Archive | Land,Agriculture

Medicinal use of cannabis makes progress

Medical Innovation Bill and cannabis

..sent to clients 18 Dec… Dr Narend Singh who took over the tabling of the Private Members’ Medical Innovation Bill from the late Dr Mario Ambrosini, said that he was so impressed by the progress of the Department of Health (DHA) in their support of the use of cannabis for medical purposes that he could see the possibility arising where he could withdraw his Members’ Bill in favour of broader legislation tabled by the Minister of Health.

He said “there was light at the end of the tunnel” and he himself was on a “high” to learn from Dr Joey Gouws, in charge of regulatory and legislative enforcement at DHA, that regulations on the growing of cannabis, manufacture, dispensing and medical use for medicinal purposes could be in place by the end of 2017 including registration processes and classification systems.

Holistic approach

Dr Gouws was briefing the Parliamentary Portfolio on Health on progress towards the commencement of such a programme and which not only covered the medical use of cannabis as proposed in the Medical Innovation Bill but covered research, registration, manufacture and the scheduling of substances.    Separate legislation would be in parallel amending such Acts as the Drugs and Drugs Trafficking Act.

Regulations were a draft form stage in authorising permits for use by practitioners, analysts, researchers or veterinarians.      In fact, said the DHA team presenting the update to parliamentarians, it might be possible to see certain herbal products with limited THC levels available within three months.

 Worldwide

Dr Gouws said that in the United Kingdom similar legislation, to be enacted, provided for innovation in medical treatment and allowed medical doctors to depart from medical treatments for a condition but the UK Bill did not specially address the use of cannabis. In South Africa, it will be allowed for under specific prescribed conditions for the treatment of certain medical conditions and for education, research and analysis.  Similar legislation in Australia and Canada had been studied.

Patients that are proposed for eligibility are those with severe pain, nausea, vomiting or wasting arising from cancer and HIV/AIDS, including treatment. Muscle spasms and severe pain associated with multiple sclerosis and seizures from epilepsy where other treatment options have failed or have intolerable side effects. Severe chronic pain is included as part of the proposals for indications.

Crop trials completed

The Department of Agriculture, the DHA team said, has justMedicines Control South Africa forwarded the outcome of cultivation trials at four agricultural research facilities jointly overseen by both departments. This would now be disseminated and assessed, which results would form part of the ongoing research by the Medical Research Council and other academic research centres involved in the future clinical use of cannabis.

Currently, cannabis is listed as a Schedule 7 prohibited substance but regulations will shift this towards Schedules 3-6 which are prescription-only medicines with authorised prescribers.   Scheduling decisions involve levels of toxicity and safety; the proposed indication for a substance; the need for medical diagnosis before prescribing; the potential for dependence, abuse and misuse and access disciplines.

Certain cannabis products are prescribed at present but unregulated illegal herbal cannabis, Dr Gouws said, which is grown incorrectly and bought from the black market will have unknown concentrations of THC’s and cannabinoid concentrations combined with potentially harmful ingredients.   Cannabinoid drugs currently used are Dronabinal for loss of appetite during severe illnesses, Nabilone for nausea under similar conditions and Sativex for spasticity.

Conditions of use

If legalised, it will be proposed that objective evidence to support the proposed use of cannabinoids in whatever regulated form must be provided; the manner and duration of treatment provided; a patient must be monitored to ensure efficacy; the treatment outcome reported upon; the physician involved must be a specialist and informed consent by the patient or legal representative obtained.

In questioning the DHA, parliamentarians were particularly concerned that appropriate measures amending the Drugs and Drugs Trafficking Act, the criminal Procedure Act and the Medicines and Related Substances Act were undertaken. One MP remarked that there must be no question of unintended consequences with law enforcement processes in order that criminal procedures under certain circumstances involving cultivation, marketing, administering and research can be clearly separated and easily understood by the South African Police Service.

Dr Joey Gouws said that this matter had already been investigated and the issues involved were with the State Law Advisor at this very moment. It appeared that they were satisfied. The framework for medical use and research had also been submitted, which also included the licensing of growers using controlled cultivation methods for medical, scientific and research purposes. There were various cultivars of cannabis which had different medicinal properties, she said.

Quality controls

The framework being worked to by DHA also includes reaching a standardised, quality assured product for medical use indications, bearing in mind that clinical decision-making in terms of Section 22A(9)(ii) and Section 21 of the Medicines Act must be made to the scheduling of products, Dr Gouws said.

For a while, Dr Joey Gouws said, cannabis as a medicinal drug for pain may remain as a Section 21 drug as things exist until all regulations were in place and registration and classification complete, so that the use could have a controlled start.  Herbal classifications may be allowed far earlier.

ends

 

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Communal Property Bill assists land reform

Reform assisted on communal property 

communal-land-4…sent to clients 21 Oct….The tabling of the Communal Property Associations Amendment Bill could represent a major advance in bringing order to many aspects of government’s land reform policy. In essence, the Bill will ensure that householders have security of tenure and thus have the ability to raise capital before they enter into any agreement on the management of communal land.

The new Bill focuses on developing the practical and legal aspects of ownership of communal land by a communal property association (CPA) whilst at the same time providing security of tenure with a new initial procedure of naming householders to benefit. The draft has now been approved by Cabinet.

Whilst the thrust of government policy on land reform has always been to bring ownership ofland-reform self-sustaining agricultural land to previously disadvantaged communities, the process has been much bedeviled by conflict over land falling under the control of traditional chiefs; the inability of small farmers to raise finance without title and, most important, for households able to enjoy security of tenure.

Communal confusion

An unintended consequence of the original CPA programme launched by government has been that government has not wished to involve itself, nor has any investing entity for that matter, in the community strife and argument over communal land, a feature of many CPAs. Consequently, the CPA system has demonstrated its inability to involve itself in loans, any state support, or receive the support of agricultural assistance programmes.

community-farmIt might be said that CPAs as a structural system is “off the banking radar”, a fact which MPs in parliamentary committee meetings have complained of a number of times.

As a result, expensive trusts have become the order of the day, banks preferring to deal with such entities and even government itself having to use them because of the informality of a CPA and the inability of loan applicant to show security.

The objective of the Act when it was signed into law was to create a new form of juristic person to allow disadvantaged communities to acquire, hold and manage property in common. A community that qualifies in terms of the Act can therefore, on the basis of agreement contained in a written constitution, form a legal entity (the CPA) and thereby become owners of property, including land, via the CPA.

Agricultural reform

A CPA as it currently stands allows its members to become owners of land which has been “prioritised for the provision of infrastructural support to land reform farmers to enable them to create sustainable jobs and alleviate poverty.”

However, over the few years since CPAs were established, it appears from parliamentary Lesedi traditionalportfolio committee meetings, that things have not gone well. In some cases, traditional chiefs had intervened and gained control of land previously under the aegis of the members of a CPA. Meanwhile, traditional chiefs had complained that CPAs were acting like “chiefdoms” in themselves, the department told parliamentarians.

Tweaking and compromising

Some attempts were made by the Department of Rural Development and Land Reform to persuade CPA members to appoint traditional chiefs on an “ex-officio basis” but the situation remained untenable, not necessarily just because of the problem of traditional control but because, due to shortage of staff, they said, had no ability to monitor the situation and no picture of what land was under CPA control, where CPAs were, and their needs.

In addition, no measurement of outcome of any schemes appeared possible, Opposition members complained. Quite clearly, they said, the NDP land reform programme has not been successful to date. Whilst the idea had been along the right tracks, it seemed the system was patently in trouble.

Green Paper study

After two years of investigation, in 2014 the Ministry, produced a Green Paper on the subject. After creating communal property ownership rights, the new proposal in the Paper was to secure individual tenure to each household beforehand, be it a farm-dweller or tenant, and for each household to own its rights at law before the CPA was formed to lock into this.

land-reform-5As per the Act in force, it would be possible for a community or group of persons to have access to a registered title to land through common or joint ownership with every name included (in a deed of transfer) or through a trust (with title vesting in the trustees) or a juristic person (with title vesting in that legal entity). Once registered, the CPA would become a juristic person – that can sue and be sued. It could acquire rights and incur obligations in its own name, in accordance with a CPA constitution.

In a policy statement, a Bill was proposed along these lines with a CPA constitution as before dealing with sub-divisions, servitudes, the right to encumber with a mortgage, deal with leases and settle disputes – all essential to the development of the area concerned but in respect of nominated persons giving those persons therefore security of ownership.

The bigger picture

The new Bill therefore speaks to a process to align a CPA to the broader land reform mandate in terms of the policy statement. The Bill also says a Communal Propertyland-claims-court Associations Office is to be established which is headed by a Registrar of Communal Property Associations. As a result, CPAs will be better equipped, it is felt, to take part in development; its status is recognised and is known to government; and has a secure system of tenure established as a base for ownership.

DHA said the plan was to clearly establish the connection between the land itself and those who live on it and depend on it for agricultural income. With more clearly established security and a need to register for compliance, it is hoped that a CPA structure will present a more viable face to the investing world.
Previous articles on category subject
New approach to land reform – ParlyReportSA
Restitution of Land Rights Act reversed – ParlyReportSA
Land Holdings Bill joins state acquisition trend – ParlyReportSA

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Restitution of Land Rights Act reversed

Concourt says land bill “improperly” passed

…,sent to clients 25 August….  The Constitutional Court has upheld anconstitutional-court application that amendments to Restitution of Land Rights Act were improperly processed by Parliament.  The Bill was tabled by Land Reform Minister, Gugile Nkwinti.

Groupings opposed to the legislation successfully argued that the amending Bill went through Parliament without sufficient consultation with affected parties.

The proposal made by the Bill was that further claims may be lodged going back to the 1913 Natives Act but the Bill, about to become an Act, had been in any case “put on hold” for 24 months to allow for existing outstanding claims, some 8,000 of them in terms of previous legislation, to processed first.

Existing claimants brought that particular application against the Bill on the basis that those who lodged claims under the new amendment to the Act would be “jumping the queue” and their claims might or were being ignored. The re-opening of the restitution of land process was therefore greeted by a mixed re-action, a fact not expected by the ANC amongst the populace concerned.

More haste less speed

madlangaOnce again the particular habit now regular of the governing party of hammering legislation through Parliament at the last minute before recess has bounced back on the Cabinet and the Presidency.    Justice Mbuyiseli Madlanga said in his finding that the Constitutional Court could find “no cogent reason” for the apparent haste to sign the Bill into law.

He said that there had been a complete lacking in the required public consultative process by all nine provinces as the Bill went through the NCOP process of approval. He described Parliament’s behaviour with regard to the passage of the Bill as “improper”.

