The Department of Rural Development and Land Reform through its Recapitalisation and Development programme has increased resources committed to the Richtersveld Communal Property Association (CPA) to ensure that they enjoy the fruits of the Land Reform programme.
Background to the Richtersveld CPA
After many years of mobilisation and lengthy negotiations between the government, the Richtersveld CPA, and Alexkor, a Settlement Agreement was reached regarding claims by the Richtersveld community. An agreement for the restoration of land and compensation for minerals extracted in mining operations was ratified by the Land Claims Court in 2007.
The CPA represents the Richtersveld claimant community, and was therefore granted restitution of land and mining rights, as well as financial compensation for losses sustained during apartheid. It is regarded as one of the largest restitution settlements in South Africa.
The Deed of Settlement and the Court Order required that two Trusts and a number of Companies be established before any assets and compensation could be transferred. This resulted in what is now considered a very complex, but legally necessary structure to protect the assets of the Richtersveld community.
The Richtersveld Investment Trust (RIT) is the sole shareholder in the Richtersveld Investment Holding Company (RIHC). The income from the RIHC is to be distributed in terms of a distribution policy to the CPA members for educational programmes, entrepreneurship and social development.
The Richtersveld Community Trust (RCT) was established having 100% shareholding in the Richtersveld Self-Development Company (RSDC). The RSDC has four subsidiary companies, namely:
- The Richtersveld Agricultural Holding Company (RAHCO);
- The Richtersveld Property Holding Company (RPHC);
- The Richtersveld Mining Company (RMC); and
- It was also decided to establish the Richtersveld Environment Rehabilitation Company (REHC) as opportunities were identified by the CPA to ensure environmental damage was limited in the area.
The financial compensation is allocated to the Richtersveld Investment Holding Company (RIHC) as follows:
- R50 million was transferred for recapitalisation of the agricultural and Mari cultural properties or for other developments which would benefit the CPA members;
- R190 million was transferred to be grown and invested in terms of an investment policy and to provide an income for the Richtersveld Investment Trust; and
- R45 million will be transferred as payment for the use of properties by Alexkor for a period of ten years.
The Richtersveld Community Trust is obliged to distribute the income from the Richtersveld Self-Development Company (RSDC) to CPA members. The RSDC is in turn dependent on the performance of the four companies in which it holds 100% shares.
The property compensation consisted of a number of farms, the land on which the local airport is situated, the township of Alexander Bay, and substantial mining areas. The total property portfolio of the CPA is considerable and amounts to 195 000ha which is spread over a vast and diverse area.
The overall management of the Restitution Award implementation structure is complex, as more than 50 Directors are required in terms of the original Company and Trust statutes. This number excludes the CPA Committee, some of whom are on the Boards of the Trusts and Companies mentioned above.
In terms of the 2007 Settlement Agreement and the CPA constitution, the CPA is required to maintain the membership list. The management of this list is critical as it determines who has access to the resources of the CPA. The annual ‘clean-up’ of the list led to a number of beneficiaries being removed without proper procedures being followed. The first of a number of court cases and other public disputes then followed from 2009, with the result that the Annual General Meetings of 2009, and 2010 did not take place as planned.
Reports, budgets and other statutory requirements of the CPA and the related Trusts and Companies have been disrupted to varying degrees. The result is that the public perception grew that the Richtersveld CPA, the Trusts, and the five Companies have become unaccountable, poorly managed and wracked by conflict.
These on-going disputes and court cases culminated in a Receiver being appointed by the Northern Cape High Court in February 2011. By agreement between the CPA Committee and some members of the CPA, who had applied to have the CPA put under Receivership, the Committee resigned and Mr Taswell Papier was appointed as the Receiver from 25 February until 30 June 2011.
Government Support for the Richtersveld CPA
Since the completion of the task of the Receiver in mid-2011 the Department of Rural Development and Land Reform (DRDLR) has been assisting the CPA. The Department has appointed a facilitator to work closely with the CPA Committee and positive results have been forthcoming, as illustrated below. Through the work of the Land Rights Management Facility, the implementation of the following support package is making steady progress:
- Committee disputes are being resolved.
- CPA committee is becoming aligned to a common programme.
- The membership list of the CPA is being managed.
- Dividend backlogs for all CPA members are being resolved and monies disbursed.
- The Beauvallon farm is being protected from creditors and will be considered for development.
- The mining agreements and its implementation is being scrutinised and management improved
- The Richtersveld Restitution Award Institutions will move to apply King III.
- Effective communication between Restitution Award entities (Trusts, Companies, CPA committee) and CPA members is in progress.
- A process to look at possible amendments to the CPA Constitution is on the agenda.
- The implementation of Richtersveld Development Plan will receive dedicated attention soon.
- The DRDLR will play a government co-ordination, support and monitoring role to the CPA.
