To amend or not to amend; that is the question?
Earlier this year, the National Assembly of Parliament adopted a resolution, mandating its Constitutional Review Committee (CRC) to review section 25 of the Constitution in terms of how the state can expropriate land without compensation in the public interest.
This resolution has been debated at length in Parliament. In response to several questions raised by the opposition parties, the President stated that for South Africa to grow faster and to build a transformed and inclusive economy, land reform is necessary and urgent. According to a survey, white South Africans own 72% of land, Coloured’s 15%, Indians 5% and Africans 4%. He emphasised that if something is not done to fast track land redistribution, South Africa will implode.
A report commissioned by the High-Level Panel (2017), found that land redistribution had decreased and fallen short of government goals and public expectations. The High-Level Panel was constituted by the Speaker of the National Assembly in 2015, to assess legislation passed since 1994 in relation to its effectiveness, and possible unintended consequences.
The Commissioned Report amongst others, identified the following factors inhibiting land redistribution: Budgets for land reform have declined. Land price: the “willing seller/ willing buyer” has turned out to be too expensive. The institutional capacity of the Department of Rural and Land Reform is weak. Another challenge identified was that the policy on land redistribution in terms of its focus, criteria and modus operandi have also undergone several significant shifts.
The CRC has conducted public hearings throughout the country to assess the views of the people on the question of expropriation without compensation during April to June 2018. The CRC met on 22 and 29 August 2018 to discuss a preliminary report on written submissions received and public hearings conducted. One of the trends was that there was support for a review of the Constitution and a need for a recognition of the historical injustices. Another trend was the question of who does the land belong to? Descendants of the Khoi & San saw themselves as the rightful owners and that the constitutional limitation of restitution (the 1913 cut-off date) excluded them from the right to restitution.
From the written submissions received, the CRC identified certain stakeholders to brief it orally. These briefings commenced this week. Stakeholders presenting their submissions made proposals and raised concerns on expropriation without compensation.
The Institute for Poverty, Land and Agrarian Studies (PLAAS) was of the view that the State can expropriate property for purposes of land reform, subject to zero compensation, if it is just and equitable to do so. However, if it is not just and equitable to pay zero compensation, compensation should be paid. Section 25(5) places a positive obligation on the State to provide suitable land and housing for landless and homeless. PLAAS highlighted that the purpose of the property clause was therefore to “strengthen the right of the property-less by creating a right of access to land on an equitable basis”. Section 25 is therefore not an absolute protection of property rights but rather aims to create a transformed property relationship between the landed and landless and between owners and tenants. The question as to when the State should pay or not pay compensation should be determined on a case-by-case basis.
One of the proposals by PLAAS was that a new compensation regime be adopted. One that is flexible and based on the principles of just and equitable. It was suggested that no compensation could be paid in cases such as inner-city buildings with absentee landlords; informal settlements; labour tenant (farm dwellers who have lived on farms for generations), publicly owned land and land donations.
The Congress of South African Trade Unions (Cosatu), emphasised its disappointment with government’s failure to achieve land reform. It stated the failure of land reform is not due to the Constitution and that the Constitution should only be amended if necessary for legal clarity. It proposed that expropriation without compensation should be used for land that has been abandoned; neglected land owned by absentee landlords, idle land that is needed for productive land use, state owned land, land occupied by labour tenants and land offered by an owner as a donation.
The Agricultural Business Chamber (Agbiz), pointed out that the current total farm debt is at R197 billion and that expropriation without compensation poses a risk to collateral which ultimately will increase the risk of lending to everyone in the agricultural sector.
The Hope of Glory Tabernacle pointed out that before amending section 25, there must be a first be a determination as to which land should be expropriated without compensation. A concern from the church was that most residential properties are mortgaged, who will pay the bonds of property expropriated without compensation? It further proposed that government should not perpetuate the evils of the apartheid government by taking land from legal owners without paying for it.
It is becoming overwhelmingly clear that the Constitution makes provision for expropriation without compensation. Water is a nationalised resource. The Minerals and Petroleum Resources Development Act (MPRDA) provides the State with custodianship of mineral rights and authority to award rights to prospecting and exploration.
Similarly, the proposed Control of Tobacco Products and Electronic Delivery Systems Bill published recently for public comments introduces plain packaging of tobacco products. This means that all tobacco products must be packaged in the prescribed regulated manner. Although, it is not an express expropriation, it is a form of deprivation. Manufacturers of tobacco products will not be allowed to use their trademarks and brands. They are therefore effectively deprived of their right to use their trademarks and brands. Tobacco packages will have to display the prescribed government health messages. Whether the deprivation of the property is arbitrary or not will be determined by how the present process of public consultation will unfold and if it is substantively and reasonably fair. Whether it is constitutional, is a question for the Constitutional Court to determine.
The CRC is tasked with considering the issues on expropriation and compensation and the question of whether or not to amend the Constitution. Will the CRC recommend that section 25 be amended? Public hearings are ongoing, however, at this stage it seems very likely, that there will be an amendment to include a clarity seeking clause regarding compensation. It is also clear that there needs to be a white paper on a compensation regime.