China, the Pondo king and Namaqualand: In pursuit of the ‘Disney playground’ deal

26 Mar 2019

The king of Western Pondoland’s contracts with a Chinese company could see an untouched stretch of the Wild Coast undergo massive development. The same company has plans to dam the Orange River in the Northern Cape and put up gas-to-power plants. Is any of it likely to happen? Even if not this time, the paper trail speaks of the intentions at the core of Operation Phakisa and China’s Belt and Road Initiative – enormous development projects that are driving our changing climate.

Without informing his subjects, King Mangaliso Ndlovuyezwe Ndamase of Western Pondoland has signed a contract to lease a pristine stretch of the Wild Coast to a Chinese company. Among other things – a mine, a 10,000-ton grade port and golf courses – the joint venture is supposed to include a “Disney playground’. Daily Maverick has followed the deal to the Northern Cape, where the same Chinese company has presented the potential for gas-to-power plants and the damming of the Orange River.

1. The contract

“As you can see, there are people here from China,” said King Mangaliso Ndlovuyezwe Ndamase, during his coronation at the Nyandeni Great Place in Libode, Eastern Cape, on 3 October 2018. “I invited them because I want us to work the land and build these hotels, but all that will depend on you as AmaMpondo.”

Less than two months later, on 27 November 2018, a contract was signed between the Nyandeni Kingdom and a company called South Africa Honglin Investment. At a price of R1-million a year, the former would lease to the latter “10,000ha of land, 30km of coastline and adjacent waters” in the vicinity of the Wild Coast town of Port St Johns. The contract, which has been confirmed as authentic by Daily Maverick, is remarkable for a number of reasons, but mainly for the following clause regarding the rights and obligations of “Party A”:

“After signing the contract and authorising the right to use, explore and exploit the land… Party A shall clear the leased land within three to six months in order to facilitate Party B’s use.”

Party A was listed as King Ndamase himself, the sole signatory on behalf of the Nyandeni Kingdom. As proof of the fact that he was required to clear the land of people and not, say, alien invasive weeds, there was the very next clause, which read:

“Party A shall be responsible for resolving the villagers’ disputes arising from Party B’s use of the land and Party B shall assist.”

And so, returning to the notion of “use, explore and exploit”: Why were King Ndamase and South Africa Honglin Investment (Party B) in such a hurry to move the villagers off this pristine stretch of Eastern Cape coast? The answer to the question had been plainly spelt out in the notarised contract too.

Agreement of Nyadeni Kingdec18

The joint venture company, in which King Ndamase would hold a 25% share once construction had been completed – and after which Party B would “no longer pay the land compensation” – would build, first of all, a “marine fisheries development base”, with a processing plant, a large refrigeration facility and a fishery terminal. At the same time, it would build an “agricultural development base”. Also, it would build what the contract was calling a “Disney playground”.

There would be a “large entertainment city with comprehensive functions such as leisure, vacation, tourism, food, entertainment, hotels, casinos and golf courses”. There would be a “Pondo cultural village”. There would be “hospitals, schools and shopping centres”.

The next item was a big one, outlining as it did the plans for a “10,000-ton grade port” to be constructed in “appropriate places along the Nyandeni coast”. The port would take “container, mineral resources and groceries as the main body”, while promoting “passenger transport and tourism”.

The existing airport at Port St Johns would be “reorganised” to assist with these plans. Then, presumably to help offset the above-mentioned “villagers’ disputes”, there would be “RDP houses, commercial economy house (sic) and high-grade commercial house (sic).”

Which would all culminate in the tenth and final clause of the sub-section:

“Within the scope of national law and authorised by King of Nyadeni Kingdom (sic), Party B shall carry out mineral prospection and exploration within the leased area and sign specific co-operation agreements when the agreements are satisfied.”

2. The context

For two reasons, the past imperfect tense is the most applicable to the telling of the above tale: First, because more than three months have passed since the contract’s signing, without any indication that King Ndamase has begun to clear the land; second, because the contract may have been set up to take advantage of an impending loophole in constitutional law.

“No, I don’t know about the deal,” said Prince Mlamli Ndamase, spokesperson for the king, when Daily Maverick called him on the morning of 13 March. “But the Chinese have been coming and going.”

In other words, while the prince was unaware, he wasn’t surprised. The prince directed us to Mziwamampondo Ndamase, his nephew, whom he said would have more information. But according to the younger Ndamase, neither he nor the local chief had any knowledge that a contract had actually been signed.

