EXPROPRIATION WITHOUT COMPENSATION-SHOULD WE BE WORRIED

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EXPROPRIATION WITHOUT COMPENSATION-SHOULD WE BE WORRIED

SA’s land-reform programme is deemed to have failed since 1994. After a survey of title deeds, the government says blacks own 4 percent of private land, and only 8 percent of farmland has been transferred to black hands, short of a target of 30 percent that was meant to have been reached in 2014. The government is under pressure to expedite land reform. It views expropriation without compensation as a way to correct imbalances of the past, decrease inequality, encourage land ownership and agricultural sector participation by black people.

An amended Expropriation Bill was passed by Parliament last year but sent back to the legislature by President Jacob Zuma because of constitutional failings. The bill effectively does away with the “willing-buyer-willing-seller” concept and reflects section 25 in the Constitution.

In December 2017, the South African Parliament voted in favour of a motion to amend its Constitution to allow expropriation of land without compensation. The acceptance of the motion follows a resolution by the ANC at its 54th national elective. To do this, it urged the government to begin a process to amend Section 25 of the Constitution. This clause allows for expropriation of land with compensation.  Compensation is critical as it recognises that property owners may use their property for productive purposes or may have mortgages on their property.

This was then referred to the Constitutional Review Committee which will consider whether expropriation without compensation is sensible and especially how section 25 should be amended. The committee has until 31 August 2018 to report back to Parliament. The Committee will compile a white/green paper and lawmakers, attorneys and the public will then be engaged to comment on it.

In order to finally pass the resolution, it must be voted in favour by at least six of the nine National Council of Provinces and two thirds (about 67%) of the National Assembly would have to agree to change Section 25. The ANC holds 62% of the seats in the National Assembly. It will have to join with other opposition parties like the EFF (holding 6.4% of seats) to amend the Constitution. Some have even argued that a 75% vote will be required as to change Section 25 of the Constitution impinges on the founding values of the Constitution.

Some estimate that this process may take years as South Africa’s whole legal jurisprudence on property ownership is affected. Other pieces of legislation will also have to be amended. These include the National Credit Act and the Expropriation Act, which anticipates just and equitable compensation.

The ANC is also considering reforms that would give title deeds to about 17 million people who live in the “homelands” to which most black South Africans were sent under Apartheid. Giving these people land title will maybe unlock capital, reduce poverty and create tax revenue for infrastructure development and boost GDP.

A team led by deputy public works minister Jeremy Cronin has drafted an amendment to a forthcoming expropriation law which also sets out which clearly which land will be expropriated without compensation. He states it is possible to achieve this without amending the constitution by adding a limitation into the forthcoming expropriation bill. He identifies abandoned buildings, unutilized land, commercial property held unproductively and underutilized state-owned land as possible land that can be utilized.

Many have asked why this is taking place now. Most authors have speculated that its due to the national election taking place next year to alleviate the loss of votes the ANC have endured.

Will this change apply to residential property and should we be worried? In his state of the nation speech, Ramaphosa said that expropriation of land without compensation must take place in a manner that does not harm the economy and improves food security. Other MP’s have indicated that the state is only targeting agricultural land. The final set of resolutions on land expropriation empahises the need to redistribute vacant land and underutilized state owned land.

If the expropriation committee decides it’s going to expropriate an entire suburb. Firstly, anything that is done cannot prejudice the banks. This is clearly shown by the way courts have dealt with evictions in the past and have recognised that mortgages have to be respected. This is because in order for an economy to function, money has to be advanced. If the government elected to expropriate properties where bonds were in place, the banks would stop granting bonds because there would be no guarantee of a return on investment. If the banks left the property market, the property market would fail.

Its important to remember that homeowners have rights which are protected by the courts. The expropriation bill is clear on this. Thus, a decision by the expropriation committee may lead t the courts being swamped with cases should the government try to do away with any expropriation decision through.”

 

Now that Zuma has been done away with, we hope that Cyril Ramaphosa will do everything possible to regain investor confidence, both domestic and international, and that he will put mechanisms in place to drive this process. If so, random expropriation of residential property would be non-sensical.

The EFF Secretary-General, Godrich Gardee, and asked him about the “second Zimbabwe” notion. He stressed the world of differences between what’s happening here, and what happened across the border:

“Zimbabwe’s policy wasn’t land reform, it was a land grab. What we are doing is constitutional. It requires decisions taken in Parliament. It is subject to laws, and the general application of our constitution.”

“Everything that happens here will be legal, and follow procedure. It simply cannot be compared to Zimbabwe.”

 

TRACY FRANK

 

 

 

 

 

2018-05-24T15:22:14+00:00 May 24th, 2018|Categories: Blog|