Expropriation Bill threatens most important path to better life for all – IRR

10 February 2021 - The ANC government’s Expropriation Bill will close the door to a better life for millions of South Africans unless its draconian provisions that empower the state at the cost of ordinary people are successfully resisted.

The ANC government’s Expropriation Bill will close the door to a better life for millions of South Africans unless its draconian provisions that empower the state at the cost of ordinary people are successfully resisted.

So says IRR Head of Policy Research Dr Anthea Jeffery in a wide-ranging livestreamed conversation on YouTube with IRR Head of Strategic Initiatives Hermann Pretorius. (You can watch it at: https://www.youtube.com/watch?v=wxICJk0aKEk)

The bill’s provisions are at odds with the common law and with the right to fair and just administrative action, and pose a grave risk to South Africa’s economic wellbeing. It must be asked, with the economy in crisis, whether the government really wants to further impoverish the country. The bill will put the kibosh on any post-Covid reconstruction and recovery.

Jeffery points out that the draft law, in combination with the moves to amend the Constitution, ‘vastly empowers the state to take custodianship of land and other assets’. Government policy is not to transfer ownership, but provide access at most through leases or land-use arrangements that can be terminated by the state in wide-ranging circumstances.

‘People will lose what is the most important way to developing a better life: acquiring an asset, building it up, seeing its value appreciate over time, transferring it to their children, so that they have a head start compared to where their parents began – that’s the way in which people around the world are able to build up individual prosperity, and property is vital to it. And they are in many instances going to lose that option. ‘This is what the bill will pave the way to and we know unfortunately that the ANC is heavily committed to the NDR … to push South Africa from a free market to a socialist and ultimately a communist one.

‘The ANC cannot achieve that aim with property rights and with millions who own their own assets. So the government has an ideological incentive to go this way … and the experience of Zimbabwe and Venezuela show how badly things can go wrong.’

Jeffery explains that expropriation procedures in the bill are heavily skewed in favour of the state and the ‘long list’ of expropriating authorities, ranging from the Presidency, provincial premiers and national departments, to all municipalities and state-owned enterprises such as Eskom.

‘These organs have the power to take property for nil compensation or less than market value, using a procedure which allows the state to expropriate and argue later, which is extraordinarily unfair and is against the Constitution.’

She says the IRR’s warnings are not ‘scaremongering’, highlighting the case of successful Limpopo farmer David Rakgase, who had to go to court to compel the government to honour an agreement to sell him the land he had been working for years. Jeffery says it is ‘extraordinary that the government was prepared to fight so hard to keep land ownership away from a black farmer who seemed to deserve it on every criterion that you could imagine’.

Government policy is not to empower people through ownership, but to provide access, which is tenuous, as it can be terminated by the government at any point.

Jeffery notes that South Africa has gone far down the path to extending property ownership to black South Africans – starting in the 1970s, then with the repeal of the Land Acts in 1991, and under earlier ANC administrations. But the 9.7 million black South Africans who now own homes, often don’t have full title deeds, but ownership of an informal kind. The same is true for millions in the former homelands. This ownership needs now to be formalised, not subjected to a law that will potentially take ownership away.

But there is more at risk than land. As defined in the bill, property is not limited to land – it extends even to a licence to sell liquor, and can affect farms, homes, shopping centres, businesses and shares in companies. ‘To pretend it’s limited to land is pulling the wool over people’s eyes.’

Jeffery argues that the risk is of full-scale expropriation without compensation lies in how the government defines expropriation. If it assumes custodianship of all land – as in the case of water and mineral rights – this will not be regarded as expropriation and thus no compensation will be payable. She notes that both the ANC and EFF favour custodianship over all land, and ‘with this bill in place, it would be easier to argue that it does not have to pay compensation. That’s how the government would get to large-scale EWC’.

But it can be thwarted, Jeffery insists.

‘It is absolutely worth fighting.’ Earlier expropriation legislation in 2008, 2013 and 2015 were all recalled in the face of resistance from the IRR and other organisations.

‘There’s a long history of raising objections and pointing out negative consequences, and history shows we can successfully resist and convince the ANC to reconsider.’

South Africans must demand that a comprehensive socio-economic assessment be undertaken and published. No such report has accompanied the Expropriation Bill, and people must insist on this before 28 February.

Challenge to banks

Noting that South Africa’s banks and financial institutions are integral to the debate about property and the fate of property owners, Hermann Pretorius challenges the institutions to speak up.

‘I challenge the banks of South Africa: you have until 28 February to make submissions on this Bill. Be honest corporate citizens and make submissions to Parliament, making it clear what it will mean for your clients to whom you have a legal and moral responsibility, and make it clear to Parliament the consequences of this Bill for your own functioning.

‘If you do not, South Africans will read into it a question of trust; your entire industry is based on asking the South African people to trust you with our assets; now it’s time for you to return the favour and show us that we should.’

Media contact: Hermann Pretorius, IRR Head of Strategic Initiatives – 079 875 4290; hermann@irr.org.za

Media enquiries: Duwayne Esau, IRR Strategic Communications Officer – 081 700 0302; duwayne@irr.org.za

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

Kelebogile Leepile Tel: 079 051 0073 Email: kelebogile@irr.org.za

Ends

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