One of the common expressions of derision in our political lexicon is the ‘tickbox exercise’. It suggests the substitution of substance by form. Going through the motions. It’s done because there is a requirement for doing it – but don’t expect it to be taken seriously.
Invariably it means that those conducting it have made up their minds, and need to follow some sort of process to do what they’ve already decided.
The business advocacy organization Sakeliga has done the country an invaluable service in sourcing the Socio-Economic Impact Assessment Report behind the Expropriation Bill. This is an important document as it sheds light on what policy makers expect the real-world outcomes of this piece of legislation – currently wending its way through parliament – to be. It is central to the concept of ‘evidence-based policy-making’, to which the South African state is nominally committed.
Given that the Expropriation Bill is a key part of the overall reordering of property rights (the idea behind the broader Expropriation without Compensation agenda), and that this is recognised by both its supporters and opponents, though with different interpretations, its impact deserves to be properly and dispassionately studied.
So, what does this document tell us?
It’s difficult to do this document justice, because it rapidly becomes apparent just how little effort has been put into analysing the legislation and the issues at hand. The document is amateurish, poorly written and internally inconsistent.
In the first instance, it actually deals relatively scantily with the legislation, at least in the sense of its technical details. It notes, correctly, that the existing law is not constitutionally compliant, and that it introduces the idea of expropriation in the public interest, but not much besides. Rather, its focus is on the broader policy question of land reform and how granting the state more ready access to the property of its subjects will impact the country.
In a way, this might not be unreasonable. It does rather confirm the suspicion that the aim of the law is to use large-scale expropriation for land-reform goals – which might be of concern to a great many people and institutions. The report states that the Bill exists to ‘remove socio-economic barriers’ by granting ‘the state extraordinary authority to compulsorily take immovable property from persons and corporations for use in the public interest’.
Commandeer other assets
Yet there is next to nothing in the report about the possibility of the legislation being used to commandeer other assets, although this has been repeatedly raised in the EWC debate, and had indeed been raised long before the report was produced (it is date-stamped 24 October 2019). The Bill itself does not confine itself to land. The Department of Public Works, under whose ambit this law falls, recently recommended that the amendment to section 25 of the Constitution should specify that assets other than land can be taken without compensation.
However, having chosen to evaluate the Bill in terms of a broad policy agenda, it proceeds to do so in the manner of something produced to justify a course of action, rather than to interrogate it.
This is, the report says, a good Bill. An exceptional Bill. It has this to say: ‘The proposed measure seeks to facilitate access to land on a non-discriminatory basis related to gender, sex, age, disability, religious belief and political affiliation [and] has the potential to reduce unemployment, poverty, homelessness, criminality and morbidity. The benefits thereof would be the promotion of entrepreneurship, food security and productivity of the nation in general.’
The report itself fails to spell out in any detail how giving the state more latitude to take private property will achieve any of this. It’s just a bland assertion made without any substantiating evidence. In fact, it flatly contradicts the international experience of countries such as Zimbabwe and Venezuela. There seems a general assumption that once the state has taken property – in some instances, at ‘nil compensation’, in order to ‘facilitate the acquisition of privately owned property in a cost-effective manner’ – this will become available to deserving people and institutions and ‘entrepreneurship, food security and productivity’ will grow from that.
Lacking is any explanation for why current land reform efforts have underperformed. Or for that matter, why South Africa’s growth performance for well over a decade has lagged well behind that of comparable emerging markets. Is this really all about land distribution? If this seems like stretching the reasonable purview of the report, it is only because of the rather expansive suggestions the report itself makes.
Indeed, one might fruitfully ask – as a SEIAS report surely should – about the prospects for successful implementation and for achieving the wonderful outcomes it envisages.
Here it has good news. There are, it concedes, some concerns about the ability and probity of the bureaucracy to oversee this. ‘Government officials may abuse the powers in the legislation,’ it notes. But not to worry: ‘The apprehension appears to be misplaced. There are sufficient checks and balances in both government policy and different legislations to keep the issue in check. Continuous rights & obligations advocacy drives should be used to get persons to know the relevant legal instruments.’
