Expropriation without Compensation: Constitutional Amendment: An Economic Knockout Blow.

EXPROPRIATION WITHOUT COMPENSATION

CONSTITUTIONAL AMENDMENT

AN ECONOMIC KNOCKOUT BLOW

 

By Jaco Swart

 

 

Dear employer

 

In this article:

 

• The Draft Constitutional Amendment Bill
• Expropriation Bill
• The worst, however, may yet still come
• The ultimate aim is unbridled socialism
• Radical economic transformation at the cost of rooting out corruption

 

The Constitution of South Africa, as it currently reads, allows for the expropriation of property where it is in the public interest, which includes land reform. This power to expropriate is, however, subject to the payment of compensation which can either be agreed upon between the parties or determined by a court.

 

The Draft Constitutional Amendment Bill

 

The Draft Constitutional Amendment Bill, in its current format, is aimed at clothing government with the power to expropriate property without compensation where it is in the public interest. This ability, according to the state, is already implied in the wording of section 25 of the Constitution, but will be made explicit by the proposed amendments. The Bill further stipulates that legislation must be enacted to stipulate circumstances under which compensation paid may be nil and that a competent court should decide on equitable remuneration where no agreement can be reached between the parties.

 

Expropriation Bill

 

The above-mentioned circumstances have been encapsulated in the Expropriation Bill, which illuminatingly, has already been drafted prior to the actual provision in the Constitution requiring such legislation having been enacted. This clearly indicates that government is hell-bent on amending section 25 of the Constitution and that no amount of evidence, as to the devastating effect expropriation has had globally and will have locally, will sway them from this course.

 

The Expropriation Bill duly sets out circumstances under which a court may decide that it is just and equitable for nil compensation to be paid where land is expropriated for a public purpose. These circumstances include, but are not limited to:

 

• Where land is only held for investment purposes;
• where the state holds the land and is not utilising it for its core purpose;
• where an owner has abandoned the land;
• where the state investment in the land is less than the value of the land;
• where the nature or state of the land poses a health and safety risk; and
• where a court determines nil compensation to be justifiable in terms of the Land Reform Act.

 

These proposals are already worrying enough, due to an ill-defined concept of public interest, and will certainly lead to much uncertainty and disinvestment.

 

The worst, however, may yet still come.

 

During a recent session of the ad-hoc committee tasked with amending section 25 of the Constitution, a number of additional and disturbing amendments were proposed. Chief among these were proposals that:

 

• The role of courts should be limited in deciding on nil compensation;
• nil compensation should be extended to all property (not just land); and
• the state should be the custodian of all property (an EFF demand).

 

According to the Department of Agriculture, Land Reform and Rural Development, supported by the Department of Public Works and Infrastructure, the provisions empowering courts to decide if nil compensation is appropriate, constitutes judicial overreach and is an infringement of the doctrine of separation of powers. It has been touted by the committee that the reason for the proposed amendment is to prevent huge backlogs of disputes as the courts will not be able to attend to all the matters.

 

This statement is completely baseless, as it has been found by the Constitutional Court that “the issue mainly lies in the department’s incapacity to fulfill its constitutional mandate and this incapacity has affected a large number of land right claimants”.

 

It is clear that the true problem is not a backlog at court but rather a failure by Government to implement. A further massive problem is that this proposal will empower government officials, at all levels, to determine when nil compensation will be appropriate. There is absolutely no evidence that government officials possess the required qualifications, knowledge or acumen to make such a decision. There is, however, a myriad of evidence to the contrary, e.g. failed state-owned enterprises, service delivery meltdown, corruption, without exception, at an unprecedented scale etc.

 

This proposal, far from alleviating the pressure on courts, will in fact increase the caseload of the courts as each, unilateral, decision made by an unqualified government official will ultimately be reviewed. It makes far more sense to have an independent, qualified and objective body, such as a court of law, decide on the appropriate compensation from the outset. This, however, does not suit the ANC’s agenda.

 

The ultimate aim is unbridled socialism

 

The second proposed amendment, by the Department of Public Works, is that expropriation in the public interest, at nil compensation, should not be limited to land, but extend to all property. The argument goes that since, in terms of the Constitution, property is not limited to land, and since the purpose of the amendment is to make that which is implicit in the Constitution explicit, the historical context makes it ‘just’ to expropriate all property at nil compensation, assumingly, again at the behest of a state official.

 

Apart from the fact that such a proposal falls outside the mandate of the committee, which is limited to land, proposals of this nature may be indicative of a realisation, on the part of government, that by far the majority of people have no interest in farming or owning land in rural areas. People are flocking to cities looking for jobs and security, and not land. However, assuming that all of this property will, in all likelihood, reside in the custodianship of the state, it points to a far more sinister agenda, that of complete state control and unbridled socialism.

 

The third proposal, made by the EFF, is simply the EFF continuing to beat the socialism drum which they have always advanced. The failure of socialism and centralisation of property in government, and the devastating effects thereof globally, have been well documented and, if implemented, will rapidly turn South Africa into a mirror image of Zimbabwe / Venezuela. Although this is an EFF demand, it seems to have found some favour with the ANC as the ANC has now proposed the following wording to be inserted: “The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable state custodianship and for citizens to gain access to land on an equitable basis”.

 

The ANC is clearly pandering to the EFF as it requires the EFF to vote in favour of the amendments in order for them to pass. Irrespective of the reason, the insertion of these words, or any version thereof, will entrench the right to of state custodianship into the Bill of Rights. This will enable the state to simply deprive citizens of their property, to be placed under the custodianship of the state. The state will then issue licenses to individuals permitting them to work the property.

 

This, according to the ANC, does not amount to expropriation but “deprivation” as ownership will not vest in the state. Therefore, this “deprivation” will occur without any compensation. There is already precedent for this in South Africa as the mineral rights of landowners were taken away and placed under the custodianship of the state and which minerals are now extracted under license from government.

It is not known to what extent, if at all, these proposals will find their way into the final product. However, irrespective of whether these proposals are adopted, the mere fact that they have been proposed and considered, illustrates the agenda of the ANC government. The ANC is, and will remain, a socialist ‘liberation movement’, which has failed to make the transition into a responsible governing party.

 

Radical economic transformation at the cost of rooting out corruption

 

These devastating proposals fall squarely within the ambit of the ANC’s overall agenda of advancing the National Democratic Revolution at all cost, consequences be damned. This is further underscored by the fact that the President had to agree to the establishment of a land reform committee within the ANC, in exchange for rooting out corruption within the party, as the land reform program is taking too long – according to the radical economic transformation elements within the ANC.

 

It is a sad day indeed if a party leader has to horse trade in order to root out rampant corruption within the party, but then, why should anything surprise us at this stage?

 

Jaco Swart is the National Manager of the National Employers’ Association of South Africa (NEASA).

 

For more information:

NEASA Media Department

media@neasa.co.za

 

 

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