Policy: Furrowed brows on the platteland…
Policy proposals requiring commercial farmers to hand over half their farms to their workers – first published in April – had somehow managed to fly under the media’s radar until this week when it was latched onto in the Sunday Times and the predictable storm ensued, notes Legalbrief. The newspaper quoted Rural Development and Land Reform Minister Gugile Nkwinti as saying stakeholders in commercial agriculture, including farmers, trade unions, farmworkers and the agricultural business sector, have until April next year to react to his proposals, which aim to derac ialise the rural economy; democratise the allocation and use of land; and ensure food security as well as food sovereignty. To this end, Nkwinti proposes that commercial farmers, as historical owners, retain 50% of the farm; labourers on the land assume ownership of the remaining 50%, proportional to their contribution to the development of the land based on the number of years they had worked on the land; the government pays for the 50% to be shared by the labourers. However, the money will not go to the farmer. It will go to an investment and development fund to be jointly owned by the parties constituting the new ownership regime. The investment and development fund will be used for reinvestment in the farm, skills improvement and to pay out those who want to opt out of the arrangement.
Full Sunday Times report (subscription needed)
Nkwinti followed up his Sunday Times interview by telling MPs later in the week that blacks had been ‘bending over backwards’ on land reform and restitution, but no longer. ‘It is unsustainable. We cannot go on like this,’ he said, according to a report on the News24site. Earlier, Freedom Front Plus MP Pieter Groenewald labelled the proposals ‘irresponsible’, and said his party had been hearing from farmers that they were looking at emigrating to farms elsewhere. The proposals had caused great uncertainty, he said. Nkwinti responded: ‘We have been bending over backwards as black people, particularly African people… It is time that all of us took responsibility for progress… for SA belongs to all who live in it, black and white.’ The Minister’s latest policy paper on land reform and restitution, finalised in February and titled ‘Strengthening the Relative Rights of People Working the Land’, has sparked alarm and uncertainty among farmers.
Full report on the News24 site
Strengthening the Relative Rights of People Working the Land
See detailed Legalbrief Policy Watch report
Reaction has been widespread and varied. Black Economic Empowerment Institute co-founder Leila Moonda said the proposed policy was ‘almost like expropriation without compensation’, notes a Business Day report. And National African Farmers Union president Motsepe Matlala reportedly told the paper the proposal inherently reinforced the notion of race in agriculture. Therefore, it was unlikely to have the desired impact of transforming the commercial agricultural sector. Moonda said the proposal meant that farmers would receive nothing for giving away half of their land. ‘I thought we had moved away from that kind of thinking.’ It was also problematic that the government proposed managing the investment and development fund, despite not having ‘a good track record in that’. Proper structures would have to be put in place to make sure the money was used effectively, Moonda said. She cited as an example the many farms transferred to claimants through the restitution process that were not productive.
Full Business Day report
A Business Day editorial says the idea of giving farm workers a stake in the farms on which they work is a good one. ‘As controversial as the 50% requirement will rightly be, it is probably a negotiating position anyway – the Minister has given until next year for comment. With any luck it will break the impasse and open a constructive debate about how to transform the sector.’The editorial adds that sharp debate will be needed, ‘because there are many aspects of the proposed model that would be highly problematic in practice. The proposal that funds should be held for reinvestment in the development of the farms has merit. But giving government full control of the money is a very bad idea. It has the potential for huge abuse and corruption.’ It notes: ‘It could severely hamper the investment needed to expand and improve productivity in SA’s agricultural sector and enhance our food security – especially given that the worker-shareholders are unlikely to be able to help finance investment in the farms themselves.’
Full Business Day editorial
Agriculture Minister Senzeni Zokwana describes the proposal as an opportunity, according to a Beeld report. Zokwana told the AgriYouth Indaba in Johannesburg that he had already started discussions about the proposal with organisations such as AgriSA.Afrikaans farmers have nothing to panic about, he added. Zokwana said he had conveyed a message that the government needs white farmers to mentor inexperienced black farmers. ‘By doing that, we can also handle the problem of attacks on farmers. They will form a family. The farmer next to you will know who you are.’
