Ingonyama Trust Board & Commission on Restitution of Land Rights 1st Quarter 2015/16 performance; Committee Oversight Reports

Meeting report

Opening remarks
The Chairperson tabled an apology from Mr Mcebisi Skwatsha, Deputy Minister of Rural Development and Land Reform, and noted that Mr Mduduzi Shabane, Director General of the Department of Rural Development and Land Reform (DRDLR or the Department), would need to leave at some point to attend another Committee meeting.

Commission on Restitution of Land Rights (CRLR)
Mr Mduduzi Shabane, Director General, Department of Rural Development and Land Reform, indicated that the Commission on Restitution of Land Rights (CRLR) was the accounting body in terms of the public Finance Management Act (PFMA),and not the individual officials. There was no objection to the officials reporting but the norm should be that the Commission, in the form of other Commissioners, should brief the Committee.

Mr P Mnguni (ANC) felt it was not right that the Committee was not receiving a briefing from the Commissioners, and asked who were the accounting authorities. The accounting lines could not be blurred.

Ms Candith Mashego-Dlamini, Deputy Minister of Rural Development and Land Reform, said the person who was presenting to the Committee was in charge of service delivery within the Commission and was therefore delivering the report on behalf of the Commissioners.

The Chairperson said if the Chief Commissioner was not available, then the Deputy should have led the delegation.

Mr Sunjay Singh, Chief Director: Service Delivery Coordination, CRLR, said the Commission’s performance against the 2015/16 targets was as follows:- 38 land claims were settled in the 1st quarter against a quarterly target of 92, and 57 land claims were finalised against a quarterly target of 74. Eight projects were approved against a quarterly target of 12 and195 land claims were researched from the 1998 land claims, out of a quarterly target of 532. The Commission also had a target of having two all-terrain mobile lodgement offices in the 1st quarter but the target was not achieved. With regard to the land claims he indicated that some of the projects planned for settlement in the 1st quarter were settled in the 4th quarter. In response to this the Commission was strengthening its project management capacity so that it could better monitor work flow and improve its planning.

He explained that the target for researching claims lodged in 1998 was not achieved for various reasons. The National Research Unit (NRU) received approximately 366 reports for 519 claims, and due to the bulk of the research reports being received between 29 and 30 June 2015, the vetting process could not be completed and the reports could not be recommended for approval before 30 June 2015. Consequently only 198 claims were vetted and approved. The remaining 321 claims were still in the process of being submitted for approval. The appointment of a service provider to conduct research on complex claims had been centralised at the National Office and the appointment process would be completed by 31 August 2015. He indicated that 45 claims were received during the last three days of the quarter and these were currently being finalised. He explained that these figures were the total number of claims to be settled for all the provinces.

With regard to the Commission’s performance during the second quarter he indicated that 24 land claims were settled against a quarterly target of 138, that 69 land claims were finalised against a quarterly target of 111, 6 projects were approved against a quarterly target of 18, and 98 claims from the 1998 land claims were researched our of a quarterly target of 798.

There was a financial improvement plan, and the Commissions’ spending from 1 April to date was R411 million. The balance, for the claims settled during the 2015/16 financial year, was R47 million. The financial committee meeting held meetings and received monthly reports from all provinces, discussing the status of claims, identifying bottlenecks, challenges and solutions to ensure of spending to cash flow projections. He described the allocations and spending as follows:
- The Eastern Cape received a budget allocation of R 257 million, to date 26.4% of the budget has been spent
- Free State received an allocation of R107 million, 0.2% of the budget has been spent
- Gauteng received R103 million of which 0.8% has been spent
- KwaZulu Natal received R387 million and spent 36.9% of its allocation
- Limpopo received R351 million and spent 22.3%
- Mpumalanga received R359 million and spent 9.8%
- Northern Cape received R247 million and spent 26.5%
- Western Cape received R 154 million and spent 21.4%.

The total budget allocation for all the provinces was R 2.2 billion.

