Ingonyama Trust and Commission on the Restitution of Land Rights Annual Report 2008/09

Meeting report

Ingonyama Trust Board: Annual Report 2008/09
Mr Jerome Ngwenya, Acting Chairperson, Ingonyama Trust Board, introduced the Ingonyama Trust's core business activities and vision. The Board saw real estate as a major point of focus, and was tasked with managing the land for the material benefit and well being of the individual members of the communities. Nonetheless, no on-site activities were permitted to occur without the written permission of the relevant traditional or community authority.

He said the Trust's main objectives were to formulate and implement policy; provide effective land administration; create a climate which encouraged development; and extend security of tenure in accordance with both customary and statutory law, as subject to the Constitution.

He said the Trust essentially made land available on a leasehold basis in order to both retain current communal social characteristics, whilst providing secure tenure. He further noted that the Trust did take 10% commission on all commercial activity on the land, but that income generated was passed on to the community.
He said the Board had established a strategic plan for the year 2008/09, the objectives of which were to optimise land usage for community benefit, and to assist in extending security of tenure further.

Mr Ngwenya outlined the activities of the Trust during the past year. It had transferred most former KwaZulu towns to municipal authorities and by the end of this year only nine townships, out of the original twenty-six, still awaited transfer. He noted that the Trust was seeking to integrate former black townships with former white suburbs, and the KwaMakhuta township had been identified as a key model for this objective. Once all the townships were identified, the Board would decide whether to sell or lease them.

Mr Ngwenya said, in terms of the mining rights on Trust land, that the trust issued mining right leases for the benefit of occupying communities. During this financial year, R14 378 571 in royalty income was generated in this manner.

Most of the challenges that the Trust faced were due, in one way or another, to inaccurate records of tenure at Municipal and Deeds offices. One particular difficulty, in which the Trust was currently in dispute with eThekwinini Municipality, was the matter of the Trust being billed for rates accounts which should have been sent to land occupiers. As a result, it was possible that the Trust's level of indebtedness had been inflated.
Another problem had been the considerable delay in the transfer of 300 parcels of land to the Trust from the Department of Rural Development and Land Reform (DRDLR), as to date there had been only one transfer. This was impinging on the Trust's strategic objectives, such as the transfer in title of townships and state properties and the issuing of leases.

He noted that, overall, the Trust's rental and royalty income increased by 43.47% and 21.95% respectively and that total revenue had increased by 33.31%. Nonetheless, expenses incurred rose by 48.13%, which brought net surplus down by 32.36%.

Discussion
Ms P Ngwenya-Mabila (ANC) said that since last year there had been three vacancies, and asked why these had not yet been filled, although she was aware that this was a responsibility of the Minister.  She further asked why all board members were not represented in the Annual Report.

She then asked why, on Page 8, there was a note that Ms S Choane had resigned on 31 August 2007, but the presentation reflected a resignation in 2008.

She further asked why Ms C Motsisi, who was listed as having joined the Audit Committee on 1 September 2007, was not listed in the 2008 report.

Mr Ngwenya confirmed that Ms Choane did resign in 2007, and that Ms Motsisi was appointed in her place, but that she had then resigned in the 2008/09 financial year. The vacancies on the Board had been filled. However, one member had since resigned and another was awaiting official appointment by the Minister.

Ms Ngwenya-Mabila noted that there had been a reduction in revenue collection from 39.4% in 2007/08 to 32.3% in 2009, and asked what the reasons for this decrease were.

Mr Ngwenya said that the reduction in revenue was due largely to unreliable data on the income of occupiers who were being upgraded from Permission to Occupy (PTO) rights to lease-holders.

Ms Ngwenya-Mabila then asked why the draft of the Fraud Prevention Plan, which, in the 2007/08 report was stated as being “in process” had still not been completed.

Ms Ngwenya-Mabila asked why the relocation and renovation of offices, which also appeared in the 2007/08 report, had still not occurred, and why this was still listed as an objective in the 2009 report.

