ANNUAL REPORT

YEAR ENDED 31 MARCH 2009

PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM

28 OCTOBER 2009

By Andrew Mphela

Chief Land Claims Commissioner

2

VISION AND MISSIONVISION AND MISSIONVisionVision::

To be leaders in the restitution of land rights to To be leaders in the restitution of land rights to victims of racial land dispossession in a manner victims of racial land dispossession in a manner that ensures sustainable socio-economic that ensures sustainable socio-economic development.development.

MissionMission::

To promote reconciliation by ensuring equity for To promote reconciliation by ensuring equity for victims of land dispossession by the state, victims of land dispossession by the state, through sustainable development initiatives and through sustainable development initiatives and equitable redistribution of land.equitable redistribution of land.

3

PURPOSE OF RESTITUTIONPURPOSE OF RESTITUTIONStrategic objectivesStrategic objectives::

• To provide equitable redress to victims of racial land dispossession in terms of the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994)

• To provide access to rights in land, including land ownership and sustainable development.

• To foster national reconciliation and stability.

• To improve household welfare, underpinning economic growth, contributing to poverty alleviation.

4

OVERVIEW

• A successful restitution process is critical especially now as we face a global economic meltdown and escalating food prices.

• Key to achieving this is effective post settlement support within the context of rural development.

• Resources, Capacity building and Cooperative Governance.

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OVERVIEW contd.

• Complex nature of claims affected pace of settling claims.

• Price of land is a huge factor affecting the state’s ability to acquire more land for beneficiaries (average R12 949.00 per ha).

• More money was spent to buy less hectares of land.

6

OVERVIEW contd.• During the year under review, a total of 653

claims were settled affecting 30 112 households.

• Approximately 136 000 individuals from poor families in rural areas benefited from the restitution process during 2008/09, resulting in a total of 1.5 million individuals who have benefited since 1995.

• Almost 100% of R3.1 billion allocated was spent.

7

OVERVIEW contd.

• The costs for restitution awards, including land purchase and financial compensation amounted to R2.8 billion.

• Approximately R338 million was spent on recurrent costs, including salaries and service providers.

8

OVERVIEW contd.

• A total amount of R803m was committed as development grants.

• The total number of households that have benefited from settlement of a total of 75400 claims settled so far is 315 433.

• Total claims settled as at 31 March 2009 represents 95.5% of all claims lodged.

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OVERVIEW: COMPLEX CLAIMS

• Claims on forestry and mining land are complex cases subject to more risk.

• Careful Sector planning and transversal consideration is key to ensure that rural development objectives are met.

• Settlement of claims must be aligned to broader objectives of rural development to fight poverty and create work opportunities.

10

BUSINESS PROCESS PERSPECTIVE

STRATEGIC PARTNERSHIPS• Challenges were experienced with some

of the relationships established between beneficiaries and Strategic Partners, e.g. South African Farm Management (SAFM) company.

• Certain projects in Limpopo and Mpumalanga were affected by the liquidation of the company.

11

BUSINESS PROCESS STRATEGIC PARTNERSHIPS contd

• Currently busy reviewing all partnerships to ensure value for money for beneficiaries.

• Several agreements were concluded with roleplayers including First National Bank (FNB); Development Bank of SA (DBSA); the Amahlathi Forestry Company and Anglo regarding the provision of strategic support to beneficiaries.

12

BUSINESS PROCESS STRATEGIC PARTNERSHIPS contd.

• Agreement also concluded with AgriSETA towards provision of critical skills training for new land owners.

• Interacting with various commodity groups affected by the restitution process with a view to unblock bottlenecks and refine models aimed at ensuring tangible benefits for claimants as well as sustainability of projects.

13

BUSINESS PROCESS SUPPORT FOR STRUGGLING

PROJECTS

• Approximately 200 struggling projects were identified for recapitalization.

• Department of Agriculture will be assisting with funding for the identified projects.

14

FINALIZATION OF OUTSTANDING CLAIMS

• Four regional offices preparing to finalize claims at end of 2009/2010 financial year (Gauteng; Free State; Northern Cape; and Western Cape).

• Remaining offices will complete their claims in the next five years e.g. Mpumalanga (2012); Limpopo (2013); KwaZulu-Natal (2014).

15

FINALIZATION OF OUTSTANDING CLAIMS (Cont.)

• Memorandum outlining challenges regarding the issue of the 2008/09 deadline was submitted to Cabinet.

• Outstanding claims will be finalized in line with the budget cycles regarding disbursement of funds for government programmes (MTEF), subject to availability of resources and creation of capacity for post settlement support.

