As the new year gets under way, property rights – their maintenance or degradation – look set to be a major policy theme. This has been the case for some years and was given additional momentum last year with the publication of the Expropriation Bill. The latter is the latest in a series of attempts to produce new expropriation legislation. And in common with earlier iterations, the current bill seeks to enhance the power of the state in relation to those subject to it. This means both private individuals and the private sector.

This is not always properly understood.

In a recent interview with the Farmer’s Weekly, Professor Elmien du Plessis remarks of the Expropriation Bill: ‘It sets out the procedure that the authorities must follow when expropriating property, how compensation must be calculated and paid, and where and when decisions can be challenged. It includes a comprehensive mediation process, and guarantees access to the courts as the final form of oversight.’

This would bring ‘clarity’ for all concerned.

But this misreads the legislation and its likely impact.

Process of expropriation

The process set out in the Bill is revealing. It requires an ‘expropriating authority’ to investigate the property it wants. Then it must then negotiate with the owner for its purchase. If no agreement can be reached, it can turn to expropriation. This it does by issuing a notice of intention to expropriate. This invites representations on the expropriation and compensation envisaged – but these must only be considered, not necessarily responded to. The ‘authority’ is not required to explain the reasons for a decision to reject them.

Then comes a notice of expropriation. This will set out the dates on which ownership will pass to the state. This could be very soon indeed, since the only time limit imposed is that ownership cannot pass on a date which is ‘earlier than the date of service’ of the notice.

Under Clause 21 (1), mediation may be sought to challenge the compensation offered. There is no explicit right to dispute the validity of an expropriation – is it really in the ‘public interest’? – but this does seem to exist in Clause 21(6). Recourse to the courts over the amount of compensation is expressly provided for in the Bill, but this wording ‘does not preclude a person from approaching a court on any matter relating to the application of this Act’.

But the protection this provides is rather diminished by the fact that ownership and the right to possession will pass to the state on the dates provided in the notice of expropriation. This is irrespective of any ongoing dispute over the compensation to be paid, as set out in Clause 21(8).

The upshot is that the Bill establishes a relatively simple and convenient system for expropriation – for the state. For those losing their property, it is less generous. Launching a court challenge will not be possible for many people whose property is to be expropriated. In view of the way the process is structured, they may well have to challenge the taking after they have already lost their property and suffered other indirect damages such as moving expenses, the possible loss of income, and so on.

Note that this is not simply about the risk of ‘nil’ compensation being paid for individual properties, as serious as that may be. The danger is of an expropriation regime that empowers the state to deprive those subject to it of their holdings without adequate compensation, and as a matter of course. (Keep in mind too that regulations gazetted in late 2019 under the Property Valuation Act of 2014 proposed a formula for evaluating property for land reform purposes that seems to grant the state generous discounts when calculating compensation.)

Danger for property owners

Indeed, the very understanding of expropriation in the Bill – ‘the compulsory acquisition of property by an expropriating authority or an organ of state’, which means that the state must become the new owner – raises an additional peril for property owners. This definition builds on the 2013 judgement in the Agri SA case, which ruled (in brief) that as the state had become a custodian and not a true owner of mineral rights, no compensation would be payable to those who had lost their rights. While this judgement was explicitly limited to the facts of the case, its potential application elsewhere has piqued policy makers’ interest.

The Expropriation Bill envisages turning this approach into a general principle of law. The implications of this are extensive and concerning, since from it could follow a compensation-free taking of all land with the state as custodian.

Defenders of the Bill have argued that it is in line with Section 25 of the Constitution. Yet to quote Prof du Plessis, this is the ‘biggest contention’. Frankly, there is no clarity at all as to where this will lead. It is entirely possible that the amended Section 25 might propel major (unwelcome) changes to the Bill. Recall that just before the pandemic hit, the African National Congress said that it rejected the proposed amendment and wanted the Constitution to specify that expropriation decisions would vest in the executive and not the courts.

Prof du Plessis, however, goes on to say that farmers should not get ‘worked up’ about the amendment. She doesn’t see it affecting working farms – although elsewhere she refers to the fact that the government’s 700 000-hectare redistribution programme has targeted a number of these. So, taken together, the Expropriation Bill and the associated moves on property rights constitute a seminal peril to the country. This will only be compounded by complacency.

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Terence Corrigan
Terence Corrigan is the Project Manager at the Institute, where he specialises in work on property rights, as well as land and mining policy. A native of KwaZulu-Natal, he is a graduate of the University of KwaZulu-Natal (Pietermaritzburg). He has held various positions at the IRR, South African Institute of International Affairs, SBP (formerly the Small Business Project) and the Gauteng Legislature – as well as having taught English in Taiwan. He is a regular commentator in the South African media and his interests include African governance, land and agrarian issues, political culture and political thought, corporate governance, enterprise and business policy.

