Paul Janisch

Politics, empowerment and new rules around water use

The article was available for publishing - thanks Ryk and Moneyweb for publishing it and fixing it up. 

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Two controversial regulations are in their public comment period – here is my comment.

By Paul Janisch 29 Jun 2023 

 

There is a simple rule that needs to be followed when it comes to government policies that require public participation, specifically South African policies – the government cannot be trusted. It’s that simple. It cannot be trusted to govern and certainly cannot be trusted to consider constructive comments on its policies.

There are two controversial regulations that have been requested for public comment and are currently in their comment period.

The first is the Draft Employment Equity Regulations, which gives the minister the power to set regional and national targets for racial representivity at the various management levels in the private sector.

The second, and most pertinent to the agricultural sector, are the proposed water licence application regulations.

‘Transparent opportunism’

Agri SA CEO Christo van der Rheede recently told Business Times (10 June 2023) that the regulations were transparent political opportunism.

In fact he went so far, correctly I would say, to describe them as “short term populist thinking that is geared towards the 2024 elections”.

A reading of the regulations does suggest that these requirements are for new water licences and amendments to existing water use licences, not to existing water licences.

The issue that we as citizens and business people face in this country is that we may know what the intention of the legislation is – it’s the administrators who issue those licences that either don’t know or choose not to know.

This is where the real danger lies.

The period for consultation and comments ends in mid-July.

‘Thorough consultation’ on BEE aspect

Minister in the Presidency [Khumbudzo Ntshavheni] told Business Times on 10 June 2023 that Minister of Water and Sanitation Senzo Mchunu would “undertake a thorough consultation process on the black ownership requirements before any proposal was implemented”.

I find this extremely hard to believe.

In the 20-odd years that I have been operating in the black economic empowerment (BEE) sector I have seen how the current government pays little or no attention to any constructive comments that disagree with their policies.

When the revised BEE codes were gazetted in 2012, the minister of the Department of Trade, Industry and Competition (dtic) claimed they had received 550 constructive comments – yet went ahead and gazetted the original BEE codes almost as they were drafted.

Roy Cokayne reaffirmed my experience when he noted in a recent Moneyweb article about the draft employment equity regulations that the Construction Alliance South Africa (Casa) tirelessly tried to convince the department to work together with the alliance.

The alliance is not arguing against the motive behind the setting of targets for the industry, but rather what targets can realistically, reasonably, and rationally be enforced on companies.

“We outlined to them [the dtic] some of the constitutional flaws that exist in that legislation as it stands, and the need for a more detailed exercise and research to look at what the numbers look like if the targets they are considering are implemented,” said Chris Campbell, a Casa board member and CEO of Consulting Engineers South Africa (Cesa).

“They went through the motions of the consultation with very little appetite to absorb, or take in [suggestions], or even collaborate.”

History will show that the minister’s assurances will amount to nothing.

Cherry-picking

If anything, it’s likely that the ministry will only look at comments that support the regulations, as the African Farmers’ Association of South Africa has indicated it will do.

Where does this leave the agricultural sector? It cannot not comment.

In fact I would recommend that each player in the sector – from the farmers through to the co-operatives and other related bodies – submit comments, even if they are the same comments.

Read: There’s a place for big and small farms in securing SA’s food supply

In the likelihood that these comments are ignored and the regulations are gazetted as is, or barely amended, then there is a record of comments.

If this is the case then we can expect litigation, which is possibly what the government wants – it wants to use such a record as a tool against certain population groups that are resistant to transformation.

Ensuring accountability

In my own experience I strongly believed that the amended BEE codes were distantly related to anything constitutional. I was informed by Lionel October, then a director-general in the dtic, that the codes were “constitutional”.

What October was actually telling me [was], if you don’t think it’s constitutional then prove it. He was not willing to explain why they were constitutional.

In other words, the dtic never bothered to test the codes against the constitution.

I went on a drive to raise money to challenge the codes and raised nothing and hence we’re stuck with this convoluted gobbledegook that purports to further the transformation of South Africa.

I should have considered the step in between, and that was making an application to the department in terms of the Promotion of Access to Information Act and requesting a copy of the many comments to check whether the government did in fact apply its mind in the process.

