By Anthea Jeffery
UNDER cover of the race debate, two senior communists (Thulas Nxesi and Jeremy Cronin) are pushing through Parliament the Expropriation Bill that will greatly harm all South Africans — especially the jobless poor.
The bill is supposedly needed to speed up land reform. However, more than 90% of land reform projects have thus far failed. That means we need a major rethink, not a faster way to keep taking farmland out of productive use.
The bill’s consequences go further too. In particular, its definition of expropriation excludes any taking by the state as "custodian" for the disadvantaged, rather than as owner. Under this definition, even where a person is deprived of property by the government, there will be no expropriation — and no compensation — if the government takes the property as custodian and not as owner.
This contradicts a 2013 Constitutional Court judgment in which two of the judges warned against limiting the meaning of expropriation in this way. This could lead "to the abolition of the private ownership of … all property" without compensation being payable, they cautioned.
Yet this kind of taking has already been carried out once and could soon be implemented again. The 2002 Mineral and Petroleum Resources Development Act has already vested all mineral resources in the state as "custodian" for all South Africans.
A 2014 bill now seeks to vest all agricultural land in the Department of Agriculture, Forestry and Fisheries as "custodian" for all South Africans. If this bill is enacted, farmers could lose ownership of their land without being able to claim compensation under the Expropriation Bill.
The bill’s definition also excludes "indirect" or "regulatory" expropriation. This occurs where the state does not take ownership itself, but its regulations rob owners of many of the normal benefits of ownership.
Under the bill’s definition, the government could impose price and export controls on mines, indigenisation requirements on all foreign investors, and 51% black economic empowerment ownership requirements on companies, without this counting as expropriation.
The bill’s rules on takings that qualify as expropriations are damaging too. Ironically, it recognises that prior court orders are needed for inspectors to enter a property without the owner’s consent, or to extend temporary expropriations. But no prior court order is needed before a final expropriation is carried out.
If a municipality wants to expropriate a property, it must start with negotiations and then give notice of its intention to expropriate. But it does not have to respond to objections, or give reasons for rejecting them. Having taken these preliminary steps, it may then serve a notice of expropriation.
Under this notice, ownership will pass to the municipality on a specified date, which could be the very next day. The right to possess the property will also pass to the municipality on a stipulated date, which could be the day thereafter.
If the expropriated owner wants to dispute the validity of the expropriation, or argue that the compensation offered is not "just and equitable", he will seemingly bear the onus of proving these points.
The provisions allowing this are clearly unconstitutional. Whether it is constitutional to limit the meaning of expropriation in the way the bill seeks to do is also uncertain. What is crystal clear, however, is that the Expropriation Bill will further limit investment, growth and jobs.
SA urgently needs many more economic opportunities for the disadvantaged. But the country cannot achieve this when growth and jobs are stagnant or shrinking.
For meaningful redress, we need economic growth at 5% of gross domestic product, excellent education, vastly more employment and much more entrepreneurship. However, if this bill is adopted, at least three of these essentials will become even more difficult to achieve.
• Jeffery is head of policy research at the South African Institute of Race Relations
Read the article on Business Day here.
