Call for forensic investigation into farm worker equity schemes

Mcebisi Skwatsha promises to set up a task team

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Photo of farm worker discussion
These farm workers belong to at least six different equity scheme projects in the Witzenberg area. They believe farm owners are using them to get black empowerment (BEE) status and additional state funding. Photo: Barbara Maregele

When Jolande Smith and 240 other farm workers became shareholders in the Langwyde Werknemers Trust ten years ago, they thought their lives would change for the better. Instead, many of them still live in dilapidated homes and say they are struggling to make ends meet because they are yet to receive any dividends from the company.

“The farmer is progressing but we are left behind. If we had known that this is how it would be, we would never have agreed to it,” said Smith.

She was speaking at a meeting with Deputy Minister of Rural Development and Land Reform Mcebisi Skwatsha, other department representatives, activists and farm workers who belong to at least six different equity schemes in the Witzenberg area.

The meeting was held at the Witzenberg Rural Development Centre in Ceres on Tuesday. The centre, which advocates for the rights of farm workers, says commercial farmers in the region have been refusing to open their books to farm workers who had collaborated in equity share schemes.

The workers believe they are being exploited by farm owners so that they can benefit from government’s black economic empowerment (BEE) policy and acquire additional state funding.

The equity schemes were introduced by the state as an alternative land reform solution. The aim was to improve the poor socio-economic conditions of farm workers by creating opportunities for them to acquire shares in a farm’s business or land value. But there has been very little oversight of these projects and government has not properly monitored whether the schemes are benefitting the people they was intended for: farm workers.

“For the ten years we’ve been a part of the scheme, we have not been paid any dividends … When people went to ask for their money about five years ago, they were told that there weren’t any funds to pay them out,” said Smith. She is one of 242 workers who collectively have a 33% shareholding in the farm. When they signed up in 2008, the government invested R52 million to fund the workers’ shares. The business and property was valued at about R150 million at the time.

“Our people are living in terrible conditions on the farm. One man’s house is falling apart. But the owner, using the name of the Trust, applied for further support from [the Department of Agriculture] through the Comprehensive Agricultural Support Programme (CASP). It’s not fair,” she said. Smith said selling their shares would be the only way for them to benefit.

Attorney John Sauls represents the Jantjies family who are also members of the Langwyde trust. “All our clients have been beneficiaries since its inception in 2007. According to our clients they have to date only received an amount of R1,000 each during 2009. We wrote letters to the chairperson of the Trust on 22 March 2018 and again on 6 August 2018 to clarify certain issues but we have not received any formal response,” he said.

Another farm worker, Anna Onker, was one of 133 people who had shares in Crispy Coolers. They became shareholders in 2003 and government funded shares worth R20,000 per person at the time. Since then, the workers were paid R500 every year as a dividend.

But a few weeks before Christmas in 2017, the company, which belongs to the Dutoit Group, gave workers the option to sell their shares back to the company. They were each paid out R30,000, a return that including the dividends barely matches inflation.

“We needed the money so what else were we supposed to do? They really fooled us and kept us in the dark about everything,” said Onker.

Call for forensic investigation into equity project

Naomi Betana, paralegal officer at the Witzenberg Rural Development Centre, said they had been inundated with complaints by farm workers over these schemes. “Land owners are using workers to get BEE status. This isn’t working for farmworkers. How can you have shareholders who live in dilapidated houses? It just doesn’t make sense to us,” she said.

Chairperson of the African Farmers Association of South Africa, Ismail Mofala, said farm workers were not being adequately compensated, if at all. “The white farm owners used this for their own benefit in terms of marketing, BEE status and to expand their own businesses by accessing funds over the years,” he said.

Mofala said that the citrus industry had more equity schemes than black farmers. “It’s becoming a pandemic in Witzenberg. There are cases where the trust deeds of these equity schemes are written in a way that if farm workers either leave employment or die, they forfeit rights to their share. It can’t be passed onto their children,” he said.

“From legal documents the projects may seem above board but from a moral perspective, it doesn’t bring home the bacon for the people it was really intended for,” he said.

Harry May, of the Surplus People Project, said: “We have been asking for an investigation into these schemes. We need to have clarity from the state because this was a redistribution mechanism and someone needs to take responsibility for these schemes.”

Jacques Pheiffer, director for strategic land and acquisitions in the Department, said that they had already begun looking into the Langwyde Trust. But Smith and other members said they were not aware of this.

“We will arrange to get a proper status of each of the schemes within the next month. We need to see if a proper investigation is needed because it’s about the value of shares and whether people still have those shares,” said Pheiffer.

Pheiffer said they would also need to determine the constitutionality of clauses in many of the trust deeds that prevented workers from accessing information about the company or their shares. “We need to engage the provincial Department of Agriculture because they made huge investments into these projects,” he said.

Betana said the group was demanding a forensic investigation into the 52 projects in the area; legal assistance provided by the department to the centre to help analyse contracts and documents; and the participation of civil society in the team looking into the schemes.

In response, Skwatsha promised to set up a team within the next two months to look into the schemes and said activists would be brought to the table. He said it would take six to nine months to do the work and that the team should then report back to farmworkers.

GroundUp contacted the Dutoit Group via email for comment on 6 September. According to the company’s website, “The Crispy Group is a successful BEE initiative with more than 1,200 farm and packing facility workers … Crispy Group has developed into a large scale farming operation and is set to grow substantially. The Crispy Group has access to the full support structure of the Dutoit Group.”

However, when contacted telephonically, Gys Du Toit, one of the executive directors at the Dutoit Group on 12 September, told GroundUp, “Where did you get this information from? I’m trying to decide if we want to respond. Every month there’s people who want to play this whole thing down. We can’t spend a lot of time on this. I must decide if I want to respond or not. I have to have a mandate from our board of directors. I will respond before 8am on Monday,” he said. But by the time of publication, no response or further communication had been received.

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TOPICS:  Farming Labour

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