Shell cashes in on apartheid-era land law
Shell is paying rent of R48 a year for each of the two properties it uses for two service stations in the province.
A parliamentary committee now wants Zulu king Goodwill Zwelithini or President Jacob Zuma to intervene. During a meeting of the parliamentary oversight committee on rural development and land reform this week, committee chairperson Stone Sizani spoke of the "trauma" of hearing that the service stations along the N2 highway in Umgababa, south of Amanzimtoti, were operating on traditional land and paying only R48 a year.
The service stations are beneficiaries of the Bantu Administration Act, which granted the owners permission to occupy certificates [PTOs] but barred black South Africans from having title deeds to the land.
Legally, a permission to occupy certificate was granted in perpetuity and, in terms of the law, a permission to occupy holder paid rental of only R48 a year to the government - and now to the Ingonyama Trust Board, which manages 32% of all state land in KwaZulu-Natal.
Sizani described the tiny rental as a "discriminatory practice by Shell, while the filling stations are generating so much money".
Reducing the bottom line
"The matter that traumatised me more when we visited Umgababa [was] when you [Ingonyama] showed us the legal lacuna that has been created by the permission to occupy to Shell service stations.
"[Shell] is very comfortable with its permission to occupy. It would not want to translate it into a lease because it [would mean] reducing the bottom line," he said.
Shell denied that they were paying monthly rentals to the state. Company spokesperson Dineo Pooe said there was an agreement between Shell and Ithala Bank, which was signed in 1988 for a duration of 50 years. In terms of the agreement, Shell was required to pay the rental upfront. Pooe declined to specify the amount they paid for the rental citing confidentiality.
The Ingonyama Trust Board is hoping that the Act that governs the trust will be amended to allow it to deal with the issue of permission to occupy certificates.
Sizani advised the board to approach Zwelithini, asking him to go to Shell's headquarters and say: "On my land, I've given you hospitality. You are abusing it."
Ingonyama's head of property, Belinda Benson, said there was no mechanism to undo or convert the contracts and that the rights to the land had been granted under earlier legislation. "Unlike in a mining agreement, where you can convert it to a new-order right, a permission to occupy is institutionalised in the legislation and protected.
"There is no way you can rationalise that to a more economic income, even though we know those two facilities are well attended and do good business. So we are sitting with this problem where we need to amend the legislation to enable PTOs to be converted, especially commercial PTOs," she said.
Benson said she believed there were a number of businesses that were benefiting from the arrangement but were not, to her knowledge, registered "anywhere".
"They hold on to the PTO and when some activity happens, they then come forward to claim whatever revenue is generated."
The spokesperson for the department of rural development and land reform, Mtobeli Mxotwa, said permission to occupy certificates and related matters would be addressed when new land-tenure policies came into effect.