Full Beeld report
And Cosatu in the Western Cape also backs the proposals, describing them ‘as the only way to avoid a war over land’. In a statement on the Politicsweb site, it says land reform measures to date have ‘been inadequate, with only a small black elite benefiting and many farming projects set up to fail. These failures are then used as justification of why land reform cannot be promoted’. It adds: The mainly white farmers’ organisation has promoted this racist agenda in the country for too long. The legacy of the 1913 Land Act where the land was stolen from indigenous Africans, is still largely in place.’ Cosatu said it supported the intention of the government ‘to force co-operation between black and white; and of workers and bosses in agriculture’.
However, the DA sees them as a recipe for agricultural disaster. ‘(They) will exacerbate insecurity, destroy jobs, escalate the already catastrophic exodus of farming expertise from the industry, and have dire implications for food security in the medium-term,’ DA leader Helen Zille said, according to a report on the News24 site. Zille said her party supported the approach of turning farm workers into farm owners, but wondered why government had made such a ‘profound departure’ from the land reform model proposed in its National Development Plan (NDP), which had the buy-in of the DA and others. Zille said the Western Cape was keen to pilot the NDP’s land reform plan, building on the province’s experience of its own farm equity-share scheme. She questioned why government appeared to have abandoned the NDP model in favour of Nkwinti’s latest proposals. ‘Why aren’t we giving the NDP model a chance,’ she asked. DA MP Thomas Walters said the NDP model included the establishment of land committees, based on district municipalities. Here ‘all stakeholders – banks, government departments, local stakeholders – get together… with the necessary expertise to support land reform projects’. Such a committee would, in co-operation with commercial farmers, identify productive land that could be used. This included land already on the market, land owned by farmers under severe financial pressure, and land owned by absentee owners who wanted to sell, as well as land in deceased estates, he said. Zille said the DA in Parliament would call for the land reform committee to debate Nkwinti’s latest proposals. ‘We will also oppose any legislation emerging from the Minister’s proposals in their current form,’ she said.
Full report on the News24 site
The EFF has also criticised the policy. Andile Mngzitama, an EFF MP, warned in an interview with Die Burger that farm workers would face mass evictions because of the proposal. ‘By April next year there will be no farm workers left in SA,’ he said. Mngzitama added the government had in effect given farmers a year to put 700 000 workers off the farms. ‘As soon as you announce a policy like this – with all its rhetoric of 50% – you instil disquiet among those who have the power to evict people.’ The report says Mngxitama made the comments after a parliamentary sitting at which Phumzile Ngwenya-Mabila was elected chairperson of the Land Reform Committee. The three opposition parties on the committee wanted the proposal to be placed on its the agenda. Ngwenya-Mabila acknowledged the ‘sensitive’ nature of the policy, but said the committee must focus on the budget that must be concluded by 31 July.
Full report in Die Burger
A different position is taken by Cornelius Jansen van Rensburg, of AfriSake, who, in a statement on the Politicsweb site, says it will lead to widespread labour unrest in the agricultural sector. He argues the ANC is creating expectations among agricultural workers which cannot be met. The result is that the discontent of workers will be artificially fanned. Jansen van Rensburg claims Nkwinti’s land plan is part of a bigger strategy to diminish property rights in SA. ‘Should Nkwinti’s plan be implemented, nothing will prohibit the implementation of similar policy in any other sector of the economy. Every worker in every industry will legally be able to demand a 50% ownership stake in the assets of their employer,’ he said.
Statement on Politicsweb site
The proposals contain elements of what had occurred in Zimbabwe, according to AgriSA president Johannes Möller in a statement on the Politicsweb site. ‘The negative results of such an approach cannot simply be shrugged off as ‘unforeseen’. Evidence of this can be found in the struggling economy and unfavourable food situation experienced by our northern neighbour,’ says Möller. According to Möller, AgriSA will not accept accusations that the organisation is not prepared to support land reform. ‘Policy confusion, as is apparent from government’s unco-ordinated approaches, can hardly be expected to produce a nationally agreed-upon plan or plans,’ says Möller.
See also a report in Die Burger
The policy presents a legal minefield, which will require big changes to current laws, a legal expert warns in a report in The Citizen. The 1970 Subdivision of Agricultural Land Act specified that agricultural land ‘shall not be subdivided’, Johan Jacobs, a partner at law firm Hogan Lovells, said. Jacobs said the proposal, if enacted, would obviously require the Act to be scrapped or amended to make provision for the co-ownership of agricultural land. He said the reason the Act had been promulgated originally was to stop farm land being subdivided into uneconomical portions, and/or to prohibit more than one person becoming the registered owner of agricultural land, which in itself affected the economic viability of a farming enterprise. ‘The question that needs to be asked is: what has changed in the economics of farming operations since 1970? Does the Minister believe that by enacting legislation to force joint ventures, subdivisions, or co-ownership of agricultural land, it will actually benefit the country by making the farms more productive?’