How it started

When the Bill was first tabled in a meeting of the National Assembly’s Rural Development and Land Reform Parliamentary Portfolio Committee, Minister Gugile Nkwinti confirmed that the whole process of land restitution for black persons dispossessed of their land was to be re-opened for a period of five years.

Under questioning,he confirmed that no constitutional changes were envisaged, despite the fact that the new Bill would mean an Act that backdated claims to 1913.    Critics of the Bill noted at the time that the tabling of such legislation was, as they put it, “politically motivated” in the light that it was being processed before national elections and with the then forthcoming provincial elections in mind just around the corner. The outcome of those elections would confirm the Minister’s fear and that of the Cabinet.

Critics also stated that there was insufficient time to process the Bill properly. ANC MPs chose to ignore this warning. Thw whole process has therefore been a waste of public funds.

In the kitty

Minister Nkwinti then announced that Cabinet had set aside R47bn for theGugile_Nkwinti envisaged exercise over a period of five years. Opposition members were again alarmed, stating the country had neither the resources nor court time to process such a plan and, in any case, the Department of Rural Development and Land Reform was already facing an uphill struggle to process and finalise the existing claims it had on their books. Opposition members also called for sight of Treasury approval.

During the course of the Minister’s departmental presentation on strategy leading to the budget vote a week later in Parliament, when confronted by opposition MPs asking for a direct answer as to whether he would call for constitutional change on property rights or not, he replied that there was “no such question arising.”

The whole truth

Since that time the tandem Expropriation Bill has also been returned to Parliament unsigned and similarly passed in haste before a recess but, in this case, in the light of a possible adverse opinion by the Constitutional Court.

Minister Nkwinti chose to issue a statement on the the passage of the Expropriation Bill upon its being voted through the National Assembly although not in the domain of his Ministry.

cronin2This statement completely contradicted the declared motivations of Deputy Minister of Public Works, Jeremy Cronin, who had steered that Bill through Parliament declaring his legislation to be necessary for public works to execute infrastructure projects.

Nkwinti’s statement  claimed  that the Expropriation Bill “would bring about the possibility of at last of speeding-up land restitution and reform” thus laying the groundwork of his new land Rights Bill and contradicting the assurances of Cronin.

The numbers game

In his original briefing on the tandem Restitution of Land Rights Bill, Minister Nkwinti stated at the time that since its inception, the state’s restitution programme had benefited some “370,000 households”.    Normally one refers to “claimants” but it was his way of getting to his point using self-serving mathematics.

This meant, he said, that some “1.83m persons had benefited so far from theland-reform process, as against an estimated 3.5m people who had been forcibly removed from their land as a result of colonialisation and racial and discriminatory laws”.

A new closing deadline for lodgement of land claims was set by the Act as mid-2019 and a booklet on how to lodge a claim published.  Mobile lodgement offices were to visit all areas, the department told subsequently told MPs, and the lodgement process required no fees.

Tough words

Whilst the Constitutional Court has now re-affirmed that the right to restitution “could not be overstated” and that “restitution of land rights equals restoration of dignity”, Justice Madlanga was not prepared to overlook the fact that the time line of the parliamentary process had been manipulated.

“As an example, the process of public participation in the Northern areas was reduced to a shambles by haste”, he said, “and as a result of the truncated process of the NCOP, the whole parliamentary procedure had been tainted”. The NCOP was found to have “not applied its mind to the task.”

Give it time

Pending re-enactment of the Act, the Commission on Restitution on Landland-claims-court Rights may continue to receive claims and acknowledge receipt but only process them once existing outstanding claims that had a closing deadline of 1998 are finalised. After 24 months, further consideration can be made on the possible re-enactment of the legislation.

In conclusion, Opposition parties fear that the new Act will allow traditional chiefs with the additional powers granted in terms of legislation favoured by President Zuma to supersede rights on land already granted to communities.

One way only

Disquiet was also expressed by some MPs with the land acquisition claim alternatives as financial compensation was mainly the choice for claimants.

Some MPs expressed the view that they were “uncomfortable” with a monetary solution as a solution to dispossession since this almost amounted to a bribe.

DA MP Thomas Walters said in his view the reason for the slow rate of land occupation was not, as the ANC claimed, the result of whether or not there was a solution on the willing-buyer, willing-seller principle but rather a reflection of the fact that 92% of land claimants preferred to take cash pay-outs instead of working the land and creating jobs.

Minister Nkwinti strongly denied this as did the Department of Rural Development and Land Reform.

Previous articles on category subject
New approach to land reform – ParlyReportSA
Land reform: Something very sad is going on – ParlyReportSA
Minister says need for legislation on land reform a priority
Agri-SA gives views on minimum wage – ParlyReportSA

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National Forests Bill enforces forestry control

SA forests critical to industry

…sent to clients 25  Aug…. With exports of forest products over R2bn and an industry that employs 170,000forests people, 66,000 of which are in hands-on forestry operations, the National Forests Bill now tabled in Parliament is of considerable interest.

The little known Minister of Agriculture, Forestry and Fisheries, Senzeni Zokwana, has published the draft Bill’s explanatory summary mainly to control and remedy deforestation. This will affect the eleven corporate timber companies operating in South Africa, 1,300 commercial timber farmers and an estimated 20,000 small-scale timber growers.

Sustainability

The Bill states that it will provide for the public trusteeship of the nation’s forestry resources; increase the promotion and enforcement of sustainable forest management and increase the measures to control and remedy deforestation.

woodlandsFrom what it appears, the Department of Agriculture and Fisheries (DAFF) has partially lost control over the whole forestry data collection story, particularly natural woodlands, although it acknowledges that thanks to hired consultants collecting data on the easy question of commercial forestries is where things are more up to date.

Short on facts

One of the major worries is that data on most of 25,000 small-scale timber growers’ data is not collected due to focus on major industries. Whilst intensively managed exotic tree plantations such as pine and eucalyptus (the largest) and wattle are highly regulated, with 70% production going in for pulp & paper production, as far as woodlands are concerned, mainly defined as 10% canopy cover, the areas are mainly exploited for firewood and represent some 40m hectares of natural resource not reported upon.

Last to know anything

On the commercial side where there is an established Investment value of some 1.3m hectares of plantations, wood-roofs-sawmillswhich have an annual sustainable production 20 million tons, such represents the national quoted figure for forest products of over $2bn. Nevertheless, by the time DAFF gets any figures on timber plantations, the data, it seems, is some three years out of date.

The problem is, it appears, that there is absolutely no back data on woodlands either, and trends cannot be calculated. The Bill wants to rectify this. With jobs to create and houses to build, there exists a vacuum in knowledge.

The air we breathe

Bearing in mind that no biomass inventory can therefore actually be represented in calculations for carbon trading purposes in terms of the Reduced Emission from Deforestation and Degradation (REDD) the calculations of the current carbon picture “do not have data baseline”, the Bill states. DAFF says it has a problem in that national figures must start somewhere but it seems that the baseline of what the heritage exactly is will take some time.

Looking around, about 0,5% of South Africa’s total land area is covered by natural forests and the word “natural” remains the expression when calculating figures because things look like a bit of a thumb suck. What is there, however, has to be saved and the quantity or area will define what is needed in money and effort.

Kynasa forests

It is known, for example, that there are some 1 700 indigenous tree and shrub species representing some 530 000 ha. of dense growth existing along the south and east coasts and on the southern and south-eastern slopes of inland mountains in South Africa. The other suspected half is spread over the interior plateaux in isolated valleys and ravines. This represents a somewhat scattered picture.

co-2-graphic“Catch up” is therefore called for in data form in order to start calculating the all-important figures surrounding carbon emissions. However, it appears from the emphasis on definitions in the Bill that the first step is to get control of the current mass extermination of South Africa’s woodlands, which is happening at a fast rate.

Stopping the destruction

To do this some clear definitions at law are necessary first, so it seems, and in order to take action it is necessary to amend the National Forests Acts so as to provide for what actually are “natural forests” and “woodlands” at law and to provide for public trusteeship of the nation’s forestry resources.

If land reform is on the horizon shortly, the perhaps the necessity for this Bill is therefore all the more important. Remedies and penalties for acts of deforestation are called for and it would appear that a great deal of thought has been given, by the State Law Advisor as well as DAFF, as to whether the Bill should remain as it is as a Section 75 Bill and therefore not referable to the Provinces through the NCOP or the Traditional Council of Leaders.

One gets the idea that this is a technical Bill rather than a Bill that needs emotive local participation at this stage.
Previous articles on category subject
New Air Quality Act will deal with major polluters – ParlyReportSA
Carbon offsets paper still open – ParlyReportSA
SA’s COP21 climate change paper debated – ParlyReportSA

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Here it comes again…. the Traditional Courts Bill

Dubious motives ……..

justice minister masuthaMinister of Justice Michael Masutha is to re-table once again the Traditional Courts Bill setting up a parallel system of justice in rural areas,  he says.   Minister Masutha was appointed by President Zuma in May 2014 and this same Bill, known to have the President’s wishes behind it, was withdrawn last year in the form it was proposed. It was thought by many to have been scrapped.

Whether this is an election ploy or whether a draft will actually appear from the Ministry of Justice for public comment remains to be seen. Should it appear, in whatever shape and form, it will have to be debated as a Section 76 Bill by all nine provincial legislatures. At least five would have to approve it for the Bill to move forward from the NCOP to the National Assembly.

Gender insensitive

It was said at the time by the media when President Zuma originally withdrew the Bill that it had been proposedtraditional chiefs
as a trade-off with traditional leaders to get rural support. The Bill then was perceived as chauvinistic by many and was certainly frowned up by legal professionals as a distinct attempt to set up two legal systems and was therefore constitutionally unacceptable.

Lulu Xingwana, at that particular time Minister of Women, Children and People with Disabilities, said the proposals “took the issue of women’s rights back into medieval times”. Her ministry was subsequently closed down.

Unexpectedly, the incumbent Minister of Justice, before his 2015/6 budget vote debated just before Parliament went into recess, told a parliamentary media briefing that he intended to re-introduce the Bill as “a priority”. He added. “We are working with representatives from traditional leadership and civil society to take this process forward, with a view to introducing the Bill in June.”

Majority provinces voted against

butheleziDr Mangosuthu Buthelezi, in his capacity as leader of the IFP, said of the old Bill when it was debated by all nine provinces, that five provinces had put in votes to scrap the proposals entirely, two would not make a decision and only two were in favour. Even then, said Mangosuthu Buthelezi, the two in favour did not support all the Bill’s provisions. In the end, he noted, the Bill did not even get past parliamentary committee stage in the NCOP.

“Its demise marked a major victory for rural people who had opposed it”, he said.    Mangosuthu Buthelezi’s view was that the Bill would bring oppression by traditional and unaccountable leaders many of whom were apartheid appointees. “It would have meant also the resuscitation of some of the boundaries of the old Bantustans”, he added.

