Restitution of Land Rights Amendment Bill [B35-2013]: financial implications briefing; Property Valuation Bill [54-2013]: public hearings

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed the Members and acknowledged the presence of the Minister and Deputy Minister of Rural Development and Land Reform.  Members went through the minutes of the previous meetings (3 and 5 February, 2014) which were duly adopted after Ms P Xaba (ANC) moved the motion for adoption of the first minutes and was seconded by Mr R Cebekhulu (IFP).  The second minutes were proposed for adoption by Ms N November (ANC) and seconded by Mr Cebekhulu.

The Chairperson explained that during the deliberations of the public hearings on the proposed amendments to the Bill, an issue had been raised about funding of the project of the restitution, and it was agreed then that Treasury and the Department would be invited to shed some light on the matter. He said that the Department would make its presentation first, followed by National Treasury.

Presentation: Department of Rural Development and Land Reform
Ms Thami Mdontswa, Deputy Land Claims Commissioner, began by acknowledging the presence of the Chairperson, the Minister, Deputy Minister and Committee Members. Her presentation focused on the readiness of the Commission on the restitution of land rights for the lodgment of land claims.

The Restitution of Land Rights and Amendment Bill provides, inter alia, for the reopening of lodgment of land claims for a period of five years and the prioritization of those claims that were lodged  by 31 December, 1998.

The Commissioner presented the outstanding claims for each province, with a national total of 8 733 outstanding claims.   The provincial split was Eastern Cape 1 008, Free State 14, Gauteng 270, Kwazulu-Natal 2 128, Northern Cape 136, Limpopo 756, Mpumalanga 2 685, Northern Cape 87, and Western Cape 1 649.  She also provided details of land claim settlements, by province, from 2009 to 2013, the outstanding claims as at June 2013, and service delivery targets for the three-year Medium Term Expenditure Framework (MTEF).  (See presentation).

The priorities of the Commission in the next 5 years would be to research all outstanding claims, streamline the procedure for processing claims through electronic processing, to shorten the time taken to settle a claim, manage the lodgment of new claims, including the communication campaign on the lodgment of claims, and to ring-fence 1998 claims, as required by the Bill,  and therefore prioritise them for settlement and finalization.

A Regulatory Impact Assessment (RIA) has calculated that it may cost R129bn to R179bn to settle claims, if settled within 5 years.  The RIA concludes that approximately 8 932 860 individuals could benefit directly from the claims, representing about 2 481 350 households.  RIA does not take into account that the restoration of state land does not have a financial cost implication.

To facilitate the lodgment of claims, 304 posts have been created.  116 posts have been advertised for the lodgment process in the 14 offices, and this number will be increased in phase 2, when the lodgement sites are increased by a further 38 offices.  The advertised posts will be filled in March 2014. The posts include supervisors, data capturers, receptionist, staff for records management.  The existing experienced staff will initially support lodgement and train new staff who will be phased in.  The National Rural Youth Service Development Corps (NARYSEC) will assist in the communication campaign, collection of oral history, and in the management of the claim lodgement process.

Presentation: National Treasury
Mr Devan Naidoo, Chief Director, Economic Services, National Treasury (NT) began by outlining the five programmes related to the DRDLR which were financed by Treasury. These were Administration, National Geomatics and Management Services, Rural Development, Land Restitution and Land Reform. A total of R30bn was made available to the Department during the 2013 MTEF period, each year being allocated R9.5bn, R9.9bn and R10.3bn respectively.

In terms of financing the restitution programme, the Chief Director said that funds would be used for the settlement of claims validated by the Land Claims Commission.  The Department had advised Treasury that an average of 1 300 claims would be settled each year during the MTEF.

Since the inception of the restitution programme, the department had settled a total of 77 334 claims at a total cost of R16bn, averaging R206 894 per claim.  Of these claims, 71 292 were for financial compensation worth R6bn.

In the financial year 2012/13, the restitution programme underspent by R20m, while in the 2011/12 financial year, it had underspent by R16m. This was due to disputes and delays in processing claims.

The Chief Director explained that the Restitution of Land Rights Act (1994) provided for the restitution of rights in land to persons or communities disposed of such rights after 19 June, 1913. The Act made provision for the establishment of the Commission on Restitution Land Rights and the Land Claims Court
The Minister is authorized to purchase, acquire and expropriate land or rights in the land for the purpose of restitution awards.  The focus over the medium term would be settling and finalising restitution claims to increase access to, and promote the productive use of, land.

