Farm BEE fronting probe
IOL / 11 AUGUST 2018 - 13.00 / SOYISO MALITI
Cape Town - Allegations have surfaced of how an increasing number of farmers in the province use equity schemes to illegally benefit from black economic empowerment.
The provincial commissioner for the SA Human Rights Commission (SAHRC) and farm worker movements have warned of cases where farmers use workers for BEE fronting
SAHRC Commissioner, Dr Chris Nissen, is investigating a farm in Wolseley.
BEE fronting occurs when a farmer, under the pretence that African, coloured and Indian farm workers will benefit from the profits of the land, applies for and is authorised to implement an equity scheme.
In reality the farm workers do not benefit from the deal and the farmer unfairly scores BEE points.
Witzenberg Rural Development Centre paralegal Naomi Betana said the centre was dealing with five such cases, but that fronting was widespread.
SAHRC commissioner Chris Nissen is investigating a farm in Wolseley.
Abraham Julies, a worker at the farm, said some workers had received shares in the farm valued at up to R35000, but had been bought out for as little as R5000.
Of the initial 118 beneficiaries, 88 had left the farm.
Betana said they had been hoodwinked into selling as they had been made to believe the farm wasn’t making money.
Louis Lategan, a part-owner of the farm, refused to comment and instead invited Weekend Argus to visit the farm.
He said he had a 10% share in the farm. However, he denied being involved in BEE-fronting.
“You must ask them (workers) why they say they feel cheated. Come and see me, I’ll give you the facts.”
Betana said shareholders became involved in such “equity schemes” and at the end of the day the majority shareholders (farm owners) would pay out the workers far less than they were entitled to and they did not benefit in the long run from owning the land.
“So government will give (farm workers) a subsidy - which can... be R16000, while others get more - and the land owner will pay them out for R4000 or R3000. The most recent case is the Wolseley project, where shareholders were told that the project wasn’t profitable,” Betana said.
“It’s similar to other cases. When we approach the Department of Rural Development and Land Reform, they say ‘sorry, this is willing buyer, willing seller’. That cannot be. Government cannot give money and mentorship wasn’t properly done.”
She said farm workers who were shareholders were in the dark when it came to the financial position of a farm.
In one instance, a farm worker had been dismissed for enquiring about the finances and the centre had taken the matter to the Commission for Conciliation, Mediation and Arbitration.
She said in most cases the farm owner became the sole owner of land again, adding: “I see it as lang-grabbing in a strategic way.”
Nissen said the most recent case of BEE fronting he had dealt with involved a farm in Ceres.
“I’ve had lots of complaints about BEE fronting from farm workers. On the Ceres farm, for example, the government (through an equity scheme) gave (R16000) per (farm worker) and then the farm was liquidated. The manager was only prepared to pay them (workers) out R7000.
“There is a lot of BEE fronting in the farming industry in the province. Obviously there is some genuine work done by farm workers and owners. But generally I think there are farmers who are trying to find easy ways of getting money from the government. It’s all over the show.”
Nissen said farm workers understood the agricultural side of farming, but lacked knowledge of finance and commerce and some farmers exploited this.
President of the Black Association of the Agricultural Centre Nosey Pieterse said BEE fronting was common practice among farmers in the Berg River area.
He said the Department of Rural Development and Land Reform had promised it would investigate fronting.
He was dealing with 30 cases of BEE fronting and disputes over water rights.
“Farmers approach government on behalf of the workers and government gives them equity schemes. When they’ve been given equity schemes, trust deeds are set up, but the government doesn’t follow up. Workers know nothing about the trust deeds or you find that they’re not involved and they don’t even sit on the boards of the trusts that are set up.
“There is no participation from their side. They’re sidelined. The Department of Rural Development and Land Reform is slacking severely. Some of the farm workers have invested for 10 years and they haven’t received a cent.”
Activists said several farm workers had laid complaints, some of them against the department.
Sidwell Medupe, trade and industry department spokesperson, confirmed that the B-BBEE commission, led by Zodwa Ntuli, was conducting several investigations of BEE fronting by farmers.
“The B-BBEE commission has been receiving tip-offs regarding BEE schemes involving employees and some farm workers are included,” he said.
A farmer, who spoke on condition of anonymity, said he had been in meetings with some of the culprits. He concurred that more often than not the farm workers who entered equity schemes with farmers were kept in the dark about the finances.
“Mr White Farmer, because he’s done the equity deal, claims the BEE points. He then also talks to international markets and shows them that they’re ‘empowering’ the community. They get benefits, but the business is still 100% white.”
AgriSA Western Cape spokesperson Jeanne Boshoff said the organisation wasn’t aware of cases of BEE fronting in the Western Cape.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER