Deprivation of rural property rights a threat to all – IRR

The interests of all South Africans are invested in the fight for the property rights of the estimated 470,000 rural landowners in Communal Property Associations who, by being barred under new legislation from leasing or selling land without state approval, have been deprived of the opportunity to improve their lives.

So says Institute of Race Relations (IRR) Fellow Gabriel Crouse in a webinar on the launch of his paper, Property Rights Deprived at Agricultural CPAs.

For the argument in favour of property rights and economic freedom to be won, not just for rural landowners, but all South Africans, Crouse argues that pressure has to be brought to bear against harmful aspects of CPA policy.

“Property rights are indivisible. If the property rights of some are exposed to deprivation by the state, so are the property rights of all,” Crouse says.

The report points out: “Whatever social engineers in the Union Buildings think, landowners cannot, under the Constitution, be deprived of their property arbitrarily, and the denial of one’s right to lease or sell is a clear deprivation.”

Crouse notes that South African property rights have faced a series of major assaults since 2017, but the latest – enacted in the Communal Property Association (CPA) Amendment Act, which was signed into law by President Cyril Ramaphosa in October – is a singular defeat for an estimated 470,000 rural landowners.

It compels these hundreds of thousands of property owners across rural South Africa to get “consent” from a state official before they can lease or sell their land.

According to the new law, CPA landowners cannot lease or sell their land without first gaining “consent” from a state “Registrar” by proving that it is in the landowners’ own interest to sell their own land.

Crouse says: “The CPA system is already a disaster for many families that were forcibly dispossessed by the apartheid state. The CPA Amendment has made their situation worse. Given time the ricochet will penetrate big city financial centres, and their customers.”

The IRR points out that the CPA Amendment Act is directly harmful to CPA landowners, who are reported to own over 2 million hectares of land across rural South Africa. For example, the new “consent” requirement threatens to delay the renewal of leases past plan-to-plant windows, which in turn could cause the proposed lease to collapse and result in no farming being undertaken for the season. This would amount to expropriation without compensation (EWC) of the use-rights on a particular CPA property for a season.

Second, the absurd precedent set by the “consent” requirement is that every landowner in South Africa could be prohibited by Parliament from selling their property, or leasing it out, because a government official believed that the owner would be better off refusing the sale instead. The principle of a voluntary contract between consenting adults that does no harm to third parties would thereby be nullified as the basis of property rights.

If the CPA Amendment precedent is legally accepted then a regime of “prescribed assets” – where the state forces pension funds, insurers, banks and other major investors to hold designated assets – will be one step closer to commanding the economy. Once 470,000 rural landowners are deprived of the property right to decide what to do with their own possessions, all South Africans are exposed.

It is recommended that the statute be struck down by the fast passage of a repeal of the relevant parts of the law curbing property rights, and in the meantime the executive branch of the state should stay the law’s harmful effects. Short of this, the report says, court action will be required to vindicate the rights of CPA landowners.

Beyond that, the CPA system reform must allow CPA landowners to sell their properties on the open market.

Click here to watch the webinar in which Crouse discusses the contents of his report with IRR project and publications manager Terence Corrigan.

Media contact: Gabriel Crouse, IRR Fellow Tel: 082 510 0360 Email: gabriel@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za