Mr Ngwenya said the delay in construction of office infrastructure was due partially to a contractor having reneged on an agreement, and having tried to obtain more money once he learned that the Trust was a parastatal. The construction was now back on track, and an architect had been hired.

Mr B Zulu (ANC) asked whether the green sections on the map presented were owned by the Trust, the tribal authorities, and therefore the Trust Chairperson King Zwelithini Goodwill ka Bhekuzulu, or the municipalities.

Mr Ngwenya said the white part of the maps indicated any land outside the ownership of the Trust. The green parts were all areas with titles registered in the name of the Trust. He said that the Trust's funds were transparent, as indicated in the report, and that the only funds that the King received went towards travel expenses to attend Board meetings.

Mr Zulu then asked whether the homeland territory transferred to the Trust effectually positioned it as a homeland authority under the Trust, and not as under the broader South Africa.

Mr Ngwenya said the Trust was not outside South African law, was established by an Act of Parliament, and was fundamentally unlike the Homeland system. Outside KwaZulu-Natal, all homeland land went to the DRDLR. The only difference was that in KwaZulu-Natal, the Trust, instead of a government department, owned the land on behalf of the occupiers.

Mr Zulu asked who authorised development on Trust land. It was noted that institutions such as schools were developed by the community, and there was a worry that ownership might be transferred to the government.

Mr Ngwenya noted that the Trust made no decisions about development, but that this lay with the municipality and tribal authority. Land was a national competence. The Trust was simply a land owning body, and not a development institution or authority, and it was not therefore responsible for building schools or any other developmental structures. It was emphasised, however, that unless land and tenure rights were clearly articulated, development could not occur as contestations of ownership would be rife.

Mr Zulu said he was not sure about the Trust’s activities. Compared to the mines at Richards Bay, which had given some benefits in the way of schools and roads, the Trust had done nothing to deliver on any developmental objectives.

Mr Ngwenya said that if a municipality approached the Trust with a request to develop land which was not under tribal authority, the Trust would set terms for this to happen. If the land was under a tribal authority, the municipality must first approach a community, and if they accepted, the Trust would provide tenure information.

Mr M Swathe (DA) asked why individual occupiers ere being required to pay rates accounts by municipalities, and not the land-owning Trusts. Furthermore as the Trust received 10% of revenue from economic activity on the land, it seemed well-situated to carry this burden.

Mr Ngwenya said that the trust only took 10% off commercial activities. The decision that everybody should pay rates was taken by government through the Municipal Property Rates Act of 2004. Previously, only a person who held property was liable to rates, but this had been extended to anyone holding a long-term lease. The Trust would pay rates on all unoccupied land, but once a lease was issued, it was the responsibility of the lease-holder to pay the rates.

Mr Swathe asked why the Trust was unable to value some of its 2.7 million hectares.

Ms H Matlanye (ANC) then asked why there was a delay in making transfers from the Department to the Trust.

Mr Ngwenya said the delay in land transfer was out of the control of the Trust, and emphasised that both the valuations and the transfer were lengthy processes, particularly in cases where land had not been surveyed.

The Chairperson then asked how many of the titles held by the Trust had been transferred and registered.

Mr Ngwenya said between 1994 and 1997 the responsibility to register titles fell with the King, who was not aware of his duties. The Trust came into being in 1998. 16 500 titles had since been registered in its name, with 300 outstanding still waiting for transfer from the DRDLR.

Ms A Steyn (DA) said that the Annual Report claimed that the Trust would seek to foster a 'creative climate' for development. She asked how often, in practice, were communities involved in management and development decisions, and how their requests would be responded to.

Mr Ngwenya said that communities were consulted on policy formulation, but not in great detail, because of the capacity constraints in consulting with all 224 traditional authorities representing communities. He reiterated, however, that the Trust was not a development institution, and that consultation would only occur around land rights.

Ms Steyn then asked whether any land under the Trust had been earmarked for restitution.

Mr Ngwenya said the Trust did not have jurisdiction over land claims.