Another problem with Nkwinti’s proposal is that the marketability of farms would become a near impossibility, according to Jacobs. ‘Who will be prepared to purchase the farmer’s undivided share in the title to the farm, or the shares in the company that owns the farm, where the government, through an appointed agent or department, controls the purse strings of the other percentage owner?’ Jacobs said this would probably result in government being forced to take transfer of the remaining percentage of the title or shares in the farms, and then dealing with them as it deemed best. He said the proposals raised a host of legal and commercial issues, some of which he eludes to in The Citizen report online. ‘The moral basis for the proposal as contained in the… proposal document is well founded. There remains a lot to be done to deal with the legal and commercial issues raised in the proposal.’
Full report in The Citizen
Labour: Judge upholds key aspects of LRA
The euphoria around the ending of the five-month platinum strike this week tended to obscure an important ruling in the Labour Court on perhaps the biggest challenge yet to the Labour Relations Act, notes Legalbrief. In its ruling the court upheld an interim order preventing the Association of Mineworkers and Construction Union (Amcu) from calling a protected strike at mines owned by AngloGold Ashanti, Sibanye Gold and Harmony Gold, says a BDlive report. Amcu wanted to call a strike to back its demands for higher salaries, rejecting a two-year wage deal reached with the National Union of Mineworkers, the United Association of South Africa and Solidarity in September last year. Those three unions represented 72% of the workers at the three companies. Amcu represented 17% of the workers at the time, with strong showings at just a few key mines and it did not sign the agreement reached in collective bargaining with the Chamber of Mines representing the gold companies.
Full BDlive report
Judge Andre van Niekerk upheld key aspects of the LRA, ruling that they were not – contrary to Amcu’s claims – in contravention of the Constitution, says a Business Day report. Mining bosses feared that had Amcu succeeded in its constitutional challenge of the Act, it could have created an uncertain and unstable labour environment, not just for their companies, but in other sectors. In a counter-application, Amcu argued the sections of the Act dealing with the extension of wage agreements reached between companies and their majority unions in collective bargaining forums to all employees were unconstitutional. The gold companies had feared Amcu was planning to halt operations at the five mines once it had concluded its five-month wage strike in the platinum sector. The constitutional challenge to the Act was ‘probably the biggest challenge to the Labour Relations Act that has happened since it was implemented’, Harmony CEO Graham Briggs said previously. The report notes the two-part ruling first upheld an interim order stopping Amcu from calling a gold sector strike, and second rejected Amcu’s claims the Act was unconstitutional in parts. This was good news, Briggs is quoted as saying. ‘This ruling has averted the potential for a labour strike for at least the next year. It’s a significant ruling all round.’
Full Business Day report
Labour: Department questions LRA pre-strike balloting provision
The Department of Labour this week joined the public debate on compulsory strike balloting, notes a Business Day report. It said the existing provision in the Labour Relations Act that a trade union include a commitment to pre-strike balloting in its constitution was not enough to ensure that balloting would take place effectively. Deputy DG of the Department of Labour Thembinkosi Mkalipi rejected the claim by labour law expert Professor Halton Cheadle that a change to the law to make secret balloting compulsory was not necessary. Cheadle has noted in several discussions that the Act made it obligatory for a trade union to have a clause in its constitution committing to pre-strike balloting. He said this makes an amendment to the Act unnecessary. If a union did not conduct a ballot prior to striking, it would be in breach of its own constitution, exposing it to legal challenge from employers or non-striking workers, he said. But Mkalipi said most unions had circumvented the requirement for a secret ballot by including a provision in their constitution that balloting be done by a show of hands. ‘The LRA (Labour Relations Act) says a union constitution must have a process for a ballot. Most unions include a one-liner which says that balloting will be by show of hands. Nowhere does the Act say that this must be a secret ballot. That is the real debate (we should have) in the labour market,’ said Mkalipi.
Full Business Day report (subscription needed)