SA land owners – vulnerable to expropriation for nil compensation: Anthea Jeffery - Biznews

25 August 2022 - Misconceptions abound about two key issues currently confronting the country: the validity of the medical parole granted to former president Jacob Zuma in September 2021; and the extent to which the Expropriation Bill of 2020 – soon to be adopted by the National Assembly – comply with the Constitution. The first issue has been much in the news. The second is largely being ignored by the media despite its enormous importance for all South Africans.

Two key issues are occupying the minds of many South Africans at the moment, writes Dr Anthea Jeffery of the Institute of Race Relations: Ex-president Jacob Zuma’s medical parole and the Expropriation Bill of 2020. But a simple solution to the issue of  Zuma’s medical parole is readily available, she argues. All the SCA needs to do is to confirm that the medical parole provisions in the Correctional Services Act do not apply to Mr Zuma, because he is not a ‘sentenced offender’ – and remind the former president that he holds the key to freedom in his own hands. He can swiftly truncate his incarceration by approaching the Constitutional Court, showing contrition, and agreeing to testify to the Zondo Commission (which could temporarily be reconstituted for this purpose). What might be more worrying for South Africans, however, is the changes to the wording of the Expropriation Bill of 2020 currently underway. ANC members on the portfolio committee on public works and infrastructure are determined to maintain its ‘nil’ compensation and other damaging provisions. They also want the committee to adopt a largely unchanged Bill on 14th September, so that the measure can then be pushed through the rest of the legislative process. Yet the Bill remains unconstitutional in at least three spheres. The analysis below documents the reasons. – Sandra Laurence

Anthea Jeffrey
Misconceptions abound about two key issues currently confronting the country: the validity of the medical parole granted to former president Jacob Zuma in September 2021; and the extent to which the Expropriation Bill of 2020 – soon to be adopted by the National Assembly – comply with the Constitution. The first issue has been much in the news. The second is largely being ignored by the media despite its enormous importance for all South Africans.

Mr Zuma’s medical parole
In June 2021 the Constitutional Court committed Mr Zuma to prison for 15 months for failing to comply with its order that he ‘obey all summonses and directives’ issued by the Zondo commission of inquiry into state capture and ‘appear and give evidence’ before it. 

When a person is committed for contempt of court under civil proceedings, he carries the key to his prison door in his own pocket. All he need do to secure an earlier release is to stop thumbing his nose at the court and ‘purge’ his contempt by complying with its order. 

In Mr Zuma’s case, he can swiftly truncate his incarceration by approaching the Constitutional Court, showing contrition, and agreeing to testify to the Zondo commission (which could temporarily be reconstituted for this purpose). Alternatively, if he has adequate reasons, he can request the Constitutional Court to sanction his early release on medical grounds and before he has purged his contempt.

As the Constitutional Court ruled in 1998, a civil committal for contempt is not a criminal proceeding and the incarceration ordered ‘cannot be regarded as a criminal sentence or be treated as such’. Mr Zuma is therefore not a ‘sentenced offender’ – and the parole provisions governing the release of convicted criminals do not apply to him.  

This is also what the IRR – having intervened as an amicus curiae (friend of the court) in the dispute over the validity of Mr Zuma’s medical parole – told the Supreme Court of Appeal (SCA) in its hearing on the matter last week. The Pretoria high court, the IRR added, had been right to strike down Arthur Fraser’s flawed parole decision in favour of Mr Zuma. But, in making this ruling, the high court should also have recognised that the medical parole provisions in the Correctional Services Act apply solely to ‘sentenced offenders’ and are irrelevant to those committed for contempt of court under civil proceedings.

A simple solution is thus available. All that the SCA need do is to confirm that the medical parole provisions in the Correctional Services Act do not apply to Mr Zuma – and remind the former president that he holds the key to freedom in his own hands.

The Expropriation Bill
The portfolio committee on public works and infrastructure (the committee) is busy making changes to the wording of the Expropriation Bill of 2020 (the Bill). The ANC members on this committee are determined to maintain its ‘nil’ compensation and other damaging provisions. They also want the committee to adopt a largely unchanged Bill on 14th September 2022, so that the measure can then be pushed through the rest of the legislative process. Yet the Bill remains unconstitutional in at least three spheres.

The ‘nil’ compensation provisions
The Bill lists five circumstances in which ‘nil’ compensation on the expropriation of land may be paid. However, this list is an open one that gives hundreds of cash-strapped municipalities and other ‘expropriating authorities’ an untrammelled discretion to offer owners ‘nil’ compensation in many other situations too. 

The resulting uncertainty conflicts with the rule of law, ‘the supremacy’ of which is guaranteed by the Constitution’s founding provisions. The vague wording used in much of the list provided is also inconsistent with the rule of law. 

The EFF are still threatening to colonise farms. Copyright jermwarfare.com.
In addition, the ‘nil’ compensation clause conflicts with the requirement in Section 25 of the Constitution (the property clause) that compensation on expropriation must ‘strike an equitable balance’ between the interests of affected owners and the public interest in land reform. 

Paying ‘nil’ compensation for expropriated land puts so high a burden of redress for past societal injustice on the shoulders of particular owners that it cannot meet the need for that ‘equitable balance’. 

The solution is a simple one. The committee must uphold the Constitution and remove the nil compensation clauses from the Bill.