Ms P De Lille (ID) noted that the Annual Report indicated that about R2 million had been allocated for the provision of rates payments, which went unspent and were then accounted for as 'surplus'. She asked for an explanation.

Ms de Lille also noted that Page 12 of the Annual Report reflected that the Trust received ten applications for mining rights, of which eight were processed, but that it did not list who these applicants and beneficiaries were. Similarly there was a list of communities who requested project funding, but no mention of how much was finally allocated, and the projects’ worth was not indicated.

Mr Ngwenya said he would submit a written response to this question as he did not have the information before him.

Ms H Matlanye (ANC) noted that the mission of the Board was to ensure that the communities' lives were improved. She whether there was consultation with communities to this end.

She then noted that since 2007/08 the Trust had mentioned that it was to appoint a service provider on HIV/AIDS. This did not seem to have occurred. She called for an explanation.

Mr Ngwenya apologised, saying these policies were being implemented, but they had only begun after the 2008/09 financial year-end and the publishing of this report.

Mr R Cebekhulu (IFP) asked why there was such a low uptake of funds amongst communities, and whether this was due to insufficient communication and procedural ignorance, rather than lack of need. He also asked how this could be improved.

Mr Ngwenya said it was beyond the mandate of the Trust to design development projects. The onus was on the community to form a Communal Property Trust, to which Ingonyama could transfer funding for projects. He said that there was still room for improvement in communication, particularly in terms of credit accounts.

Mr Ngwenya added that overlaps in developmental mandates were often a struggle, and cited a Supreme Court of Appeal case in September, where a development tribunal was in conflict with municipal planning, and Chapters 5 and 6 of the Development Facilitation Act were overturned. Consequently, all developmental powers now legally lay with municipalities, and the Trust would be in breach of the law if it were to make developmental planning decisions.

Mr Ngwenya said that people in the rural areas were often discriminated against, particularly in terms of credit, because they did not have clear tenure rights. It was the Trust’s responsibility to define these rights when approached to do so. The Trust had moved away from PTO title to lease-hold rights, in the interest of generating income for communities. He noted that an Ultracity in KwaZulu Natal, near the Eastern Cape border, had formerly been paying only R48 a year under the PTO, until the Trust had intervened.

Mr Ngwenya concluded by expressing confidence in the Trust, noting that it had a highly specialised mandate in registering title, but that with only ten employees had out-performed parastatal institutions with the same mandate.

Commission on Restitution of Land Rights (CRLR): Annual Report 2008/09
Mr Andrew Mphela, Chief Land Claims Commissioner, Commissioner on Restitution of Land Rights, noted that the CRLR had the vision to ensure the return of land or provide proper compensation to the victims of racially based dispossession, and to guarantee that this contributed to sustainable socio-economic development. Its mission was to promote reconciliation by ensuring equity for victims of dispossession.

He said the strategic objectives included provision of equitable redress to victims of racial land dispossession. The CRLR would also provide access to rights in land and sustainable development, would foster national reconciliation and stability, and would contribute to household income, employment and poverty alleviation.
He said the restitution process was particularly relevant in the context of global recession and escalating food prices. Key to achieving the aims of the programmes would  be the giving of effective post-settlement support, which in turn would require a significant amount of human and financial resources, community training, and good cooperative governance.

Mr Mphela noted that the complex nature of claims had significantly affected the pace of settlement. One particular inhibiting factor of concern was the high, sometimes inflated price of land, averaging at R12 949 per hectare, which had significantly delayed transfer. At these prices, more funding would be required to increase the pace of restitution.

He noted that during the year a total of 653 claims were settled, affecting 30 112 households, but this was below the Ministry's target of 2 500 claims. Approximately 136 000 individuals had benefited from the programme over the course of 2008/09, bringing the total number of beneficiaries since 1995 to 1.5 million individuals. 315 433 households had benefited from settlement,  within 75 400 claims, which, as of 31 March 2009, represented 95% of all claims lodged.

