New Expropriation Bill: serious threat?

All countries expropriate land to ensure that essential infrastructure such as dams, roads, railway lines and airports are built. What may be hurting the individual is considered to have a public purpose that is for the greater good of society.

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No, Agri SA subscribes to the constitution and acknowledges the state’s power to expropriate. The 1975 expropriation legislation is outdated and needs to be brought in line with the constitution. It only allows for expropriation for public purposes, whereas the constitution also allows for expropriation that is in the public interest.

How does one interpret what is in the public interest?

This is problematic. The constitution speaks of every South African’s right to equality and the right of access to natural resources as examples of what constitute public interest. Land reform is specifically mentioned as a legitimate tool to achieve this. For the rest, it is wide open to interpretation. With the new Bill, the Minister of Public Works will have carte blanche to interpret what he or she thinks is in the public interest and expropriate accordingly.

Is it only land that can be expropriated?
No, the Bill calls for the power to expropriate property. Property includes all assets, so that’s not only farmland. The Bill defines property as including a right in property and movable property. In the widest sense, property includes all assets that form part of a person’s estate such as their houses, cars, livestock and immaterial property such as patents and shares. The possible repercussions of the minister’s interpretation of what constitutes public interest now become clear. Also bear in mind that more black people are accumulating assets as well as land in the South African economy. They are also potential victims of expropriation.

The Bill prescribes that the minister should appoint an expropriation board. Please explain.

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This is another problem area. This board will advise the minister on all matters regarding expropriation, including the type of compensation and manner of compensating applicable in each case. As to the calibre of persons that could be considered by the minister, the Bill is non-committal. It merely states that the members of the board should reflect the racial and gender composition of the Republic. But it’s of crucial importance that this board should include only highly skilled and reputable people with a background in expropriation-related fields.

Who will determine compensation and how will it be determined?
This function resides with the Minister of Public Works or a so-called expropriation authority. An expropriation authority is defined in the Bill as: “any organ of state contemplated in Section 239 of the constitution, authorised by this Act or any other Act to acquire property through expropriation…” with the final say being the prerogative of the minister.

A host of factors have to be considered to determine the eventual compensation sum and manner of compensating including market value, history of the land, previous grants and subsidies, current use of the land, purpose of expropriation and any advice from the board or guidelines set by the minister. But then the Bill prescribes that no single consideration may outweigh another when determining compensation. This means that market value, the only objectively quantifiable measure available, can’t be more convincingthan any of the other subjective value measurements. This makes no sense, and the fear in farming circles is that the Bill is trying to set things up for below-market value expropriation.

How will below-market value expropriation affect the property market?

Investors may lose confidence in the property market, farmers may be reluctant to invest in production, food security may deteriorate and agricultural job losses may ensue. It could be very serious indeed.

Where does our independent judiciary fit into this?

I think the core of the problem lies here. According to the Bill, the judiciary will only have a review function. With the old law, where the authority and an expropriated entity could not agree on equitable compensation, the courts could adjudicate on the matter. With the new Bill, it’s proposed that the courts can only review the minister’s decisions regarding expropriation compensation matters. In this way, the court is severely restricted in its judiciary mandate as described in the constitution.
If the court rules that it differs with the minister or expropriating authority regarding a compensation issue, it has to supply reasons for doing so and refer the matter back to the minister. And so the court is essentially reduced to a rubber stamp for the Minister of Public Works.

Is the Bill unconstitutional?

I think a strong case can be made that it’s unconstitutional. The constitution guarantees citizens access to a fair trail, and this means full and direct access to a court of law. But with the Bill, the court will be restricted to reviewing a decision that the minister has already taken. The court can agree with the minister on the amount payable in compensation and approve it, or disagree and supply reasons for doing so. But it can’t adjudicate on the matter. Our democracy is built on the principles of separation of powers, where the judiciary should always be independent and not influenced by any organ of state. Clearly, when the adviser courts have to report to a minister on decisions it has no say in making it unconstitutional.

What influence will the Bill have on the amendments to the Provision of Land and Assistance Act 126 of 1993?

Act 126 will enable government to buy a going concern and not only land. Some observers predict that the Act will be used as a precursor to expropriation, if government is unable to find willing sellers. Agri SA therefore takes a clear stand that willing-seller, willing-buyer principles should always be in place when this Act is used. Agri SA is of the opinion that Act 126 should enable government to buy enough land to fulfil its 30% land reform targets, making land expropriation unnecessary. – Wouter Kriel Contact Annalize Crosby on (012) 300 9500 |fw