Objectives over the medium term would therefore be to increase the number of land claims finalised to 983, increase the number of land claims settled to 1 457, and to increase the number of new recapitalized projects to 76 under the land reform programme

Treasury had been in contact with the Department over the Restitution of Land Rights Amendment Bill, 2013 which provides an opportunity to those who did not lodge claims by 31 December 1998, to lodge their claims.   Additional resources would be needed to deal with the settlement and finalization of claims, administration of claims, internal and external capacity, and for campaigning and advertisements, as well as workshops, needed to inform the general public on the process.  The process would be supported by a comprehensive communication campaign which would involve distribution of a citizen’s manual on land claims, translated in all official languages, including those of the Khoi and the San communities.

The Bill provides for the re-opening of the lodgment of restitution claims up to 31 December 2018, and 400 000 potential new claims were anticipated. Therefore, the institutional capacity to process these claims had to be addressed.

Discussion
Mr K Mileham (DA) expressed concerned about outstanding claims.  Looking at the Commissioner’s report, it would take about five years to settle outstanding claims in the Eastern Cape alone.  He was concerned that the delivery of claims was very slow, thereby maintaining the status quo. There was nothing that inspired confidence that the Department was going to settle claims and wrap up the process in time, and at the rate it was moving, it would take 265 years to settle claims.

He added that from the Treasury’s presentation, he did not pick out anything that gave an indication of whether the funding of about R8.6bn to R11.9bn needed each year to settle and re-open land claims over a 15-year period, was available. He had been asking the same question for the last six months, including during the Budgetary Review and Recommendation Report (BRRR) debates.

He wanted to know whether the 304 additional posts to be created by the Department for lodgment would be contractual or permanent staff, and what would happen after lodgment ends.

Mr S Ntapane (UDM) was concerned that the new target gave priority to the old claims, some of which had existed for years.  During the public hearings, a number of embers of the public were not in favour of  the idea of opening new claims only after the old ones had been dealt with.  He asked how the Department would handle the lodgment claims, especially since some provinces like the Eastern Cape and the Northern Cape were big, but had few sites. He also echoed Mr Mileham’s sentiments on funding and wanted to know from the Treasury if funds were really available, because people were becoming impatient.

Mr M Swathe (DA) expressed concern with the Treasury on finances.  The presentation was not informative, and he wanted to know when people who were lodging claims now would be covered, seeing that the Department was still covering those who had lodged claims between 1994 and 1998. During public hearings, people had complained that compensation was too little for some to even take it, and that if their problems were not addressed soon enough, they feared that the new lodgment would affect their old claims. He warned against making promises which could not be fulfilled.

Ms N November (ANC) suggested that for effective communication, municipalities could be used to distribute the manuals, as they were more central. She also wondered if it would be adequate to have only one mobile unit in each province, considering that some provinces like KwaZulu-Natal and Northern Cape were vast.

Ms P Xaba (ANC) expressed her disappointment at not seeing a budget for the handling of disputes.  There were many disputes as a result of claims, and people were fighting. During the public hearings, people themselves had said so. She had called the Land Claims Commissioner to inform her, as it was very serious. She felt strongly and was quite upset that the Department was not doing enough to address these disputes and the problems they had created, as people were seriously fighting, especially in Zululand.

Ms P Ngwenya-Mabila (ANC) reminded Members not to mismatch issues, but to focus instead on the Bill, which was the aim of the discussion. She urged them to realise that it was a whole process, not an event, and therefore patience needed to be exercised.  She recommended that to improve communication for the lodgment process, the Department should consider using the strategy that the Department of Home Affairs was using -- sending texts to applicants once their documents were received or processed, so that people were well informed, as a there were a lot of complaints that some people had lodged claims in 1998 but had heard nothing since.  As a Committee, its duty was not only to criticise the Department, but also to assist and help the Department, despite the challenges it faced.

The Deputy Land Claims Commissioner gave the floor to the Minister of Rural Development and Land Reform and the Deputy Director General (DDG) to respond.