28 COMMENTS

  1. The only advice that would make any sense is to eradicate all expropriation legislation entered into over the past few years.
    Expropriation without compensation is more like using four letter gutter swearing when it comes to attracting investment of any size & value.
    From he start the whole idea has been poisonous. The whole idea is seen as legalised theft of assets & the perception is unlikely to change. As long as the likes of Malema lurking in the background & the Chinese presence in he economy cast shadows expect “0” investments of any medium to long term value!! Investors are not a bunch of greedy bureaucrats feeding off tax payer funds in gay abandon. They are responsible hard working people working for the benefit of hard working people who have invested well earned wealth & expect good returns in a stable & profitable undertaking.

    The ANC government does not project that image. Quite the opposite in fact!

    • Agreed. i wonder if there is a way to quantify how much South Africa has lost by means of investment purely because of the mere mention of nationalisation. Oops I mean expropriation without compensation.

  2. I do not know how useful idiots like Elmien du Plessis gets so much airtime on the main stream news channels.

    • It is exactly because of her support for government policy in general threat she gets so much airings. The same applies to other useful idiots such as Prof. Pierre de Vos (his biased take on the Coligny fiasco and recently his Gary Player smear come to mind).

  3. I agree with Graham. Investors don’t take avoidable risks as they can invest
    in so many other countries where there is land and business security. This new
    Legislation will certainly drive away the serious investors that we need so much!

  4. There’s been barely a peep in mainstream media about expropriation and it’s dangers. As a result I’m sure most people remain blissfully ignorant of it. It’s 100 percent pure undiluted Socialism. Just the very threat of it’s proposed implementation would be ruinous enough for any economy. So the only explanation I can see it that both mainstream media and those citizens who are aware of it must be convinced that it couldn’t possibly be implemented in our glorious so-called ‘democracy’. Will they only wake up when it’s too late?

    • Well, seeing as we are NOT a democracy at present, but under the control of an unelected Covid Command Council, with no oversight of our (sort-of) elected Parliament, then maybe we must act as non-democracies do. Is it time for Satyagraha yet?

  5. Together with this ludicrous Expropriation nonsense anybody with half a brain knows ANC ideology has led them to begin eyeing the appropriation of the SA Reserve Bank, pension funds , insurance companies & god knows how many other sources of income to fund their moronic “ideologies”,

    The whole of Africa has followed Marxism, there is not one really successful, independent, state showing any signs of progressing beyond being a burden on the World Bank, IMF and western capitalist economies. Their other alternative is to sell out to China which will confiscate the entire country.

  6. Join Elon Musk and dispense with property ownership – why would I want to own it anyway with all the responsibilities, etc. Maybe leasing or renting is a better option?

    • Small problem…….no one will own anything then, all preferring to hedge their risk, so where is the stock going to come from??? No, this is pure legalized theft and can NEVER be in the public interest. Public interest is investment to generate the wealth a country needs – all expropriation legislation, no matter what form it takes, is totally against the public interest as it will lead, as does all socialism/communism, to wide-spread wealth destruction, poverty and starvation. Total and utter madness. Even the discussion of it, has harmed investment into the country. Money is flowing out of SA at such a rate, SARB can hardly keep up. I read the net outflow is counted in billions and billions since 2017. I refer interested readers to an article in The Citizen published on the 16 January 2019 “Tragic data shows capital fleeing along with jobs.” I say no more.

      • On the evidence to date the DNA of the ANC seems to be inclined to theft. All that this legislation will do is to legalise it when the government or it’s cadres are the thieves.

    • Exactly. By international standards, expropriation is an extreme measure, and it should always be followed by compensation to the effect that the rightful owner is ‘made whole’.

      This has nothing to do with redress. This has everything to do with egg on face after the ANC stole tribal land to build a soccer stadium, and now that tribe sits with nothing, and the ANC has many other such ‘upliftment projects’ in mind.

  7. That ideology is even more moronic than the ANC’s ideology. You obviously wish to survive on government handouts. Maybe you should wake up to the fact your government is bankrupt, so good luck to you!

  8. That this communist/socialist ANC regime has been allowed unhindered to rip the country apart (ZUMA/GUPTA/ANC state capture and mass corruption/looting) without any repercussions is beyond belief.
    It’s a tragedy that we have such weak opposition, and an over supply of monkeys and baboons blindly voting for a revolutionary bunch of over zealous greedy thugs.
    One comes to the conclusion that the only way forward is a counter revolution. When the ANC resorts to amending the Constitution (cast in stone) to satisfy their ideological madness, then one must know the end is nigh. So much for ANC ‘democracy’, a term they so fondly espouse when it suits them.

