Joint media statement by AfriForum, Akkerland Boerdery, TAU SA, Solidarity and Agri Limpopo, 3 September 2018

Expropriation of Akkerland Boerdery: SA government abuses land reform as pretext for obtaining minerals and facilitating Chinese expansion in SA

The South African civil rights organisation AfriForum, Akkerland Boerdery, the agricultural organisation TAU SA, the trade union Solidarity and Agri Limpopo argued at a joint media conference in Pretoria today that the South African government’s current attempts to expropriate two Akkerland Boerdery farms, Lukin and Salaita, at 10% of the market value employ land reform as pretext to hide the real motives behind expropriation: That the government wants to lay its hands on coal reserves under the surface of these farms to facilitate expansion of the Chinese government’s economic interests in South Africa.

The organisations pointed out that Chinese government-controlled companies were planning development to the value of $10 billion in the Musina-Makhado special economic zone (SEZ), in which Akkerland falls. Exploration by the controversial Coal of Africa on Akkerland indicates that the farm’s coal is suitable for use in power stations and steel factories.

According to Akkerland, AfriForum, TAU SA, Solidarity and Agri Limpopo, government needs the coal reserves on the farms because the Chinese development includes among other the building of a coal-powered power station, a coal plant and various metallurgical plants. More information is available at:

South Africa Energy Metallurgy Economic Zone

Chinese investors plan $10bn metallurgical complex in South Africa

South Africa Energy Metallurgical Industrial Zone Brief Introduction

AfriForum, TAU SA and Solidarity also announced that they would financially support Akkerland Boerdery’s legal actions against government’s expropriation attempts in the interest of the protection of property rights. They would also offer help to uncover the injustices committed against the Akkerland Boerdery nationally as well as internationally. These organisations also requested the public to contribute financially to Akkerland’s legal battle and have already opened a separate banking account in the name of the Akkerland Regsfonds (account number 9343268401 and ABSA branch code 632005), which will be administrated by TAU SA’s auditors. The organisation will also publish the banking details on their respective websites.

Johan Steenkamp, co-owner of Akkerland Boerdery, points out that Maite Nkoana-Mashabane, Minister of Rural Development and Land Reform, served Akkerland Boerdery with an ejectment order on 29 March this year in which the owners were given seven days to vacate the farms. “The Minister would have known that 30 March to 2 May was a long weekend. I believe she wanted to make it difficult for us to take timeous legal steps. This agrees with the Minister’s public statement that she did not want farmers targeted for expropriation to know this beforehand to prevent them from preparing legal action,” Steenkamp said.

According to Steenkamp, they succeeded in taking timeous legal steps to have the ejectment order temporarily repealed. Akkerland is preparing itself for a drawn-out court battle against the baseless land claim and government’s expropriation attempts. “We fight for property rights, because the fact that government wants to pay only 10% of the market value of Akkerland Boerdery’s farms in effect means that it is busy expropriating 90% of our property without compensation,” Steenkamp added.   

According to Kallie Kriel, CEO of AfriForum, Akkerland Boerdery’s two farms are listed at the top of government’s secret expropriation list titled Proposed expropriation test cases, which is currently circulating in the Department of Rural Development and Land Reform and was recently made public by AfriForum. “Despite government denying until very recently the existence of such a list, the correctness of the list is confirmed because government has already started to expropriate Akkerland’s farms at significantly lower compensation than market value,” Kriel adds.  

According to Louis Meintjes, President of TAU SA, the expropriation of Akkerland’s farms at a fraction of its market value is an indication that the ANC’s stated policy of expropriation without compensation is in the process of being settled. “The principle is that it is unacceptable for the state to want to expropriate the assets of its citizens without paying for it or paying for it only in part. Expropriation at compensation lower than the market value under the pretext of land reform and redistribution of land is the fate of Johan Steenkamp’s Akkerland farms if we do not stand together now and help him. TAU SA appeals to farmers as well as other deed holders to unite and help Johan to prevent the theft of property for which he has worked hard over the years. We appeal to every South African who values future of the country to support these organisations in order to help Johan to save his farm from ANC corruption,” Meintjes says.

Leon Borcherds, President of Agri Limpopo, says the principles on which the court must rule on in the Akkerland case will have a decisive impact on how land owners will in future be compensated for expropriation. It is especially the wide, unregulated discretion of the Valuator-General – who must quantify the constitutionally-permissible deductions from market value to reach a “fair and reasonable” compensation – that must be tested in court. Agri Limpopo accepts that, in a democracy, it cannot be expected of an individual land owner to have to foot the bill for a national responsibility such as land reform.

Even though market-related compensation is not guaranteed in the Constitution, it is also not prohibited and remains the only way to accelerate land reform without harming investments, agricultural financing and goodwill. The high-level Mothlante report on land reform has already showed that it is the state’s corruption and inability that cause land reform to fail – and not the voluntary seller principle. Agri Limpopo suggests that the Minister packages the public private partnership in a special review agency to ensure that the land reform process is cleared of corruption, self-enrichment and nepotism.

