Communal Property Associations 2012/13 and 2013/14 Annual Reports: Department of Rural Development and Land Reform briefing

Rural Development and Land Reform

12 November 2014
Chairperson: Ms P Ngwenya (ANC)
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Meeting Summary

The Committee was briefed by the Department of Rural Development and Land Reform on the annual reports of the Communal Property Associations for the 2012/13 and 2013/14 financial years.

The primary objective is for CPAs to serve as mechanisms for the democratisation of land use and enjoyment, where land reform communities understand and accept the rules by which the land and assets that are commonly held are governed. The success of CPAs therefore depends largely on the ability of the CPA committees, equipped with sufficient resources and skills, to manage and administer the collectively owned land and property for the benefit of its members.

Once the CPA is formed and land and assets transferred to it, problems regarding access, control and management abound. CPA cases handled through the Land Rights Management Facility (“LRMF”) confirm that the most challenging issue confronting individual beneficiaries and communities relates to the development of shared systems and procedures for allocating, managing and administering land rights in a communal context. Access to resources, skills and opportunities become contested sites of struggle and tend to divide communities that previously stood unified in a common struggle for land reform.

In response to the glaring non-compliance of CPAs with the Act, the Department of Rural Development and Land Reform (DRDLR) had, in line with its Turn-Around Strategy, embarked on a process to regularise ailing CPAs. This process is intended to ensure that CPAs and Provisional CPAs are fully functional and the objects of the Act are being achieved. The main causes of non-compliance included lack of accountability, corruption, conflicts within communities and ineffective land utilization.

A lesson learnt was that the regularization process was multi-faceted, involving a range of interventions to address the different issues confronting individual CPAs. Long standing disputes could not be resolved within the confines and resources of the CPAs. This required intervention of third parties such as mediators and municipalities, or the allocation of additional resources such as land and/or finances.

Future plans included:

* The appointment of dedicated personnel within the provinces to provide adequate support to CPAs;
* Amendment of the CPA Act by the Department;
* Training.  379 CPA committee members, representing 95 CPAs, have already been trained on corporate governance;
* A policy on CPAs has been developed which aims to address inequitable access to land, democratic governance deficits, and CPA relations with surrounding communities and state structures.
* The CPA Amendment Bill seeks to create dedicated capacity within the Department to support CPAs.

The Committee asked if the trainee CPA committee members were trainable, and why the communities were not trained at the same time. There were queries about disparities in CPA statistics, and concern was expressed that its annual reports had not been submitted for the past three years. Members asked when the amendment Bill would be submitted to Parliament.  The Department was also questioned on how issues of corruption and non-accountability were handled by the CPA.

The minutes of meetings held on 29 October and 5 November 2014 were unanimously adopted, with amendments.
 

Meeting report

Opening Remarks by the Chairperson
The Chairperson welcomed the Committee Members and the Deputy Ministers, who led the delegates from the Department.

Ms Phumla Nyamza, the Committee Secretary, read apologies from the Minister, the Director General, Mr A Mngxitama (EFF) and the Committee Researcher.

The Chairperson said that the meeting had been convened to deal with the annual reports of the Communal Property Associations (CPAs), which were guided by the CPA Act of 1960. It was the responsibility of the Department of Rural Development and Land Reform (DRDLR) to make sure that the new structures were functioning, and also to assist those structures that were struggling to function.

Briefing by DRDLR on CPA’s Annual Reports for 2012/13 and 2013/14
Mr Jeff Sebape, Director: DRDLR, briefed the Committee on the annual reports of the Communal Property Associations. The reports covered the 2012/13 and 2013/14financial years.

The primary objective is for CPAs to serve as mechanisms for the democratisation of land use and enjoyment, where land reform communities understand and accept the rules by which the land and assets that are commonly held are governed. The success of CPAs therefore depends largely on the ability of the CPA committees, equipped with sufficient resources and skills, to manage and administer the collectively owned land and property for the benefit of its members.

Once the CPA is formed and land and assets transferred to it, problems regarding access, control and management abound. CPA cases handled through the Land Rights Management Facility (“LRMF”) confirm that the most challenging issue confronting individual beneficiaries and communities relates to the development of shared systems and procedures for allocating, managing and administering land rights in a communal context. Access to resources, skills and opportunities become contested sites of struggle and tend to divide communities that previously stood unified in a common struggle for land reform. The solution lies in developing the appropriate institutional and management mechanisms, with the support and assistance of municipalities, which can address this issue while balancing the need for sustainable development.

In response to the glaring non-compliance of CPAs with the Act, the Department of Rural Development and Land Reform (DRDLR) has, in line with its Turn-Around Strategy, embarked on a process to regularise ailing CPAs. This process is intended to ensure that CPAs and Provisional CPAs are fully functional and the objects of the Act are being achieved.