“Yes,” he told us, “there were people who came here, representing the Chinese. They haven’t returned, we are still waiting. We also took the matter to the king, we are waiting for him to come back to us too. You can’t pressure him, he’s the king. So now you come, saying there’s a signed contract. We are definitely not aware of that.”

And so, if the royal family and local chief didn’t know, it meant that neither did any of the villagers. Of the half-dozen calls made by Daily Maverick to various high-ranking subjects of King Ndamase, calls both on- and off-record, there was nobody who wasn’t angered by this fact.

The source of their anger, legally speaking, was the Interim Protection of Informal Land Rights Act (Informal Land Rights Act), which had been passed in 1996 to safeguard the security of tenure of the residents of the former Bantustans. In October 2018, referring to section 25(6) of the Constitution, the Constitutional Court had confirmed the customary land rights of the 17 million South Africans to whom the Act applied, thereby elevating these rights to the same status as common law.

Henceforth, if an outside company wanted to monetise any natural and mineral resources in the former homelands, it would need the local community’s “free and informed” consent.

Is it conceivable, when he signed the contract with South Africa Honglin Investment, that King Ndamase was ignorant of this judgment? Due to royal protocol, Daily Maverick was unable to put the question to the king directly – but we did discover that Prince Mlamli Ndamase was once an advocate of the High Court, a man in a perfect position to enlighten his regent.

Could there have been another reason that King Ndamase was keeping the deal secret from even his closest advisers? Without the ability to read the king’s mind, we could only speculate.

It’s possible, perhaps likely, that King Ndamase was throwing his lot in with the Traditional and Khoi-San Leadership Bill (Traditional Leadership Bill), which President Cyril Ramaphosa had promised back in March 2018 would be fast-tracked through Parliament. Because, contrary to the Informal Land Rights Act and the Constitution itself, clause 24 of the Traditional Leadership Bill would allow the king to do the deal without the consent of his people.

On 27 February 2019, the day after the president had made good on his promise and the Traditional Leadership Bill had been approved, there was a picket at the gates of Parliament. At the protest, a coalition named Stop The Bantustan Bill said this:

“Clause 24 of the Traditional Leadership Bill would give chiefs and their councils the power to sign over your land, including your family graves, your fields and even your homes, to mining companies, large farms, developers and casinos. They will be able to do this without asking your opinion, let alone your permission. They will make millions while you lose your home.”

The great thing about a king, as the Chinese company may have been wagering, was that he didn’t even need the say-so of his traditional council. The one remaining question, then, concerned South Africa Honglin Investment.

Who were they?

Company records accessed on 8 March 2019 show that the only active South African director of the company, alongside four active Chinese directors – Wei Ji, Bonan Li, Zhe Sun and Cheng Zhang – is Simon Collin Thabo Makweya.

According to Makweya’s LinkedIn page, in the early 1990s, he served as regional secretary of Cosatu in the Northern Cape. From 1994 to 2003, he held various positions in the Northern Cape provincial government, after which he became chairman of Seven Falls Resources – a company that made headlines in 2006 when its Australian mining partner, Tawana Resources, allegedly threatened to fire local workers.

The connections to the Xolobeni saga, which likewise involves an Australian mining partner, will be teased out further below, but suffice to note for now that when Makweya left Seven Falls, he served as CEO of the Free State Development Corporation and on the Free State Gambling and Racing Board. At the same time, from May 2011 to September 2012, he was deputy director-general of the Free State department of economic development and tourism.

Today, Makweya’s LinkedIn page says only that he is the chairman of Promethean Investments. But a LexisNexis director report shows that he is an active director of 80 companies, most of which are in the mining sector. Among his directorships is one listed as The Solomon Star, a Northern Cape community newspaper.

On 24 May 2018, an article was published in The Solomon Star under the headline, “Chinese investors to visit the Northern Cape”. The piece opened with the information that since the return of a Northern Cape delegation from a “mission” to the People’s Republic of China, a draft memorandum of co-operation had been signed between Honglin Investment and the Northern Cape Economic Development Agency. The third paragraph of the article read as follows:

“Thanks to the efforts of Honglin’s local partner, Promethean Investments, the Corridor project and the port development in particular is now seen by the Chinese as a natural extension of the One Belt One Road (OBOR) initiative. This initiative is an ambitious, large-scale, multi-country effort to re-establish the old ‘Silk Road’ trade routes between China and the West. This $4-8-trillion, 65-country effort scheduled for implementation by 2049 is meant to encourage the further integration of the People’s Republic of China with international markets.”

