PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM

COMMUNAL PROPERTY ASSOCIATIONS ANNUAL REPORT 2009/10

31 AUGUST 2011

MR V MAHLANGU

ACTING DEPUTY DIRECTOR GENERAL: LAND REFORM

1. INTRODUCTION2. BACKGROUND3. STRUCTURE OF THE REPORT4. RESULTS AND FINDINGS5. DEPARTMENTAL RESPONSE• CPA Turnaround Strategy • Implementation Plan• Action Plan• Institutional Capacity• Policy and Legislative Reforms

OUTLINE OF THE PRESENTATION

•The Communal Property Associations Act (CPA) Act,1996 (Act No. 28 of 1996) was promulgated on 22 May 1996 to enable communities to form juristic persons, to be known as communal property associations in order to acquire, hold and manage property on a basis agreed to by members of a community in terms of a written constitution.

INTRODUCTION

• In terms of section 8 (3) (b) of the Act, the Director: Tenure Systems Reform (TSR) of the Department is the Registration Officer and must keep a register of registered provisional associations, associations and similar entities to which the provisions of the Act have been applicable in terms of section 2 (3)

INTRODUCTION

•Since 1996, about1500 communal property associations, provisional associations and similar entities have been registered.

•The CPA Act imposes a variety of obligations to the Director General and the Minister throughout the establishment process and life of a CPA, Section13.

INTRODUCTION

The Regulations to the CPA Act direct the content of the report as follows:

The Communal Property Association must, annually and within two months of the date on which its annual general meeting is held, furnish the following information and documents to the Director General:1.Names and where readily available the identity numbers, and the addresses of the members of the committee elected at the annual general meeting indicating what office is held by each of them

BACKGROUND

2. The names and where readily available the identity numbers and the addresses of all new members whose names do not appear on the most recent membership list previously furnished to the Director General

3. Copies of all the associations annual balance sheet or financial statements which have been independently verified as approved by the Director General

4. the minutes of all general meetings of all members of the associations which were held since the registration of the association or the previous annual general meeting, including the minutes of the last annual general meeting.5. A list of all dealings in land or rights to land involving the association during the period since the registration of the association or the previous annual general meeting, which created, altered or extinguished any right to land held by the association itself or any of its members

•This report is a response to the above requirements

1. Executive Summary2. National Overview3. National Compliance Summary4. Provincial Breakdowns• Eastern Cape• Free State• Gauteng• KwaZulu- Natal• Limpopo• Mpumalanga• Northern Cape• North West• Western Cape 5. Conclusion

STRUCTURE OF THE REPORT

• Non compliance of the CPAs with the CPA Act and Regulations;

• Non compliance by the Department in supporting the CPAs;

• Non compliance/failure by other partners e.g. non co operative farmers, overlapping roles with traditional institutions.

RESULTS AND FINDINGS

Of the 887 registered CPAs visited:

• Only a few were compliant 59 CPAs had financial statements;241 convened Annual General Meetings;173 had minutes of those meetings;

• 4 CPAs were found to be under administration.

• 224 experienced changes in committee members

•.

RESULTS AND FINDINGS

• 34 CPAs had not had their land transferred to them.

• 39 CPAs sold their properties

• 57 CPAs did not have registration numbers

• 13 CPAs could not be traced ( e.g.Land sales withdrawn after registration of CPA etc.)

RESULTS AND FINDINGS

CPA Turnaround strategy

Objective: To regularize non-compliant CPAs

• Underperforming/distressed →normality

• Reverse causes of distress →overcome constrains

• Acceptable levels of functionality

DEPARTMENTAL RESPONSE

Stabilise

Strategy

Fund Fix

Organis-

ation

Operations

Stabilise

Strategy

Fund Fix

Organis-

ation

Operations

Turnaround Strategy components

Turnaround Leadership Management Manage Stakeholder Turnaround Project Management

Phase 1: Regularizing (assisted by LRMF)

• Fact finding

• Governance issues→compliance

Phase 2: Recap and Development

• Funding and recapitalizing the business

• Operational issues →Sustainability

DEPARTMENTAL RESPONSE

• Pilot in 10 selected CPAs per province plus

10 other CPIs for the remainder of financial year

• Funding some of the selected CPAs within the Recapitalization and Development Programme

• 2012/2013 roll to the rest of the country

• Monitor/Evaluate and Report

IMPLEMENTATION PLAN

ACTION PLAN

ACTIVITIES TIMEFRAME BY WHO RESOURCE REQUIREMENTS

PHASE 1 :Regularization of CPAs and Trusts. Process:•Appoint mediators/facilitators/lawyers•Conduct 3rd party fact finding exercise•Fact finding report identifying issues in dispute, needs of the CPA, communication issues, amendments to constitution, clarify membership list, status of farm, status of dividends for all CPA members, Implementation of development plan, DRDLR role in co-ordination, support and monitoring•Develop an assistance plan and budget estimate•Interventions of service providers to address each aspect identified in fact finding report•CTH reports to DRDLR on monthly, quarterly and annual basis

18 months (contract between CTH and DRDLR from 1st June 2011 to 30th November 2012)

CTH (managing agent) and LRMF Panellists across South Africa

•Reconciliation•Co-ordination •Mentoring•Auditing•Funding - the total preliminary contingent liability assessment for the 100 CPA matters likely to be referred by the DRDLR during the pilot phase is R 16 285 713.00•Legal•Communication•Facilitation•Mediation•Municipality•Agricultural•Mining•Governance•Leadership and management•Skills development•Performance management •Monitoring•Evaluation

ACTION PLAN

ACTIVITIES WHEN BY WHO RESOURCES

PHASE 2 :Recap and Development

• Request the PSSCs to identify CPAs to be recapitalized ( of the 10 per province)

3rd Quarter

Sept – Dec 2011

PSSCs

Rollout recapitalization

• Appoint strategic partners/mentors to implement the intervention on selected projects

4th Quarter

• Branch Land Reform: New unit within the Chief Directorate: Tenure Systems Reform to administer the CPA Act and report to Parliament annually;

• Branch STRIF: Institutional support to CPAs

• Training of officials on the implementation of the Act

INSTITUTIONAL CAPACITY

• The Department intends bringing technical amendments to the CPA Act to improve its application and implementation;

• In the long run it may be necessary to interrogate whether or not the current CPI institutions are sufficient as a vehicle for holding land. That is a political debate.

POLICY AND LEGISLATIVE REFORMS

THANK YOU