Mr Sebape said the main causes of non-compliance included lack of accountability, corruption, conflicts within communities and ineffective land utilization. CPAs found to have lost land either through sale or execution were Dirisanang in Northern Cape, Impala in Free State; Thuthukani in Mpumalanga and Segwaelane Balemi Itsoseng in North West. Other CPAs reported normal voluntary land transactions, like the lease of land and registration of servitudes on their land.

The following CPAs were placed under judicial administration: Khomani San; Khomanani ; Loeriesfontein and Pniel, all in the Northern Cape; Klein Tswaing in North West; Elandskloof in Western Cape;  Serala and Letswalo in Limpopo; and Sisonke in Mpumalanga. The administration will cease in either 2016 or 2017. There were two applications in the North West High Court to place Barolong Boo Seitshiro and Barolong Boo Modiboa CPAs under judicial administration.

The objective of the Department was to regularize non-compliant CPAs, to change underperforming and non-compliant CPAs to normality, to reverse non-compliance to overcome constraints, and bring them to acceptable levels of functionality. The CPA turnaround strategy involved a regularization process which was divided into fact-finding, intervention and close-out phases.

20 CPAs had been regularized to date, while the process for 23 CPAs was nearing completion. 11 CPAs had been recommended for judicial administration. 16 CPAs had been recommended for deregistration, while 24 did not appear to be suitable for regularization. 53 CPAs were at the early phase of regularization, due to some challenges. Expenditure on regularization since December 2012 had been R14 429 692.

A lesson learnt was that the regularization process was multi-faceted, involving a range of interventions to address the different issues confronting individual CPAs. Most of the long-standing and complex disputes had been difficult to resolve and required thorough and patient mediation efforts. In many instances, formal regularization and compliance could be achieved only by addressing the underlying capacity and development issues faced by the communities.

Long standing disputes could not be resolved within the confines and resources of the CPAs. This required intervention of third parties such as mediators and municipalities, or the allocation of additional resources such as land and/or finances.

In 2009/10, there had been 100 nationally compliant CPAs. This had increased to 158 in 2011/12, and 209 in 2012/13.  In 2013/14, there were 171 compliant CPAs.

Future plans include:

* The appointment of dedicated personnel within the provinces to provide adequate support to CPAs;
* Amendment of the CPA Act by the Department;
* Training.  379 CPA committee members, representing 95 CPAs, have already been trained on corporate governance;
* A policy on CPAs has been developed which aims to address inequitable access to land, democratic governance deficits, and CPA relations with surrounding communities and state structures.
* The CPA Amendment Bill seeks to create dedicated capacity within the Department to support CPAs.

Discussion
The Chairperson urged Members to be brief and specific when engaging in the presentation, as dialogue would not be entertained.

Mr M Filtane (UDM) asked if the CPA trainees were trainable and if they were able to demonstrate their role by implementing the knowledge.

Mr Sebape replied that the trainees were trainable. The training manual’s language had been made as simple as possible for the trainees to understand, as it was not high level training. The Department had not received any major problems from those trained and had more demands for training and extension, which proved its success.

Mr T Mhlongo (DA) asked what year the distribution of CPAs represented in the presentation, as some figures were missing in the nationally compliant statistics. He asked how the Department assisted where there were instances of lack of accountability, and asked if the CPA culture was sustainable. He asked for the exact time frame when judicial administrations would cease for some CPAs, and how long it took for an entity or CPA to be put under judicial administration.

Mr Sam Mogaswa, Deputy Director: DRDLR, replied that the challenges with some of the CPAs placed under administration was that some had underlying conflicts that had to be addressed, hence the estimation of feasible dates for finalization of the resolutions. By the end of the estimated timeframe, the challenges would have been fixed.

Mr T Walters (DA) expressed concern about the viability measurements of CPAs, as he did not understand if they were commercially viable measurements, or institutional measurements. He asked for the impact of the usage of property on income generation and asked if a CPA could be prevented from forming a management company. He expressed concern about the general trend of the annual reports, as the Department was taking up the responsibility of administering CPAs. Given the microeconomic indicators and the relationship between the extensions of bureaucracy and the impact on budget, he expressed concern about bureaucracy and the options available for CPAs to become viable.

Mr Masiphula Mbongwa, Acting DDG, Land Tenure and Administration: DRDLR, replied that the focus was more on the institutional viability, such as annual reports, holding regular meetings, asnnual general meetings, and so on. There were issues around cropping, forestry, mining, grazing, investment and developments that would apply to the commercial elements. It was strongly advocated by the Minister that CPAs should consider the commercial elements.

Mr M Nchabeleng (ANC) asked why the option of Section 21 Company was not considered rather than the CPA. He added that CPA was non-profit, but could also make profit because it dealt with farming, production and so on. He asked what happened after the trained executives of CPA had passed away, and how the Department ensured that the quality of the training remained the same. Training should be brought down to the communities because for a new organization to function, the monitoring must be done by the membership. If the members did not know what was expected of their leadership, then the training should be brought down to the communities. He suggested that the Committee members required a workshop, as most of them were new to the Portfolio.

