South Africa asks SIU to investigate failed farm worker equity schemes
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South Africa's Department of Land Reform and Rural Development has approached the Special Investigating Unit to probe farm worker equity schemes after nearly R700 million was paid to 89 schemes, most of which have failed, been sold off or cannot be traced.
The Department of Land Reform and Rural Development has approached the Special Investigating Unit (SIU) to investigate the failure of farm worker equity schemes (FWES), following pressure from civil society organisations and Parliament over the disbursement of millions of rand to schemes that have largely collapsed.
The equity schemes were established in the 1990s to benefit farm workers economically. The erstwhile Department of Land Affairs initiated the redistribution project, under which farm workers signed agreements with farm owners and received shares and dividends for their social benefit.
Parliament heard in August that the department had disbursed nearly R700 million to 89 equity schemes. Most were in the Western Cape, where 54 schemes were paid R366 million, and the Eastern Cape, where 21 schemes received R103 million.
Briefing the Portfolio Committee on Land Reform and Rural Development, the department said officials had visited 65 equity schemes, of which only 18 were fully functional. Sixteen had limited functionality with "limited or no meaningful worker participation", 19 had workers who sold their shares and no longer held ownership interests, six had collapsed, four were in serious financial trouble and two were in business rescue. For the remaining 24 schemes, officials could not find documentation.
SIU spokesperson Selby Makgotho confirmed to GroundUp that the unit is in talks with the department's acting deputy director-general, Dumisani Lupungela, and is awaiting information to assess whether it is sufficient to motivate for a proclamation. He said the case would then be evaluated and referred to the SIU's Case Assessment Committee for consideration.
Corruption Watch and the Surplus People Project have been pushing for scrutiny of the schemes. A 2023 Corruption Watch report based on interviews with 35 members on eight farms found serious issues with transparency, farm worker participation and dividend payments, with several participants reporting few or no benefits. Land reform deputy director-general Terries Ndove told Parliament that recommendations in an earlier internal Zalo Capital report were never implemented, and admitted that the department's monitoring of the schemes had been "poor". The department did not respond to questions.