Mr G Nkwinti, Minister of Rural Development and Land Reform, said that the presentation by Treasury actually did cover everything on finance that the Members wanted to know. The restitution of land rights was not a Department policy, but rather a government policy, so expenditure would be funded from the national coffers. He said it was not clear what the Members wanted, and would appreciate if they could indicate whether they wanted a stand-alone budget.

He responded to Mr Swathe’s comments, saying that a claim had been lodged by people in the Eastern Cape, and the Land Claims Commissioner in the province had dismissed the claims on the basis that they were not part of the restitution process.  However, he had been wrong and the Department had been taken to court.  Afterwards, it had interacted with about 1 600 people who were, in fact, recipients of claims, especially land.

He said that people had informed the Department that they had a moral obligation to re-open claims so that their colleagues, who had not claimed, could do so.  It was therefore not correct to imply that promises were not being fulfilled. 

He agreed with Ms Ngwenya-Mabila’s comments on assisting the government.  Sometimes Members of Parliament -- especially the opposition -- forgot their responsibility to assist the government.  They were all part of one country who wanted the same things and despite having different strategies, they could definitely agree on some fundamental principles.  South Africa was for all -- black and white -- and therefore they needed to assist one another.  As leaders, Members must provide leadership and explain to people the challenges that the nation was facing, as opposed to lamenting like them.

Mr Nkwinti said that both old and new claims would be processed simultaneously, though the Department would prioritise the claims from 1998.   However, the Department would not wait for claims in court, but would pay the claims that were ready to be paid, irrespective of when they were lodged, rather than returning money to the Treasury.

He admitted that indeed, there were a lot of disputes.  The challenge was with trusts, and the justice system too. He was concerned that Members, as law makers, were not aware of the challenges and the dynamics of trusts, which made it difficult to fully understand and resolve the disputes.

The Deputy Director General (DDG), Mr Vusi Mahlangu, informed Members that research was the most critical, and possibly the longest, phase in the cycle of settling land claims in order to prevent problems that may be costly to government.

Regarding staff employed for the process, the Deputy Land Claims Commissioner said that the staff would be permanent, and would be used not only to lodge claims, but also to process them.

The mobile units would be rotated among the provinces, based on need, and that the targeted lodgment sites would be first. The national office would have an information centre and would be able to field questions and responses from the public.  Municipalities would also be used, while text messages would be sent to claimants at some point in the process.

The Chairperson urged Members that going forward, they needed to build unity and reconciliation, just as Nelson Mandela did, and continue to fight for what he stood for.  Government had a responsibility to ensure that land was restored.

Mr Swathe said that since the Minister said that Members should have been upfront if they wanted a stand-alone budget, he was therefore stating so. He did not like it, that people were promised what could not be delivered.

Mr M Mandela (ANC) echoed Ms Ngwenya-Mabila’s sentiments that it was indeed a process and not an event. He said they did not know how much land was there to be claimed but reiterated government’s pledge to distribute land to all South Africans, whether it took 10 years or more. He observed that the injustices of 350 years could not be fully resolved in 20years.

The Minister appealed to the Chairperson to ensure that Mr Swathe was helped, not only for that particular day but all the time. He said it was important to explain to him that land was not an election promise, rather, it was at the centre of liberation, that which forefathers fought for. Therefore, it should not be taken as a light issue.

Mr Mileham requested that it be recorded that there were concerns about funding of the Department.

The Chairperson agreed.

Public Hearings on Property Valuations Bill    `
Hearings were expected from Agri SA, the Banking Association of South Africa (BASA), the South African Institute of Valuers, the Agricultural Union (TAU SA) and Mr Jo Kruger, a citizen.  However, only Agri SA and BASA were available.

Agri SA
Ms Annelize Crosby, Parliamentary Liaison Officer, Legal and Policy Advisor presented Agri SA’s comments on the Bill.

She said that Agri SA had participated in the consultation process and recognised the need to speed up the pace of land reform.  It stood by its support of market-based transactions for land reform.  It was Agri SA’s contention that a valuation by the Office of the Valuer-General (OVG) should be restricted for the state’s own internal house-keeping requirements and must never be binding on the property owner. The Bill should in no way restrict the owner’s ability to access the courts if a dispute arose.  Agri SA was concerned that the Bill would undermine the chances of successfully concluding transactions to buy land for reform, and force the state to expropriate the land.  It was also concerned about the suitability of authorized valuers to interpret factors synonymous with just and equitable compensation.

