When the Expropriation Bill of 2020 (the Bill) was gazetted in October last year, Deputy President David Mabuza claimed that it would ‘address the injustices of the past and restore land rights’.
But the Bill is in fact a draconian measure that can be used to strip millions of South Africans of their homes and other assets without the prior court orders, fair procedures, or equitable compensation that the Constitution requires.
The Bill is unconstitutional
The Bill is unconstitutional in at least three ways:
First, its open list of the circumstances in which ‘nil’ compensation may be paid for land is void for vagueness. It also contradicts the rule of law, the ‘supremacy’ of which is guaranteed by the Constitution’s founding provisions in Section 1.
Allowing expropriation for nil compensation is inconsistent with Section 25 (the property clause), which requires ‘an equitable balance’ between the nation’s interest in land reform and the interests of the expropriated owner. Since the expropriated owner cannot be expected to shoulder a disproportionate share of the costs of meeting a broad societal need, nil compensation is intrinsically inequitable and invalid.
Second, the Bill’s procedural rules allow an expropriating authority to act as judge and jury in its own cause. This contradicts, among other things, Section 1 of the Constitution (with its emphasis on the supremacy of the rule of law), Section 25 (with its objective requirements for a valid expropriation), Section 33 (which guarantees fair and reasonable administrative action) and Section 34 (which gives people the right to have the compensation payable decided by the courts before the state unilaterally takes ownership and possession of their key assets).
Third, the Bill defines ‘expropriation’ in a way that is intended to allow the government to take custodianship of all land in the country without having to pay any compensation at all. It seeks to achieve this by drawing a technical and artificial distinction between the taking of ownership by the state – which counts as an expropriation requiring ‘just’ compensation – and the state’s assumption of custodianship, which does not. However, what the Constitution means by the term ‘expropriation’ is not so easily circumvented.
The Bill will not help with land reform
The government has repeatedly claimed that the Bill will help ‘return’ the land to ‘the people’. But land and other assets expropriated for nil or inadequate compensation will in fact be owned or controlled by the state. Nor will such property be transferred into the ownership of black South Africans thereafter. Instead, this property will be held by the state as a patronage tool and will be used by it to deepen dependency on the ruling party. That is the fraud at the heart of the Bill.
In addition, though land reform since 1994 has resulted in the transfer of some 10 million hectares, this has brought very little benefit to anyone. Instead, more than 70% of previously successful farms have fallen out of production, while many agricultural jobs have been lost.
The Bill cannot rectify these failures, which have little to do with land acquisition costs. To turn land reform from failure to success, we need vastly better bureaucratic efficiency, increased training and skills, and effective action against corruption and crippling rural crime. Farmers also need secure ownership rights – free from any threat of expropriation – so that they can borrow working capital from the banks.
The economic damage will be massive
After almost a year of Covid-19 lockdowns, GDP has shrunk by some 8%, almost 2 million people have lost their jobs, and tax revenues have tumbled. Public debt has soared to some 82% of GDP, and is set to rise even higher (to 95% of GDP) by 2025. The government is borrowing roughly R2.2bn a day, mainly to fund consumption spending, and the budget deficit could rise to almost 16% of GDP in this financial year. The country has been downgraded to sub-investment or ‘junk’ status by all international ratings agencies.
Against this background, South Africa urgently needs an upsurge in foreign and local direct investment to jumpstart growth, expand employment, and quicken economic recovery. But this will not be possible under the Bill, which – contrary to the ANC’s own 54th national conference resolution – is sure to destabilise the agricultural sector, endanger food security, and undermine economic growth. It will also erode business confidence, increase the unemployment rate, reduce tax revenues, add to an already unsustainable burden of public debt, and push the economy closer to the brink of collapse.
The real aim is to advance the NDR
The ANC’s real aim is to help advance the ‘national democratic revolution’ (NDR) to which it has been committed for more than 50 years. The NDR is a Soviet-inspired strategy which the ANC’s communist allies in the tripartite alliance openly identify as offering the ‘most direct’ route from South Africa’s predominantly free-market system to a socialist and then communist future.
