The chair of the ad hoc committee tasked with amending the wording of section 25 of the constitution or the property clause has raised concern that another committee in parliament was already holding public hearings on the Expropriation Bill.
There are currently two separate but related processes in motion regarding expropriation without compensation. The ad hoc committee on section 25 is focused on the wording of the property clause in the constitution with the aim of making clear that which is implicit regarding expropriation of land without compensation, as a legitimate option to tackle skewed land ownership patterns dating back to the apartheid and colonial eras. An amendment to the constitution such as this will require the support of at least two-thirds of members of the National Assembly for it to pass.
Meanwhile, the portfolio committee on public works has also been holding public hearings on the Expropriation Bill, which seeks to provide clarity on how expropriation in broad terms can be done and on what basis. The bill outlines circumstances when it may be just and equitable for zero compensation. It does not, however, prescribe nil compensation and provides that the amount of compensation will be determined by the courts. Ordinary bills require a simple majority (50% plus 1) to pass. Once promulgated, it will replace the Expropriation Act which dates that back more than four decades.
The ANC has previously proposed shifting the arbitration powers from the courts to the executive in terms of compensation to be paid. Mathole Motshekga, who leads the ad hoc committee, said previously that if the courts determined compensation “it will take another 25 or 50 years to sort out land reform”.
“It seems a bit like putting the cart before the horse, as our process should inform what should be in the Expropriation Bill. I will write to the chairperson [of public works committee] first, as the concern was raised several times during our hearings,” Motshekga said on Thursday.
The issue of expropriation without compensation is highly politicised and has been pushed by both the ANC and the EFF. At the same time, the security of tenure has been of major concern for investors, and threatens efforts to rebuild the country’s economy which has been hard hit by Covid-19.
The ad hoc committee has received presentations from various stakeholders on the proposed amendment to the constitution. On Wednesday, the Banking Association SA (Basa), the industry body representing all registered banks in the country, warned that expropriation without compensation could spark an economic crisis much like how the 2007-2008 global slump started from the downturn of land-based properties in the US.
Moves to expropriate land without compensation could also force banks to adopt a more conservative approach to the extent of the loans they would be prepared to provide and increase the borrowing interest rates to compensate for the additional risk in the event of expropriation, Basa said. It said the courts should be the final arbiter should government decide to expropriate property without paying compensation
In its submission to the committee, trade union federation Cosatu said the amendment to the constitution was a rational intervention to deal with inequalities and legacies of colonialism and apartheid. Failure to address the land question could lead to instability and land invasions, the union said.
On the Expropriation Bill, the SA Institute of Race Relations said the draft legislation offers no solution to land reform.
Anthea Jeffery, the institute’s head of policy research, said the bill covered far more than land, as was commonly thought.
“Instead, it covers homes, pensions, business premises, mining rights, shares, and unit trusts — all of which will fall within the bill’s definition of ‘property’ — and all of which will be vulnerable to expropriation for ‘nil’ or inadequate compensation.”
This will not solve land reform problems, which stem largely from inefficiency, corruption, and an absence of secure ownership, Jeffery said.
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