The bill allows the state to expropriate land in the public interest, including for land reform. It replaces current legislation that only caters for expropriation for public purposes such as building dams, roads and airports. Parliamentary hearings are scheduled for May and the Bill is expected to be passed into law by mid-year.
Government’s approach to expropriation so far provides little cause for concern. The Restitution Act already allows for expropriation of land under claim from farmers who refuse to sell. Despite plenty of public posturing and rhetoric, government is clearly wary of scaring off foreign investors and has proved extremely reluctant to exercise these powers. But it’s by no means clear that a future government, especially one more inclined to cave in to populist demands for radical action over the land issue, won’t be tempted to throw caution to the wind.
The Bill has several serious flaws that could prove dangerous in the wrong hands. Firstly, its scope is too broad. Any government or non-profit entity can ask Public Works Minister Thoko Didiza to expropriate any property, not just land, if it can make a case that this would be in the public interest. Public Works will become the ultimate authority for all expropriations.land to expropriate, the merits of each case and compensation to be paid. No legal, agricultural or property expertise is required, although review judges must be well versed in expropriation law.
Thirdly, landowners don’t get to keep their farms while fighting an expropriation order in court, leaving them landless while cumbersome legal and administrative processes take their course. Several strident attacks on the Bill, since it was approved by Cabinet in March, have proved unhelpful and appear to have hardened attitudes among officials. Detractors have objected loudly to the Bill’s implication that the market value of a farm would henceforth no longer be the prime determiner of the compensation to be paid.
But expropriation at below market value has been enshrined in our constitution since 1996 and is considered an important part of the negotiated settlement that ended apartheid without a civil war. The reaction from Public Works, the department that’s drafting the law, was to amend it to make explicit provision for allowing compensation at below market value.
Emotions became heated over claims that the Bill imposed several limits on the landowner’s rights to court redress, particularly in objecting to the compensation offered. But in fact, farmers are given several opportunities to object to the compensation offer, including in court. The minister must be able to convince a judge that both the decision to expropriate and compensation are reasonable and both parties can appeal a court ruling.
Moreover, there is little to support the claim that the is being rammed through to give effect to populist resolutions taken at Polokwane. Amending the apartheid-era expropriation law of 1975 was a key demand of the 2005 Land Summit and forms part of a three-year review of the willing-buyer, willing-seller policy submitted to Cabinet last month that will inform a new white paper on land. And if anything, a new realism is evident in government’s thinking on land. Land affairs director general Tozi Gwanya, whose department is most likely to use the new law, claims to have political buy-in from both Cabinet and the post-Polokwane ANC to scrap the 2014 deadline to meet his target of redistributing 30% of white-owned farms to blacks. He wants every rand spent on buying land to be matched twofold by post-settlement support and a solid plan to implement it, to ensure land reform farms don’t keep collapsing. He says this will take until at least 2025.
However, there is disquiet in several quarters that more consultation did not take place and that several concerns raised during public workshops on an earlier draft of the Bill were not included in the version tabled in parliament in April.
An important question needing more discussion is who should determine compensation – the courts or the state? The constitution is unambiguous: in the absence of agreement between the landowner and the state, the amount of compensation must be “decided or approved by a court”.
The Bill leaves the decision to the executive, subject to court review. Legal opinion is unanimous that it would be unconstitutional for the state to take the final decision, but officials argue the constitutional burden is met because the court can be asked to approve any decision.What constitutes fair compensation also requires further debate. Current expropriation law makes provision for owners to be compensated for future financial losses or be paid so-called solatium or tranegeld – a sweetener for the emotional distress suffered. This means expropriated farmers are, in effect, paid above market value, which is clearly politically unpalatable.The new law not only dispenses with both, but allows the value of any past state investment or subsidy in acquiring or improving the property to be subtracted from the price paid to the expropriated farmer. This becomes especially problematic with more recent landowners who paid market value for their properties and did not enjoy any subsidies.
Of further concern is that the land boards lacking farming or property expertise are required to advise the minister on how just and equitable compensation should be calculated. There’s clearly political momentum for getting landowners to share the cost of expropriation, particularly because the Bill also requires the state to compensate holders of unregistered land rights, such as farm tenants. One senior politician told me it was nonsense for white farmers to expect to be paid market value for land their forebears took from blacks without extending them the same courtesy.
But any hint that the state wants to use legislation to drive down land prices for redistribution will clearly deter much-needed investment in the agricultural sector, with likely knock-on effects of rising food prices and deepening poverty in rural areas – neither of which are politically desirable.
Gwanya’s position mirrors government’s ambiguity. He strongly denies his department will seek to use expropriation as a tool to bring down the cost of land reform, but concedes he expects the law to curb price expectations. He insists he will happily pay a realistic market value based on a farm’s productive capacity, but wants to discourage farmers from demanding speculative prices. But Gwanya and his officials are also well aware
Secondly, race and gender are the only criteria for appointing members of boards set up to advise the minister on which that buying land on the open market at negotiated prices tends to be quicker and cheaper than expropriation, because of all the legal and administrative steps involved.
Pretoria is actively encouraging the provinces to find farms for sale that can contribute to the 30% target. Beefing up capacity to process these transactions more efficiently is also regarded a priority. This is far from the beginning of widespread state-sanctioned land grabs and therefore fears that the new law signals the start of a desperate bid by government to inject some life into its flagging land reform programme by embarking on large-scale expropriations are unfounded.
There is no such conspiracy. The real danger lies in conferring substantial powers to the state without providing sufficient clarity on the necessary legal checks and balances, which makes it open to abuse. Unless these flaws are ironed out before the Bill is passed into law, future generations of South Africans, both black and white, will pay the price.
