As the whole world now knows, a recent legislative amendment could make it possible for the SA state to expropriate property without compensation — albeit within a narrow set of circumstances. This is a risky amendment and should be used with extreme care once it is gazetted, if at all. The question is whether it was necessary, given the already extensive powers of the state under the long-standing expropriation legislation.
I have direct experience of using this legislation as a state official. That experience suggests the law already had extensive power but was seldom understood by officials. In 2010, while working as CEO of the Johannesburg Development Agency (JDA), I was involved in expropriating a property on the basis of public interest. This has turned out to be a rare case, especially because the building was expropriated for heritage purposes.
The property in question was Chancellor House, which had once housed the offices of Mandela & Tambo Attorneys, SA’s first black law firm. In the mid-2000s the building was privately owned and was in a state of shocking disrepair. It had been hijacked, the services had failed, the waterproofing was long gone, and there was grass growing from what was left of the roof. It was home to more than 200 people living in the building illegally. Something had to be done to restore this important piece of Johannesburg’s heritage.
A nonprofit heritage organisation had approached the owners repeatedly, offering to buy it from them for a reasonable sum, and to take on the problem of the illegal occupants, which would cost millions to resolve. The owners were willing to sell, but named an exorbitant price the heritage foundation was unable to pay. Several years of negotiations failed to arrive at a solution. And so the problem was brought to the JDA, the city agency responsible for inner city regeneration. We asked the owners to either address the conditions of this important building or allow us to buy it for a reasonable price. Again, negotiations broke down.
I contacted a member of the city’s legal team to discuss the possibility of expropriation. At first he argued that a property could not be expropriated for heritage purposes under the existing act as “heritage” did not fall explicitly within the ambit of “public interest” and there had never been a case that created a precedent. Perhaps it was time for such a precedent, I argued. Surely the public has an interest in seeing an important part of its heritage restored and celebrated? And so we went to court, and won.
Of course, we were required to pay the owners a market-related price, and rightly so. The court asked for three independent valuations to be submitted, which all valued the building at a similar price (far lower than the price the owner had insisted upon). After legal arguments and evidence on value, the court made an order, the city paid the owner and we took ownership of the building, or what was left of it.
We then undertook the arduous process of rehousing the occupants and redeveloping the building. In time, a small but beautiful museum was built, showcasing the extraordinary legal work Mandela and Tambo did in that space. “Shadow Boxer”, a monumental statue of Mandela in his boxing gear by SA sculptor Marco Cianfanelli, was erected nearby and is still a favourite spot for visitors to the inner city.
Two lessons can be learnt from this experience. The first is that the long-standing SA expropriation law was a powerful instrument for public officials who were willing to be proactive and accountable. The second is that expropriation should be used very carefully indeed.
As is often the case in SA, the difficulty is not with our laws and policies but with their implementation. Government officials rarely have the skills, discipline and drive required to use their extensive legal powers, or they use these powers for the wrong reasons.
Expropriation should only be used for sound reasons, with compensation based on market value, supervised by a competent court. This continues to be an excellent basis for rational, well intentioned state action.
• Bethlehem is an economic development specialist and partner at Genesis Analytics. She has worked in the forestry, renewable energy, housing and property sectors as well as in local and national government.
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