It’s likely that this stage of the process will show that the government did not in fact apply its mind.

I am sure that this situation will be the same for the proposals in question.

 

 

 

Using the Promotion of Access to Information to show the government doesn't listen

It is hoped that this article will be published by Landbou Weekblad. I can tell you it's hard to get articles in that publication.

I'm now reading that the so called government does not read or consider comments.  This is the extent to which we, as citizens, and reluctant tax payers are taken for absolute fools.  This is across the board.  A president with a standard three can come up with more sound policies (please do not think I'm referring to that thief zuma).  But we engage and talk and fawn and fail the people around us.

The Poland incident shows the extent to which we as a country are a joke in the eyes of the world.  It's heartbreaking

If you want to publish the story below - please do.

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There is a simple rule that needs to be followed when it comes to government policies that require public participation, specifically South African policies  – the government cannot be trusted.  It’s that simple.  It cannot be trusted to govern and certainly cannot be trusted to consider constructive comments on its policies.

There are two controversial regulations that have been requested for public comment and are currently in their comment period.  The first is the Draft Employment Equity Regulations, which gives the minister the power to set regional and national targets for racial representivity at the various management levels in the private sector.  The second, and most pertinent to the agricultural sector are the proposed water licence application regulations. 

Agri SA CEO, Christo van der Rheede recently told Business Times (June 10 2023) that the regulations were transparent political opportunism.  In fact he went so far, correctly I would say, to describe them as “short term populist thinking that is geared towards the 2024 elections.” 

A reading of the regulations does suggest that these requirements are for new water licences and an amendment of an existing water use licence.  The issue that we as citizens and business people face in this country, is that we know what the intention of the legislation is, it’s the administrators who issue those licences that either don’t know or choose not to know.  This is where the real danger lies.

The period for consultation and comments ends in mid July 2023.  Minister in the Presidency told the Business Times (June 10 2023) that the Minister of Water and Sanitation, Senzo Mchunu, would “undertake a thorough consultation process on the black ownership requirements before any proposal was implemented.”

I find this extremely hard to believe.  In the 20 odd years that I have been operating in the black economic empowerment sector I haves seen how the current government pays little or no attention to any constructive comments that disagree with their policies.  When the revised BEE codes were gazetted in 2012, the minister of trade and industry claimed that they had received 550 constructive comments and yet went ahead and gazetted the original BEE codes almost as they were drafted.  Roy Cockayne noted in a recent Moneyweb article about the draft employment equity regulations that the Construction Alliance South Africa (CASA)

tirelessly tried to convince the department to work together with the alliance, which is not arguing against the motive behind the setting of targets for the industry, but rather what targets can realistically, reasonably, and rationally be enforced on companies.  “We outlined to them, some of the constitutional flaws that exist in that legislation as it stands, and the need for a more detailed exercise and research to look at what the numbers look like if the targets they are considering are implemented,” Campbell said.  “They [DEL] went through the motions of the consultation with very little appetite to absorb, or take in [suggestions], or even collaborate.”

It's very likely that the minister’s assurances will amount to nothing.  If anything it’s likely that the Ministry will only look at comments that support the regulations, as the African Farmers Association of South Africa has indicated that they would do. 

Where does leave the agricultural sector.  It can’t not comment, in fact I would recommend that each player in the sector from the farmers through to the co-operatives and other related bodies submit comments.  Even if they are the same comment.  In the likelihood that these comments are ignored and the regulations are gazetted as is, or barely amended.  If this is the case then we can expect litigation which is possibly what the government wants, it wants to use it as a tool against certain population groups that are resistant to transformation. 

There’s a step on between.  Something that I should have considered many years ago and that is making an application to the department in terms of the Protection of Access to Information Act (PAIA) and requesting a copy of the many comments to check whether the government did in fact apply its mind in the process.  It’s likely that this stage of the process will show that the government did not in fact apply its mind.

Paul Janisch is a BEE consultant who has realised that BEE is only for a boom economy, which is not where the South African economy is recently.

The most successful land reform projects were those where beneficiaries enlisted the help of commercial farmers

Democratic Alliance MP Lourie Bosman, a former president of farmers’ union Agri SA, endorsed the bureau’s findings and said the most successful land reform projects were those where beneficiaries enlisted the help of commercial farmers. "I therefore share the bureau’s findings on support. I have seen many farming projects fail for lack of it," he said. "There was often no expertise available and people didn’t know how to manage, or didn’t have the capital they needed."