Elsewhere, it refers to how the Bill ‘obviates the possibility of an irrational expropriation by requiring consultation with affected parties’.
Trail of tears
How anyone who has followed the trail of tears that is South Africa’s corruption and state misgovernance record in recent years (or its land reform programme) could take this remotely seriously is a mystery. More accurately, it is an insult to the intelligence of the report’s audience. Agriculture, land reform and rural development minister Thoko Didiza recently spoke in Parliament about the failings of the land administration systems: ‘It’s clear what we have in large measure are individuals who may not have the requisite skills to undertake this task.’
One looks in vain for an acknowledgement of this in the report.
But one would find the South African Local Government Association quoted as supporting the Bill as a means of the ‘promotion of efficiency in governance and uniformity.’ One might take this seriously if SALGA could point to a general standard of ‘efficiency in governance’ among South Africa’s dysfunctional local governments. The Bill in the hands of many of SALGA’s members is hardly an enticing prospect.
Fortunately, according to the report, it seems that there is near-unanimous support for the Bill. Of all those that the report quotes – admittedly, not an exhaustive list of ‘stakeholders’ – only Agri SA has any reservations. But even it ‘cautiously supports the Bill’. The Banking Association of South Africa (BASA), Nedbank and the American Chamber of Commerce are all in support. (Their stance would, one imagines, require some explanation…) No mention is made of those who, like the Institute of Race Relations, have been outspoken in their opposition, and have made extensive public commentary and policy analysis of the measure. Curious, that.
Should there be people concerned about the impact of the measure on investment and growth, the SEIAS offers reassurance. ‘There is no empirical evidence to support this observation. Investors’ interest is whether the Bill complies with the Constitution. They are also interested in a stable and safe investment environment. South Africa meets this requirement based on its strong adherence to the Rule of Law principle.’
This is the old chestnut that it doesn’t really matter what the government does, as long as it is consistent. This is nonsense. Consistently bad policy is a disincentive to investment, and it is foolish and reckless to pretend otherwise. To imagine that the threat of confiscating investments would not figure adversely into investment decisions (local as well as foreign) is delusional. This would detract from whatever attractiveness South Africa has as a ‘stable and safe investment environment’.
Even while claiming ‘no empirical evidence’ about an investment impact, the report records the contrary. It notes from Agri SA, which apparently ‘cautiously supports’ the Bill: ‘Most commercial farmers are no longer willing to invest on [sic] land due to fear of expropriation without compensation. Banks no longer view farming as safe for lending money due to the uncertainty created by the proposal.’ BASA, which ‘supports’ the Bill, nevertheless reports: ‘Reluctance to invest further by commercial farmers is causing many business ventures to collapse. In turn the financial sector is suffering a real and potential financial loss which may not be recoverable.’
Perhaps the editor neglected to remove these inconvenient remarks, but they certainly point to something other than a non-problem.
Completely absent is also, for example, the very sobering economic modelling by Roelof Botha and Ilse Botha of the damage an extensive programme of EWC would carry with it – a multi-year recession, collapsing investment and so on. ‘This study confirms imminent socio-economic disaster for SA in the event of expropriation without compensation being pursued,’ they argued.
It is breathtaking, and frankly dishonest, not to address these concerns forthrightly – even if to dispel them.
But then, doing so would imply that this was an exercise in attempting to establish an accurate picture and realistic outlook. This is a report that gives scant indication of having this as an objective.
Rather, this has every hallmark of being an exercise in box-ticking. Literally, in some places on its template. To the extent that this shallow document can be filed away as the SEAIS report, it has fulfilled its purpose.
But anyone hoping for a robust exploration of the issues at hand, and what they will mean for South Africa, will be disappointed. So will a country desperate for good policy.
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