In pursuing the NDR, one of the ANC’s main objectives is to bring about the ‘elimination of apartheid property relations’. However, the word ‘apartheid’ is a red herring. Replace it with the word ‘existing’ and the real meaning of this goal becomes apparent.
Putting an end to private property rights is vital to the NDR for various reasons. Socialism and communism demand pervasive state control, which cannot be achieved when the ownership of land and other assets is dispersed among millions of individuals and enterprises. In addition, private property rights are crucial to free markets, which cannot function without them.
Capitalism has been extraordinarily successful in lifting people out of poverty and meeting their needs in innovative and efficient ways, but the ANC nevertheless remains deeply hostile to it. The ANC is also indifferent to the starvation and destitution that expropriation for little or no compensation has triggered in Venezuela, Zimbabwe, and other socialist countries. All that matters to the ruling party is its ideological determination to advance the NDR and thereby achieve a supposed socialist ‘nirvana’.
The vital need to ‘kill the Bill’
The Bill will rig the rules of the game by bypassing all common law and constitutional protections for property rights. It will deprive the Constitution of much of its vital force, leaving people far more vulnerable to the destructive interventions of an increasingly corrupt and venal state.
Over time, the Bill will be used to strip individuals and others of their land, homes, business premises, pensions, and other assets – and to vest these in the hands of a powerful political elite intent on pursuing a socialist NDR.
There is no time to waste in mobilising against the measure. South Africans only have until 10 February to kill this bill and protect property rights for everyone, black or white, rich or poor. Add your voice here.
Even without the EWC constitutional amendment bill, the Expropriation Bill (the Bill) will allow property of many kinds – not only land – to be confiscated by municipalities and other organs of state for no or inadequate compensation.
According to the Bill, ‘it may be just and equitable for nil compensation to be paid’ for expropriated land which:
is unused but is being held in the hope of it’s appreciating in value over time;
has been ‘abandoned by failing to exercise control over it’;
poses a ‘health, safety, or physical risk’ to others;
is worth less than the state subsidies from which it has benefited; or
is owned by a state-owned entity which is not using it and consents to the expropriation.
This list is intended to reassure South Africans that EWC will be sparingly used and justifiably applied. However, the circumstances in which ‘nil’ compensation may be paid for land are expressly ‘not limited’ to those set out in the Bill. They may thus extend far beyond this list.
The Bill also empowers all municipalities – along with various other state entities at higher levels of government – to expropriate land and other property by following a set of specified procedures. These procedures are heavily skewed against the owner and in favour of the government. For example, a municipality is obliged to consider any representations received opposed to expropriation, but it need not respond to them or give reasons for rejecting them.
Enormous ramifications
The Bill has enormous ramifications for the 1 million white and 8.7 million black South Africans who own houses, as well as for the roughly 17 million black people with informal rights to plots held in customary tenure. All these individuals will be vulnerable to expropriation by a state that is cash-strapped with little to no options for remedy.
Often even the limited safeguards set out in the Bill may not be fulfilled in practice. In the Groutville area of KwaZulu-Natal, for instance, the 3 000 or so hectares of land that Bheki Dlamini had inherited from his great-grandfather – and to which he had finally obtained the title deeds in 2002 – were expropriated in March 2013 by the KwaDukuza Local Municipality in return for R117 000 in compensation, which was offered but not paid. (Mr Dlamini claimed his house alone was worth R550 000 – while a much smaller 240 ha farm is currently on sale in nearby Stanger for R16m, though its value may not be fully comparable.)
The municipality’s confiscation of Mr. Dlamini’s land, that his family had owned for generations, is but one example of how the Expropriation Bill will be implemented in practice.
The government claims that this Bill will address the injustices of the past. In fact, the Bill is a draconian measure that can be used to strip millions of South Africans of their homes and other assets without the prior court orders, fair procedures, or equitable compensation that the Constitution requires.