As per BDlive today.  And the bureau found

TIGHTER margins in farming because of "fierce" local competition and the entry of global players will make it "virtually impossible" for small farmers to enter the sector, an agricultural think tank said on Tuesday, raising fresh doubt about the government’s land reform targets.

The Bureau for Food and Agricultural Policy also said land reform had been dealt a severe blow by the dismantling of support services for farmers in the years of political transition, the bureau said in its latest Baseline Agricultural Outlook.

 

 

Land restitution - considering the emotional practicalities

Two articles appeared in BDLive this morning (and yes there are ways to read this without paying extortionate amounts for the content; as soon as the drop the price to something reasonable I will subscribe).

This paragraph sums up the need for black ownership of farmland

At this point, the landlessness of black people should be the most pressing priority. Land brings dignity and is capital to fund a better education, new businesses and an improved quality of life. We should have solved the restitution question many years ago and redistributed 30% of land to blacks by now. Without it, black lives will continue to suffer indignity and upward mobility will still be largely in the hands of the government.

Written by Sipho Hlongwane on the anniversary of the 1913 Land Act, the article provides a surprisingly objective view of the emotional attachment to land and the indignity of having that land removed from you. Sipho writes

Sol Plaatje famously put it: "Awaking on Friday morning, June 20 1913, the South African native found himself, not actually a slave, but a pariah in the land of his birth." In one fell swoop, the government of the day restricted black land ownership to just 7% of the available land, and later, under the 1936 Native Trust and Land Act of South Africa, that portion was extended to 13% — most of it a collection of "native reserves" that could not possibly support the country's growing black population. The results of this political act were immediately apparent. Blacks were either forced into unsustainable slivers of land or forced to move to white areas where they were ruthlessly exploited as cheap labour.

In this context it is easy to understand the emotional attachment to land. But Hlongwane conveniently omits a vital point that has been accepted by the government.

The government has long assumed a major land hunger among South Africans, which restitution is supposed to help fulfil. However, in April, Rural Development and Land Reform Minister Gugile Nkwinti finally acknowledged that few claimants wanted land, for 93% (about 71,000 out of 76,000) had opted for financial compensation instead. Said Nkwinti: "We thought everybody, when they got a chance to get land, they would jump for it. Now, only 5,856 have opted for land restoration." People wanted money because of poverty and unemployment, but they had also become urbanised and "deculturised" in terms of tilling land. "We no longer have a peasantry; we have wage earners now."

This is taken from the other article in BDLive, written by Anthea Jeffery who is head of special research at the South African Institute of Race Relations. Anthea goes into a fair amount of detail about the pitfalls of the land restitution process and the ramifications of the Restitution of Land Rights Amendment Bill which is now open for comment. Jeffery goes into a few issues that we are likely to experience if the bill goes through. The first one relates to verifying the claim.

According to Theo de Jager, the vice-president of Agri SA, which is the national voice of commercial agriculture, part of the reason is that would-be claimants have realised that claims are no longer being adequately verified. In the past, says De Jager, when people anticipated proper investigation, they hesitated to put in bogus claims. But now that probes are no longer rigorous, lodging land claims has become "a free-for-all, in which the only criterion is a claim form".

The second is purely an economic one, farmers will no longer invest in the land if there is a claim on it. This has a direct impact on food availability.

And finally – taking the lead from Zimbabwe, we need to consider that the ANC might just go for land grabs to retain its dwindling majority

Land reform in Zimbabwe — which Nkwinti was recently at pains to praise — has left virtually all land in the hands of the government, which leases it to people on a "use it or lose it" basis. This has given President Robert Mugabe's administration a powerful instrument of political control. South Africa's ruling party may also want the same for itself as its already declining electoral support withers further in the future.

This is not an easy situation to sort out. There is no doubt that people feel dispossessed but allowing for expropriation below market value could force our people to become refugees in Zimbabwe.

Water affairs issues water licences not DAFF

Thanks for correcting this Andrew.  Andrew wrote in the comments

Water use licensing is undertaken by DWA. The current demise of DWA is not unlike that of DAFF though....but it is a different minister....