Specific concerns over the Bill were that the definition of “land reform” was too wide and the term “land development” was too vague.  The meaning of the phrase “also considering all the underlying economic factors of the market,” in terms of valuation, was queried as to what exactly those underlying factors were.
Clause 7(C), “engage in any activity”, should be qualified and Agri SA suggested that the powers of the OVG be qualified and described in more detail. Clause 8(2) regarding appointment should be clarified as to what would constitute “sufficient experience”.  Clause 10(1)(b) which states that the OVG takes all decisions, should be clarified on whether it meant he/she could trump decisions taken by an official to whom delegated authority was given, or whether all decisions by other officials would be ‘’ultra-vires”.
In Clause 11(3), Agri SA suggests that assistants to accompany authorized valuers should be issued with identity cards, to avoid confusion.

The Banking Association South Africa (BASA)
Mr Pierre Venter, General Manager, said BASA was the trade association for all registered banks in SA, which had an exposure of about R120bn to the agricultural sector.  The Association welcomed many of the changes that the DRDLR had made to the draft Bill, but still harboured some material concerns.

The definition of “land reform” was too wide, because it included normal state acquisitions, disposals and leases of property. It was recommended that those be excluded.  It was concerned about the accuracy of past state acquisitions and thus recommended that one should not restrict valuers to perpetuating an inaccuracy.  Another concern was that the definition of “value” within the Bill was a direct extract from section 25(3) of the Constitution, therefore “just and equitable” compensation could be less than market value.  BASA recommended that the OVG be accountable to the Minister of Public Works, and that Chapter 2 Clause 7(C) be qualified to align it with constitutional principles such as the rule of law.  The Deputy Valuer General should have same required set of skills as the Valuer General.  Section 19 of Chapter 5 should be amplified to clearly define which functions and powers may or may not be delegated to all staff.

Discussion
Mr Ntapane said that one of the reasons for government forming the OVG was because the issue of buyer and seller did not work. He therefore wondered how it would work if it was not be binding on the property owner, as proposed by Agri SA.

He also said he did not understand what Agri SA meant by referring to the ability of valuers, because valuers were qualified individuals whose job was to valuate.

Mr Swathe inquired from BASA whether it did not want the OVG to be independent, since it was proposing that he/she should be accountable to the Minister of Public Works.

Ms Ngwenya- Mabila also followed up on that and wondered why BASA was proposing that the OVG be under the Department of Public Works, when it was clear that land issues were a competence of the DRDLR.

Ms Xaba wanted to understand if Agri SA had a problem with the OVG and if it had a way of ensuring that land owners did not inflate prices.

Ms Crosby responded that according to Agri SA, the Department had little internal capacity to conduct evaluations, and government was overpaying external evaluators, which is why it was proposing internal housekeeping.

Whether land owners would be inflating prices, she said that the monitoring of evaluations by the OVG would largely prevent that from happening, as government would not accept something that the OVG regarded as a fake value.

She added that the Property Valuations Bill did not have an element of compulsion in it -- this lay rather in the Expropriation Bill, because it had a clause on negotiated settlement.  What they did not want was a situation where a property owner put a price and there was compulsion by the OVG on selling at another price, causing a dispute over the price.

On the ability of valuers, she said that what was meant was not the qualifications of valuers, because they were experts. She was referring to placing a value on those factors mentioned in the Constitution regarding expropriation. It was about balancing constitutional interests, and valuers were not the best placed to do so.

Mr Venter also explained that BASA’s proposal that the OVG be accountable to the Minister of Public Works was because the Department of Public Works was the owner of the Expropriation Bill, and the function was broader than land reform. He also suggested that valuers on the lists that the DRDLR was using to undertake tasks, must be specialists in their respective areas.

He also said that in terms of capacity, requests by the Department for valuations came through very late and they were given just a few days to come up with a value, when undertaking research was usually a long process.  Therefore the capacity that the OVG would provide in that area would be very useful.

Conclusion
The Chairperson thanked all the presenters and Members for their participation. The Department would be able to respond at the next meeting, and the Bill would be looked at clause by clause. The last item on the agenda -- consideration of a draft report on the public hearings conducted by the Committee in all the provinces -- would also be looked at at the next meeting, since Members had received the reports only on the day of the meeting.

The meeting was adjourned.