Four tiers of govt

Chief Buthelezi also noted at the time that the Bill would mean that chiefs would become a fourth tier of government, something the country could ill afford. The Minister of Justice’s next move should be to gazette a draft for public comment.

Previous articles on category subject
President Zuma determined to push Traditional Courts Bill – ParlyReportSA
Zuma goes for traditional support with expropriation – ParlyReportSA

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Expropriation Bill tops parliamentary agenda

Expropriation Bill to be voted on ….

Sent to clients 4 January….The Expropriation Bill is now carried over into this year’s first parliamentary termcronin2 because of the earlier strike of parliamentary workers, still not fully resolved. The Bill originally provided for the “expropriation of property for a public purpose or in the public interest, subject to just and equitable compensation.”

What defines “a public purpose”, “property” and “the public interest” have been the subject of five weeks of hearings and debate in the Portfolio Committee of Public Works. Reference to the Constitution has been constantly made.

The Bill, considerably refined in some aspects, is expected to be passed quite early in the new parliamentary year as part of a personal determined drive by Deputy Minister of Public Works, Jeremy Cronin.

Behind the Bill

Minister Cronin has attended each and every portfolio committee debate, all the hearings and responded for the most part to Opposition questioning and the rejection, to varying degrees, to changes of some of the proposals contained in the Bill and accommodating others.

The State Law Advisor and various parliamentary legal advisors have been attending all meetings since their advice was constantly being sought during discussions in the clause-by-clause debates.

A major issue to be debated was whether this Bill could be “trumped” by BEE legislation, a trumping proposal for BEE legislation to trump other legislation having being proposed in different forums. It appears that this is now the case.

The Bill has achieved a “B” version – in other words there being so many amendments that the entire Bill has had to be re-printed and tabled, this now being the version parliamentarians are working from.

Luthuli House query

The fact that the expression “subject to just and equitable compensation” was removed by the ANC from the long title of the “B” version of the Bill has led many Opposition members to suspect the motives of the ANC in supporting many of the amendments made during the closing passage of the Bill. This issue will probably be the first to be debated when Parliament re-opens.

Until now, Deputy Minister Cronin has been going to extreme measures to explain that the main purpose of the Bill is to assist Eskom in its drive to equip the utility with the tools to enable it to connect more grid lines to under supplied industrial areas. However, the recent change has re-established a lack of trust by opposition members, particularly those representing the farming lobby, that this is really the policy behind the Bill.

Previous articles on category subject
Expropriation Bill grinds on – ParlyReportSA
Expropriation Bill phrases could be re-drafted – ParlyReportSA
Zuma goes for traditional support with expropriation – ParlyReportSA

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Expropriation Bill grinds on

Expropriation: “public interest” and “property”

3- day précis…sent to clients 2 Nov….. Parties are coming closer during debate in the Portfolio cronin3Committee on Public Works to a slightly watered down Expropriation Bill, with Deputy Minister of Public Works, Jeremy Cronin, leading for the Minister who tabled the Bill before Parliament.

The name of the Bill has not resonated well amongst the international business community in the light of other events in Southern Africa.

Nevertheless, Minister Cronin has stated that eventually such a Bill will succeed, despite the concerns of many parties and that the proposed Bill has no malevolent purpose other than assisting “in the public interest”.

The public interest?

Therein lies the problem in that it remains a state responsibility to decide what the public’s interest is and which “public” is the subject matter of any decision for invoking the legislation.   As is the case with so much legislation at the moment, it is therefore a question of the wording of the Minister’s powers and the definitions of the tools at his or her disposal which is of debate.

Most of the debate earlier had centered around the definition of “property to be expropriated” in the light of the fact that the Bill cannot exceed the powers of the Constitution, wherein the word “property” is also not expanded upon – a number of court precedents arising previously where no final determination was made on the subject.

Calling in the Constitution

At one stage, the Deputy Minister proposed that “property” could be defined as “contemplated in section 25 of the Constitution”, the Deputy Minister considering this a major concession by the Department.  However, Opposition members still claimed that the word “property” could not be used in any piece of legislation without a definition of the term “property” also being listed and also in the knowledge that such terminology could not be contextualized even in terms of the Constitution.

On what could be expropriated, the Deputy Minister presented another alternative wording stating the that “the Minister’s power to expropriate property applies to property which is connected to the provision and management of the accommodation, land and infrastructure needs of an organ of state, in terms of his or her mandate”.

This was not found to be satisfactory either by the Committee since the term “that does not fall within his mandate” was vague and could be determined in any number of ways and open to any kind of interpretation.

The Deputy Minister was advised by senior counsel the way the Constitutional Court defined property land seizureremained “ a moving target”, especially section 25, and also in the Bill of Rights and this matter needed to be looked at again.

New draft for discussion

The Deputy Minister is to return to the next meeting with a further proposal on the definition of property issue which would possibly be part of a “B” version of the Bill, then to be reconsidered in totality by the committee. Such will be ready in a few days.

Another alteration of major importance so far is that a new wording using the expression “disputing party” has used in some cases instead of “claimant”. This is now used to describe “claimants” where they no longer are such in the process of expropriation, particularly in not accepting the amount of compensation offered. This is important, as thus the Bill and the parties will accept that indeed a dispute has occurred.

Two months in debate

At this stage the Bill has had three full days of “clause by clause” debate with more to come, draft clauses flying backwards and forwards, the final to be proposed by the Minister as agreed to and under the guidance of the State Law Advisor representing the State’s last offer of compromise and agreement to change wording and those changes as so far agreed to by the Committee.

Minister Cronin still maintains infrastructure projects are being held up, having to be changed or stopped. He had earlier called upon Eskom to give evidence of this.

There is general agreement that Deputy Minister Jeremy Cronin has bent over backwards with subsequent alterations to meet demands but there still exists amongst Opposition a feeling that ulterior motives exist for the legislation and the legislation is not simply “to assist Eskom buy land for electricity development”, as Minister Cronin first declared.  In the background is the threat of a constitutional challenge but this has dissipated somewhat.

The “E” word

pylonsMuch of the debate has also centered around the issues of “municipal planning” and “powers of municipal mangers” giving credence to Minister Cronin’s views. He has said the word “expropriation” is a loaded expression at this time in Africa’s history and has an unfortunate influence on the necessity for the Bill to proceed.

There is also change, seen by Opposition members as an improvement, which deals with the mediation process which previously allowed the expropriating authority to use the absence of a timeous response to bypass the process of mediation. This is not now the case, the issue of mediation being allowed to proceed under any circumstances should this be required.

Progress

More debate is to follow in subsequent days but a final document will no doubt be voted on by the committee shortly before going to the National Assembly, probably in this session of Parliament. In a meeting subsequently, a “B” version of the Bill was introduced and Chapter 4 on Intentions to Expropriate and Expropriation of Property was completed to the satisfaction of most, leaving the impression that much of the steam about the Bill in general had been reduced.

The issue of the definition of “property”, however, still remains a contentious issue simply because of legal determinations.  On 21 October, to expropriate where there was a mortgage bond was debated at length and satisfaction reached and that notice to the expropriated party and any farm workers or dwellers must be simultaneous before the issue of “just and equitable compensation” is considered.

More serious issues

On 27 October the major issue of debate involved the term of “just and equitable” compensation in the Constitution and how this would be applied to the expropriation process in the Bill.

Also debated was the question of a large community being expropriated and whether water availability, dwelling provision and the needs of a community restored. The Minister explained that the Expropriation Bill per se was about expropriation and the process and not about land reform and for this process there was plenty of legislation already to hand and new legislation planned.

The following week of November, however, should see this matter resolved mid-month providing hecronin current NEHAWU strike action of disturbing meetings does not continue, but whether all will be to the satisfaction of each party has become somewhat academic, it becoming more and more evident that Deputy Minister Cronin, who has handled each stage of the process personally, seems determined, in his patient and determined way, to see this Bill through with the property clause undefined.

Last minute attack

The EFF attempted to delete the whole of chapter 5 on compensation in the Bill as they maintained that the subject matter was expropriation, not compensation at all but such a suggestion was put aside by the chairperson Ben Martins as a political ploy rather than a serious contribution.

Other articles in this category or as background
Expropriation Bill phrases could be re-drafted – ParlyReportSA
Expropriation Bill has now to be faced – ParlyReportSA
Zuma goes for traditional support with expropriation – ParlyReportSA
Expropriation of land stays constitutional – ParlyReportSA
Amended Expropriation Bill returns – ParlyReportSA

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Expropriation Bill phrases could be re-drafted

Most countries have forms of expropriation…..

As a result of three full days of public hearings on the new Expropriation Bill,  Deputy Minister of croninPublic Works, Jeremy Cronin, confirmed that in a number of aspects, notably on issues of arbitration and definitions of “the public interest”, the Bill as tabled needed re-drafting considering certain constitutional aspects.

He was adamant that a Bill of this nature was needed, a fact not disputed by many in submissions, but the wording of the Bill at present certainly seems to have raised the spectre of a constitutional challenge if the hearings were anything to go by unless considerable alterations take place.

Expropriation definition will trump all

Whether the Expropriation Bill is land reform in disguise or a genuine attempt by the Ministry of Public Works to unlock mechanisms that are preventing infrastructure development became the kernel of discussion and debate. This was after some twenty five submissions by various parties across the entire business, political analyst and land ownership spectrum.

Clearly opinion is still divided but the motives for dissension and the subject of the submissions put to the Portfolio Committee on Public Works were as varied as the arguments put forward by the department itself in the need for such a Bill.

Eskom used as reason

The worry behind any disagreements with the wording of the new Bill appeared in question time. Would the Department of Public Works (DAPW) seriously put forward an ANC Alliance proposal for “land grabbing” under the simple guise of a platform of argument such as that Eskom needed to resolve land issues to extend electricity grid installations or that the N2 was held up in the Eastern Cape?

Anything else in the “public interest” including “property”, as yet undefined, would be unconstitutional, said many of the submissions, whether agreeing to the basic need to alter the anchor Act by amendment or not because the ‘willing buyer, willing seller” principle was clearly “out of the window”.

How close is Constitution on “expropriation”

Minister Cronin The Bill tabled clearly states that it “seeks to align the Expropriation Act, 1975, with the Constitution and to provide a common framework to guide the processes and procedures for expropriation of property by organs of state.”    This, the Bill says, would be in the “public interest” but again and again the query arose as to what the “public interest” might be.

Throughout the entire round of submissions, the Deputy Minister of Public Works, Jeremy Cronin, was at pains to express the benign in nature of the proposed Bill insofar as plans to expropriate land. The intention of the Bill was merely to speed up processes that hindered development in the “public interest”, he argued.

