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Encouraging expropriation

Dr Anthea Jeffery holds law degrees from Wits, Cambridge, and London universities. Since 1990, she has worked for the South African Institute of Race Relations, where she is Head of Special Research. She is the author of ten books, including Business and Affirmative Action; The Truth about the Truth Commission; Peoples War: New Light on the Struggle for South Africa; and Chasing the Rainbow: South Africas Move from Mandela to Zuma.

The government says the current Expropriation Act of 1975 is unconstitutional and has to be replaced. To this end, it has recently put forward a reworked Expropriation Bill, but this Bill is just as unconstitutional as the present statute. The sweeping powers in the Bill will also encourage all organs of state to use expropriation as a first, rather than a last, resort. The predictable effects will be to curtail growth, worsen poverty, deepen dependency on the State – and advance the national democratic revolution and its socialist objectives.

A reworked Expropriation Bill of 2015 (the Bill) has finally been released by the Department of Public Works. The minister, Thulas Nxesi, wants it pushed through Parliament before year end. However, the 2015 Bill (like its predecessors in 2008 and 2013) is just as unconstitutional as the current Expropriation Act of 1975 it is intended to replace.

Crucially, the Bill still seeks to allow any “expropriating authority” to take property of virtually any kind by serving a notice of expropriation on the owner. Ownership of the property in question will then pass automatically to the State on the “date of expropriation” identified in the notice, which could be the day after the notice of expropriation has been served.

Like its 2013 predecessor, the Bill puts great pressure on expropriated owners to accept whatever amounts of compensation the State might offer. This time around, the Bill does so by saying that owners will be deemed to have accepted these amounts unless they sue for more within two months. Given clogged court rolls and heavy legal costs, most people will be loath to risk such litigation.

As these provisions show, the Bill again empowers the State to take property upfront and leaves it up to expropriated owners to seek redress in the courts thereafter – if they can afford this. But ‘self-help’ of this kind is barred by both the common law and the Constitution.

Under the common law, the State cannot simply seize property – even a gun likely to have been used in committing a murder – without first obtaining a court order in the form of a search-and-seizure warrant.

This common law protection for property rights has been buttressed by the 1996 Constitution, which lays down a number of requirements for a valid expropriation. The Constitution also prevents people from being evicted from their homes without express judicial authority and, in many instances, the provision of suitable alternative accommodation.

The revised Bill ignores both the common law and the Constitution. The Bill is also unnecessary, as the existing Expropriation Act (the Act) – which requires compensation to be based on market value, plus damages for any consequential loss – can be brought into line with the Constitution through three simple amendments.

The first amendment would give the minister of public works the power to expropriate not only “for public purposes” (as now), but also “in the public interest”, as the Constitution allows.

The second amendment would add, to the Act’s present list of the factors relevant to compensation, the four “discount” factors set out in the property clause (Section 25) of the Constitution. The present gap in the Act would be filled, while factors such as the “history” of the property could then be taken into account, along with market value. However, expropriated owners would remain entitled to damages for consequential loss, in recognition of the fact that expropriation is a drastic measure that places an inordinate burden of redressing past societal wrongs on particular individuals.

The third amendment would prevent the State from issuing a notice of expropriation until it has obtained a court order confirming that all constitutional requirements for a valid expropriation have been met.

The underlying purpose of the 2015 Bill is not to speed up land reform, or to spur on infrastructural development (as Mr Nxesi now says). Its true rationale is rather to give the State ownership and control over ever more private property. From the viewpoint of the ruling party and its communist allies, the “elimination of [existing] property relations” in this way is necessary to build up and entrench the power of the State. The predictable results will be to curtail growth, worsen poverty, and increase dependency upon the Government. This in turn will help advance the national democratic revolution and its socialist objectives.

Governments that start by taking away property rights often move on to undermining or destroying other fundamental liberties. If we don’t want to “bring Zimbabwe to South Africa” (as an opposition politician once put it), we need to reject Mr Nxesi’s Bill and push for a much better way of curing the defects in the current Expropriation Act. DM

  • Anthea Jeffery, Head of Policy Research, IRR. Jeffery is the author of BEE: Helping or Hurting? which deals with threats to property rights in mining, agriculture, and elsewhere.

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