  9. This is a massive threat to our democracy. You remove property rights, you remove the corner stone of why people remain in the country. Wealthy landowners will simply sell up and take their wealth to countries where they have greater certainty. And people with money wont invest locally in land for fear of expropriation without compensation. The flawed socialist thinking of the ideologically bereft ANC.

      • Precisely. Property is worthless if there are no certain property rights. The ANC saw this with its own expropriated farms, which were passed around like village bicycles. That entails that whomever lands on it for a while, only invests and sets up shop for the next season, because long-term prospects are uncertain. I know very little about farming, but I don’t think it’s feasible to farm for a year at a time.

  10. Land expropriation is a fundamental objective of the ANC. The ANC and its alliance partners (including the EFF, COSATU, MK, etc.) have since its inception driven the agenda to steal, corrupt, and rape South Africa’s, the nation’s resources. Taking into account the level of corruption of the ANC state, the state capture, also corruption within the SOE’s, town councils and public sector / enterprises and the overall delinquency, incompetence of managing these resources has led to the situation of South Africa’s economic deficit of trillions of Rand. Looking at the destructiveness and malicious act of violence of the ANC and its alliance partner’s corruption at an epic scale, their public gatherings, emanating into burning of schools, infrastructure, sabotaging the economic stability and gross lawlessness of their constituents and followers – we can see as a direct consequence the demise of South Africa. – The facts are all available, you don’t have to go and search for it. The orchestrated killing of white farmers by the ANC and its alliances (evidence is quite obvious, because the ANC does nothing to stop or prevent this and denies it in World Forums) is yet another act to illegally expropriate land. The ANC and its alliance partners acts of racism is evidenced in every speech, gathering and public forum against whites which is clearly visible as declared by their BBBEE policies and they blame all their inability to build and grow the economy on everything else like colonialism, settlers, apartheid, even when the ANC talk about “our communities” or “our people” by its nature excludes whites. Any discussion or dialogue with the ANC and its alliance partners cannot be based on fundamentals and issues relating to the point at hand as their incompetence and inability to rational reasoning is reduced merely to blame everything on colonialism, discrimination, etc.
    Let’s take some facts from pre-1994 – It was not the National Party or any other political party that created the illegal squatters camps (now so called informal settlements/townships) nor any government policy that mandated these so-called illegal settlements to be build / allowed – it was intentionally orchestrated by the ANC as a means to expropriate land (get it for free, squat – the don’t pay mentality), channeling in thousands of illegal squatter into areas so that the political demarcation / regions can be defined to get the “majority” rule into play – occupying land illegally (expropriation without compensation). Why do the ANC not stop illegal squatters – you can listen to all the ANC’s excuses – but the ANC fundamentals are at play – expropriation of land without compensation. The fact that the ANC is pushing to legislate the expropriation act is nothing more than to try and “legalize” the land grab (without compensation) and try and “convince” the world that they are acting within a legal framework within the republics constitutional boundaries. This shows how illegitimate they are with their actions as a government.
    This all above means that the ANC and its alliance partners are threatening the sovereignty of the Republic of South Africa with it current policies and actions, which is an act of terrorism. This means that today the evidence is at hand that confirms and validates the conviction and sentencing of Mandela and its ANC collaborators (and alliances) as terrorists to the sovereignty of South Africa. If we take into account the judge’s verdict that the ANC are deemed a threat to the sovereignty of South Africa, this is now a reality which you can touch, see and feel – this should not escape the minds of the citizens of South Africa. We all need to protect our rights -livelihood, pensions, ownership of land and properties, citizenship, Human rights, etc. from the pilfering corrupt ANC and its efforts to destruct South Africa. This current economic destruction and downturn since the ANC came to power with its widespread of corruption has not been seen in all of South Africa’s history / existence since its discovery and land expropriation will not attract any investors internal or external to South Africa

  11. It is time that more people, particularly those that voted for the ANC, realised that the ANC is a socially toxic mix of criminals, masquerading as a democratic government. People need to start making concrete plans to deal with the destructive consequences of the ANC in government.

  12. Terrence, what confuses me is this : people opposed the changes to the constitution because they said “the existing constitution already allows for ewc”. This was true. So if the govt always intended to do ewc then why didnt they do it all these years ? And why would they suddenly do it now when they were always able to but did not ?

  13. I would suggest many of the above comments are circulated to interested sources overseas. Just maybe those who so ardently, but blindly, supported the ANC ‘freedom fighters/terrorists’ back in the 1980’s will realise all they were actually backing was a mob of self-serving “SKELMS”. Others, hopefully sympathetic to our cause, will want to learn the sad state of affairs presently unraveling in our once vibrant country.

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