to the Agricultural Land Hold Landings Account, there were no material findings.

In respect to the Deeds Training Account, it found that a human resource plan was not in place, as required by Public Service Regulation. It noted the root cause was management’s inability to have an HR plan in place to identify the human resource needs and skills required within the trading entity, and recommended that management needed to compile and implement a deeds-specific HR plan which should have already been compiled,according to the previous year’s management response.

In respect to the Ingonyama Trust Board, there were no material findings.

Information Technology Controls
In respect to the DRDLR, the Agricultural Land Holdings Account, Deeds Trading Account and Ingonyama Trust Board there were no material findings.

Financial Health Status
In respect to the DRDLR, the Agricultural Land Holdings Account, Deeds Trading Account and Ingonyama Trust Board there were no material findings.

Mr Haan thanked the Department for allowing the AGSA to present.

Discussion
Mr Mileham said the audit outcomes presented by the AGSA had outlined a lot of Departmental issues with regard to its performance objectives.

The Chairperson asked what the consequences were for a perpetual offender who failed to comply with the recommendations made by the AGSA.

Ms Nkau said on a yearly basis, after the outcomes had been presented to the Departments, ideally the Departments would need to indicate the steps it would take to address those findings, and they would compile a consolidated action plan which would be evaluated by internal audit and report to the audit committee highlighting progress. She noted that overall there was a lack of hard consequences in the public sector to hold perpetual offenders accountable, but in her view consequences applied at the individual level would ensure that the communication of consequences was far reaching.

The Chairperson thanked the AGSA team for its effort, and thanked all Members.

The Meeting was adjourned.