Land Reform - Presidential policy statements on expropriation without compensation

The latest presidential pronouncements

In his State of the Nation Address in Parliament on 9 February 2017, the President said:

“It will be difficult, if not impossible, to achieve true reconciliation until the land question is resolved. …We had stated our intention of using the Expropriation Act (No. 63 of 1975) to pursue land reform and land redistribution, in line with the Constitution.  I have now decided to refer the Bill[1] back to Parliament for reconsideration on the basis that it might not pass constitutional muster. This is due to inadequate public participation during its processing. …The reopening of land claims is also still on hold because the Restitution of Land Rights Amendment Act (No. 15 of 2014) was declared invalid by the Constitutional Court. The Court found that the public consultation process facilitated by the National Council of Provinces and some provincial legislatures did not meet the standard set in the Constitution. …Most importantly, we appeal to land claimants to accept land instead of financial compensation. Over 90% of claims are currently settled through financial compensation, which does not help the process at all. It perpetuates dispossession. It also undermines economic empowerment...“

Following these comments, he went on to say the following in his address at the annual opening of the National House of Traditional Leaders (NHTL) in Cape Town on 3 March 2017:

“The land question is central to the achievement of a national democratic society and true reconciliation and empowerment of our people.  It is a central issue for traditional leaders. We have identified the weaknesses in the land restitution and redistribution programme. The willing buyer, willing seller principle did not work effectively.  It made the State a price taker in an unfair process. In addition, there are too many laws dealing with land reform which causes confusion and delays. …To attain the goal of radical social-economic transformation in relation to land reform, we are looking at two critical actions: first we must undertake a pre-colonial audit of land ownership, use and occupation patterns.  Once the audit has been completed, a single law should be developed to address the issue of land restitution without compensation. The necessary constitutional amendments would then be undertaken to effect this process.”

Both the President and the Minister of Rural Development and Land Reform have since then repeated that land reform would take place within the parameters of the law and that there would be no land grabs.

But the ANC itself does not agree with expropriation without compensation

However, this new found radical approach, as announced by the President, is not shared by many others at top level in the ANC.  For example, in the discussion document on Economic Transformation which has been prepared for the ANC’s national policy conference at the end of June 2017 (as released in March 2017), the “returning of land to our people and supporting land reform” is identified as one of the required policy interventions, but then goes on to say:

“ANC policy commits government to returning land to our people and due to this commitment South Africa’s Constitution mandates that land reform must take place. The Constitution’s commitment to ‘just and equitable’ compensation for the acquisition of land for land reform purposes should be codified and should replace market-based valuations of land. The process must be facilitated and accelerated by the passing of updated expropriation legislation by Parliament. Government should take heed of the Constitutional Court’s finding that agreement on the quantum of fair compensation is not a pre-condition for land redistribution to take place and should never pay a premium in purchasing land for the purpose of land reform. In general, the success of land redistribution will be improved if there is greater oversight over land, farming equipment and technical skills transfer to the beneficiaries of land reform. Substantial investment in irrigation infrastructure is required, as is the resolving of water rights and the control over the allocation of water rights, and as is greater investment in innovative market linkages for small-scale farmers in communal and land reform areas. Furthermore, institutional capacity needs to be improved with regards to accurate record keeping and the removal of uncertainties with regard to the roles of various overlapping public sector bodies involved in land reform.”

The Mail and Guardian reports as follows on recent comments by ANC economic transformation head Enoch Godongwana: 

“The barrier to effective land reform is a lack of political will and not the Constitution. He dismissed as rhetoric the growing calls by some ANC leaders, including President Jacob Zuma, for radical economic transformation, which includes expropriation of land without compensation…”[2]

In similar vein, ANC Treasurer-General Zweli Mkhize has stated: 

“I believe a lot of progress can be made within the existing Constitution - maybe with one or other legislation - but within the Constitution, we [have] a lot that can be done and achieved”.[3]

Are remedies in Section 25 of the Constitution and the Expropriation Bill sufficient?

Section 25 of the Constitution provides for expropriation, inter alia, in the public interest, which is defined as including “the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources”. It further states that compensation is payable in the event of expropriation, that it must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected having regard to all relevant circumstances.

The existing Expropriation Act of 1975 predates the Constitution by 19 years and enables expropriation for public purposes, subject to an obligation to pay compensation. “Public purposes” is defined as any purposes connected with the administration of the provisions of any law by an organ of State.  The compensation which is payable in terms of this Act is the amount which the property would have realised in the open market on a willing seller/willing buyer basis. If no agreement is reached on the amount to be paid as compensation, the amount is to be determined by a court. Costs of any court action are dependent on whether the amount determined by the court was equal to or lower than that offered by the State (where the costs order would be in favour of the State) or equal to or higher than demanded by the owner (costs in favour of the owner).

An attempt was made to amend the whole expropriation process over the past few years in the Expropriation Bill, which was passed by Parliament on 26 May 2016 and sent to the President for assent. However, it was sent back on 17 February 2017 due to reservations about inadequate public participation. The Bill provides that expropriation may not be done for any purpose other than a public purpose or in the public interest and may only be done if the State has without success attempted to reach an agreement with the owner for the acquisition on reasonable terms. Compensation is to be determined on the same essential criteria which are set out in Section 25 of the Constitution: it “must be just and equitable reflecting an equitable balance between the public interest and the interests of the expropriated owner”, having regard to all relevant circumstances, including, inter alia, current use and history of the property, market value, the extent of state investment in the acquisition and improvement of the property and the purpose of expropriation - this is identical to Section 25 of the Constitution. The provisions relating to who is liable for legal costs in the event of a dispute, are the same as those in the current legislation.