It seems that I am a little too hasty to blame incompetent ministers on everything, Tina gets a reprieve.  I've made changes to the original post.  

The link to apply for water rights is here.

I was also a little too hasty to post the complete AgriBEE scorecard. Here it is 

 

AgriBEE – why would you bother?

A farmers' union has asked me to present a course on the AgriBEE Code. In conducting my research I could not fathom why any entity involved in agricultural would want to pay any attention to the AgriBEE scorecard. It's rather like paying your TV licence because it's the right thing to do but otherwise there is no other perceived benefit. The real issue with agricultural land is that of land restitution and the AgriBEE Code attempts to offer some sort of incentive to agricultural land owners to become part of this process. The only incentive offered being BEE points under the ownership scorecard. Government has committed to a number of initiatives to facilitate ownership under the code – all of which are stated land reform outcomes and land reform is still awaiting the finalisation of the Land Reform Green Paper. Most of the ownership aspect of the AgriBEE code does depend on the finalisation of the land reform legislative process.

• Contribute to increasing access and acquisition of agricultural land by Black People, through its existing programmes;
• Proactively acquire suitable agricultural land that comes onto the market for land redistribution
• Use above mentioned land and agricultural land that reverts to the state through foreclosure of indebted farmers, for redistribution, including through long lease arrangements (e.g. 99 year lease)
• Promote sustainable management and use of natural resources
• Finalise the land restitution process (it must be noted that the draft said this was to be done by 2008 – the code leaves this deadline open)
• Encourage the development of a land lease and land rental market
• Promote the consolidation and tenure on traditional community land in terms of relevant acts that support communal land
• Secure the ownership, access and tenure rights of Black Designated Groups through the registration of old order rights or new order rights into freehold ownership.

Returning to my earlier argument that, other than land redistribution there is little reason to implement a BEE scorecard within an agricultural environment. Implementation of BEE cannot be enforced without a procurement process driving it. It is because of the preferential procurement element that all BEE scorecards exist. The principle is simple – a large corporate asks its suppliers for a BEE scorecard because this has an impact in their own preferential procurement scorecard; the supplier asks its suppliers and so you get further down the chain. BEE has succeeded because of this process and this is without any assistance from the government. Agricultural produce, like all consumer goods should in theory fit in with this model. The retail sector is not the fastest adopter of BEE because there is less pressure on them to comply. The average customer is not concerned about the BEE status of their favourite retail store (although I think Jimmy Manyi might be), they purchase for a variety of reasons that are unrelated to BEE status. It is very likely that agricultural products are going to follow the same process. Pick 'n Pay is not going to quibble about the BEE status of a carrot supplier, they are going to buy because the stock is available and the price is right. Similarly, Tiger Brands is not going to prioritise baked bean suppliers on the basis of BEE status because it might possibly impact on the quality and price of the product which will result in me not buying a tin of Koo baked beans. The code does make a pathetic attempt at creating preferential procurement urgency by claiming that government will

• Align their procurement practices with AgriBEE when procuring goods and services from the agricultural Sector
• Provide Black People and QSEs preferred supplier status in the procurement of goods and services;
• Identify, prioritise and target Black entrepreneurs and Enterprises which contribute to broad-based BEE when awarding tenders and contracts to entities in the private sector; and
• Utilise all legislative and other measures available to it, including preferential procurement, to influence the attainment of broad-based BEE objectives

Of the four drivers only 1 and 4 carry any weight. In fact number 4 is a repeat of number 1. Numbers 2 and 3 lack the constitutional and legislative muscle to enforce. As it stands at the moment government is not permitted to prioritise classes of suppliers for their procurement. The success of the uptake of AgriBEE will therefore depend entirely on government as a consumer in this model. I suspect that this is not enough to sway farmers to implement any form of BEE in their organisations.

However – we are not out of the woods completely. A trend is starting to emerge within government legislative circles where BEE scorecards are going to be required when certain licences are allocated. This has been threatened in the allocation of liquor licences. There is nothing stopping the Department of Water Affairs from insisting on BEE compliance in the allocation of water licences.  In the absence of such a driver it is likely that uptake of AgriBEE is going to be very slow.