The new Expropriation Bill gazetted last Friday is a belated but necessary part of enabling land reform.
All states expropriate, but no political process could be more sensitive than deciding how to do it. On the one hand, security of property rights is at the top of the list for property owners, aspirant owners and investors when deciding whether to come into SA, stay here or leave as fast as possible.
On the other, land reform is at the heart of economic justice and is an essential building block in creating a more equitable and democratic country.
But it is a process that has been bungled by the political posturing of the EFF, ANC factions and ANC leaders themselves. Their decision to amend section 25 of the constitution to explicitly allow for expropriation without compensation has raised red flags and caused alarm. And, as is clear from the now published Expropriation Bill — which state law advisers say is constitutional — the amendment is not legally necessary after all.
The new Expropriation Bill was made necessary because the existing law, which dates from 1975, was in conflict with the constitution written about 20 years later. The existing act prescribed processes that did not stand up to constitutional scrutiny. It also only provided for compensation to be paid at market value, while the constitution says compensation must be just and equitable.
Among other things, the new bill states that compensation for expropriation must be just and equitable and repeats the provisions of the constitution, which outline the considerations for this to be determined. Among them are the current use of the property, the history of its acquisition, market value, the value of state investment in the property, and the purpose of expropriation.
The bill then gets to the interesting part: the circumstances under which compensation could be nil. This includes, but is not limited to: unused land held for speculation; land where an organ of state (a state-owned company for example) is not using it or likely to use it in the future; where the land has been abandoned by the owner; where the market value is less than what the state has invested in it; where the condition of the property is a health risk; and where a court has determined nil compensation under legislation dealing with labour tenants.
Will this formulation be enough to satisfy both those concerned about property rights and those concerned about land redistribution?
Theo Boshoff, head of legal intelligence at Agbiz, says that while property owners will be hard to reassure completely, given the bogeyman that expropriation without compensation has grown into, the bill does contain important checks and balances on how it is done. Importantly, it is a court that will make the final decision on the amount of compensation to be paid in instances where the landowner and the state are unable to reach agreement.
Boshoff says the bill sets out the considerations for nil compensation but it does not present an exhaustive list. That the bill is not prescriptive and a court could consider other factors as well is a positive aspect, says Boshoff, because it allows a court to fully explore the circumstances.
Prof Ruth Hall of the University of the Western Cape, who was also a member of President Cyril Ramaphosa’s presidential advisory panel on land reform, says the bill is “permissive”.
“It permits expropriation without compensation but is not specific. This means that decisions will need to be established through precedent, which means court judgments on specific cases. Our advisory panel had proposed that the minister responsible for land reform be empowered to expropriate and determine compensation, and that the government should develop a compensation policy setting out how compensation will be determined,” she says.
Hall is among many land reform experts who have argued that the constitution has allowed for nil compensation all along, and that the problem is that the courts have never applied it and the government has never tested their decisions.
The parliamentary committee to look into the amendment of section 25 reached the same conclusion. But after all the hype and heart-wrenching public hearings all over the country in which people told their stories of dispossession, a decision not to amend would have been difficult to explain to the broader population. It would have made the ANC politically vulnerable to attack from the EFF.
The committee is still in public consultation over the wording of the amendment, which is exactly the same that now appears in the already “constitutionally sound” Expropriation Bill.
Asked on Sunday if there is still a need to go ahead with the constitutional amendment, agriculture, land reform & rural development minister Thoko Didiza said that process is a parliamentary one with its own momentum.
“Parliament is doing what a majority of people felt was not necessarily explicit in the constitution. The process is still relevant in terms of giving clarity to constitutional principles,” she said.
But while the ANC hopes that going ahead and changing the constitution will reassure its political base, it is viewed with suspicion by property owners and investors, who will continue to wonder about further encroachments on property rights.
In trying to satisfy both, the ANC has found itself in a double bind. It has made a choice to which it is sticking. Ramaphosa will have to try much harder now to reassure investors.
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