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CHALLENGES & STRATEGIESChallenge Proposed solution

Community conflicts: Governance issues

Conflict between CPA/Trusts and Traditional Authorities (CLARA)

Review of the CPA Act

Align modern organization form / legal entity with cultural practices and traditional forms of governance.

Valuation of land (method of valuation) S25(3) of the Constitution, White Paper on South African Land Policy. Market led land reform.

Review Policy

Constitutional Reform

Disposal of State land / Public land Bring MFMA, PFMA into alignment with Restitution Act and related laws.

Expropriation Act of 1975 Finalize amendments to the Expropriation Act.

Resources for Restitution Increase baseline allocation or reschedule finalization of claims.

Exit strategy from projects Agreements with lead agents / government departments.

17

CHALLENGES and STRATEGIES contd.

Challenge Proposed solution

Recapitalization of failed projects (Treasury regulations)

Land bank or other development agencies, IDT, NDA to play more prominent role.

Fragmentation of the Development mandate, Grants funding regime (CASP, MAFISA, Land Reform Grants, Housing grants, MIG)

Review and align the grant / funding regime.

Tenure systems: flexible system of tenure

(Communal, individual tenure, leasehold)

Subdivision of land – more individualized forms of tenure

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OVERVIEWFINALIZATION OF OUTSTANDING

CLAIMSProvince No. of outstanding claims

Eastern Cape 522

Free State 28

Northern Cape 189

Gauteng 3

North West 195

KwaZulu-Natal 1652

Limpopo 422

Mpumalanga 712

Western Cape 573

Total 4296

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SETTLED RESTITUTION CLAIMS 01 APRIL 2008-31 MARCH 2009

PROVINCE RURAL DISMISSED HHs BENEFICIARIES FHHs Ha

E CAPE 33 0 5930 21046 2761 6602

F STATE 15 54 920 3336 425 2745

GAUTENG 1 0 311 1359 153 45

KZN 72 12 7873 44040 2753 44308

LIMPOPO 235 17 2789 7869 1335 91816

MPLANGA 139 0 4841 25919 2115 105490

N CAPE 18 11 1966 9497 1107 56617

N WEST 20 0 4601 20044 2590 87126

W CAPE 12 14 881 3645 555 5.58

TOTAL 545 108 30112 136755 13794 394755

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SETTLED RESTITUTION CLAIMS 01 APRIL 2008-31 MARCH 2009

CONTD.

LAND COST FIN COMP

GRANTS

TOTAL AWARDDevelopment RSG

10,345,453.00 202,376,541.67 5,173,760.97 17,562,485.00 235,458,240.64

1,685,000.00 47,175,963.00 2,350,587.13 2,215,920.00 53,427,470.13

4,800,000.00 2,160,000.00 1,830,000.00 1,813,625.00 10,603,625.00

1,379,940,250.24 163,545,423.09 327,086,145.06 31,273,195.00 1,901,845,013.39

621,204,396.45 39,746,516.85 223,621,836.79 10,778,670.00 895,351,420.09

1,133,173,574.14 54,168,931.90 84,002,076.50 16,889,795.00 1,288,234,377.54

120,059,935.04 20,227,371.19 39,177,106.29 9,661,675.00 189,126,087.52

248,313,789.48 13,637,838.32 115,020,097.22 29,812,575.00 406,784,300.02

286,260.00 26,551,371.85 4,980,000.00 2,163,160.00 33,980,791.85

         

3,519,808,658.35 569,589,957.87 803,241,609.96 122,171,100.00 5,014,811,326.18

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CUMULATIVE STATISTICS1995 - 31 MARCH 2009

PROVINCE CLAIMS HHs BEN Ha LAND COST

E CAPE 16194 60747 208064 93600 213,681,581.13

F STATE 2654 5813 40624 47363 9,428,300.00

GAUTENG 13159 15153 70179 9476 117,283,195.57

KZN 14742 68910 409323 610996 3,463,227,556.25

LIMPOPO 3067 40124 215936 487935 2,359,532,882.37

MPLANGA 2688 48366 223524 389395 3,650,382,194.58

N CAPE 3663 18216 97479 471896 340,441,333.81

N WEST 3707 35118 169823 364729 1,129,633,366.81

W CAPE 15526 22986 116297 3132.04 22,584,547.00

           

TOTAL 75400 315433 1551249 2478522 R 11,306,194,957.52

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CUMULATIVE STATISTICS: 1995 - 31 MARCH 2009

CONTD.