The total operational expenditure for the Commission was R486 million, and to date 33% of the budget had been spent. With regard to the filling of vacancies, he said the Commission’s structure made provision for 1 523 approved posts, both funded and unfunded. 736 posts have been filled, 221 posts were vacant and 115 posts have been advertised. With regard to communication on the lodgement campaign, he said the Commission had a media liaison office which worked with the Minister, the Commission and the Provincial Chief Directors of Land Restitution Support, and conducted interviews on various media platforms. In addition the Commission had been running an advertising campaign since June, advertising on national and community media. The Commission also conducted community outreach, in the form of road shows in various provinces.

Discussion
Mr T Mhlongo (DA) said service delivery within the Commission was a serious problem because the Commission had failed dismally on a number of issues. He asked why there were only two slides on the Commissions’ expenditure? What were the causes of some of the challenges relating to staff challenges and were they related to a lack of technical skills within the Commission? What strategies were in place to ensure the development of the Commission? He said the 23% vacancy rate was unacceptable. What were some of the implications of the budget on the Commissions’ finances?

Mr M Filtane (UDM) said it was very hard to look at the report from a positive viewpoint. He too wanted to know the real reasons behind such serious under-performance? Dealing with land claims was a serious matter and these claims should be prioritised. He said the Commission had used a poor choice of words for explaining why projects were not completed. He asked for the exact number of claims which were not processed. He said the fact that there was no political head present was unacceptable and suggested that in these circumstances the meeting should have been rescheduled. He wondered if the Commission had full internal capacity to deliver on its mandate and asked if the Commission had considered getting staff to do overtime work while the Commission was trying to fill the vacant posts. What was the problem with the Free State and what was the Commission doing to get more funding? How did the Commission assess the value of the media communication it undertook and the community outreach programmes in which it was involved?

Mr E Nchabeleng (ANC) said the only positive thing with the presentation was the fact that the Commission was able to pay salaries, but other than that he questioned what exactly the Commission had achieved. He asked how much the Commission had spent on advertising costs? He wanted to know why the provinces were not performing and to identify them. He suggested that staff from the Commission's internal audit team should be invited to the next meeting because the Commission was not performing and it was not reaching its targets.

Mr Mnguni said performance issues transcended political parties. The Committee should be raising its concerns to the Commissioners who were the ones running the Commission. With regard to the land claims lodged in 1998 he noted that the presentation gave the annual target as 2v660, but at the end of the 1st quarter the Commission had only processed 195 claims. He asked why, and said this figure was highly unacceptable. If the Commission was not able to meet its 1st quarter targets, then he asked how it would meet annual targets. He described its performance as “dismal”.

Mr T Walters (DA) also said he was worried that the Committee was raising its questions and concerns to the wrong people; the Commissioners needed to be called in to explain what was going wrong within the Commission, and where were the problems. He wondered if the Commission could provide a breakdown of the projects involved in the community outreach work of the Commission. He said he was not impressed by the amount of money being spent on communications when the Commission was not even meeting its targets. There was a fundamental lack of performance.

Mr A Madella (ANC) said the Commission needed to take remedial action to address its under-performance issues. He suggested that the Committee meet with the Commission again before the end of the second quarter. Of the 221 funded posts, 115 have been advertised, but he questioned what was being done about the rest? He said there were serious under-staffing issues within the Commission. He said the Commission needed to look at establishing partnerships with universities to capacitate the Commission’s research unit. There were a number of postgraduate students who could be brought in to offer research expertise for the Commission.
 
Mr Nchabeleng said it was a serious concern that there were land claims which were lodged over seven years ago but have not even been gazetted, and he asked how long this process should take. Because these processes took so long people ended up occupying land illegally.

The Chairperson agreed with the Members and said research was a critical skill on which the Commission needed to improve. She too questioned how, if the Commission was failing to meet its quarterly targets, it hoped to be able to meet its annual targets. How far was the Commission in engaging institutions to fast track the research process? Why was the recap funding not mentioned in the presentation; this was a developmental grant. She also asked what informed the direction of the mobile claim lodging sites.
 
Mr Nchabeleng asked why meetings were being held in traditional councils and not in local community areas. There were a lot of concerns that local communities were not being consulted about work which the Commission wanted to undertake in their communities, and he asked if the Commission was aware of this.

Mr L Mbinda (PAC) suggested that the Commission respond to the questions in writing. There were serious issues of capacity within the Commission and these needed to be addressed.

Mr Filtane said some of the questions have not been give the attention they deserved, such as those round the Free State. He wondered how the funding issues would be resolved, and asked what instruments would the Commission use to assess the value of the outreach programmes. The Commission should not continue spending money on something which might not have value. The Department needed to demonstrate that it really  understood the seriousness of the Commission and the impact that not meeting targets had on the public. There seemed to be no attempts to try and meet the targets.

Mr Mnguni said the main problem in the Eastern Cape was that of the former bantustans, particularly in Transkei where the structure made it difficult for government to access. The mobile lodgement centres were therefore a great initiative.

Mr Singh responded to the question on the impact of the Commission’s communication and said that in the last quarters there had not been an evaluation of the effectiveness of the communication. He noted that the Commission could make a separate presentation on the 397 unfunded posts.

An official conceded that the Commission had under-performed in terms of achieving its targets. The reasons for the under-performance were in part due to the 1998 outstanding land claims put on hold because of objections raised about the validity of the claims. The Commission had revised negotiations with the land owners, and in the second quarter the Commission managed to settle one land claim and three others were submitted for approval. She indicated that a commitment of R13 million was made; R4 million was for financial compensation and R9 million was for grants. She said the difficulty with the Free State spending was that some of the commitments which were approved for paying beneficiaries were very minimal and the Commission was therefore looking to reconcile some of these projects. The expenditure for these projects would be presented under the 3rd and 4th quarter reports.

Mr Shabane responded to the question around 379 unfunded posts, and said the Department had met with National Treasury regarding the financial situation of the Commission, and in terms of the budget process the Commission had submitted a memorandum on its financial position. The Commission requested assistance from the Department to further prioritise funding. He said the Commission’s under-performance was not something the Department was taking lightly, the picture was unacceptable and there was nothing to justify. The Commission had been asked to come up with a plan for improvement. He said quite a number of claims had been approved and so the statistics on the number of claims would certainly improve drastically, together with the budget expenditure. However there was still a lot do to in order to improve the Commission’s research capacity.

The Chairperson said the Committee had noted the Commission’s under-performance, together with the issue around the lack of alignment between service delivery and expenditure. The Commission should submit a roadmap or plan to the Committee indicating how many posts would be filled by the end of the year. She said the Commission needed to plan properly, and it should not have been giving a presentation on the 1st quarter performance yet referring the Committee to the targets being achieved in the 4th quarter. This was very confusing. She said the internal audit team and the chairperson of internal audit should be invited to the next meeting. Any other outstanding responses should be submitted to the Committee in writing. She also noted her concern that the mobile lodgement centres were in towns, and not in rural areas where they were needed the most.

Ingonyama Trust Board (ITB) – 1st Quarter Financial and Performance Report
Judge Jerome Ngwenya, Chairperson, Ingonyama Trust Board, indicated that the report was divided into three components; the background and finance model, financial expenditure for the 1st quarter and the performance of the Ingonyama Trust Board (ITB or the Trust)  against the strategic plan and strategic objectives. There was a report on vacant positions within the Board and the actions to be taken to address these. He said that he would welcome criticism from the Committee. He indicated that the Board did not have a Chief Executive Officer for a period of over a year, and there had been a number of consequences arising from that. Dr Fikisiwe Madlopha was recently appointed as the Chief Executive Officer and should therefore be exempted from responsibility for this report and for the performance of the Board in the financial year under discussion.

The Ingonyama Trust was established in 1994 by Act No 3 of 1994, with King Zwelithini as the sole Trustee.  An Amendment Act in 1997 had, among other things, established a Board to administer the affairs of the Trust.  The Board comprised of eight members plus the King or his nominee as Chairperson.  The eight board members were appointed by the Minister of Rural Development and Land Reform, after considering national and provincial interests. The Trust was the one of the largest landowners in the Province with a total extent of 2 844 903 hectares held under some 1 600 individual titles.  The Trust owned land in all of the district municipalities and metropolitan municipal areas in KwaZulu-Natal. The core business of the Trust was to administer the land for the “material benefit and social well-being of the individual members of the tribes”.
 
The Ingonyama Trust Board obtained its funding from the following two sources; transfer payment received from the Department of Rural Development and Land Reform and an income from trading and investing activities. The income from trading activities consisted mainly of lease income and compensation from servitudes.