Mr Sebape said that due to budget constraints only executives were trained, but the Department ensured that the people coming in understudied the executives. He added that training should be broadened to include the beneficiaries and not just the people in the offices, but it costs a lot if the communities must be trained.

Ms K Mashego-Dlamini, Deputy Minister, DRDLR, commented that there was a communal right in trust under traditional leadership, but the community had a rightful claim. CPAs were experiencing a problem in including the traditional leadership because there had been a previous traditional leader who had been expelled, and the responsibility of the Department was to restore the land to the community. CPAs were facing a problem of non-accountability because they operated as both the property and business right holders. As a Department, the property holder must stand alone, and when a business was operated on the property, there should be a business entity which should be accountable to the property holder. This would prevent putting up the land as collateral, so that if the business collapsed the land would still remain. The Department was recapitalizing the CPA as a business entity, so that the CPA would hold the property and those who operated businesses on the property would pay for the property.

Mr Mcebisi Skwatsha, Deputy Minister: DRDLR commented that when the Committee played its oversight role, it was expected to criticise and strengthen the Department. When the Bill had been published, the Department should take some of the issues raised and look at how it might be possible to sharpen the tools.

The Chairperson asked that accurate figures of CPA distribution be provided in writing to the Committee.

Mr Walters suggested that it be included in the Committee’s oversight programme, if possible, to verify if CPA models were workable.

Mr Mhlongo asked if the Department often checked the value for money -- that is, money used versus the outcomes. He asked if the Department could share experiences on issues faced in other provinces, as compared to the Western Cape.

Ms Mashego Dlamini replied that it would be difficult to check the outcomes versus money used, as money was being used to mediate conflicts among beneficiaries, hence this could not be used to ascertain if it yielded outcomes.

Mr Filtane commented that the presentation gave a direct contrast to the remarks made by the Minister at the Land Summit held in Johannesburg on the sustainability of CPAs.  He asked the Department what was happening.

Ms Mashego Dlamini replied that the Department had developed a turnaround strategy to address the huge problems in the CPAs. Before restitution was done, claims had to be advertised for people to come forward, as issues from 1998 were being dealt with and needed to be verified. The responsibility of the Department was to install CPAs in areas of the displaced traditional leaders.

Mr Nchabeleng said that CPAs were working in some areas, while in some areas they did not work. The challenges faced had been identified and processes had been developed to address these challenges. There had been claims where some traditional authorities lost their land rights due to the 1995 Act to other traditional authorities who were loyal to the then government. He asked if there were CPAs against such claims.

Mr P Mnguni (ANC) expressed concern that the CPA’s annual reports had not been sent for about three years. He asked when the proposed amendment Bill was likely to be presented before the Committee.

Ms Mashego Dlamini replied that the CPA Act did not indicate how often the annual and quarterly reports of CPAs had to be presented, and this should be considered in the amendment Bill.

The Chairperson asked when the Department intended to bring the amendment to Parliament, and added that the CPA Act did not allow for people to be fired anyhow, as the Act was clear on the processes to follow. The turnaround strategy and training of people should be emphasized in the Bill. She asked if the Land Right management facility was not being overloaded and if the Land Tenure administration unit could be capacitated and established in provinces to assist. She asked if people had been arrested on charges of corruption.
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Ms Mashego Dlamini said that the due date for the amendment to be presented to the House was this month, but it had not yet been finalized internally, so she could not state when it would be presented to the Committee.

Ms Tshepo Mahlaela, Chief Director, Legal Services: DRDLR, commented that the Bill was at the Office of the Chief State Law Adviser for pre-certification opinion, and had not yet been finalized. The Bill would be published by early next year and tentatively should be with Parliament by April-May next year.

Mr Masiphula Mbongwa, DG, War on Poverty: DRDLR, said that the Land Rights Management Board and Land Rights Management Committee were part of the amendment, and this would go a long way towards strengthening of the Department’s capacity. The Department would consider the training of both executives and the communities themselves to assume the functions of monitoring and dealing with conflict resolution, so that it became a shared function.

Mr Sebape said that each CPA’s constitution covered how it dealt with corruption, hence the Department had identified that the constitution issue was problematic, but it was being rectified. Cases of corruption were being addressed, as some cases were pending while some people had been prosecuted.

The Chairperson indicated that there was no timeframe for the submission of CPA’s annual reports in the Act, but the Land Rights Management facility had to submit its monthly, quarterly and annual reports to the Department, while the Department in turn submitted the annual report to the Committee. The Committee had the responsibility to oversee all the programmes funded by the Department. She thanked the Deputy Ministers present, the Acting Director General and the officials from the Department.

Adoption of minutes
The minutes of meetings on 29 October and 5 November 2014 were unanimously adopted, with amendments.

The meeting was adjourned.

 

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