Corporate SA’s creepy defence of the Expropriation Act - Politicsweb

Makone Maja 
In recent months, property rights have featured prominently in public discourse, largely due to the controversy surrounding the Expropriation Act. Our country’s painful history of dispossession has once again taken centre stage, with politicians skilfully − and sometimes deceitfully − proposing to use the Act to drive land reform.

This is well beyond the remit of the Ministry of Public Works and Infrastructure, which is the Act’s legal custodian. Many South Africans fell hook, line, and sinker for the idea that the Act could compensate for failures in land reform − which misplaces blame for the hold-up of land and title deed distribution on factors beyond the government’s control. They, like many of the country’s challenges, need only political will to be remedied.

Others supported the Act without scrutinising its inconsistencies or its potential for abuse.

One of the most surprising developments in this debate has been the enthusiastic support of the Act by several reputable firms and corporations. Some have gone so far as to whitewash the potential risks, offering assurances that the state’s intentions are benign.

Whether such confidence in the state applying a measured approach to expropriations can be guaranteed for all expropriating authorities which range anywhere from 257 to over 1,000 government entities, remains questionable. Given the public’s trust in these corporate voices, their support for the Act deserves particular scrutiny, as many South Africans may adopt these views without adequate consideration.

Land Reform

Fairbridges Wertheim Becker (FWB) Attorneys argue that the Expropriation Act offers a legal mechanism to address “historical injustices and facilitate land reform.” This perspective echoes political rhetoric that frames the Act as a tool for land acquisition for purposes of redistribution.

However, data from our research – based on official statistics − shows that the government already owns 23% of South Africa’s land, including the 1 085 600 title deeds held in backlog as at November 2024, which, if processed, could empower millions of family members by providing them with legal ownership and financial opportunity. A truly committed government would have prioritised clearing this backlog, some of which dates back to the apartheid era more than 30 years ago. Title deed reform remains a crucial but underutilised step toward meaningful land redistribution and home ownership.

Rule of Law

Standard Bank has stated that the Act “does not weaken property rights” nor “the sanctity of contract.” The Chas Everitt International Property Group confirms this position by stating that the Act reassures investors and property owners that constitutional protections remain intact. According to Chas Everitt, “… this Act will help protect the interests of property owners in South Africa...” They overlook the fact that the uncertainties embedded in the Expropriation Act do erode property rights.

These uncertainties range from the open-ended list of properties that could be expropriated without compensation or whether property other than land may also be expropriated for below market-value compensation to the number expropriating authorities who have been armed with these vast powers. For banks specifically, it raises questions about whether individuals who have had property expropriated will still be liable for paying back the loan that they acquired the property with. Surely, under those circumstances, sanctity of contract is undermined by the imbalance of power stacked against faultless individuals.

However, Webber Wentzel takes a more cautious stance, advising clients in the insurance sector to prepare for “legal uncertainties” resulting from the Act. The firm warns of potential spillover effects and advises insurers that “exclusions remain clear, current and legally enforceable”, emphasising the importance of precise legal language when handling contentious claims. Either Standard Bank’s optimism is warranted − or insurance companies are quietly restructuring contracts to shield themselves from liability, based on legal advice such as that from Webber Wentzel. If this advice were to be applied industry-wide, it could result in property that is susceptible to expropriation receiving less coverage by insurance companies.

Checks and Balances

Perhaps the most widely cited defence of the Act is its alleged “checks and balances.” Firms such as Bishop Fraser Attorneys, Alexander Forbes, Fasken Martineau DuMoulin, and Nedbank highlight these “safeguards” as mainly the obligation the Act places on expropriating authorities to negotiate and to use expropriation “only after all other efforts to purchase the property have failed.”

Momentum’s remarks are specifically note-worthy. According to them, these safeguards grant landowners with “more rights” to challenge expropriation in court, affirming the position that courts have a stronger check on government overreach and judicial oversight over the element of compensation.

However, these claims gloss over the fact that a determined expropriating authority can proceed with taking property even when the owner objects. In practice, these checks depend heavily on access to competent legal representation − an option out of reach for many South Africans. Even when legal recourse is pursued, court dates are often set years in advance, delaying justice.

Moreover, the Act contains internal contradictions. Section 8(3)(g) states that a notice of expropriation must include a date and an amount of compensation agreed upon or determined by a court under Section 19. However, Section 19 allows for court intervention only after failed mediation within 180 days of the notice.

This ambiguity undermines the constitutional right to access the courts and exposes the law’s structural weaknesses. The notion that judicial review alone can resolve these challenges fails to account for the Act’s flaws. The restrictions it imposes on court access may even be unconstitutional. One wonders whether these corporations have applied sufficient rigour to their legal assessments − or whether their support was a rushed attempt to appear aligned with the prevailing political wind.

A Better Way Forward

The IRR has proposed an alternative in the form of the Right to Own Bill. If enacted, this legislation would mandate market-value compensation for all expropriations and repeal any conflicting laws. The Bill expands property rights by tackling the title-deed backlog through township formalisation and infrastructure development. Secure title ownership would not only protect citizens but also attract investment, stimulate development, and empower neglected communities. At its core, the Bill aims to restore dignity and give homeowners enforceable rights. Why would any principled parliamentarian oppose it?

Makone Maja is the Strategic Engagements Manager at the Institute of Race Relations

https://www.politicsweb.co.za/opinion/scrutinising-corporate-sas-defence-of-the-expropri