He described the 1st quarter expenditure for the 2015/16 financial year. The administration programme  received a total allocation of R59 million and by the end of the 1st quarter R6.5 million (11%) had been spent. The land management programme received R2.5 million but had managed to spend only 0.15%. The programme on rural development received R  9 million and had spent R  6.03 million (67.04%) at the end of the 1st quarter. .The programme on traditional council and community support received R87 million and had spent R14.6 million (16.68%) at the end of the 1st quarter. In total, the ITB received a total allocation of R87.6 million for the 2015/16 financial year, and R14.6 has been spent to date. He indicated that the total amount spent, included provisions, for the 1st quarter amounted to R14.6m. This represented 6.68 % of the total budget for the year.

Giving a line item breakdown, he noted that R4.5 million was spent in the 1st quarter on goods and services. The total revenue generated for the 1st quarter amounted to R23.6 million, or 26.96% of the total budget. Transfer payments received for the 1st quarter were R6.1 million. On the revenue side, he indicated that R23.6 million was received in the 1st quarter, this included revenue from rental income, servitudes and others, reserves, and transfer payments.

With regard to performance, he indicated that the ITB had an annual target of approving five policies, and one should have been done in the 1st quarter, but no policies were approved. Three draft policies were available but were pending approval. The ITB had a quarterly target of filling 100% of all vacancies, and 66% of the vacancies were filled. With regard to conducting training programmes he indicated that the ITB’s annual target was 10, and the target for the 1st quarter was two, and this target was achieved. The ITB had a target of approving four Memorandums of Agreements with traditional councils, but this was prioritised for the 2nd quarter. In regard to land management he indicated that the ITB had a target of approving 325 land tenure rights for the 1st quarter. The target was exceeded and the ITB approved 369 land tenure rights. With regard to rural development, he indicated that ITB had a target to approve one agricultural project in the 1st quarter, but this target was not achieved. The ITB also had a target to develop a strategy on economic development, and this target was prioritised for implementation in the 4th quarter. The ITB had a target to approve one commercial high impact project in the 1st quarter, but this target was not achieved. With regard to the Traditional Council Support Programme he indicated that the ITB had a target to train 11 traditional councils in the 1st quarter, but this target was not achieved as only  seven traditional councils were trained. The ITB also had a target to facilitate 25 socio-economic investments to communities living on Trust Land. This target was exceeded, with 35 educational awards being granted.

He indicated that the structure of the Board made provision for 27 permanent staff and 31 staff on contract. To date, three permanent staff posts were vacant and three contract staff posts were vacant. The vacant positions were for Manager of Real Estate and the Auxiliary Services Assistant which would be filled in the 2nd quarter. The Chief Executive Officer’s post had been filled.

Discussion
Mr Filtane welcomed the appointment of the new Chief Executive Officer. He said there were still delays in the ITB developing policies and wanted to know what was the exact problem and whether the Committee could be of assistance here. He said the delay in developing policies had a knock on effect on completion of performance agreements, resulting in below par performance. He asked why the dates for the development of the economic plan had been moved to the 4th quarter? With regard to land being released for great economic activities such as mining, he pointed out that many of the residents who lived on the land owned by the ITB were fighting with the traditional councils because they were not being adequately consulted on these projects. Many people were extremely unhappy. He asked if the ITB had consulted residents, over and above consulting with the traditional councils.

Mr S Matiase (EFF) welcomed the disclaimer that the Chief Executive Officer was new and should be removed from responsibilities arising from the report. The core business of the Trust was to administer land to members of tribes. He wondered if this meant that the ITB was administering land only to the Zulu tribe. He said there seemed to be misalignment of what the core business of the ITB was, and who the target market was. He wanted to know how the Trust was aligned with the overall programmes of the Department, and the instruments provided by the Department to deal with spatial development through infrastructure development.

Mr Mhlongo asked whether a copy of the Memorandum of Agreement could be made available to the Committee. He also wanted to know what policy the Trust had in place for bursary allocations, since this was necessary for oversight work of the Committee. He indicated that the Auditor-General had recommended that the Trust conduct a land audit and wanted to know if this had been done and, if so, what were the outcomes? If this was an expensive exercise it could be done in a phased approach. He questioned the amount of the ITB’s legal fees? What were the causes around the delay in finalising policy – and was this because of human resource constraints or was it because the Trust was operating without a Chief Executive Officer? The delays in policy were of great concern.