He further noted that almost 100% of the R3.1 billion allocated was spent, but this was far below the approximately R5 billion which had been awarded this year. Of the R3.1 billion, the bulk of costs for restitution went to awards, including land purchase and financial compensation, amounting to R2.8 billion. Approximately R338 million was spent on recurrent costs, including salaries and service providers, such as land valuers. A total of R830 million was committed to development grants. The total projected cost for restitution would be R65.3 billion.

Mr Mphela reported that the most complex claims included those on mining and forestry land, which were subject to a particular amount of risk. Careful sector planning would be critical to ensure that the settlement of claims was aligned to broader objectives of rural development, which had not formed part of the mandate of the previous Department of Land Affairs.

On the subject of the relationship between strategic partnerships and beneficiaries, he said that some notable challenges had been experienced. Certain projects in Limpopo, Mpumalanga, the Northern Cape and Free State had suffered from non-profitability and had been liquidated. The Department was in the process of embarking on an investigation of the remaining partnerships to assess the scale and form of problems encountered. Several agreements with FNB, the Development Bank of South Africa and Amahlathi Forestry Company were under way to ensure provision of strategic support to beneficiaries.

In addition, discussions with the Department of Agriculture, Forestry and Fisheries (DoA) had resulted in agreements to provide technical support and training to new land owners. The Department was seeking additional funding from the DoA and the Comprehensive Agricultural Support Programme (CASP) to finance development assistance. One particularly critical area identified was the need to prevent the degrading of land and infrastructural quality over the transfer period. Claims often prevented farmers accessing credit, assistance and contracts for periods of four to five years. Both the DoA and the DRDLR would need to intervene to prevent this problem persisting.

He said that approximately two hundred struggling restitution projects had been identified for recapitalisation, and that the Department of Agriculture would assist in this regard.

He said that the Restitution programme was in a position to finalise most claims by 2009/10 in Gauteng,  the Free State, the Northern Cape, and the Western Cape. The remaining offices would complete their claims in the next five years, with, approximately 800 Mpumalanga claims to be completed by 2012, 900 in Limpopo by 2013, 500 in the Eastern Cape by 2014, and 1 400 in KwaZulu-Natal by 2014.

Mr Mphela confirmed that a memorandum outlining challenges of finalisation by the 2008/09 deadline was submitted to the Minister. Finalisation would be in line with the budget cycles regarding disbursement of funds for government programmes, but this would be subject to availability of resources and creation of capacity for post-settlement support. Despite the imminent finalisation, he warned that if insufficient funds were allocated, the process would be prolonged, and its quality threatened.

Mr Mphela highlighted the most notable challenges. There was a trend of endemic conflicts within Community Property Association or Trusts and between these associations or trusts and the Traditional Authorities under the Communal Land Rights Act (CLaRA). This was under review. The position of the Department was that land did not belong to an inkosi or chief, but to the community, and that democratic structures to realise this objective must be developed. Sometimes there was collapse of the scheme because of lack of support and training, and also because of conflict within CPAs due to unclear or inappropriate tenure structures and lack of communication amongst members. In addition, the Department had encountered problems in valuation of land, in terms of high land prices, and a dearth of valuers, who tended to be drawn from a very small demographic group. Although a review of policy had been suggested, South Africa's policy was already one of the most developed in the region. Since the Department would often be the only prospective purchaser, there was something of a market failure in this area, and 'the market' could not be relied upon to resolve the issue. He also said that there were problems in the realm of disposing of State land, where municipalities used their legislation to sell land at market values without prioritising land reform and the needs of the Department.  There was also a need for the Expropriation Act of 1975, administered by the Department of Public Works, to be brought further in line with the Constitution.
This Act had established an inefficient incentive structure for potential sellers, as the financial compensation required by an act of expropriation was often substantially higher than market prices.

