Agricultural industry body Agri SA has warned that the country’s economy faces a huge knock-on effect should the Expropriation Bill be promulgated by the president.
“If this bill is passed in its current form, its weakening of the protections afforded to private property could see an exodus of capital from the agricultural sector and the broader economy, with a resulting loss of jobs and investments,” Agri SA’s executive director, Christo van der Rheede, said on Tuesday.
Van der Rheede said this will adversely affect established, emerging and new farmers alike, and undermine efforts to build an inclusive and prosperous rural economy.
On Tuesday, parliament’s public works committee adopted a report on the contentious bill that seeks to provide clarity on how expropriation in broad terms can be done and on what basis, in the public interest and public purpose.
The report, which includes opposing views and the bill in its entirety, will be passed on to the National Assembly for further deliberations before being sent to the president.
The DA and other smaller parties oppose the bill, arguing that it is a crude attempt by the ANC to sneak expropriation without compensation through the “back door”.
Parliament has in recent years been engaged in two separate but related processes regarding expropriation without compensation. The ad hoc committee on section 25 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. The proposed amendment was thrown out in December after it failed to get the support of at least two-thirds of members of the National Assembly for it to pass.
As that process was unfolding, the portfolio committee on public works was continuing with public hearings on the Expropriation Bill, which outlines circumstances when it may be just and equitable for zero compensation. It suggests that any amount of compensation will have to be eventually determined by the courts. Ordinary bills require a simple majority (50% plus 1) to pass, meaning the Expropriation Bill could sail through as the ANC holds 230 of the 400 seats in the National Assembly. Once promulgated, it will replace the Expropriation Act, which dates back more than four decades.
Van der Rheede said some of the definitions contained in the bill are problematic.
“The bill’s provision for nil compensation will result in a future of policy uncertainty for the agricultural sector. SA farmers already operate under difficult conditions. Hence, the ongoing assault on any constitutional principle that protects property rights against any arbitrary action by government or by a court fuels a climate of uncertainty that deters greater investment, job creation and inclusivity in the sector,” he said.
Van der Rheede pointed to a recent ruling delivered in the Land Claims Court, which held that the state should offer landowners full market value for their land “if no other factors as stipulated in section 25(3) of the constitution apply”.
“In essence, it reaffirmed the principle of market-related, just and equitable compensation. Given the existence of legitimate circumstances where nil compensation may be just and equitable, the constitution sufficiently provides for these cases, negating the need for this potentially economically catastrophic bill,” Van der Rheede said.
The SA Institute of Race Relations has previously stated that the draft legislation offers no solution to land reform.
Anthea Jeffery, the institute’s head of policy research, noted as the hearings were progressing last year that 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 at the time.
According to DA MP Samantha Graham-Maré: “As a result of the ANC’s failure to pass a constitutional amendment to allow for expropriation without compensation, they are now attempting to amend the constitution through the back door by including the ‘nil-compensation’ wording within ordinary legislation.”
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