Ms A Qikani (ANC) asked for details of the three policies which were pending approval.
 
Mr Madella said the number of employees on contract were of great concern and he asked if these contracts were a fixed term basis? He noted that legislation around labour relations had been amended to give more job security for temporary employees, and questioned why in principle there were so many staff on contract. He asked if the Trust could elaborate on the gross under-spending on land management and the reasons for this.

Mr Nchabeleng said R50 million was used to administer land yet there was still under-spending under the programme, and asked what was the rationale for this? What road-map could the ITB provide for the development of policy? He said because the institution was handled by one person – the King - planning would most probably be a problem as it would run according to the King’s schedule. He asked if the ITB was conscious of this, and how was it being handled?

Mr Mbinda asked the extent of the litigation was for the financial year, and also wanted details of some of the pending cases. He asked how many board members there were, and what budget was allocated for their compensation.  Did the Trust have an internal audit committee, and if so, he wanted a report to be provided to the Committee?

The Chairperson Ngwenya-Mabila asked who owned the tractors; who was responsible for their maintenance, and how local residents accessed these tractors? She wanted to know how exactly the Trust was contributing towards rural development, and what impact  the projects had on local communities? According to the presentation, around R2 million had been spent on contracting trainers for the ITB, but she questioned why the Trust was not establishing its own training capacity rather than making use of consultants? What were timelines for processing recruitment for the filling of vacant posts and what were the reasons for the delay in recruitment? She asked about the role of the Department in contributing towards rural development through the Trust?

Judge Ngwenya responded that there were two role-players involved in the development of the mines – namely the municipalities and the national departments. However neither of these institutions would get very far without access to land. The law related to mining development and resources stated very clearly that once the applications for mining or exploration had been accepted by the regional manager, the regional manager must notify the Department to prepare an environmental management plan and also to consult with the land owners and the lawful occupiers. He indicated that the Department was overlooking the requirement to consult the land owners, and this was the reason why people were up in arms, claiming that traditional leaders were conniving with the mining houses and with the ITB. However, the ITB was committed to finding out how many mining activities were taking place on the Trust’s land and to what extent the communities were affected. He indicated that neither the Board nor the Trust had any powers to give the mining houses authority to undertake mining activities without consulting the residents. When it found out that some people were being removed from their land, the Trust had taken various legal actions against these mining houses. Negotiation processes needed to involve not only the ITB, but also traditional councils and members of the community, especially those who would be directly affected. When any person wanted access to land s/he needed to go through the traditional council and then to the ITB. Land would be granted subject to the individual having approached the municipality for planning permission. The ITB did not have any right to pass a building plan, this was the municipality’s jurisdiction.

There were many reasons for the delays around policy development. One was that the ITB did not have a policy unit. The Secretariat of the Trust had been managing policy when there was no Chief Executive Officer to handle policy development.

Judge Ngwenya said that he was not aware of any residents being up in arms against the Trust. He indicated that the ITB's strategic plan was approved by the House. With regard to the questions on the Trust’s alignment with the Department, he said the Department worked with the ITB on a number of projects. He noted the questions on the land audit, but although there was a full report on land valuations, he did not have the full report with him, and this information would be forwarded to the Committee. With regard to the number of employees on contract compared to those who were permanent, he said the reason for this was that there were no permanent established posts, but the ITB hoped to absorb these staff who had been serving on contract soon. Currently, there was an advertisement, in the Gazette, for a service provider to assist the Trust in developing a proper organogram.

Judge Ngwenya noted the questions on revenue but reminded Members that the revenue could still go up. He reiterated that the delays around developing a road map for policy had been rooted in the inadequacies around senior staff, and also added that in the absence of the Chief Executive Officer it was difficult to appoint other senior staff members.

Responding to the question around legal fees, he said the only time the Trust took a party to court was when land was occupied illegally.

The Chairperson thanked all the officials for their presentations and the Members for their engagements with the presentations. She indicated that all remaining responses should be forwarded to the Committee in writing.

The meeting was adjourned.