In signing the Expropriation Bill into law, President Cyril Ramaphosa has armed the state with a powerfully intrusive instrument against the property rights of all South Africa’s people and businesses – a measure the IRR is now preparing to challenge in court.
“Without fanfare and in defiance of economic good sense, the Expropriation without Compensation (EWC) agenda has taken a significant step forward,” says IRR Campaign Manager Makone Maja.
The passage of this Act into law introduces a system for expropriation which is heavily weighted in favour of the state and against the targeted property holder.
The Act explicitly allows for land to be expropriated for “nil” compensation and lists a number of circumstances under which this may be done. However, this list is open-ended, so many other unlisted factors could in time contribute to “nil” determinations.
“Moreover, there is considerable uncertainty as to how the various listed provisions are to be interpreted,” comments Maja. “Who is to judge whether a piece of land is being held to ‘benefit from appreciation of its market value’? Would a property that has suffered a land invasion, and from which the authorities have not acted to remove the occupiers, now be regarded as one over which the owner has ‘failed to exercise control’ despite being ‘reasonably capable of doing so’? This poses a real risk for many property owners.”
Notably, the IRR has warned that the narrow definition of expropriation excludes so-called “custodial” takings. This would apply in instances where the state assumes control of land on behalf of “the people of South Africa”, as has been done with water and mineral resources.
There have been repeated suggestions that this model should be applied to land as well – and that Parliament should in time pass a new statute vesting land in the custodianship of the state, either in whole or part. Such a custodial taking would not count as an expropriation – or qualify for the payment of compensation – because the definition in the Expropriation Act is too narrow to cover it.
Where a dispute arises as to the amount of compensation to be paid by an expropriating authority, the Constitution makes it clear that the expropriation cannot proceed without a prior court order deciding the amount, timing, and manner of payment of compensation. Though the Act pays lip-service to this provision, its vague wording still allows an expropriation to proceed without the necessary court order.
This in itself is clearly unconstitutional. It also denies affected property owners their guaranteed rights to dignity, fair and reasonable administrative action and prior judicial authorisation for any eviction from their home.
For all these reasons, the Act should never have been made law.
Maja points out the irony that the assent was given directly after the President was at the World Economic Forum claiming that South Africa was boldly improving its investment environment.
“Signing the Bill reveals where the President’s true policy priorities are at the moment,” she concludes.
“Mr Ramaphosa had every reason to decline to sign the Bill on constitutional grounds, as advised in the IRR’s petition in April 2024. He should also be aware that assenting to this piece of legislation raises a further red flag to investors, local and foreign. Property rights, properly protected by impartial law, are essential for the sort of growth and development that South Africa needs. This Act is a disincentive. It is troubling that the President cannot see that.”
The IRR’s arguments are summarised on our website: https://irr.org.za/reports/letters/petition-to-the-honourable-mc-ramaphosa-president-of-the-republic-of-south-africa-regarding-the-expropriation-bill-of-2020-b23d-2020
The IRR invites members of the business community and investors to support us in opposing the Expropriation Act by e-mailing us or clicking on the Support button on our website at www.irr.org.za.
Media contact: Makone Maja, IRR Campaign Manager Tel: 079 418 6676 Email: makone@irr.org.za
Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za