He admitted that in some cases this might include “land development” but denied that the Bill was in fact a pre-cursor to the proposed Land Reform Bill and the recently tabled Promotion and Protection of Investment Bill, where the issue of land in the one case and “property” in the other case arose.

CCCI attacks whole raft of Bills

ccci logoSuspicions in respect of this were strongly expressed by Ms Janine Myburgh of the Cape Chamber of Commerce (CCCI) who claimed to represent also the views of SA Chamber of Commerce, in completely rejecting the Bill as a flagrant attempt to undermine the Constitution.   She thus brought CCCI to a great degree into contradiction with Business Unity SA (BUSA) and even Agric-SA, both of whom agreed that such a Bill was in order but that the wording need much attention on the issues under debate.

In some respects the CCCI presentation, as lodged with Parliament and subsequently circulated, differed in basic content from the speech actually made, which was particularly vehement in its rejection of the Bill and which, Ms Myburgh said, flew in the face of the Constitution. She linked the Expropriation Bill with the Promotion and Protection of Investment and other land reform legislation from the Minister of Rural and Land Development together.

Coming round the corners is more…

CCCI was convinced that the Expropriation Bill was the first of more legislation to come that could damage any investment in the South African economy; was an attempt to provide precedent for expropriation at “any price”; and should be the subject of a constitutional challenge. The need for the Bill in totality was rejected.

The chairperson, Ben Martins, complained that the CCCI submission brought “nothing to the party” with no alternative suggestions, “nor an attempt to understand the processes involved”. They should only discuss the Bill before them. The UDM stated that they doubted whether Ms Myburgh, an attorney, “had even read the Bill” and Minister Cronin, said that the input by CCCI was an embarrassment and a waste of the committee’s time. There would be a Bill tabled eventually, that was a fact that seemed to be accepted, but to contribute nothing was a pointless exercise, he said.

He expressed his view that Ms Myburgh should not even be allowed to respond to these different criticisms since her organisation either had not read or did not understand the Bill. He asked how the Bill could be “unconstitutional” when it directly enforced the “public interest”. What was being discussed, he said, was to define this with wordings necessary to resolve issues, achieve this, and move forward.

Minister Cronin said that CCCI had adopted an alarmist attitude, which he was continually at pains to oppose, and added that a wide majority of stakeholders who had intervened in the public hearing thus far, including Business Unity South Africa (BUSA), Agriculture South Africa (Agri-SA) and the Banking Association South Africa (BASA) amongst others, had raised useful contributions which had to be considered.

Minister Cronin said that he hoped that the media present would have the intelligence to understand the processes envisaged by the amended Bill and the suggestions that had so far come forward were part of a process that all countries had.  He condemned the attitude of CCCI towards an Act that had been in place but needed revision because of circumstances.

Institute of Race Relations

anthea jeffriesRight from the start of hearings, the first being from the South African Institute of Race Relations (SAIRR) represented by Dr Anthea Jeffrey, the point was that in the case of poorer folk the whole question of court litigation costs was not only a dubious issue but the time frame for lodging an appeal had to be extended from 60 to 120 days.

When asked why SAIRR should become involved in land issues, Dr Jeffrey replied that it was just a question of the unconstitutionality of the issues and for many years SAIRR had been involved in discrimination against black land ownership.

She said that under the present Act the validity of any expropriation could be challenged, whereas under the new proposals it could not; SAIRR was deeply concerned that all types of property could be expropriated; property that was expropriated “in the public interest” should be better defined and she asked that the new Bill should trump all other Bills.

She complained that Bill in no way assumed responsibility for loss of livelihood; loss of property and the unintended consequences of taking land. She reminded MPs that over 8.6m black people owned their own homes in South Africa.

Dr Jeffrey was asked what she meant by making the remark that “a number of interested organisations would be taking the current wording to the Constitutional Court if the wording should stand”. Would SAIRR really appoint silk and go to the Court, they asked.  She replied succinctly, “It totally depends what you put in the Bill”.

Earlier, Ms Vuyokazi Ngcobozi, Parliamentary Legal Advisor, reminded the Portfolio Committee that it needed to be mindful of Section 25(2b) of the Constitution which states that if parties did not agree on compensation, they should approach a court.

People could not afford to take the route of going to court, she said, and arbitration was expensive. However, this was a right which is provided for in the Constitution. Alternative approaches had to be considered, she said. There was, throughout the hearings, much debate on which courts should be used.

Eskom goes up front as reason

eskom logoEskom in its presentation said that it was currently experiencing significant delays in acquiring servitudes for the construction and installation of its infrastructure and this was largely due to an “ineffective expropriation process”. They quoted one essential transmission line to the Western Cape which had been held up for six years and one even more critical line to the Vaal Triangle industrial area held up for four years.

When asked why the land had to be bought, Eskom said in many cases this was the only route to acquire rights. At this point, the Deputy Minister responded that there was absolutely nothing against the acquisition of servitudes in the public interest but the issue remained the market value for such rights, whether ownership or servitudes, and the Bill itself therefore remained a Bill about expropriation of such rights.

SA Institute of Valuers

This point was made by Saul du Toit of the SA Institute of Valuers (SAIV) in urging both the committee and the department not to leave the notion of value as openly definable and to align it with market value for purposes of fairness and constitutionality and the rights of a property owner.

He found himself answering provocative questions from EFF members who stated the land was not the property of the current owners in the first case so the question of rights did not apply.

Mr du Toit urged members of the EFF to obtain a copy of “Grundrisse” by Karl Marx, in which Marx explained how “labour” actually allocates a certain value to land.  He again confirmed that it was highly doubtful whether some magistrate’s courts, which had to take a fair share of the load of expropriation cases away from costly High Court actions, had the experience but not necessarily the competence, to deal with expropriation matters.

One submission, from a valuator, Mr Peter Meakin, suggested that that all land, as in Hong Kong, should become state land and leased back to owners, thus completely changing the structure of taxes and rates into rent and leasing costs, making expropriation a much easier matter, providing just compensation for property only as the main issue. The impracticality of this suggestion led to very little debate.

Agric-SA- “process must totally protect”

agri-saMs Annelise Crosby, parliamentary representative for Agri-SA, said they “supported orderly land as a prerequisite for rural stability and inclusive rural development.” She stated that “expropriation should only be used as a last resort where negotiations had failed”.

Agri-SA had been totally opposed to the original 2008 Bill on the basis that it restricted access to the courts and was not in line with Section 25, 33 and 165 of the Constitution and she said that government “should be applauded for the extensive and inclusive consultation process which it undertook on the 2015 Bill before the showed significant improvements”.

However, expropriation without compensation, she said was traumatic, causing financial loss, emotional stress and suffering.  Agri-SA proposed that the full 100% of compensation offered be paid to the owner on the date which the state took responsibility of the property. Under no circumstances should an expropriation lead to insolvency on the part of the land owner because the compensation was not sufficient to settle the loan secured by the mortgage bond and settlement paid in time.

Claimants, she said, should as far as possible be placed in the same position as was the case before the expropriation. The definitions of “expropriating authority” and “public interest” were broad and left a lot of room for uncertainty.

Also Ms Crosby said, “due regard must be given to the owner’s right to privacy and these should therefore be resolved in the wording, submitted by Agric-SA, before the Bill was finalised if it was to be acceptable.”

Banking Assoc: Expropriation should only be for land

basaThe Banking Association of SA (BASA) went a stage further, stating the whole preamble to the Bill and the Constitution should be altered to state that the Bill be restricted to land, water and related reform as opposed to “other types of property”.

BASA noted since the instigation of the original Act the word “property” had become a debatable issue at law. This was agreed later by Minister Cronin and not even the Constitutional Court had been able to rule on this.  BASA pointed out that the Bill had to be aligned to the Constitution which called for “just and equitable” access to land which was missing in the proposed Bill, thus there being no adequate safeguard against abuse of the power to expropriate.

BASA stated that the new Bill left out the previous expression of “consequential loss” contained in the original Act and any replacement or amendment should be aligned to relevant international norms and standards. In terms of global regulatory requirements, they said, lenders are required to make use of market values against which mortgage loans are made and they could see “no valid reason” for leaving out the relevant clauses as contained in the original Act.

“Expropriation is a drastic measure which places an inordinately heavy burden on the shoulders of particular individuals. The full extent of their consequential loss must be taken into account, not disregarded”, BASA emphasised. They disagreed with the concept that any property that had been “taken without the consent of the expropriated entity or person” should not be taken into account.

BASA set out a full alternative set of wordings and concluded by urging government use caution and act in strict compliance with the Constitution, especially in cases when a heavy burden on the expropriated person became apparent. They concluded with the comment that South Africa could ill afford to have an Expropriation Bill that works against investment growth and the creation of jobs. This was not conducive to a satisfactory international business environment, they said.

Taking bits out of land destroys values

The South African Institute of Valuers (SAIV) further said that land assets should be considered as holistic units and should not be divided up by any expropriation process since the units thus divided, they argued, become non-viable and lost their use or value. The expropriation process, they argued, had to be related to market value for purposes of fairness and constitutionality.

Discussion again centered on what courts should be used, SAIV sharing its experience with the Gautrain expropriation where some 1,400 cases of expropriation were satisfactorily concluded by arbitration before the necessity of going to the courts arose.

SAIV called for privacy on compensation agreements, for if the amounts paid, the Institute said, were to become public, landowners could rely on data from previous cases and play these off against each other as well as against the state.

Minister Cronin’s consistent assurances throughout the hearings that the amended Bill was benign on the issue of expropriation and mainly for state utilities to complete infrastructure projects was challenged after a submission on the third day by Prof. Ruth Hall for Institute for Poverty, Land and Agrarian Studies (PLAAS)

She said the amending Expropriation Bill highlighted “the necessity to bring expropriation laws and theirRuth hall compensation components into line with the Constitution in order to remove the ‘veto power’ of landowners in relation to land reform and to ensure consistency in expropriations undertaken by the different arms of government.”

Prof. Hall said that the proposals, for the first time, properly phrased historical factors into a Bill, particularly regarding the shaping of compensation in order to address the apartheid legacy and the necessity for redress. She said a state “advisory panel on expropriation” could provide all citizens with a cost free framework for negotiations and arbitration in order to address the costly and “intimidating” court system.

Minister Cronin hastened to assure Prof. Hall that this legislation, like much of South Africa’s current legislation, had the main purpose of addressing improprieties of the past and was designed to continue the process of redress.

sapoaThe South African Property Owners Association (SAPOA), represented by Adv. Gerrit Grobler, felt that in broad terms the Bill conformed to international standards and the department was to be commended. “It is workable, practical and constitutionally sound but there were a few outstanding matters needed to be attended to and that the Bill could not go forward as it was.”

