South African Institute of Race Relations NPC
Submission to the Department of Rural Development and Land Reform
regarding the
Property Valuation Bill of 2013
Johannesburg, 21st June 2013
SYNOPSIS
The South African Institute of Race Relations (the Institute) has always condemned the race discrimination which unjustly restricted African land ownership prior to 1991 and underpinned the forced removal of some 2m people to the so-called ‘homelands’. It thus supports constructive initiatives to redress the historical injustice regarding land, provided these measures are appropriate and likely to be effective in building the success of African farmers.
This makes the Institute all the more concerned at the negative impact the Property Valuation Bill of 2013 (the Valuation Bill) – in combination with the Expropriation Bill of 2013 (the Expropriation Bill) and the Restitution of Land Rights Amendment Bill of 2013 (the Restitution Bill) – is likely to have.
A key purpose of the Valuation Bill is to speed up land reform. However, the main obstacle to success here is not the willing seller/willing buyer principle the Bill seeks to circumvent. According to organised agriculture, that principle has long been ignored in practice, the State generally paying only around 60% of market value and then pushing farmers into accepting this. In addition, delays in land reform are mainly due to poor administration and a lack of capacity within the Department of Rural Development and Land Reform (the land department).
The Valuation Bill is also based on the false assumption that many black South Africans (some put the figure at 45%) want land to farm. This claim, however, is belied by the current land restitution process. As the minister of rural development and land reform, Gugile Nkwinti, has recently acknowledged, only 92% of successful land claimants have opted for the return of the land they previously owned, the rest preferring cash compensation instead. As Mr Nkwinti notes, South Africa has urbanised and the country has ‘wage earners now’ who want jobs in the towns and cities, not the back-breaking work of tilling the land.
Moreover, between 50% and 90% of land reform projects implemented to date have failed, largely because the Government has omitted to provide adequate support or skills to emergent farmers. In addition, small farmers face other daunting challenges, ranging from inadequate infrastructure to limited markets, soaring input costs, and high crime rates.
If land reform is now to be speeded up by using the new ‘valuer general’ to decide on the compensation payable – rather than by addressing the key obstacles to its success – the result (as Tozi Gwanya, then director general of land affairs, warned in 2007) will be more ‘assets dying in the hands of the poor’. This will cost farming jobs, undermine food security, and leave supposed land reform beneficiaries no better off than before.
In providing a supposed ‘quick fix’ that bypasses the real challenges, the Valuation Bill is likely to be more of a hindrance than a help to successful land reform. In addition, the Bill governs not only land and other immovable property but also ‘rights in or to property’, along with all types of movable property. In combination with the Expropriation Bill, it thus paves the way for hundreds of government departments, municipalities, and other organs of state to expropriate both land and other property for less than adequate compensation.
In addition, the Valuation Bill seeks to empower the State to proceed with expropriation irrespective of any dispute over the compensation payable. Thereafter, expropriated owners who object to the compensation offered by the State will have to follow complex and time-consuming objection and review procedures before they can apply to the courts to decide on a different measure of compensation. In practice, this means that the option of seeking relief in the courts will be confined to those with deep pockets – the relatively few who, despite the loss of their property to the State and a lengthy review process – can still afford the heavy costs of litigation. Yet ex post facto relief of this kind is contrary to Section 25 of the Constitution (the property clause) and unlikely to pass constitutional muster.
The Valuation Bill also undermines guaranteed privacy rights and contradicts the rights of access to court and just administrative action. In addition, it’s whole thrust is in conflict with the property clause in the Bill of Rights, which it attempts to bypass rather than uphold. For this reason, above all others, the Valuation Bill needs to be withdrawn in its entirety. Neither the land department nor the country’s lawmakers can ignore the Constitution, which states in Section 2 that ‘law or conduct inconsistent with it is invalid’ and that ‘the obligations imposed by it must be fulfilled’.
The ambit of the Valuation Bill is so broad as to make its overall consequences impossible to foresee. All that is certain is that the Valuation Bill, in combination with the Expropriation Bill and the Restitution Bill, will make it harder to attract the direct investment urgently required to raise the average annual rate of economic growth to 5.4%, as the National Development Plan (NDP) envisages. This, in turn, will make it more difficult to generate the 11m new jobs the NDP seeks to achieve. Far from helping to provide redress for past injustices, the Valuation Bill is likely to leave millions of South Africans mired in destitution – and make it much harder for the Government to overcome the ‘triple evils’ of poverty, inequality, and unemployment.
South African Institute of Race Relations NPC 21st June 2013
