SIU asked to investigate farm worker equity schemes
Nearly R700 million was disbursed to equity schemes. Most of them have failed.
The Department of Land Reform and Rural Development has requested the Special Investigating Unit (SIU) to investigate the failures of farm worker equity schemes (FWES). This request stems from pressure from civil society organizations and Parliament regarding the distribution of millions of rand to these schemes, many of which have failed or cannot be traced.
The schemes, established in the 1990s, were intended to economically benefit farm workers. The schemes required farm workers to sign agreements with farm owners, receiving shares and dividends as a form of social benefit. The department disbursed nearly R700 million to 89 equity schemes, with most located in the Western Cape and Eastern Cape.
During a briefing to the Portfolio Committee on Land Reform and Rural Development, the department revealed that only 18 out of 65 visited schemes were fully functional, 16 had limited functionality, 19 had workers who sold their shares, and 6 had collapsed. Six schemes had serious financial trouble and two were in business rescue.
The department stated that they were unable to locate documentation for the remaining 24 schemes. The SIU's spokesperson, Selby Makgotho, confirmed that the SIU is discussing with the department to determine if sufficient information exists to warrant a proclamation. Civil society groups, such as Corruption Watch and the Surplus People Project, have been advocating for the government to investigate the maladministration and oversight issues within the equity schemes.
Corruption Watch's research, based on interviews with 35 farm workers on eight farms, revealed significant concerns regarding transparency, worker participation, and dividend payments. The department has acknowledged several schemes where worker governance and benefits were limited or unclear, with some workers selling their shares while still employed on the farm.
There were also instances of poor cash flow and mounting debt. The department recommended immediate interventions, including resuscitating oversight and engaging with the SIU. However, internal recommendations from a 2013 report by Zalo Capital advising rehabilitation of failed schemes and establishing a support unit to monitor and support FWES were not implemented, according to Terries Ndove, deputy director-general of land reform.
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