According to Marius Croucamp, Solidarity’s Deputy Chief Secretary responsible for the metal and engineering industry, the steel products produced by Chinese plants in the Musina SES will directly compete with products manufactured by the struggling local industry. “The steel market in South Africa and pressure on the international steel market cause the margins on which local steel companies operate to become so marginalised that any further competition in the market will force local companies to close down.

This will result in thousands of South African workers losing their jobs. Local companies that will possibly be affected include Columbus Stainless in Middelburg and Samancor, South 32. Consequently, communities around these factory towns may collapse and leave thousands of people destitute. Solidarity is also unaware of any studies done to determine the impact of the Musina SES on the current South African steel industry,” Croucamp says.

Kallie Kriel
CEO
AfriForum

Johan Steenkamp
Co-owner
Akkerland Boerdery

Louis Meintjes
President
TAU SA

Leon Borcherds
President
Agri Limpopo

Marius Croucamp
Deputy Chief Secretary: Metal and Engineering Industry
Solidarity

EXPROPRIATION OF THE AKKERLAND BOERDERY AND THE SOUTH AFRICAN GOVERNMENT’S ABUSE OF THE LAND REFORM PROCESS

3 September 2018

Introduction

Land reform and the expropriation of property with or without compensation has firmly taken the centre stage on the political and public debate platforms in South Africa and internationally. The expropriation of the Akkerland Boerdery farms Luken and Salaita came to the forefront recently after the Minister of Rural Development and Land Reform and the Limpopo Regional Land Claims Commissioner were successfully interdicted from taking possession of the farms. There appears to be a causal relationship between the expropriation and the establishment of a special economic zone (SEZ) development, steel plants and a power station development close to the farms.

Investment announcement and the Musina-Makhado special economic zone

At a joint media conference on 24 July 2018, President Cyril Ramaphosa and Chinese President Xi Jinping announced that China would invest $14,7 billion in the South African economy. President Xi was on a state visit to South Africa. Trade and Industry Minister Dr Rob Davies later announced that China was considering the establishment of a metallurgical project in a special economic zone. Richard Zitha, who is involved in the Musina-Makhado SEZ where the project will be located, announced that the project would be established by state-owned Chinese companies. Zitha said the Chinese were looking for black economic empowerment partners to comply with South African regulations, more than two decades after apartheid was abolished. Zitha added that the investors were in South Africa for longer than a week and that they had visited mines to obtain inputs about the project. The Musina-Makhado SEZ is situated in Limpopo Province near the border with Mozambique, Zimbabwe and Botswana.

Steel plants and power station

According to a report published in Engineering News on 27 July 2018, the SEZ would house manufacturing units with an annual capacity of 3 million tonnes of stainless steel, 3 million tonnes of ferrochrome and 500 000 tonnes of silico-manganese. According to the report a coal-fired power station, coking coal plant and a coal washery would also be built next to the metallurgical plants.

IPAP, NDP and state of steel industry report

Solidarity could not find any indication of the project in the government’s Industry Policy Action Plan 2021 (IPAP) or the National Development Plan (NDP). No mention was made of this development in a presentation of the Department of Trade and Industry during the Parliamentary Portfolio Committee meeting on the state of the South African steel industry in June 2018. 2

Scoping report and Metallurgical Industrial Zone Introduction document

During further investigation, Solidarity came across a comprehensive scoping report that was completed in August 2017 and has a bearing on the power station development, as well as a document titled “South African Energy Metallurgical Base Project feasibility study report outline summary” and dated 2014, which is available on the Department of Trade and Industry’s website. It seems that this document is a precursor for the concept of the Musina-Makhado SEZ and the Metallurgy Park. The document clearly indicates that it is part of a project investment promotion by the Hong Kong Mining Exchange Company Ltd, with project investment planning by the (Chinese JV) SA Energy Metallurgical Investment Ltd and the Limpopo Economic Development Agency. The document further indicates that the research was conducted by the Hong Kong Mining Exchange Company Ltd Research Institute of Technology and is dated August 2014. The document outlines the South Africa Energy Metallurgical Base Project Preliminary Feasibility Study Report for the following developments:

1. Coking plant

2. Thermal power plant

3. High-carbon ferrochrome plant

4. Ferromanganese plant

5. Ferrosilicon plant

6. Steel plant

7. Stainless steel plant

8. Lime plant

Within the context of the Akkerland Boerdery expropriation case and the Musina-Makhado SEZ development, it is important to note that the document states the proximity of the Coal of Africa mining company and Universal Coal PLC throughout the project outline.

South African Energy Metallurgical Special Economic Zone Park website

In addition to the scoping report and the Metallurgical Industrial Zone Introduction document, there is a website (www.emsez.com) that outlines the South African Energy Metallurgical Special Economic Zone (EMSEZ). This website provides more information, including graphical presentations of the different plant developments.

The impact on the current South African steel industry

It is a fact that the South African steel industry is under significant pressure and that thousands of people in the industry have lost their jobs over the past few years. Solidarity contacted the major stakeholders in the industry to obtain more information on this development. It was crucial to determine the impact of the Musina development on the current South African steel industry. From the discussions it became clear that the stakeholders in the South African steel industry had not been informed or approached to discuss the Musina project, nor had they been consulted.

Solidarity identified several red lights because the nature of the steel products that will be manufactured at the Musina SEZ plants will be in direct competition with products that are manufactured by the struggling local steel industry. The steel market in South Africa and the pressure on the international steel industry caused the margins on which the local steel companies operate to become so marginal that any additional competition in the market will result in the closure of local companies. This will result in thousands of South African workers losing their jobs.

Local companies that may be affected include Columbus Stainless in Middelburg, as well as Samancor and South32. Consequently, the communities around these factory towns may also collapse and leave thousands of people without any means of survival. Solidarity is also unaware of any study that was conducted to determine the impact of the Musina SEZ on the current South African steel industry.

The link between expropriation of the Akkerland Boerdery and the SEZ development

Simultaneously, the expropriation of farms featured strongly on the political scene and in the media. It is noteworthy that a detailed study of the scoping report revealed that the reported Akkerland Boerdery farms Lukin and Salaita were located close to the SEZ development. Further investigation revealed that Coal of Africa performed exploration on the farms, which found that underground coal was suitable for power stations and steel factories. The proximity of the Coal of Africa mining activities to the SEZ is well documented in the feasibility study report and especially with reference to the –

- Coking coal plant project;

- Thermal power plant project;

- Ferromanganese plant project;

- Metallurgy plant project;

- Steel plant project;

- Stainless-steel plant project; and

- Lime plant project.

It appears that the expropriation of these farms is related to the coal needed to operate the Chinese-built power station and steel factories.

In terms of the South African steel industry, Solidarity is of the view that:

1. The current South African steel industry must enjoy priority to ensure the sustainability of the industry and to protect thousands of South African jobs;

2. New investment or development in South Africa may not take the place of the existing steel industry or create a parallel industry that threatens the current industry’s sustainability; and

3. The South African government must act transparently and consult with all current role players in the South African steel industry about the impact of the Musina SEZ on the South African steel industry.

Concerns regarding the Akkerland Boerdery expropriation case

Akkerland Boerdery (Pty) Ltd is the registered owner of the farms Luken and Salaita, which are the subject of expropriation by the Minister of Rural Development and Land Reform, and the Limpopo Land Claims Commissioner. Based on Akkerland Boerdery’s version, the following facts emerged regarding this case: On 28 March 2018, Akkerland Boerdery was served with an expropriation notice that was signed by the Minister on 19 March 2018 and that 4 gave the owners seven days to hand over the keys of the farms to the state. The Expropriation Act, 1975 (Act No 63 of 1975) requires 21 days’ notice, however.

Akkerland Boerdery disputes the validity on the land claim. Coal of Africa commissioned a study of the validity of the land claim by the Musekwa community. Prof. F.C. de Beer’s report on the findings of this study disputes the validity of the claim and, based on the facts, finds that the Musekwa community never possessed land rights on the farms. In their issuing of the expropriation order, the Minister and the Limpopo Land Claims Commissioner relied on the report claiming the report findings validated the land claim despite the report finding to the contrary.

The Limpopo Land Claims Commissioner ignored Akkerland Boerdery’s attempts to engage and reach an agreement on the validity (or not) of the land claim. The government’s offer to pay only 10% of the farm’s market value is a further concern. The Minister’s conduct in issuing the notice is unconstitutional as well as unlawful, as it was invoked and motivated by an ulterior motive.

Private property rights, the UN and AGOA

Solidarity takes note that the protection of private property rights serves as a requirement in terms of Article 17 of the UN Convention 217 of 1948. Solidarity further acknowledges that private property rights are a prerequisite in terms of AGOA legislation, which must be met by sub-Saharan countries to qualify for tariff-free trade with the USA. The American Trade Act of 1974 obliges the USA President to act against beneficiaries of AGOA who unlawfully and unfairly expropriate private property.

President Cyril Ramaphosa and the ANC made public statements on expropriation of property without compensation. The alleged irregular conduct of the Department of Rural Development and Land Reform in the Akkerland Boerdery expropriation case, linked to the owners’ dispute of the lawfulness and legality of the expropriation, remains a major concern.

Solidarity believes that South Africa is at risk to be excluded from the benefits of the AGOA agreement. This may result in the compromise of about 70 000 direct as well as another 75 000 indirect South African job opportunities that were created by AGOA and trade with the USA. The trade balance between South Africa and the United States affords a healthy trade surplus in South Africa’s favour.

Solidarity’s position on private property rights

World history proves that the violation of private property rights contributed to serious economic decline in countries such as Zimbabwe and Venezuela, with catastrophic consequences for the people of those countries after unemployment and hunger increased drastically.

Solidarity insists that private property rights must be protected in the interest of the South African economy and all the people of South Africa. The South African government should be very careful when dealing with the land reform process and must refrain from introducing populist policies that will destroy the economy and private property rights.

ENDS

Issued by AfriForum 3 September 2018