FIN COMP

GRANTS  

TOTAL AWARDDevelopment RDG SPG RSG

1,218,620,493.20 91,969,907.84 93,420,000.00 44,841,600.00 36,846,265.00 1,699,379,847.17

127,494,315.96 26,527,091.48 9,192,000.00 4,099,680.00 2,255,490.00 178,996,877.44

635,320,713.73 62,827,001.38 8,617,000.00 2,926,440.00 1,813,625.00 828,787,975.68

1,261,621,490.18 1,047,442,735.37 107,313,000.00 48,345,840.00 35,428,045.00 5,969,745,666.80

134,435,896.27 551,626,964.94 90,843,000.00 41,427,360.00 15,250,080.00 3,193,116,183.58

361,866,107.94 174,236,027.35 102,986,640.00 49,614,510.00 21,024,860.00 4,360,110,339.87

658,472,991.86 84,070,305.49 10,493,640.00 12,071,495.48 12,543,690.00 1,118,093,456.64

244,070,518.35 353,441,131.47 81,587,000.00 39,089,472.00 30,828,060.00 1,878,649,548.63

784,108,519.53 295,907,500.00 15,765,540.00 3,427,452.00 2,163,160.00 1,124,003,718.53

           

R 5,426,011,047

.02 R 2,688,048,665.32

R 520,217,820

.00

R 245,843,84

9.48

R 158,153,27

5.00

R 20,350,883,61

4.34

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CUMULATIVE STATISTICS ON SETTLED LAND CLAIMS: RURAL AND URBAN

1995 – 31 MARCH 2009

LAND RESTORATION

FINANCIAL COMPENSATION

ALTERNATIVE REMEDY

URBAN CLAIMS SETTLED

15439 47726 2477

RURAL CLAIMS SETTLED

4652 52288 2913

TOTAL 20091 52288 2913

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CUMULATIVE STATISTICS ON SETTLED LAND CLAIMS: RURAL AND

URBAN 1995 – 31 MARCH 2009 DISMISSED CLAIMS TOTAL NO. OF CLAIMS

SETTLEDBENEFICIARIES INVOLVED

0 65642 513232

108 9758 1038017

108 75400 1551249

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Expenditure 2008/09

Standard Item Budget Allocation Expenditure Available budget

Compensation of employees R 194,325,740 R 188,051,277 R 6,274,463

Goods & Services R 143,920,260 R 132,098,691 R 11,821,569

Payments Capital Assets R 17,507,000 R 15,477,322 R 2,029,678

Transfer Payment R 2,794,393,000 R 2,789,456,575 R 4,936,425

Total R 3,150,146,000 R 3,125,083,865 R 25,062,135

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Expenditure till 15 July 2009

  Budget Exp till date Commitment Budget Available %

Comp of employees 225,666,000.00 62,164,401.82 - 163,501,598.18 28%

Good & Services 173,841,000.00 34,823,061.04 44,238,271.24 94,779,667.72 20%

Payments Cap Assets 1,180,000.00 702,391.94 1,316,803.60 -839,195.54 60%

Sub Total 400,689,000.00 97,967,391.80 45,555,074.84 257,166,533.36 24%

Households 1,488,595,000.00 1,441,563,016.76   47,031,983.24 97%

- Land Cost 1,358,000,000.00 1,357,260,293.89   739,706.11 100%

- Grants 102,595,000.00 63,970,721.86   38,624,278.14 62%

- Financial Compensation 25,000,000.00 17,993,838.58   7,006,161.42 72%

- Other 3,000,000.00 2,338,162.43   661,837.57 78%

           

TOTAL 1,889,284,000.00 1,539,530,408.56 45,555,074.84 304,198,516.60 81%

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Expenditure until 15 July 2009

 

Balance b/forward 1995-2004 04/05 05/06 06/07 07/08 08/09 09/10 Total

Capital Expenditure 1,465,977 1,016,790 1,582,334 2,123,918 2,877,637 2,797,639 1,441,563

13,305,858

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Total projected cost for Restitution

• MTEF requirement: R10,4 billion

• Committed projects: R 21,5 billion

• Betterment claims: R10,0 billion

• Kruger National Park: R20,0 billion

• 2009/10 Budget R 3,4 billion

• Total: R65,3 billion

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2009/10 and MTEF budget

NOTE:*For the 2009/10 financial year, the budget would be exhausted by the end of July 2009. An additional R3.4 billion would required to see through the financial year.

In view thereof the Commission will require a further R13.8 billion.  

PROVINCE2009/10 (R'000)  

2010/11 (R'000)

2011/12 (R'000)

2012/13 (R'000)

Total for MTEF

Total 2009-2013

  Required   1 2 3    

Eastern Cape 300,000   600,029 639,426 650,000 1,889,455 2,189,455

Free State 400,000   300,030 310,000 350,000 960,030 1,360,030

Gauteng 372,000   300,000 520,749 550,000 1,370,749 1,742,749

KZN 1,634,361   1,895,742 2,372,763 1,500,000 5,768,505 7,402,866

Limpopo 917,000   896,000 448,984 500,000 1,844,984 2,761,984

Mpumalanga 783,000   882,600 875,956 890,000 2,648,556 3,431,556

Western Cape 505,000   200,400 167,823 178,228 546,451 1,051,451

TOTAL 4,911,361   5,074,801 5,335,701 4,618,228 15,028,730 19,940,091

BASELINE 1,488,595   1,172,974 1,660,947 1,763,926 4,597,847 6,086,442

OPTION ITO MTEF 3,422,766   3,901,827 3,674,754 2,854,302 10,430,883 13,853,649

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Budget breakdown MTEF 2010-2013

  Total

Office Land cost Grants Financial Compensation Total

Eastern Cape 891,459,643 888,426,000 109,569,357 1,889,455,000

Free State & NC 726,470,573 129,887,639 103,671,788 960,030,000

Gauteng & NW 730,000,000 480,000,000 160,749,000 1,370,749,000

KZN 2,161,972,976 3,371,532,024 235,000,000 5,768,505,000

Limpopo 1,267,195,332 577,788,668 - 1,844,984,000

Mpumalanga 1,100,319,550 1,459,438,423 88,798,027 2,648,556,000

Western Cape 376,632,287 53,300,590 116,518,123 546,451,000

Total 7,254,050,361 6,960,373,344 814,306,295 15,028,730,000

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Budget breakdown 2010/11

  2010/11

Office Land cost Grants Financial Compensation Total

Eastern Cape 411,459,643 148,000,000 40,569,357 600,029,000

Free State & NC 145,477,095 89,374,715 65,178,190 300,030,000

Gauteng & NW 180,000,000 90,000,000 30,000,000 300,000,000

KZN 874,282,357 951,459,643 70,000,000 1,895,742,000

Limpopo 780,211,332 115,788,668   896,000,000

Mpumalanga 553,184,370 305,052,866 24,362,765 882,600,000

Western Cape 139,115,129 17,195,452 44,089,419 200,400,000

Total 3,083,729,925 1,716,871,344 274,199,731 5,074,801,000

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Budget breakdown 2011/12

  2011/12

Office Land cost Grants Financial Compensation Total

Eastern Cape 280,000,000 340,426,000 19,000,000 639,426,000

Free State & NC 236,506,402 35,000,000 38,493,598 310,000,000

Gauteng & NW 300,000,000 160,000,000 60,749,000 520,749,000

KZN 730,143,916 1,562,619,084 80,000,000 2,372,763,000

Limpopo 228,984,000 220,000,000   448,984,000

Mpumalanga 251,369,302 586,104,265 38,482,433 875,956,000

Western Cape 79,388,083 36,006,213 52,428,704 167,823,000

Total 2,106,391,703 2,940,155,562 289,153,735 5,335,701,000

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Budget breakdown 2012/13

  2012/13

Office Land cost Grants Financial Compensation Total

Eastern Cape 200,000,000 400,000,000 50,000,000 650,000,000

Free State & NC 344,487,076 5,512,924   350,000,000

Gauteng & NW 250,000,000 230,000,000 70,000,000 550,000,000

KZN 557,546,703 857,453,297 85,000,000 1,500,000,000

Limpopo 258,000,000 242,000,000   500,000,000

Mpumalanga 295,765,879 568,281,292 25,952,829 890,000,000

Western Cape 158,129,075 98,925 20,000,000 178,228,000

Total 2,063,928,733 2,303,346,438 250,952,829 4,618,228,000

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CONCLUSION• Massive pressure placed on Commissioners as a

result of financial constraints affecting the restitution programme.

• Huge demands: social, political, economic implications of not resolving claims.

• Commission: Act of Parliament

(review of Commission’s existence or other).

• Reschedule delivery

35

Thank you

Andrew Mphela

Chief Land Claims Commissioner

Tel: (012) 312 8883 Fax: (012) 321 0428

email: MMPhela@dla.gov.za