Originally only the High Court where the property was situated could determine compensation for all instances of expropriation, Adv. Grobler said, but in 1975 the Expropriation Act provisions allowed for compensation to be decided by a magistrate but subsequently were deleted from the Act because compensation mostly fell outside the experience of magistrates.  This had to be cleared up and decided upon, he said.

He advised that the 60 day notice of expropriation was too short and felt it would not meet constitutional muster.   It could not be expected that property could be valued and a claim for compensation prepared in such short time. He suggested 6 months in the light of court rolls being overloaded.

Mr M Ndlozi (EFF) said that SAPOA represented land and property of capitalists, some of whom were the main beneficiaries of the policies of a criminal government. SAPOA needed to have a conversation around the criminal acquisition of land, he said.

Adv. Grobler, when replying, said if a property owner who had paid full value for the property, whether in 1960 or 1975 and the property is taken away, then the owner would lose the market value which he or she had paid for the property. That was a fact. If the land was acquired for nothing, then this would be taken into consideration.

gerrit groblerAdv Grobler said he was not a politician but a lawyer and therefore could not discuss any member’s personal ideologies. He followed only the Constitution which outlined the principle that compensation for expropriation be paid.

However, SAPOA continued with the proposition that High Courts, or preferably arbitration beforehand, had to take place first in terms of the Constitution but the argument remained, as had been stated from the start of the hearings, that these costs were too high and the period in which a defence could be prepared before expropriation took place was too short. This had to be reconciled, he said.

Adv Grobler again repeated that the Bill was a good piece of legislation which needed a few technical adjustments. Magistrate courts were specifically good in matters relating to criminal law but not to expropriation. However, he stressed that the proposals would “not serve the bottom end of the market”.

Deputy Minister Cronin thanked the presenters for providing clarity on the jurisdictional areas of the High Court and the Minister notably remarked that it made sense to begin assessing things from a market value point of view.

On the Eskom matter, he said the problem with Eskom was that the entity was pursuing the “willing buyer, willing seller” approach and a couple of landowners held out to drive up prices. Therefore such a Bill as tabled was important to tackle land acquisition although it had to be in line with the Constitution.   Adv. Grobler was thanked by the chairperson, Ben Martins, for his thoughtful observations.

cosatu2The Congress of South African Trade Unions (COSATU) submission descended into an argument between their need for an answer why land restitution had “failed so far” and the fact that the land was “stolen” in the first place. A response was made by FF+ member, F Groenewald, that most of the land referred to had been stolen from the Khoi-San by such historical parties as King Shaka in the first place.

Chairperson, Ben Martins, called for order and asked both parties to continue their debate “at another timeBenedict Martins in a different place” since the issues were irrelevant to the meeting.

However, Mathew Parks, parliamentary coordinator at COSATU, submitted the view that government should never compensate theft and emphasised that arbitration should be able to take place prior to referring to a court at low cost. The present process was, moreover, described as long, costly and intimidating. This could be sorted out without changing the Bill.

He suggested as a solution the development of an advisory panel on expropriation which would provide actors in a dispute with a comprehensive framework, enabling the development of fruitful negotiations.

He described the recent criticisms directed against the Bill in the media as attacks lacking any foundation. He urged members of the committee to vote in favour of the Expropriation Bill as it stood.

In conclusion, Deputy Minister Cronin said that Department of Works and his Ministry Department had much benefited from the general support and advice contained in the majority of the submissions. It was a Bill which was now perceived as a nearly completed and was now a working document which any government needed to bring matters in line with international practice.

He added that the Freedom Charter “did not contain any reference to the possibility of nationalising any land” and this was a “red herring”.

Other articles in this category or as background
Expropriation Bill has now to be faced – ParlyReportSA
Zuma goes for traditional support with expropriation – ParlyReportSA
Expropriation of land stays constitutional – ParlyReportSA
Amended Expropriation Bill returns – ParlyReportSA

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Land Holdings Bill joins state acquisition trend

Any new land holdings by foreigners to be excluded…

bbc logoThe BBC on their website quotes Minister Gugile Nkwinti of Rural Development and Land Reform (RDRL) as stating that a Land Holdings Bill “would be introduced to the South African Parliament by 2019″ which would, quoting the Minister further, restrict to locals the purchase of new land in terms of South African law.

In the light of the ministry involved and its mandate, this is likely to mean “productive” or agricultural land.

On their website and under the heading “SA to fast-track bill to block land sales to foreigners”, the BBC further reported that according to Minster Nkwinti this “would not mean annexing of current properties as this would be unconstitutional”.

Too much owned by foreigners

A weaker rand and lenient property laws had contributed to the South African decision, said the BBC, and further quoted the Minister as stating that “7% of land in SA was currently owned by foreigners.”  Minister Nkwinti has since said it might be less than 5%.

A “foreigner”, said the BBC,  is as per “the definition used by the South African Department of Home Affairs”.

Gugile_NkwintiLocally, Minister Nkwinti has said that Bill is to be tabled urgently in Parliament but that he had “no problem with the Bill being processed in the financial year ending 2016”. It is important to realize, he said, that the Bill will apply to agricultural land ownership only, or what is termed “productive land”.

Other Bills in process on expropriation

When the first outcry against the Bill was heard in South Africa, the BBC continued, it was soon confirmed by the RDRL department that residential property was not being targeted. Most of the argument against the Bill has been on constitutional issues, backed by a fear that this is the “thin edge of the wedge” in terms of investment certainty, the BBC concluded.

The reason for the Bill, Minister Nkwinti also said during a local media briefing in the parliamentary precinct, was to “address land reform and food security in South Africa.” The property referred to was that which exceeded a 12 000 hectare ceiling and the minister added that “on the basis of a just and equitable principle we shall pay for any land.”

A separate Bill is now to be enabled whereby a state valuator post is established to evaluate whether a stated market price is fair or not and to process such acquisitions. How independent this valuator will be from state pressure is not clear.

This is all in tandem with an Expropriation Bill, stated as being more designed to meet state infrastructure requirement needs, the acquisition of land for state electricity transmission grids being quoted by Deputycronin  Minister Jeremy Cronin, who briefed Parliament on the Bill, as an example. However the Bill is unclear on the use of the words “in the public interest” and what constitutes  “property” in terms of the tabled Bill.

Also out for comment at present is a Promotion and Protection of Investment Bill tabled by the Minister of Trade and Industry which deals with the subject of foreign based investment in South Africa and the “protection” of local industry and local manufacturing.

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Property Practitioners Bill will protect buyers

Property market will see major changes…..

lindiwe sisuluMinister Lindiwe Sisulu has stated that what will be termed “home inspectors” will have a far greater role to play than the present process of various clearance certificates that are produced before the sale of home property can take place.

At present, a Property Practitioners Bill changing the landscape in respect of the way property changes hands is in the process of drafting by the department of human settlements, she told Parliament.

Also at present, buyers only have recourse to the Consumer Protection Act, which is both vague on affected issues and out of reach financially for many should recourse  be sought, she noted.

In relation to this problem now being experienced by many buyers, particularly in lower income situations, new legislation is in draft form revising the selling/buying process in the home property industry. This has come about mainly as a result of the fact that the Estate Agency Affairs Board (EAAB) now falls under the ambit of the department of human settlements (DHS).

Doing it better for the buyer

The wish of DHS, says the Minister, is to prioritise for new rules that will place a heavier onus on estate agents/realtors to provide a much deeper level of advice to prospective purchasers and to engage a properly trained and certified home inspector for the sale.

Consequently, it is hoped that there be will a raised level of awareness on the part of sellers and theirmechanic agents that more is required of them before a sale can take place. At the present moment, varying from province to province, just a gas, plumbing and electrical clearance is called for – and sometimes a “beetle certificate” for wood borers, anciently known as the deathwatch beetle, and non-existent in most parts of SA.

Not just a name

Yet to be fully drafted, this Property Practitioners Bill will shortly go to the State Law Advisor aimed at tightening up on many such aspects of the property market industry. The main stakeholder, the EAAB, appears to be working with DHS to achieve a number of objectives, such as re-naming estate agents as “property practioners” and increasing their responsibility for more informed advice to the buyer.

Part of the re-structuring is also that EAAB may become known as the Property Practitioners’ Regulatory Authority (PPRA) registering those acceptable on a criteria basis and upgrading the industry’s level of responsibility at law to avoid “commission hunters looking for a fast sale” at the expense of a truthful and an expert assessment of the property in question.

Getting it going

The new Bill, the department says, will upgrade many of the practices selling home property; will set out provisions for the establishment of this new authority; re-emphasize and tighten up on certain aspects of governance in the industry; regulate for property home inspectors/surveyors; and regulate for their registration by the new authority before they can be part of any sale process.

Where the big change will come, it seems, is in the area of generalised consumer protection, which it is proposed will fall under the common jurisprudence of the new authority rather than relate to the Consumer Protection Act.

It is suspected that many more possible registered “home inspectors” than that who potentially exist at the moment will have to be trained and registered by the new authority before the current volume of sales can be processed. This may call for the Bill to be introduced in stages.

Buyer beware

house for saleWhilst the practice in the past on property sales has been on the basis of voetstoets enabling sellers to walk away from known faults, this has left home purchasers particularly vulnerable and with only recourse to the courts, an expensive process.

In terms of the proposed Bill, a clause will apply setting out that the seller is exempt from the authority of the new body replacing the EAAB, leaving only the consumer as a possible aggrieved party subject the result of the appointment of a registered home inspector and a properly informed property professional.

Tightening up

The Consumer Protection Commission has stated that as things stand at present estate agents are responsible for all advice and a satisfactory outcome of a sale in terms of the Consumer Protection Act, yet the whole area is vague at law with many experts differing on expected outcomes.

It is hoped that the new proposals will clarify much in this area which has been described by the EAAB itself as a “legal quagmire” and to make the sale of a home a “less stressful and time consuming process” for the buyer.

Other articles in this category or as background
White Paper on Human Settlements shortly for comment. – ParlyReportSA
Rental Housing Amendment Bill goes for country coverage
Spatial planning bill ends long journey in Parliament – ParlyReportSA

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White Paper on Human Settlements shortly for comment.

Human settlements rethink on township size…

lindiwe sisuluMinister of Human Settlements, Lindiwe Sisulu, has told Parliament  that a White Paper  on “restoring human dignity by building quality houses by obtaining the advantage of larger developments to improve economies of scale”.

She said that the plan was to encourage beneficiaries to participate in their own building developments in their own areas accompanied by the appropriate trade skills training.

Minister Sisulu said the whole question of hostels would be restructured for the moment but eventually the plan was to do away with the hostel system in its entirety.