National Treasury expected restitution to be completed by 2005 to 2008, and therefore its funding allocation towards this programme had now decreased. Current resources for restitution would be insufficient to finalise all claims, and he noted that either the baseline fund allocation would need to be increased, or the finalisation of claims would need to be rescheduled. In addition, the Department would have to develop a workable exit strategy from projects and ensure sustainable land use. It would further need to recapitalise failed projects, and had approached the Land Bank, IDT, and NDA to this end. It had to reform and streamline its grant regime, which had become fragmented and inefficient as more grants had been established for different needs, and this would have to be done in a way that would still reflect and allow for a broad range of land uses. He finally concluded that there was great pressure placed on the Commission as a result of financial constraints, and that the demands, whether measured economically, socially or politically, were huge.

Discussion
Ms Ngwenya-Mabila asked what the reasons were for the Commission's vacancies for two senior positions.

Mr Mphela said the two vacant posts were in respect of posts in Mpumalanga and Limpopo. The Limpopo post for Commissioner has been filled, as at 1 June 2009, but the Mpumalanga position had yet to be filled, after Parliament turned down the Department's recommendations.

Ms Ngwenya-Mabila then asked how the Commission could expect to receive more funds from the National Treasury, given its under-spending in almost all of its programmes.

Mr Mphela said that the Department had savings in its operational budget, due primarily to unpaid salaries and benefits for vacant positions, those unfilled and those deemed redundant. Furthermore, staff had been careful not to utilise external consultants and services wherever possible. In the area of capital spending however, which was dedicated to land purchase, and to which additional funding would primarily be directed, the total budget was spent.

Ms Ngwenya-Mabila then asked whether the Commission had investigated what the underlying reasons were behind project failures, rather than expecting that more funding from the DoA would alone resolve these issues.

Ms Ngwenya-Mabila asked what the status of the strategic partnership models in Mpumalanga were.

The Chairperson noted that questions surrounding strategic partnerships and joint ventures would be answered at a subsequent session.

Ms N November (ANC) asked why Northern Cape and Free State shared restitution commissioners, but the Western Cape had its own.

Mr Mphela noted that Gauteng and Northern Cape had always shared a Commissioner due to the low number of claims in both provinces.

The Chairperson asked whether there were any remaining vacancies for provincial commissioners.

Mr Mphela said he was acting in the stead of the KwaZulu-Natal Commissioner, who was asked to take compulsory leave.
 
Mr Swathe asked where the 200 struggling projects were, and of what type of business model was used.

Mr Mphela said that struggling projects were spread across the country, but the most notable were found in KwaZulu-Natal, Mpumalanga and Limpopo, largely because of the high-value commercial agricultural land in these provinces.

Mr Swathe then asked how the R803 million earmarked for development grants was to be utilised.

Mr Mphela said that though capital expenditure for land acquisition had been exhausted, R803 million had been committed for development grants, allocated as a percentage of up to 35% of the value of a claim.

Ms De Lille said that Gauteng, the Free State, Northern Cape and Western Cape were optimistic that they could finalise claims by 2014, but that this was subject to availability of resources, and effective implementation of post-settlement support. She asked how realistic it was that these claims would be completed, and whether the Commission had already engaged with relevant development institutions, particularly in terms of recapitalisation.

Ms Beverley Jansen, Regional Land Claims Commissioner, CRLR, said that there were about 500 development claims in the Western Cape, mainly in rural areas. The chief problems had been trying to get municipalities to relinquish State land.

Mr S Hlangwe, Regional Land Claims Commissioner, CRLR, said that the Northern Cape still faced problems where beneficiaries had changed their preferences from land restitution to financial compensation, which posed logistical complications where money had already been earmarked for the development of land.

Ms Linda Faleni, Regional Land Claims Commissioner, CRLR, said that struggling projects tended to have difficulties in terms of project management and skills development, but the Department was seeking to address these. She said that if land restoration was not possible, and financial compensation had been denied, alternative arrangements included provision of alternative land or developmental assistance.

Ms Tumi Seboka, Regional Land Claims Commissioner, Mpumalanga, said the main challenges for Mpumalanga included resolving disputes between communities within an inadequate policy space, and designing effective methods of post-settlement support.

