South Africa: Expropriation In South Africa - A Changing Landscape

Introduction

During his maiden State of the Nation address, South Africa's president, Cyril Ramaphosa, stated that the implementation of a land redistribution programme involving expropriation without compensation is on the ruling party's agenda. This is in line with the policy decision on expropriation taken at the ANC's 54th national conference in December 2017. He briefly explained that the government would undertake a consultative process to determine how to put this policy into effect.

Soon thereafter, on 27 February 2018, the EFF's leader, Julius Malema, called for a motion establishing an ad hoc committee to review and amend section 25 of the Constitution to allow the state to expropriate land, in the public interest, without compensation.1 The ANC proposed an amended motion for Parliament's Constitutional Review Committee to "undertake a process of consultation to determine the modalities of the governing party resolution [relating to expropriation without compensation]". The amended motion was adopted by the National Assembly.

By adopting the motion, the National Assembly has introduced a process that could result in the amendment of the Constitution, to allow for the expropriation of land without compensation.

In this article, we provide an overview of the current expropriation regime in South Africa.

Applicable Laws and Policies

In the succeeding paragraphs, we provide an overview of the key laws and policies relating to expropriation:

Constitution: The Constitution currently provides that property may only be expropriated in terms of a law of general application, (i) for a public purpose, and (ii) subject to compensation. Essentially, there must be a specific reason for expropriation as seen in section 25(2) of the Constitution.

White Paper on Land Policy: In terms of the White Paper on Land Policy2, expropriation would only be considered by the state in a situation where there is no reasonable alternative land and the owner refuses to sell or negotiate a fair price (as calculated in terms of the compensation formula set out in section 25 of the Constitution) with the state.

Expropriation Act: The Expropriation Act No. 63 of 1975 (he Expropriation Act) remains in force. The Expropriation Act sets out a procedure for expropriation, as well as the calculation of compensation for expropriation. The Expropriation Act is in the process of being amended. On [insert date], an amended Expropriation Bill was enacted. However, it has subsequently been referred back to Parliament due to concerns regarding inadequate public participation.

Current Process of Expropriation

The table below provides the step-by-step process of expropriation, as provided under the Expropriation Act

Step Taken in Expropriation Process Action Required Time Constraint
Decision on whether to consider expropriation Adhere to criteria i.e. if in the public interest or to overthrow the apartheid wrongdoings.

Determine the Compensation
N/A N/A
Preparing for Hearing:

Recommendation of Expropriation and Compensation
Notice of Recommendation for Expropriation

Memorandum of Justification for Expropriation

Approval of Memorandum to Director General of Land Reform

Submission to Director General of Land Reform N/A
The Hearing:

Serve to Owner of property:
  • the Notice of Recommendation and Compensation
  • Memorandum for Justification
How to deliver

Possibility of owner to respond
Delivery of the Notice of Recommendation of Expropriation to owner of property 21 Days
Preparing for Expropriation Prepare the Memorandum to the Minister of Public Works

Prepare the Notice of Expropriation and Compensation
Submission to the Minister of Public Works 6 Days
Serving the Expropriation and Compensation Notice

Payment of Compensation
Ensure Delivery of Notice

As stipulated
Deliver Notice of Expropriation and Compensation to owner of property 14 Days
Payment of Compensation As stipulated Cheque to be handed to owner of property 60 Days
Transfer and Registration of Property Prepare for Transfer and Registration formalities Register expropriation with Registrar of Deeds

Conveyancer see to transfer of property
N/A

The future of expropriation

At this stage, it is not clear to what extent the expropriation regime will be changed in South Africa and whether or not compensation will remain a requirement for lawful expropriation. In the succeeding paragraphs we provide a summary of some of the views in this regard.

For expropriation without compensation:

Cyril Ramaphosa (President, Republic of South Africa) addressed the issue with the statement "to redress a grave historical injustice" and leaned on the basis that expropriation without compensation should be implemented in a manner that promotes agricultural production and that land should be returned to those from whom it was unjustly taken during apartheid and colonialism.

Julius Malema (Member of Parliament and the leader of the Economic Freedom Fighters) opened with the determined notion: "The time for reconciliation is over. Now is the time for justice." He continued by stating that they did not seek revenge on white people but rather the restoration of black people's dignity.

Rural Affairs and Land Reform Deputy Minister, Mcebisi Skwatsha, announced a similar view to Malema and added: "We want to take everybody along in achieving an equitable society."

Against expropriation without compensation:

MD Cas Coovadia (Banking Association of South Africa) gave a directive at the Cape Town Press Club function, that the banking sector was hopeful that newly elected president Cyril Ramaphosa would start a new chapter on land expropriation, debt relief and social grants in a similar manner that resulted in the re-negotiation of the quarrelsome Mining Charter. Instead, swayed by the outcome that expropriation without compensation would erode property rights, this would mean that land could no longer serve as collateral for loans, resulting in major shortcomings to the banking sector.

Thandeka Mbabama (Member of the National Assembly, Member of the Democratic Alliance) exaggerated the undeniable need to rectify the past's discrepancies, but expropriation without compensation "cannot be part of the solution". She blamed the motion as a way of the ANC to divert from its failure to meet land reform targets and accused that it was a "lie peddled by the ANC, who fears being outflanked on the left by the EFF".

Pieter Groenewald (leader of the Freedom Front Plus) argued: "If you continue on this course, I can assure you there are going to be unforeseen consequences that are not in the interest of South Africa."

Mosiuoa Lekota (Cope leader) had his say on the podium and shook the media, by stating "there is a danger that those who think equality in our lifetime equates that we must dominate whites. This is PAC of '59, it's no longer the African National Congress".

Conclusion

If implemented, a policy of expropriation without compensation would have a significant impact on the Republic, some negative and some positive. The proposal of the policy has evoked a mixed set of reactions, with stakeholders on each side of the debate having strong views on the matter. Therefore, it is likely that irrespective of the findings reported on by Parliament's Constitutional Review Committee by 30 August 2018, that there will be a huge outcry over the decision taken.

Dentons would also like to thank Ameer Jassat, Candidate Attorney at Dentons in JHB, for his contribution to this month's newsletter.

Footnotes

1. https://www.news24.com/SouthAfrica/News/land-expropriation-without-compensation-what-you-need-to-know-20180228 (Online), last accessed: 19 March 2018.

2. White Paper on Land Policy, Department of Rural Development and Land Reform, 30 April 1997.

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