At which point our investigations began to take on the hue of the hopelessly surreal. Were we stuck in the bowels of a Lewis Carroll novel? Was this where the whole country turned into a dystopian Disney playground, an extractive fun-house serviced by deepwater ports and transcontinental highways? Was this really our collective fate?

In an attempt to reverse out of the rabbit hole, Daily Maverick kept trying Makweya on his private number. On the evening of 19 March, half an hour before the Northern Cape provincial government was due to answer our emailed questions about the draft memorandum on the mooted R40-billion port development at Boegoe Baai, he called us back.

“I know nothing about that contract with King Ndamase,” he insisted. According to Makweya, the contract was drawn up and signed by South Africa Honglin Investment – and stamped by its parent company Honglin Investment – without his knowledge or approval, an act that “concerned” him greatly.

Makweya was, therefore, more than happy to assist us with background about Honglin.

“They are a company that seeks opportunities in South Africa,” he said, “and then try to raise money for those opportunities in their country. So I think I can speak with authority when I say they do not have the money in their own capacity. Part of our visit to China was to establish whether there was appetite for the [Northern Cape] project.”

To show his good faith, Makweya emailed us a powerpoint presentation as soon as he hung up. The presentation was delivered to the executive committee of the Northern Cape provincial government on 22 February 2017 and in the first slide were details about Honglin. Based in Dalian in the People’s Republic of China, it stated, the company had “bank guarantees and assurances in place for a credit line of approx $45-billion (ZAR 600-billion)”.

In the fourth slide, there was an “interested anchor investor” identified simply as “Yong Li”. The presentation then went on to talk about an “industrial development zone” and “gas-to-power” plants, a “gas-to-industry and petrochemical” plant, a cement plant, iron and manganese smelters, “new base metal mining and mineral processing developments,” and, finally, a “dam on the lower Orange River”. In short, the deepwater port was just the start.

To quote the presentation’s “vision statement” in full:

“The development of a new deepwater port, related transport and energy infrastructure and associated commercial and industrial activities on the Namaqualand coast to unlock the mineral wealth and agricultural potential of its immediate and regional hinterland and bring sustainable GDP growth, economic development and job creation to what is a terribly impoverished and sparsely populated area.”

For its part, the Northern Cape government informed Daily Maverick that none of it would happen until a feasibility study had been completed — a study it was paying for itself, it stated. No formal deal had been entered into with Honglin, it promised.

As to the question of why Northern Cape MEC Mac Jack had met with Kenneth Ka and Honglin Li of Honglin Investment on 12 March 2018, it said this:

“It is normal practice, from time to time, for the MEC to meet with potential investors, and meeting with the above-mentioned company was not different from the normal practice.”

What, then, was the current relationship between the Northern Cape government and Thabo Makweya?

“Mr Thabo Makweya is a business man in his own right and deputy chairperson of the Northern Cape Economic Development Agency (NCEDA),” it replied.

“NCEDA signed an MOU with Honglin Investment for the facilitation of the establishment of the Boegoe Baai harbour development. Nothing happened to activate the MOU with Honglin Investments, without the concurrence of Provincial Government and a viable project. Upon the completion of the feasibility study, a bidding process will be opened to interested parties.”

The Northern Cape provincial government did not reply to our request for the contact details of Kenneth Ka and Honglin Li. South Africa Honglin Investment does not have a listed phone number. All attempts to contact the company “with a credit line of approx $45-billion” have proved fruitless.

3. The consequences

In late November 2018, two days after King Ndamase signed the deal with South Africa Honglin Investment, Daily Maverick published a critique of China’s OBOR – also known as the Belt and Road Initiative, or BRI.

In the piece, we noted that since Africa was the continent least responsible but most vulnerable to climate change, the BRI could easily send its fragile ecosystems over the edge. We wondered whether the Chinese government was misinforming us when it said that the BRI was climate change-friendly.

From a World Resources Institute report on the BRI, we learned that “most bank loans and cross-border investments in energy and transportation over 2014-2017 were tied to fossil fuel projects”. And from a report compiled by the Sierra Club, Greenpeace and CoalSwarm, we learned this:

“Internationally, Chinese financial institutions are the world’s largest funder of overseas coal plants, investing $15-billion in coal projects from 2013 to 2016 through international development funds, with another US$13-billion in proposed funding. CoalSwarm estimates Chinese firms are involved in the construction, ownership or financing of at least 16% of all coal-fired power stations under development outside China.”