The membership list has received on-going attention. A ‘membership management plan’ which includes a ‘membership commission’ and dedicated administrative capacity to manage the list has been adopted by the Committee. A series of recommendations regarding the status of individual members will be available in mid-April 2012 after the Commission has considered representations from affected members.
A number of initiatives are underway to ensure that debt incurred in the development of the agricultural land does not lead to the loss of land transferred as part of the Restitution settlement. Once the CPA is fully functional they will qualify to apply for Recapitalisation of the farms.
Further Assistance to the CPA
Over the next few weeks the CPA leadership will participate in a programme to enhance the performance of the Committee. The move from a highly contested situation to one where there is a common purpose within the Committee requires the following:
- A comprehensive status quo report;
- Reconciliation and team building; and
- A strategic and operational planning session.
The next section unpacks the issues and what is intended with the process.
1. A Comprehensive Status Report
Since 2007 various Committees have managed the affairs of the CPA. Communication from the CPA Committee to the membership has been a serious challenge and is considered an area requiring substantial improvement. Due to this situation, the CPA leadership is constantly accused of wrong-doing in the past, and present. Allegations relate to conflict of interest, nepotism, fraud and so on.
These have been fuelled by factionalism and the limited benefit that has been received to-date. The key issue is that not much is known about the operations of the various Companies and Trusts, how they are managed, their financial status, board members, contractual obligations etc. Rumours and allegations, rather than facts, fuel the conflict. This can be managed by getting the facts on the table in the form of a Status Report.
What are the Components of a Status Report?
- Details of the 2007 Restitution Settlement Agreement (Land, Grants, Rights, Agreements)
- Progress report on asset transfer from Alexkor and government
- Details of the Interest Register
- A report on all contracts, and beneficiaries of such contracts at the Company level
- Boards of Directors/Trustees and their terms of appointments
- Sitting fees of the various entities
- Management Agreements between the various entities
- Management Agreements between the CPA and other entities
- Clarification of institutional mandates
- Financial status of the various entities
What is the Expected Outcome?
The members of the RCPA will have an opportunity to interact with the report, and to address questions of clarity and concern to each other in a safe environment. A plan to deal with priority matters will then be developed and task teams identified to deal with the matters requiring attention.
2. Reconciliation and Team Building
The committee has indirectly acknowledged that is currently divided into two factions. The matters identified in the Status Report (above) feed the faction forming. It is assumed that if enough information is shared and the true situation is known, an opportunity for engagement undertaken, the level of distrust and animosity will dissipate slowly but surely. However, this is not guaranteed.
The information sharing will have created a platform for planning regarding challenges the Committee has to address in pursuit of delivery of benefits to the CPA members. The process should consciously break down the animosity, hurt and distrust that is evident within the Committee. The identification of what makes a winning team, personality profiles, past experiences; existing and desired organisational cultures should be explored and adopted.
What is the Expected Outcome?
The process of clarifying matters, correcting misconceptions, and identifying the challenges facing the Committee, as well as agreeing to ‘new rules’, will develop coherence and alignment between committee members. A shared vision, developed by all, will be critical. They will then also commit to new methods of engagement by signing a public commitment to working together with sanctions identified for those members who ‘break the rules’.
3. Strategic and Operational Planning
It can be said that the on-going disputes has prevented the CPA reaching its full potential and members receiving appropriate benefits. A comprehensive development plan was adopted in 2009 but little has been implemented thus far. The administrative capacity of the CPA needs enhancing. The coordination, communication and alignment linkages between the various institutions need further improvement. Developmental projects should be identified, prioritised and funded.
At present the CPA relies on the Trust for funding their operational costs. The DRDLR has funded the Membership Commission and the assistance package. A three year budget which is well motivated, approved by the CPA, and then monitored on an on-going basis should be the aim of such a Strategic and Operational Planning process.
It will be important to identify new institutional arrangements which can guide the operations of the Committee and manage conflict as this is core to the future sustainability model of the Restitution entities. How to improve communication across all elements of the entities should be a priority in this process.
What are the Expected Outcomes?
A suitable matrix will be developed and the planning structured to ensure that a budget, with an achievable plan is adopted by the Committee. This will then be submitted to the Trust for approval and release of the funds. A mechanism to monitor and support the workings of the CPA Committee should also receive serious consideration
Conclusion
An unprecedented financial, property and mining rights portfolio has to be managed and developed by the CPA, Trusts and Companies through joint ventures and management agreements with a multitude of stakeholders which have varying interests, expectations and needs.
It is inevitable that the CPA and its leadership would be under tremendous scrutiny and pressure to deliver speedily to a resource-poor community of beneficiaries.
Enquiries:
Mr Eddie Mohoebi
Tel: 012 312 8502
Fax: 012 323 3693
Cell: 082 550 1445