Hostels always an issue

The plan was to upgrade the hostels and then have them managed as social housing projects by the Social Housing Regulatory Authority which had a provincial reach.  Hostel dwellers will eventually receive a subsidy towards normal accommodation.

On housing generally, the minister announced that a partnership between her department and the Banking Association of South Africa was being developed which would result in the setting up of a working group focused on the housing market. A consultative workshop is planned before the end of June 2015 that will allow key stakeholders to brainstorm on ideas.

Minister Sisulu concluded “We want to give hope to our people and indicate that there is solid policy. But a policy is only as credible as its capacity to deliver on that
policy.”

Other articles in this category or as background
http://parlyreportsa.co.za/human-settlements/informal-settlements-lack-progress-queried/
http://parlyreportsa.co.za/justice-constitutional/spatial-planning-bill-ends-long-journey-in-the-parliament/

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Expropriation Bill has now to be faced

Much of the sting goes out of Expropriation Bill…..

landseizuresThe subject of expropriation, not necessarily of land but any property, has now reached the stage of a considerably watered down third Bill which has now been tabled and whilst there are grumbles from many quarters, it appears that the new Bill has not caused the same furore as its predecessors.

The long awaited Expropriation Bill (B4-2015) came before Parliament in the form for a briefing to the portfolio committee of public works attended by the minister of public works, Thulas Nxesi, the briefing itself remaining very much in the hands of the deputy minister, Jeremy Cronin.

Great emphasis was laid by both ministers on the difference between expropriation as a “public purpose” and expropriation “in the public interest”, a difference they said that was clearly laid out in South Africa’s Constitution.

Public purpose, public interest

nxesiMinister Nxesi in his introduction said if there was a need to put up electricity lines or build a road, it was then for a “public purpose” and he saw that there could be no argument – a statement which was later queried by opposition members.

However, minister Nxesi said, expropriating property for “public interest” had to pass a rigorous rationality test as stipulated in the Constitution but a major problem with all Bills previously tabled was that there was no recourse to the courts and on this issue the cabinet had decided to withdraw them. Jeremy Cronin seemed to come to the rescue with a far more detailed and rational presentation.  

He argued that expropriation was an essential mechanism or tool for any state in any country to acquire property under certain instances but much emphasis had been laid in South Africa on the issue of land and white commercial farmers.

He admitted that whilst “public interest includes the nation’s commitment to land reform” in the Bill before them, a fact emphasised in the preamble to the Bill, the proposed legislation was very much in the nature of a mechanism to deal with expropriation rather than say who it applied to.

Expropriation just a “tool”

croninMinister Cronin added that this was one of many reforms taking place to bring about equitable access to all South Africa’s natural resources and reforms to redress the results of past racial discriminatory laws or practices. Such a preamble existed in much of South Africa’s legislation since 1984.

He said, “The Constitution requires “just and equitable” compensation to be determined by having regard of all circumstances without placing undue weight on any single or particular factor. National, provincial and local government were empowered to expropriate property to varying degrees through several pieces of legislation, he noted.

Deputy minister Cronin tracked the history of the Bill before them stating that the 1975 Expropriation Act was totally unconstitutional as it gave draconian powers to the state and was “wisely” withdrawn. A further 2007 Bill was also removed on these grounds and the current Bill was unable to be processed for Parliament before the 2014 elections.

In line with Constitution

settlement_law_justice_However, he said, the Expropriation Bill B4-2015 seeks to ensure consistency with the Constitution and to provide uniformity of procedure of all expropriations without interfering with the powers granted to the expropriating authorities.

Opposition members claimed that the Bill enlarged upon the definition of “public interest” contained in the Constitution and the Bill could not do this constitutionally. Nor did the Bill talk to in broad terms to the issue of compensation, whether it be a commercial farm or alternative accommodation for a shack dweller.

They argued that the new Bill did not talk to the issue of the interest of a bank in terms of a mortgage and where the bank might stand on such issues. The Bill now tabled, minister Cronin said, detailed the manner in which the expropriating authority had to follow, as well as setting up the process of evaluation and the authority to do this “in a just and administrative way”.  

On mortgages and loans from a bank, he said it was the bank that will be expropriated and not the individual.

Credibility of Bill challenged

masangoDA member Masango contradicted this and said any agreement or loan was between a person and the bank and not the state and the bank and he asked how the Bill could have possibly got through the NEDLAC process.

He also raised the issue of poor people not be able to afford litigation if the process of expropriation was contested. ANC member Madlopha said “whilst the media had been rubbishing the Bill, saying that it targets white commercial farmers”, the Bill in her mind gave the state power to expropriate with only a simple notice to the property owner, a process which seemed to contradict with common law.

Blaming apartheid and more

Minister Cronin responded along the lines that in expropriation, the property clause in the Bill of Rights guided the process. Indeed, argument, he said, will no doubt occur on “just and equitable compensation matters” but this did not remove “the consideration of colonial injustice”.   

It was the Constitution, he said, that insisted that in determining “justice and equitable” compensation it should include the process of “restitution”. Deputy Minister Cronin commented that expropriation did not just affect white commercial farmers and any compensation would consider the amount of bond outstandings. 

He concluded that the new Bill was attempting to shorten the process of any litigation. He added that the NEDLAC findings on the Bill would be supplied to Parliament and suggested that the committee ask Agric-SA to appear before them to obtain their views.

Other articles in this category or as background

Zuma goes for traditional support with expropriation –

ParlyReportSA New approach to land reform – ParlyReportSA

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Zuma goes for traditional support with expropriation

Editorial….

Session ahead may bring clarity on expropriation…….

NAIt is a difficult time for business and industry to establish exactly where they are in terms of the legislative environment in South Africa, land expropriation and state or BEE participation being mainly the issues.  However, the cabinet must be aware of the need expressed in many circles for more certainty in terms of the investment climate.

The Bills held back by the Presidency for re-consideration or signature are re-emerging slowly back into the public sphere.   Aside from the highly controversial Traditional Courts Bill adding power to the arm of President Zuma’s supporters in rural  leadership roles but offending women’s rights groups, now re-tabled in Parliament in a different form, as a section 76 Bill, is the Expropriation Bill.

Being a 76 section Bill means that the proposed changes and the formation of a state valuator’s office as thezuma traditional final arbiter on land restitution will have to be debated in all nine provincial legislatures and a mandate provided to the National Council of Provinces to gain concurrence with any vote on the Bill taken in the National Assembly. 

It is interesting to note that some time ago, President Zuma let it be known that he would also like to see this Bill considered by the House of Traditional Leaders. This is probably in the light of the debate now emerging that traditional chiefs were not consulted properly, if at all, in terms of the Restitution of Land Rights amendments.

Serving notice

Crucially, the Expropriation Bill still seeks to allow any ‘expropriating authority’ to take property by serving a notice of expropriation on the owner stipulating the value the state will pay, presumably according to the state valuation if there has been an appeal.

Commentators have noted that the new Bill differs in that the state may then serve a further notice of expropriation, which could be less, more or not necessarily revised at all, and the owner will be deemed to have accepted that transfer of land to the state unless the owner commences litigation within 60 days.

The short amount of time to respond and appoint and brief counsel and the fact that litigation, a highly costly process (costs being to the owner not the state), will no doubt be an issue debated extensively in Parliament. At this moment the main opposition party has been caucusing on the Bill. The fact that the Bill will now have to be debated in all nine provinces will leave a fluid situation for some time yet.

Struggling to produce

The Protection of Investment Bill remains an unknown quantity. Speaking to the DTI legal advisor, all he could say was “We are struggling with it”. 

Similarly, no tabling notice has been published with regard to the Private Security Industry Bill.

No energy  outcome

At the time of writing the “Five Point Energy Plan”, promised by the cabinet “war room”, has also not been presented to Parliament, the minister of energy advising all that it was necessary to have first a trip to the DRC and discuss the Grand Inga Hydro project.

Instead of her unadvised non-appearance in Parliament, a presentation by the department of energy took place, monitored in this report. What did emerge however was that future regarding the intended energy mix is also very fluid, there clearly being a division of interest in what is necessary to bring about in the short term better service delivery to the poor and in the longer term the needs of investors.

Traditional support

Time and time again, since his state address to the nation, President Zuma, where land matters are concerned, has made reference to the Council of Traditional Leaders, the majority party having no doubt realised that this base of power can either be pacified or radicalised – a very sensitive area and where the least service delivery by government occurs.

In his speech opening the National House of Traditional Leaders, he encouraged traditional leaders to take advantage of the 2013 Restitution of Land Rights Act as amended and rushed through at the end of the last Parliament and for them to put in claims.

The amendment Bill passed reopened the window for lodging restitution claims, but retains the restriction that dispossession must have taken place after 1913. The hints by the President in subsequent days in further briefings that the date of 1913 “is negotiable” have led to further claims being notified some of them apparently going back many hundreds of years. 

Once again, this will only be finalised when parliamentary debate finally takes place as the issue is bound to be raised but the whole matters adds to current uncertainty.

Hole in the pocket

Meanwhile the budget for what can be paid out in the form of restitution has been decided by minister of finance Nene and was presented in the last budget to Parliament in the current session.

President Zuma’s reference in Parliament to land held by foreigners in the state of nation address produced an unfortunate atmosphere which was somewhat mollified by off-the-record remarks by ministers to the media but no legislative clarity for Parliament to consider has emerged.

Indeed, a difficult time for business and industry, not forgetting that the Eskom issue is about to be raised again in forthcoming portfolio committee meetings in the coming week, hopefully bringing some clarity to the issue of reliable electricity supply.

Editorial only

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MPRDA Bill to be amended urgently

Some form of compromise….

coal miningIn referring back to Parliament the Mineral and Petroleum Resources Development Amendment Bill (MPRDA) and acknowledging in his State of Nation Address (SONA) that in its present form it could be damaging to South Africa’s investment climate, President Zuma and his cabinet have introduced more certainty to both the mining and oil and gas industries.

At least a year and a half delay was a guess if the suggestion that two replacement Bills were to be drafted separating mineral resources from oil and gas in the light of the fact that both have separate BEE charters.

Certainty needed

However, mineral resources minister Ngoako Ramatlhodi has agreed with mining companies and also the point put forward by Chamber of Mines that the best and fastest way forward to bring certainty to theRoughnecks wrestle pipe on a True Company oil drilling rig outside Watford industry would be to pass the Bill subject to amendments based on a new approach to the mining beneficiation issue and the matter of state “free carry” in any successful gas exploration.

Originally, on an issue raised both in submissions and by opposition parties and, even a couple of ANC MPs, the presidency has also agreed to doubts expressed whether, once signed, the MPRD Act after amendment would pass constitutional muster on the basis of the amending Bill’s passage through Parliament and the process adopted.

