Update On Expropriation Of Land Without Compensation After President Ramaphosa’s Announcement About
Category Property Market News
A comprehensive land audit undertaken by economist Johann Bornman in partnership with magazine Landbouweekblad and Agri SA, made it possible to obtain data about 100,000's of land transactions from the deeds office, as well as geographical data. To determine how much agricultural land there is in the country, a complete set of satellite images of the country’s total surface area of 122.5 million hectares were obtained from 1994 and from 2016.
What does the Constitution currently say about expropriation and compensation?
Section 25(2) of the Constitution provides as follows (our emphasis): -
1. No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.
2. Property may be expropriated only in terms of law of general application-
a. for a public purpose or in the public interest; and
b. subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.”
Section 25(2)(b) in our view specifically and clearly provides that land cannot be expropriated without compensation.
Can the right to expropriation with compensation be validly limited in terms of the Constitution? Does the Constitution allow for expropriation without compensation?
Section 25(8) reads as follows:
25(8) “ No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination, provided that any departure from the provisions of this section is in accordance with the provisions of section 36 (1).”
Section 25(8) creates a mandate for the government to ensure land reform. This mandate is not limited by the rights contained in section 25 of the Constitution which includes the right contained in section 25(2)(b) as discussed above. In other words, if the land rights contained in section 25 are to be limited they may only be limited in terms of section 36 of the Constitution. Section 36 of the Constitution creates the test for when a right contained in the Bill of Rights, in this instance the property right contained in section 25, may be limited.
The question then that must be asked is (i) does expropriation of land without compensation result in a valid limitation of the relevant right contained in the Constitution and as such is allowable in terms of our current Constitutional framework and limitations provisions; or (ii) does expropriation without compensation amount to an outright deprivation and extinguishing of the right to property which is beyond the limitation allowed for and as such is not permitted in terms of section 36 of the Constitution?
if section 25 of the Constitution prohibits expropriation without compensation and the limitation or extinguishing of these rights are found to exceed the powers afforded to the government in terms of the Constitution, then any attempt to adopt such land reform method would be rejected by the Constitutional Court as unconstitutional. Then should the government still wish to proceed with expropriation without compensation the only way forward would be an amendment to the Constitution.
How likely is it that the Constitution will be amended if the amendment is tabled?
The Constitution would be amended by the national government at a vote at the National Assembly. The National Assembly has 400 seats made up of the various political parties. If the Constitution was required to be amended the parties in favour would require a 2/3 majority (66.6%).
With elections coming up next year the seat allocation may change which may affect the percentage of those in support of the motion. In addition, certain individual members of the parties who are in favour of this motion may, notwithstanding their parties’ agenda, nevertheless vote against party lines and vote against such motion.
What is the foreign perspective?
Standard and Poor’s (S&P) one of the largest international rating agencies, kept South Africa’s rating unchanged despite the motion put forward in February 2018. S&P commented “It is still too early to tell how the process will unfold, but we expect the rule of law, property rights and enforcements of contracts will remain in place and will not significantly hamper investments in South Africa.”
Where to from here?
It is still early days in the discussion around expropriation without compensation. All eagerly await the feedback to be expected from the Constitutional Review Committee at the end of August to give more clarity on what will be considered and the way forward.
The Committee initially called for written submissions to be submitted before the closing date of 31 May 2018. The Committee received over 140 000 submissions from 13 April 2018 to 8 May 2018. The deadline was then extended to 15 June 2018 and there are currently over 700 000 submissions.
The Committee will travel in two teams to hold at least three meetings in each province starting from 27 June 2018 until 4 August 2018.There will also be an opportunity for members of the public to make oral submissions in Parliament from 7 – 17 August 2018 based on their written submissions.
Once the Committee has heard from the public, policy makers, civil society organisations and academics, the Committee will then report back to the National
The above should be seen as a brief comment and our interpretation thereof and should not be seen as an extensive guideline. Please obtain a full legal opinion if you wish to act on any aspect hereof as the guideline is not fully comprehensive.
Author: DVH / STBB / Daily Maverick / Media 24 & Landbouweekblad