Property & Wealth

Expropriation Bill of 2015 fails constitutional test

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The draft Expropriation Bill presently before parliament fails to embrace the extensive property rights, defined and entrenched in the list of human rights contained in South Africa’s Constitution.

This is the opinion of the Institute of Race Relations (IRR), a search-based think tank that has strongly voiced its concerns about the latest version of the draft bill, now in its final phase prior to promulgation. In the IRR’s view the bill is based on pre-1994 legislation.

In its most basic sense, the verb expropriate simply means to deprive an owner of property. In the political context expropriation provides a powerful tool for governments to appropriate land to meet their policy objectives.

Property, as referred to in the bill, is so vaguely defined that it is not confined to land only and could also relate to tenure affected by past discriminatory laws or practices, according to the IRR. 

IRR Head of Policy Research, Dr Anthea Jeffery, correctly argues that the Act should be aligned to the Constitution to protect the rights of citizens and landowners. Instead, it sets out to increase substantially the powers of government to expropriate land “for public purposes” or “in the public interest”, is formulated to be “in the direct interests of government” and is as unconstitutional as the previous draft bill of 2013.

The bill is steered through parliament by the Department of Public Works (DPW) that wants it pushed through parliament without further delay.

In its present form it will allow the expropriating authority (for example a municipality) to acquire targeted property for public purposes by simply serving a notice of expropriation on the owner. Here is the first sting in the tail: ownership of the property will then automatically pass to the state on the “date of expropriation” specified in the notice, which may be soon after the notice is served. 

 In a nutshell: the bill aims to empower the state, on the basis of a reasonably simple notice of expropriation, to confiscate targeted property upfront “in the public interest”, placing the onus on the landowner to seek redress from the appropriate court at considerable personal expense. 

 The right to “posses” the property by the state is similarly expedited as well as the process of transfer to the expropriating authority. The second, more lethal, sting in the tail is that the bill, as presently worded, provides that the amount of compensation to the luckless landowner is the amount as stated in the notice of expropriation.

 In short: The state can unilaterally determine the amount of compensation.

 Where does your landowner turn to?

The bill states that the owner who objects to a final offer of compensation must start court proceedings within 60 days for contesting the amount offered by the state. If they fail to do so, they will be deemed to have accepted the state’s offer.

Simply put, the onus to go to court is shifted onto the property owner and not, as in the past, onto the state. It is simply assumed that the affected landowner has the resources to match the deep pockets of the state in the appropriate court.

This is in conflict with common law, developed over centuries, and the Constitution, both geared to protect individual property rights.  

More specifically, since 1996 the Constitution has strengthened the common law in three fundamental respects:

  • The property clause lays down several conditions for an expropriation to be valid and it, for instance, cannot be arbitrary;
  • It stipulates that legal disputes must be resolved in a fair public hearing before a court; and
  • It bars the state from evicting a person from their home without an appropriate court order.

The threat nevertheless remains that, in its current wording, the bill aims to give the state – all three tiers of government, state-owned enterprises (like Eskom, Telkom, etc.) and its myriad agencies the power to expropriate any land, be it agricultural, commercial, industrial, mining or residential – without due regard to the common law and Constitution.

Intended positive role of expropriation in land reform

 An argument, advanced in favour of the bill, is the widespread need to speed up land reform in the public interest.

While this objective is a noble ideal, it must be balanced against the constitutional imperative of fairness and justice.

Some research indicates that:  

  • As little as 8% of previously deprived landowners in fact want land to farm as a way of compensation for past dispossession; and
  • Over 70% of land reform projects to date have failed and the final result has simply been to take productive land out of circulation, with very little benefit to the recipients.

Clearly, land reform must have its own agenda and strategy and should, for instance, be balanced against the national/regional/local need for food security and cannot simply rely on a one-sided act of parliament to succeed.

For instance, while a fierce debate is still taking place on the status of customary tenure, which presently resides under the jurisdiction of the state as represented by the local traditional leaders, the question arises whether a municipality has the power to expropriate a family’s land for a RDP project that will ostensibly benefit many more occupants.

Curiously, the EFF is also vehemently opposing the bill, but not on the grounds discussed here. Their viewpoint is that they entirely reject compensation as a consideration when deciding on expropriation.

Legal requirements

Dr Jeffery went out of her way to clarify the legal requirements for and role of expropriation in a modern economy and pointed out that since 1994 the rights of all citizens (and investors or visitors) to property are clearly defined in the Constitution. The courts have on many occasions stepped in to protect individuals from infringements on their rights by the state.

The Constitution has also laid down clear criteria for the state to follow when expropriating property:

  • The process starts with an order of court and not an arbitrary government notice;
  • Affected landowners are entitled to fair compensation on a willing buyer and a willing seller basis, and if either party feels aggrieved they can go to court to get finality; and
  • In these instances, the compensation is based on fair market value.

Finally, as often argued in the past, the rule of law should be upheld under all circumstances and property rights are intertwined with the prosperity of a nation and that of its individual citizens.

by Eve van Basten

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