Section 79(1) of the Constitution empowers the President to return a Bill to Parliament for reconsideration if reservations about the constitutionality of the Bill prevail.

Mining land

Subsequently pointed out as a further reason for the Bill not beingtrad leaders signed, raised in a presidency statment issued by spokeperson Mac Maharaj, was a concern of cabinet that the Bill had to be processed through the Council of Traditional Leaders.

Parliament passed the Bill all in a rush at the end of March 2014 after much lobbying by ANC whips and despite warnings and constitutional challenges from many parties.  Nearly a year has passed since sending the proposals off for presidential assent.

The subject of the regulatory environment has not even been touched upon or has come up in the debate at this stage.

During the parliamentary recess both the Chamber of Mines and others have complained of sustained uncertainty in their industries and in the investment world.

Two issues emerged almost immediately when the President announced he was delaying his signature. The first issue was a hefty warning from mineral resources minister Ngoako Ramatlhodi who said “the implications for companies that did not meet BEE targets set out in the mining charter would be severe”, inferring that this might eventually affect the granting of mining licences. He raised, once again, the issue of employee shareholding.

“Developmental” metals pricing

Consequently, it still remains somewhat foggy what government policy was in instituting such clauses other than an overall ambition for the state to have more ownership of strategic resources in both industries and the drive by minister of trade and industry, Dr Rob Davies, to assist smaller manufacturing metals industries becoming more viable at the cost of larger industries, therefore creating more jobs, he said.

On the subject of BEE and the two different charters affected, all that has been said officially was a remark by minister Ramatlhodi “We have to satisfy ourselves that the Act meets our broader socio-economic development activities.”

The second issue to emerge after the announcement of the return of the MPRDA to Parliament was further mention by the department of energy of“Operation Phakisa”, the speed-up process as part of a co-ordination exercise with the oil and gas industry to reduce reliance on oil imports.

Fracking and renewables

On a separate issue, further statements by ministers with regard to fracking and speeding of delays in the IPP world with renewables has also emerged, overshadowed by the urgent need of an energy plan from the newly formed energy “war room”.

Whatever happens, both industries should be prepared for another round of public comment, hopefully in the first parliamentary period after the Budget…… minister of finance Nene notably mentioning nothing of nuclear interest in his budget speech.
Other articles in this category or as background
Energy War Room formed to meet crisis – Parly ReportSA
Mineral and Petroleum Resources Bill halted perhaps – ParlyReportSA
Medupi is the key to short term energy crisis – ParlyReportSA

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Grand Inga hydro power possible

DRC clean energy destined for SA….

drc flagOpposition members of the parliamentary energy committee expressed a certain level of cynicism regarding the Grand Inga project treaty signed recently between South Africa and the Democratic Republic of Congo (DRC), the subject of which is a multi-phased hydro power station to be built on the Congo River.

They noted that the DRC is ranked second only to Somalia as the worst country on a worldwide index of failed states    However, despite this reservation, MPs in general noted that on the whole the project had “exciting possibilities”, albeit long term ones.

These points were made during a presentation by the department of energy (DoE) on the Inga treaty recently signed by President Zuma.   Inga 1 and Inga 2 dams are already in operation, supplying low output power. The issue of a hydro power link with the DRC has been “on the table” for some fifteen years.

Congo River cusec power

The new third Inga dam, which will be by far the largest and hence the title “grand” for the whole project. The project will be approximately 250 kms from the capital Kinshasa and 50kms from Africa’s West coast, the Congo River having the second largest and strongest flow after the Amazon, mainly as a result of the dams being sited after one of the largest waterfalls in the world. However, the Congo has by no means the longest and largest drainage area.

DoE said in response to the statement that the DRC was a failed state that whilst it recognised that the DRC had been unstable for years, especially in the North Eastern Region, most of the trouble was more than 200km from the Inga site and even when the civil war at its height, there had never been any interruption of power services.

The Grand Inga project, said DOE in quoting the developers, would be able to supply some 40,000MW in clean energy when all seven phases were completed for development in Central, East and Southern Africa.

SA power line to local grid

It is foreseen that new transmission line to South Africa necessary will be associated with the first phase of the project and which would probably traverse Zambia, Zimbabwe and Botswana.   It is estimated that the first phase will cost some R140bn at current prices.

The meeting in question was attended by the deputy minister of energy, Thembisile Majola, and DoE represented by Ompi Aphane, DDG: policy, planning and clean energy, DoE, who indicated that the treaty provided for the establishment of an Inga Development Authority (ADEPI). There would also be a joint ministerial committee drawn from the two signatory countries and a joint and permanent technical committee to facilitate the project.

Earlier failures

The deputy minister said that the new treaty had at last put behind the failed Westcor project, involving Billiton and essentially a SADC body involving SA, Angola, Botswana, the Congo and Namibia with the DRC as lead.

In 2010, the DRC announced it was pulling out of the arrangement and would develop the Inga dam complex on its own, which move collapsed the Westcor consortium. However, despite much wasted time and effort, Aphane said a good deal of the feasibility work had been completed.

Minister Majola said that what had been learnt from Westcor was that any future proposition had to be on a win/win basis for each participant in order to avoid such a collapse.    It was now recognised that the DRC had to meet its own requirements first as a basis for any project to succeed as a consortium, the minister added.

Getting in first

An MOU with the DRC was subsequently signed on this basis in 2011 and the current treaty provides not only a potential to generate the stated 40 000 MW after its seven phases but to provide relatively cheap, clean energy at any point, of which RSA has secured rights to import 12 000MW.

Ompi Aphane explained that in return DRC have agreed to grant SA the right of first refusal (ROFR) for both equity and off-take in respect of any and all future phases of the project or any related hydro-electric development of the Congo River in and around the Inga complex.

Once RSA is “locked in” to phase one and proceeds with implementation, it is committed to take 2500 MW as an off take.

SA gets lowest terms

US$ 10m is payable by SA in terms of the treaty into an escrow account as commitment fee in terms of the ROFR.    Aphane said that SA will be charged the lowest possible tariff and no other off-taker will be able to receive better terms than SA.

He continued, “DRC are to ensure that for each phase of the project, the developer company will reserve at least 15 per cent of the available equity to SA and South African entities, public or private, and SA shall be the first to be offered such share capital.”

Aphane said the “designated delivery point” will be at Kolwezi, about 150 km from the DRC/Zambia border and SA will be responsible for the 150 km line needed.   The DRC will either provide a concession to enable SA to construct and operate that portion of the line to the Zambian border, or commit to develop it themselves.   One of the DRC’s most obvious priorities was the supply of power to Kinshasa and Zambia’s “copperbelt”.

Parliament to approve

DoE concluded their presentation by telling MPs that the treaty would be introduced to Parliament for ratification in due course and negotiations on the outstanding protocols on tariff setting also needed to be finalised.    On a critical path plan were also negotiations with transit countries and a final feasibility study on the direction that the transmission line would take.

Ompi Aphane, in responding to a number of MPs questions, said that on environmental issues, which were in article 14 of the treaty, carbon credit matters has been taken into consideration and more would be heard on this.

SA not involved in dam

On the critical issue of finance, Ompi Aphane said that MPs should realize that other than the possibility of transmission lines, SA was not involved in dam construction and the country would be paying for power on connection, plus in all probability building a transmission line to connect to the SA grid.   Consequently there were no major debt issues arising at present.

Ntsiki Mashimbye, SA’s ambassador to the DRC, was present at the meeting and commented that the Grand Inga project “was not a project in isolation, not even just about electricity, but about industrializing Africa as a whole.”

The minister concluded by commenting that the integration of the African continent was the target as well as providing clean energy sustainability for South Africa and all the benefits that would ensue, including resale to other nations.
Other articles in this category or as background
http://parlyreportsa.co.za/uncategorized/grand-inga-hydroelectric-power-getting-under-way-at-last/
http://parlyreportsa.co.za/energy/integrated-energy-plan-iep-around-corner/
http://parlyreportsa.co.za/energy/doe-talks-biofuels-and-biomass/

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Minister Nene maps survival route

Not so merry Christmas….

Editorial……

candlesWithout wishing to put a dampener on festive arrangements, the last few weeks of the closing parliamentary session, which included the medium term budget from minister Nene, have seen a difficult period, not in the least caused by fiascos in the National Assembly with the EFF. Baiting President Zuma, whatever the reason, has nothing to do with running a country.

Such hooligan behaviour completely demeans the status of Parliament but worse, it also denigrates all the real work that is going on the engine room of Parliament, the working committees.  Some observers are quietly happy that the ANC Alliance is being called to account on certain matters but the overall effect has been to take South Africa perceptually into dangerous waters.

Nkandla unpleasant diversion

The Nkandla issue has clearly damaged the political standing of Parliament as well as giving the media a field day, or a field month as the case turned out to be.  But in the parliamentary portfolio, ad hoc, finance standing and NCOP select committees, the work has gone on and it has been a busy and difficult period as a result of the necessity to approve finance minister Nene’s medium term budget.

Difficult because some fifty utilities, government departments and section nine companies had to declare their objectives, say how things were going and reflect upon the auditor general’s findings on each of them.   Difficult because cabinet statements are really giving no true direction on questions being asked every day in Parliament.   Difficult because it is still the first year of a new Parliament and everything is running late with new MPs.

Whilst the auditor general (AG) may have declared that government departments only received 15% unqualified reports, the balance of 85% are qualified to some degree by the AG.  A learning process. This means the working committees have seen it, everyone knows about it and the system works. This is the difference between weekend newspaper reporting and monitoring. It is not just a question of putting a positive spin on things but recognising that there is, indeed, a force working for morality and financial correctness.

Focus is on medium term budget

Nevertheless, minister Nene’s budget speech was still the key issue of the last month, not Nkandla as the perception might be.  Nene’s remarks that “business is a key area in fostering the ideal that the NDP becomes a reality” had the all too familiar ring of what Alec Erwin had to say twenty years ago when the ANC promised private and public partnerships on energy matters. Nothing happened of course, the ANC embarking upon ten years of infrastructure inactivity.

In fact major private sector participation in the country’s development was totally halted at that point and has since never really got going.

When is when?

Now the question is being asked once again as to whether the government will actually ever embark upon real hard core private/public investments, other than dishing out a few solar and wind power projects. This is the question being asked by opposition MPs in Parliament at working committee level, ignoring for the moment the embarrassing fracas upstairs in the National Assembly.

It is difficult to imagine in parliamentary terms that minister Rob Davies, minister Tina Joemat-Pettersson, minister Jeff Radebe, minister Lindiwe Sisulu and minister Lynne Brown will ever truly understand the tenets, motivations and passion that drive businesses, even perhaps the President himself.  South Africa suffers from bad politicians, not necessarily bad government.

