Forestry in South Africa
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August : Memorandum on the potential legal liability of Agri SA members serving on District Land Reform Committees (DLRCs)

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3 August, 2016

Memorandum on the potential legal liability of Agri SA members serving on District Land Reform Committees (DLRCs)


Background
Several farmers affiliated to Agri SA's members have been appointed by the Minister of Rural Development and Land Reform to represent organised agriculture on the District Land Reform Committees (DLRCs). According to the National Development Plan, DLRCs are supposed to identify 20% of land in each district and transfer it to previously disadvantaged individuals through the land reform programme. The DRDLR has established DLRCs, however they are not authorised to take any binding decisions nor actually take part in the acquisition and transfer of any property. Instead, the DLRCs are simply tasked with identifying land and recommending a beneficiary (for either land or recap) to the National Land Acquisition and Recapitalisation Control Committee (NLARCC) of the DRDLR.

Our members have reported several cases where their representatives on the DLRCs oppose a project, and in some cases even manage to convince the entire DLRC to oppose the application if it is not sustainable or where the application is clouded with suspicious, and possibly fraudulent circumstances. Despite the member's objection, or the whole DLRC's objection for that matter, the projects are often approved by NLARCC, thereby over-riding the recommendations of the DLRCs.

This state of affairs has led to concerns that our members could be held personally liable for failed projects as a result of their involvement in the DLRCs. The purpose of this legal opinion is therefore to consider the potential legal liability of individuals serving on the DLRCs

Introduction
Although the DLRCs are loosely based on the NDP, the actual implementation has veered very substantially from that envisioned by the NDP. The NDP is furthermore not a piece of legislation but merely a framework policy document which broadly sets out the goals for the DLRCs without going into too much detail.

The DLRCs have not been constituted by statute, nor is it incorporated and duly registered as a non-profit company, a registered non-profit organisation, a trust nor does it have a constitution which would qualify it as a voluntary association. It can therefore safely be stated that the DLRCs are not creatures of statute nor are they legal entities in their own right.

The only document currently regulating the DLRCs in terms of composition, functions and purpose is the Terms of Reference. Agri SA initially made a host of substantial comments and inputs to the ToR which was entirely ignored. The ToR does state what the functions of the DLRCs are but it is silent on its powers and contains no clause dealing with liability nor fiduciary duties of the members. To date, we still do not know if the ToR have been finally accepted or not. The ToR can therefore certainly not be regarded as an assumption of risk or a code of conduct agreed to by all of the parties as the members serving on the DLRCs do not even know if the ToRs has been finalised nor what its exact contents are. There can therefore hardly be any notion that the ToR represents a meeting of the minds between the various members of the ToR.

The ToR therefore also does not seem to be a document with any legal standing whatsoever. The DLRCs therefore do not seem to be a legal entity of any kind, and there is no legal instrument of any kind which regulates it. Never-the-less, the DLRCs are making recommendations that can influence the spending of government funds and have an adverse and material effect on the interests of applicants, and it is in this context that potential liability must be assessed. Given the huge degree of uncertainty surrounding the status of DLRCs, it is best to consider each possible source of liability or obligation recognised by our law and follow a process of elimination to determine if any could possibly find application.

Click HERE to read the full 20pg Memorandum