Prior court confirmation of constitutional validity
When the current Expropriation Act was adopted back in 1975, the principle of parliamentary sovereignty applied and there was nothing to prevent the National Party government from legislating to give the minister of public works the power to expropriate property by:

completing certain preliminary steps, and then 
When the current Expropriation Act was adopted back in 1975, the principle of parliamentary sovereignty applied and there was nothing to prevent the National Party government from legislating to give the minister of public works the power to expropriate property by:

completing certain preliminary steps, and then 
serving a notice of expropriation on the owner, under which both the ownership of the property and the right to possess it automatically vest in the minister on the dates specified in the notice.
However, since the Constitution took effect in 1997, South Africa has had the benefit of an entrenched Bill of Rights. This lays down binding criteria for a valid expropriation, guarantees that administrative action will be reasonable and procedurally fair, gives everyone a right of access to the courts, requires a court order before people can be evicted from their homes, reinforces the principle of equality before the law, and guarantees the supremacy of the rule of law.

The Bill nevertheless seeks to bypass all these constitutional guarantees by giving expropriating authorities the very same power to expropriate by:

completing certain preliminary steps, and then
serving a notice of expropriation on the owner, under which both ownership and the right to possess the property automatically vest in the expropriating authority on the specified dates.
The Bill’s list of preliminary steps is longer than the one in the Act and reflects the impact of the Bill of Rights. However, these increased safeguards matter little because no equivalent protections apply at the point of expropriation – which is when they matter most. 

Again, the solution is a simple one. The committee must amend the Bill to provide that, in the event of a dispute, an expropriating authority must seek and obtain a high court order confirming the constitutional validity of its proposed expropriation before it issues a notice of expropriation. In these proceedings, the onus of proof must lie on the expropriating authority to show that what it seeks to do is fully in line with all constitutional requirements. 

The amount and timing of compensation
Section 25 of the Constitution makes it clear that the ‘amount of compensation’, along with ‘the time and manner’ of its payment, ‘must have been’ agreed between the parties or ‘decided by a court’ before an expropriation takes effect. Agreement with the owner, or a court ruling on the compensation payable, must thus precede the transfer of ownership.

This was confirmed by the Constitutional Court judgment in the Haffejee case in 2011. Here, a unanimous court ruled that it is only in exceptional and emergency situations that this order of doing things may (briefly) be reversed.

By contrast, the Bill allows the transfer of ownership at any time after ‘the date of service’ of the notice of expropriation and long before the amount of compensation has been agreed or decided by a court. This is in breach of Section 25, the Haffejee ruling, and the right to administrative justice, among other things.

The Bill also seeks to exclude compensation for losses directly resulting from an expropriation, such as moving costs, lost income, and any shortfall between the compensation offered and the amount the expropriated owner still owes on a mortgage bond over the property. 

The current Act requires such compensation, but the Bill takes the view that the only factors relevant to compensation are the five listed in Section 25. These range from market value to ‘the purpose’ of the expropriation and the ‘history of the acquisition’ of the property. 

Yet the Constitution also states that all relevant circumstances must be taken into account in deciding on compensation, including the five it lists. Hence, non-listed factors may also be considered in striking the ‘equitable balance’ that Section 25 requires. If justice is to be done to those from whom property is taken in the public interest, their consequential losses must be compensated in full, not brushed aside. 

Again, the solution is a simple one. The committee should amend the Bill to state that compensation must include damages for all consequential losses – and that the transfer of ownership to an expropriating authority cannot take place until the compensation payable has been agreed with the owner or decided by the courts. Since state entities are notoriously late in paying their debts, the Bill should also stipulate that ownership may not pass until the full amount of compensation has been paid.

Evident unconstitutionality and massive economic harm 
Unless the committee makes these changes to the Bill, all South Africans will find themselves vulnerable to expropriation – for nil or inadequate compensation – by hundreds of cash-strapped municipalities and other organs of state. 

This risk will not be confined to whites and other minority groups but will extend to the 9.6 million black people who own formal homes, the millions more with customary land-use rights, and the thousands of blacks who have bought more than 6 million hectares of rural and urban land since the repeal of the notorious Land Acts in 1991. 

Even before any expropriations are carried out, the mere adoption of the Bill in its present form will bring further harm to all South Africans. The current Bill will deter investment, restrict growth, worsen the unemployment crisis, and mire millions more people in joblessness, poverty, and hunger.  

In 2021 the minister of public works and infrastructure, Patricia de Lille, derided critics of the Bill as ‘tone-deaf whiners’ and ‘enemies of land reform’. This was hardly an adequate response to well-founded concerns about the obvious unconstitutionality of the Bill and the massive economic harm it is sure to unleash.

This week the minister of justice and correctional services, Ronald Lamola, took a different view. Speaking on the land reform issue, he described the ANC as ‘a realistic’ entity that is ‘not on the far left or the extreme right’. Rather, he went on, ‘we are still a reasonable organisation that can be engaged to deal with policies informed by evidence and the facts. Where we have gone wrong, we can correct it’.

The Bill is one of the many areas in which the ANC has gone badly wrong. But the ANC majority on the committee now has the opportunity to correct the measure, avert a deeper economic crisis, and ensure that the Bill sent on to the National Assembly for adoption is fully in line with the Constitution.

Dr Anthea Jeffery holds law degrees from Wits, Cambridge and London universities, and is the Head of Policy Research at the IRR. She has authored 11 books, including People’s War: New Light on the Struggle for South Africa and BEE: Helping or Hurting? She has also written extensively on property rights, land reform, the mining sector, the proposed National Health Insurance (NHI) system, and a growth-focused alternative to BEE.

This article was first published on the Daily Friend.

https://www.biznews.com/thought-leaders/2022/08/25/land-owners-expropriation-compensation

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