Ms Steyn then asked what the development grant acronyms stood for.

Mr Mphela said that RDG stood for the Restitution Discretionary Grant, which was initially R30 000 but had since been raised. The SPG stood for the Settlement Planning Grant of R1 440 per household.

Ms Steyn then asked whether, if the Commission had already committed itself to purchasing land after exhausting its budget, it had already committed funds for next year, and if so, how much.

Mr Mphela said that financial commitments had been made for next year, although the budget had indeed been exhausted. The Minister and Commissioners agreed on a number of Section 42 applications, where the Department paid 50% of the value, and gave a commitment to pay the rest in the subsequent year. Not all submissions had been formalised into contracts. A number of contracts, worth about R3.4 billion, had been accumulating at the DRDLR.

Ms Matlanyane asked how sustainable restitution projects were, and how they were addressing problems in strategic post-settlement support. She noted that in a case in Zanene, Limpopo, beneficiaries had even been locked out and brought to court for being unable to fulfil their obligations.

Mr Tele Maphotho, Regional Land Claims Commissioner, responded that the challenges in the case at Zanene were well documented, and were currently under judicial review. However, the Commission had experienced some problems with judicial managers, and those responsible with overseeing a sustainable transfer, because of their inability to resolve community conflicts and develop sustainable ownership models.

Mr R Cebekhulu (IFP)asked how the Commission resolved cases where there were competing claims for one area, as in the cases of Somopo and Nobizo falling under Nkuhlu Properties.

Mr Mphela said that in instances where there were multiple claims to one piece of land, the Commission would conduct  an investigation into both claims in an attempt to establish rights. However, sometimes both communities had a legitimate claim, and here, a negotiated settlement would be attempted ,to establish a claim comprising both communities.

Mr Maphotho said that in regard to the Nkhulu properties, some of the claimants had said they did not want to be part of the other community's claim, and that tomorrow there would be a meeting with the provisional land reform office.

Mr Mphela added that some beneficiaries had opted for financial compensation, but others had opted for land.

Mr Cebekhulu asked how the Nkuza claim in KwaZulu-Natal was proceeding.

Mr Mphela said that a Section 42 deal was signed by the Minister and Commissioner for about 7 000 hectares of agricultural land, but that the remaining 1 000 hectares was declared as a game farm by the former owner. The Department still needed to investigate whether this was legitimate, or was an attempt to circumvent the claim. After discussion with the beneficiaries, they were prepared to cede the so-called game lodge, which was located on rocky terrain in any event.
 
Mr B Zulu (ANC) asked about a particular claim that was not finalised. The owner had apparently attempted to sell the farms before the restitution claim could be finalised, and despite the tribal authority’s objections, was authorised to do so by the courts. The new owner had converted the property into a game farm, and the status of the claim was unclear.

Mr Mphela said that a similar situation had unfolded, and that negotiations were still in place, but that claimants had said, in discussion, that they were prepared to cede the so-called game lodge.

Ms De Lille said Page 38 of the Annual Report noted that there were several claims in the Southern and Eastern Cape under review by the Lands Claim Court. She asked who was bringing these claims against the communities, as no clear community representative body had been established.

Ms Jansen said an eight-person committee could not deal with the legalities inherent in land transfer, and a community property association must be established, in conjunction with the Independent Electoral Commission, which would help to run the process. The Department had hired an expert mediator on court orders to help reconcile internal conflicts, and hoped to conduct an election soon.

Ms Steyn said she was concerned about the long period between the gazetting and settling of claims, and asked what the Commission was doing to assist farmers in the interim period to prevent disrepair.

The Chairperson requested that the Commission produce a written explanation on exactly how the Department was dealing with this issue, and as to exactly which schemes had been placed in moratorium. He further requested that the Commission submit an updated progress report on claims, rather than simply supplying general information, and said that it was crucial that the Commission must make an audit of existing CPAs and the challenges facing them.

The meeting was adjourned.