The obvious question is:  why has it taken almost 20 years to draft and table an Expropriation Bill, which in essence, reflects the provisions of the Constitution in this regard? Presidential statements bemoaning the negative effects of the “willing seller – willing buyer”, as contained in the existing expropriation legislation, therefore do not sound credible. Many commentators maintain that there has simply been a lack of political will. To quote Enoch Godongwana again: 

“…we don’t have an expropriation Act 20 years after Mandela signed the Constitution. And yet you blame section 25? We bark at section 25 when we have not even tested the implications of section 25”.[4]

The proposed pre-colonial land audit

In respect of the President’s new idea of a pre-colonial land audit, Aninka Claassens points to the difficulties of such an undertaking and asks how far back this is supposed to go: 

“The proposed audit would yield very different results if it took a snapshot of land occupation at the height of Shaka and Mzilikazi’s powers, or before that. Would the principle be to try to go back to who was first in the area, as the Khoi and San would have it, or to select a specific time? Very material interests are at stake either way. ….Land redistribution has failed not because of the property protection in section 25 of the Constitution but because of the government’s choice to use redistribution land and the land reform budget as sources of political patronage.”[5]

Even if there is clarity about the scope of a land audit, a properly funded entity, staffed with expert personnel and benefitting from adequate administrative and logistical back-up, would take many years to complete a survey of this massive scale. Government does not have these resources at its disposal and there are no signs that they will be made available. If the Presidential timeline is correct (in that the required constitutional amendments to permit expropriation without compensation would be undertaken only after completion of the pre-colonial land audit), it seems safe to say that expropriation on this basis will not see the light of day. The logical consequences of the newly announced approach have not been thought through. 

Restitution of Land Rights Amendment Act

The Restitution of Land Rights Amendment Act was declared invalid by the Constitutional Court on 28 July 2016, as a consequence of insufficient public consultation. The initial cut-off date for the lodging of claims was the end of 1998, but the Amendment Act was meant to open up the process of land claims for another five years, from 1 July 2014 to 30 June 2019. 

Between the date of implementation of the existing Restitution of Land Rights Act and the initial deadline for the lodging of claims (31 December 1998), about 80 000 claims were filed. By the end of November 2015, 59 758 claims had been finalised out of 78 483 claims settled. 133 778 new land claims have been lodged since the re-opening of land claims on 1 July 2014.[6] However, the Constitutional Court now held that no further applications can be lodged, but that the claims that had been lodged are not invalidated. Apart from the lack of public participation, the concern raised by the applicants at the Constitutional Court was that a re-opening of the claims process could negatively affect claims that had been lodged but not yet resolved, in that it could now give rise to competing claims. It may be noted that a further concern raised was that traditional leaders would exploit the re-opened process to lodge claims on land that had already been restored. The concern was also raised that the Land Commission lacks capacity and more claims at this stage would further exacerbate an already “intolerable” situation.

Why shouldn’t claimants be paid out?  Why should they have to accept the land instead?

The President’s comments that claimants should take the land and not accept financial compensation, make no economic sense.  Many (if not most) claimants are certainly too poor to take over land and to make something of it, since there is no capital available to inject into any kind of meaningful venture. The approach contained in the ANC discussion document referred to above, makes much more sense, in that it proposes increased assistance, in a variety of ways, to beneficiaries of land reform. In the final analysis, it would seem that financial compensation will continue to be the solution desired by claimants, unless a workable assistance plan is put in place for them.

Government service delivery in the land reform space

Another obstacle in land reform space is the quality of service delivery by the Department of Rural Development and Land Reform. One recent example was highlighted by Carmel Rickard[7], in a case where a local community lodged a restitution claim 20 years ago and where no progress had been made to date, in spite of Ministerial assurances. The case history includes, amongst other things, missing files and a mistaken consolidation with another claim by the land claim authorities. In his judgment, the Judge even found the opinion of the claimants’ advocate that the land claim authorities seemed to be hiding the file was “a credible and sound argument”. He commented that

“Such conduct by an organ of State can only be described as appalling and manifestly horrendous”.[8]

Rickard also quotes comments by a member of the Legal Resources Centre in Durban as follows:

“Our government is blaming the land legislation, saying the laws do not protect or assist land claimants (and) farm occupiers. This is not true. The problem is the implementation. There is (also) a perception that the Constitution is a stumbling block in land reform, particularly with regard to expropriation. I do not agree. There is nothing wrong with the Constitution. It is the state officials who are failing to implement the current legislation and the Constitution.” 

Other commentators have also highlighted the problems in this regard.[9]

Trying to make sense of it all

So against this background, why has the President raised the issue in this way at this stage? One potential reason is, as indicated by Aninka Claassens[10], the aim to garner electoral support among the traditional chiefs. The tenor of this comment is echoed by many others on the Government’s policy in this field over many years.[11]   

In trying to interpret any policy pronouncements by Government in the land reform sphere, one therefore first has to ask the question as to who the targeted audience appears to be and secondly, whether what is being proposed is actually feasible in practice. There seems to be a clear divergence between Government’s public statements and its action: this is highlighted by the practical weaknesses of the administration in dealing with land claims and the complete lack of urgency in amending expropriation legislation.

Anton van Dalsen
Legal Counsellor
anton@hsf.org.za