Circus with no ringmaster

What the presidential national planning commission is actually saying to the cabinet is an issue that cannot be guessed at by anybody at this stage, such private messages certainly not being conveyed in Parliamentary papers. In fact nobody seems to be talking, the DA having as little knowledge as half the SA cabinet, it appears.

Consequently minister Nene’s hopes appear somewhat lame at this stage. To be positive however, it may be that as next year’s parliamentary oversight programme on service delivery targets gains momentum, as it has already, accompanied with all the political pain that will occur if voters remain dissatisfied, political reality may force the governing party to at last start walking the talk that minister Nene espouses.

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Eskom crosses its fingers

Medupi:  Eskom on final run ….

eskomCollin Matjila, interim CEO of Eskom, told a joint parliamentary portfolio committee on energy and public enterprises that Eskom had learned a number of lessons in the building of coal-based power stations, probably the most important being the need for a suitably qualified and capacitated contractor oversight team to handle the complexity and extent of any project such as the construction of Medupi.

Although power from the new plant was to be introduced to the grid this Christmas Eve from Medupi, and incrementally more onwards, full power would only be happening at stable levels by winter 2015.

With both the boiler contractor and control and instrumentation contractor problems causing delays and a strike affecting between 40% -70% of the workforce, the 6-month delay had been recognised by both treasury and cabinet in financial re-calculations.

Minister notes….

Also addressing the committee, public enterprises minister, Lynne Brown, stressed that in her view “the corner had been turned at Medupi”.  She said that cabinet had approved a package to “support a strong and sustainable Eskom to ensure energy security”.   The inter-ministerial committee, which was comprised of finance, public enterprises and cooperative governance and traditional affairs, had now reviewed all options before them both on electricity and energy generally.

Eskom then stated that the second unit, Kusile would be added to the grid in a start-up process in the first half of 2015 and Ingula, the third and smaller hydro unit, in the second half of 2015.

No rest with summer

Matjila cautioned MPs that additional capacity would be needed during summer this year, despite any reduced seasonal demand.   This was because of the need to accommodate “planned” outages, which were set to take up 10% of full capacity being supplied.

By referring to full capacity, this was a theoretical maximum availability, Matjila said, subject to the reality of unplanned outages.  Eskom warned of a possible inability to meet demand throughout the remainder of the financial year, as distinct from seasonal timing, if it should be financially restrained in its use of it expensive-to-run standby open-cycle gas-turbines.

More price increases

Recovery of unbudgeted costs in this area for the year under review were part of the problem facing Eskom, Matjila said, and the recent announcement by the national electricity regulator, Nersa, of a rise of just short of 13% in electricity prices in April 2015 was no doubt motivated by this factor amongst others.

However, he said, Eskom may also have to deal with a higher maintenance in December, including half station shutdowns for three stations. He qualified this in a later Engineering News report which stated that 32 of Eskom’s 87 coal-fired generating units required “major surgery”, whilst four were in a “critical condition”.   November was also critical, he said, if all did not go as planned.

Despite continued questioning by parliamentarians on the state of progress at the second “New Build” power station, Kusile, no specific answers were provided by either Eskom or the minister other than the fact that Kusile had experienced “protected” and “unprotected” strikes in contractor workforces during the year.

Strikes

Matjila stressed that the workforce was back on site at both locations. “Additional resources had been mobilised to mitigate delays, he said, and additional shifts have been introduced 24 hours a day, 7 days a week, to accelerate progress on site.  Eskom was liaising with contractors to deal with any issues which had the potential of causing further delays, he said.

In his overall concluding remarks, Matjila said a five-point recovery plan had been introduced to improve the performance of the Eskom coal-fired fleet, with the utility having reaffirmed its objective of “returning to an 80-10-10 operating model, which implied 80% plant availability, 10% planned outages and 10% unplanned events across a period of a year.”

Outside inputs

On the situation with regard to the independent power producers (IPP) programme, Matjila said he was aware that the department of energy (DoE) had processed  over one thousand applications during the three IPP 3-stage bidding process and this had stretched DoE resources considerably.

He said it had been a complicated process to secure sustainable competitive prices in respect of the particular technologies involved. What had to be also factored in was the burden of hidden costs of storage and back-up which had to be borne by Eskom, not the IPPs.

Also the proximity and availability of energy supplies on the supply in providing the “appropriate infrastructure” was being dealt with and overcome.

It was important, Matjila said in conclusion, for Eskom to ensure that potential and online suppliers met grid code requirements and he was aware that some IPPs were struggling with this process.
Other articles in this category or as background
http://parlyreportsa.co.za/energy/medupi-key-short-term-energy-crisis/
http://parlyreportsa.co.za/cabinetpresidential/eskom-says-medupi-and-kusile-will-have-great-local-benefits/
http://parlyreportsa.co.za/energy/eskom-warns-on-costs-of-new-air-quality-rules/
http://parlyreportsa.co.za/energy/dpe-reports-on-eskom-and-it-utilities-to-parliament/

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Agri-SA gives views on minimum wage

Tough stuff….

agri-saIn a tense meeting with MPs at working committee level, Agri-SA warned of possible job losses in the agricultural sector if a national minimum wage (NMW) were applied across the board without reference to categories or conditions of employment. The parliamentary portfolio committee on labour had invited Agri-SA and trade union affiliates to comment on the issue of a NMW being applied across the board in all spheres of national employment.

Lumka Yengeni, the chair of the portfolio committee, who caused a stir in the last parliament for touring the country for public views on labour brokers, in addition had called for comment from the mining, industry and commerce. The issue of a minimum wage for domestic workers, however, was not tabled at these series of meetings.

Higher wages the result

In the debate that took place, Hans van der Merwe, Executive Director, Agri-SA, told parliamentarians that a minimum wage set at a higher level than at present as part of a national application would result in a considerable number of structural changes within the farming industry to accommodate what would undoubtedly be, as a result, a call for higher wages in many spheres.

 He said any “adjustments” would no doubt be characterised by the shedding of jobs, increased mechanisation and the consolidation of farming units, as had happened in the past when farmers throughout the country had to “adjust to maintain their competitiveness and profitability.” He warned government that any such moves “should be carefully considered first” since aside from a number of unintended consequences, the target contained in the NDP to create a million jobs by 2030 would be vastly undermined.

Steadily less

Van der Merwe showed parliamentarians that the number of farming units in 1993 was estimated at 57,980, declining to 45,848 in 2002 and to 39,982 in 2007.   The decline in individual units continues, he said, and now some 20% of commercial farms were responsible for 80% of total production.   Employment showed a decline between from 1,093,265 in 1993 to 796,806 in 2007 with further declines since, much of it no doubt due to consolidation of farming units.

He said, “Whilst this does not necessarily imply that consolidated and larger farms are more cost-efficient, it does point to the fact that larger farming units have the financial ability to mechanise. This, against a backdrop of rising costs and in particular rising wages makes mechanisation more and more attractive.”

Agri-SA pointed out that all sectors in industry and commerce consisted of many different and contrasting sub-sectors and this was especially true of the agricultural sector. It ranged from small-scale farmers with a few hired workers to those who only hired seasonally; from some with very low skilled workers to some with a major system of mechanisation and highly skilled operators. He was adamant that there could be no “one size fits all” approach to a minimum wage in the agriculture sector.

The trend overall though, Van der Merwe said, was changing to a situation where in the end there would be fewer but more highly skilled workers with quality jobs and with a higher wage and more complementary benefits.   He produced statistics from UCT to show historically a picture where, as the agricultural minimum wage had increased, so the employment numbers had immediately gone down.

Big squeeze

Finally, he pointed to the fact that a number of farmers had currently hit hard times as a result of the current global economic situation and local recessive climate insofar as exports and local production was concerned and many were going out of business and with financial problems.

Van der Merwe said that in an overall sense the country was going through difficult times in the agricultural sector and there was consequently a threat to national food security targets associated with the decline. He said that the monthly national minimum wage in Namibia was R888, Botswana R5,470, Zimbabwe R590 and South Africa R2,420 and he commented that the issue of a much higher minimum wage would “increase the possibility of South African farmers investing in neighbouring countries where there were more favourable conditions for farming, particularly where labour issues were concerned.”

He also warned that any substitution of local farming produce would be at the cost of South Africa having to import more agricultural produce.

Diametrically opposed

Raymond Mnguni, Food and Allied Workers Union (FAWU), said the union was insulted by the comparison of national minimum wages between neighbouring countries and South Africa.  It made little difference how bad or worse other countries were, he said, but the point was that South African farmers on the whole were paying “poverty wages”.

He indicated that Agri-SA had inferred throughout their presentation that farm workers in this country were a liability rather than an asset.  He said FAWU was “tired” of the threat that farmers would mechanise and cut down on the wages bill every time the question of a better life for working families on farms came up.

Neil Coleman of COSATU disputed Agri-SA’s statistics that showed a decline in employment in the agricultural sector of recent, quoting figures from Free Market Foundation.  In response, Agri-SA admitted that since 2010 to 2013 there had been a minimal increase in employment but their point was that every time there was an increase in minimum wages, employment figures dropped.

What others are doing

Opposition member, Ian Ollis (DA), said nobody wanted the workers to remain poor and he considered the statistics, in fact, slightly encouraging.    Mostly, he added, they showed that Zimbabwe, Mozambique and Namibia badly needed a national minimum wage of some sort very soon.  

He said the debate in South Africa was not about the need for a minimum wage but whether there should be a national minimum, what it should be currently and whether it should applied sector by sector according to the economics of that sector. He said opposition members needed to know how and to what degree Agri-SA were involved in skills training and more about any adaption to mechanisation.

There followed lengthy questioning of dubious quality from various smaller agriculture affiliated unions and opposition members, notably the EFF, on the subject of mistreatment of agricultural workers, low wages paid and matters which did not contribute to the issue of a debate on the NMW.  

At one stage, chair Yengeni called for questioners to refrain from derogatory comments. Ms Mantashe (ANC) called for a detailed written response on the training and up-skilling of farm workers and some accurate figures to be supplied for committee consumption. 

She added that she was disappointed that Agri-SA had omitted the information on the profits made in the sector, particularly comparisons before the 2008 financial crisis and now. Similarly, chair Yengeni called for details of skills training undertaken in the agri-sector.  Agri–SA said such figures were available and would be submitted to the parliamentary committee.

Other articles in this category or as background

http://parlyreportsa.co.za/cabinetpresidential/new-approach-to-land-reform/ http://parlyreportsa.co.za/landagriculture/state-land-reform-process-excludes-expropriation/ http://parlyreportsa.co.za/landagriculture/parliament-discusses-use-agric-gmos/

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