Ambassador Lin Songtian, who we quoted extensively in the article, was clearly irritated by what we learnt, because on 14 December 2018 a response was published in Daily Maverick under his name. The response was a transcript of the speech he had given at Wits University on 23 November, at an event billed as an opportunity “to engage directly with African and Chinese experts on the BRI”.

Unfortunately, this exact speech had been at the core of our critique.

Now we know, from the details provided above, that not only have companies linked to the BRI been pumping hundreds of billions into fossil fuels just as greenhouse gas emissions have begun to render sub-Saharan Africa at extremely high risk, but these selfsame companies have been signing deals that disregard the land tenure rights of South Africa’s rural poor.

Not that the South African government is entirely clean on these two points either.

As Aninka Claassens of the Land and Accountability Resource Centre pointed out to Daily Maverick, the small port harbour conversions of the likes Honglin is proposing in both the Northern Cape and Pondoland are supported by Operation Phakisa. This would be the same Operation Phakisa that backed the recent oil and gas find off the Southern Cape coast, which Daily Maverick also reported on.

Our argument against the “economy saving” sloganeering that accompanied the discovery, aside from the climate denialism thus evoked, was that it a) completely ignored the resource curse in oil- and gas-rich countries such as Angola, Mozambique and Nigeria, and b) wilfully disregarded the fact, as confirmed in 2015 by the IMF itself, that when it comes to countries with high inequality the trickle-down effect doesn’t work.

South Africa, we’ve been led to believe, is the most unequal country on earth. And the poorest province in this record-breaking country is, of course, the Eastern Cape. Which is why allowing King Ndamase to lease his land to the Chinese, basically for mahala, might not be the sharpest economic strategy.

For starters, there’s the deal’s “marine fisheries development base”, with its refrigeration facility and processing plant. In the past few years, Chinese fishing trawlers have been spotted fishing illegally on precisely that stretch of coast.

In 2016, after three trawlers were seized by the South African Navy, a spokesman from the Chinese embassy demanded a “prompt and appropriate settlement” of the investigation “in line with the friendship and co-operation between (the two) countries” – a statement that would have looked less like diplomatic coercion had three television crews not been warned off boarding the boats.

According to reports, 800 tons of squid to a value of R85-million were in the vessels’ hulls, plus “large numbers of dorado”, a species on the “red list” of the Southern African Sustainable Seafood Initiative.

Does the Eastern Cape government, which would need to ratify the deal with Honglin, really believe that a Chinese-run fishery would be a positive thing for the locals? What about casinos and golf courses? Would the former be “good” for the people? Would the latter be good for the environment, recognised by Conservation International as a global biodiversity hotspot, part of 2.4% of the earth’s land surface that supports more than half of the world’s plant species as endemics?

The “Disney playground”? The “entertainment city”? The shopping centres?

Hospitals, schools and RDP houses, on the other hand, might be something that the locals would say they wanted; if they were consulted – which the Informal Land Rights Act says they have to be, and the Traditional Leadership Bill says they don’t.

And so now we circle back, as we always do in this country, to mining – specifically, the final clause in the contract between South Africa Honglin Investment and King Ndamase, the “mineral prospection and exploration” part of the deal.

King Ndamase’s blood relative, although the two don’t seem to be speaking, is Tyelovuyo Zanozuko Sigcau, who claims that he alone is the king of Pondoland. On 16 January 2019, when Sigcau stood at the government-sponsored podium in Xolobeni and announced, “I am your king!” he was booed by 250 members of the anti-mining Amadiba Crisis Committee. But Sigcau had the support of mineral resources minister Gwede Mantashe, who, as Daily Maverick reported from the scene, promised that mining in Xolobeni would go ahead.

This despite the fact that Judge Annali Basson of the North Gauteng High Court had in November 2018 sided with the applicants from Xolobeni in determining that they – and not the government in Pretoria – had the right to say whether mining could happen in their backyard.

A watershed ruling that placed the Informal Land Rights Act on an equal footing with the Mineral and Petroleum Resources Development Act, it echoed the Constitutional Court judgment of the month before. Government and its private sector mining partners had been ignoring the Informal Land Rights Act for more than two decades, dealing with communities by employing consultants and paying off chiefs, but now the game was up.

Except the game wasn’t up. With BRI and Operation Phakisa doubling down on carbon-intensive resource extraction in the face of dwindling reserves and a dying biosphere, the game was only just beginning. If the documents that led to Honglin turned out to be meaningless, the structures were in place for other companies to pick up the trail. DM

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