THE EXPROPRIATION BILL OF 2020 – NEW LAWS TO REGULATE EXPROPRIATION, INCLUDING EXPROPRIATION WITHOUT COMPENSATION
On 9 October 2020 and in Government Gazette number 43798 the latest draft of the Expropriation Bill was published. The first draft of this Bill was published in December 2018 (the 2018 Bill). These proposed Bills, if passed by Parliament, will bring our law of expropriation into line with our constitution.
The 2018 Bill was published after expropriation without compensation was again highlighted as a mechanism for land reform following statements made by the EFF, and the policy adopted by the ANC at their 2017 elective conference, where Cyril Ramaphosa was elected as President of the party. This initiative also resulted in extensive public hearings, and the formation of an ad hoc Parliamentary committee that was tasked to advise Parliament on the amendment of the Constitution to allow for expropriation without compensation. The work of this committee continues.
It was therefore surprising to see that government was persevering with their agenda to pass a new expropriation law without first finalising amendments to the constitution.
I have compared this new 2020 Bill against the 2018 Bill and there are very few changes of any serious consequence. If anything, the 2020 Bill is now more in line with the rights that are enshrined in our constitution. The 2020 Bill provides for a clearly regulated and transparent process for the government to follow should they wish to expropriate property, and provides protection for owners, and third parties, whose rights might be affected.
In section 12(3) of the 2018 Bill, examples of the circumstances in which land could be expropriated without compensation were set out. This section has now been rewritten. I think it is important to highlight the changes that have been made, as this gives us insight into the thinking behind the Bill.
In the 2018 bill, the first category of land where expropriation without compensation was contemplated was where the land was occupied or used by a labour tenant as defined in the Land Reform (Labour Tenants) Act. This category remains, albeit in a slightly different form, in section 12(4) of the 2020 Bill.
The second category of land where expropriation without compensation was contemplated was where the land is held for purely speculative purposes. This category was the most contentious because of the obvious problems inherent in determining what the owner’s purpose for holding the land was, and what would amount to “speculation”.
This category has now been restated as follows: “where land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value”. While there is still some scope for debate on the interpretation of this category, the new definition does assist to clear up some of the confusion created by the previous draft.
The third category of land where expropriation without compensation was contemplated was where the land was owned by a state-owned corporation or other state-owned entity. This category has also been further defined. Land owned by an organ of state will only fall into this category if that organ of state is not using the land for its core functions, and is not likely to need the land for its future activities. In addition, for such land to be expropriated without compensation, the organ of state must not have paid for the property.
The fourth ground upon which land could be subject to expropriation without compensation in terms of the 2018 Bill was where the land had been abandoned by its owner. This category remains in the 2020 Bill, with minor amendments to the wording.
The fifth category of land that was cited in the 2018 Bill as an example where expropriation without compensation might be applicable was land where the market value was less than the value of direct state investment and subsidy in the acquisition and improvement of the land. This category has been restated verbatim.
The new bill also adds an additional category of land that might be expropriated without compensation. This is where the nature or condition of the property poses a health, safety or physical risk to persons or other property.
While these categories are not exclusive, it remains clear that expropriation without compensation will only be applied in limited circumstances. Furthermore, the constitutional requirement that land may only be expropriated for a proper reason, and in terms of a law that applies equally to everyone in South Africa remains. In addition, property can only be expropriated for a public purpose or in the public interest and all relevant circumstances need to be taken into consideration in determining the issue of compensation. The amount of compensation to be paid also needs to balance the public interest and the interests of those who are affected by the expropriation.
Finally, it is important to emphasise that the courts will be the final arbiter in the event of disputes flowing from any expropriation. Such disputes might flow from the decision to expropriate, the procedures adopted, or the amount of compensation to be paid. The jurisdiction of the courts will not be able to be overridden by a government official with arbitrary powers.
The 2020 Bill therefore remains true to our constitution.
The publishing of the 2020 Bill is surprising in the light of the work that is being done by the Parliamentary ad hoc committee who are tasked to make proposals to Parliament for the amendment of the constitution to allow for expropriation without compensation. I say this because this 2020 Bill is in line with the constitution as it now stands. Are these two initiatives, the first, to pass this new law that fits in with the constitution; and the second, to amend the constitution, evidence of a dual agenda within the ANC, or will they be reconciled at some time in the future?
Whatever the case, if one looks at the proposed changes to the constitution that were published by the ad hoc Committee in December 2019, and if we read the latest draft of the Expropriation Bill, I anticipate no major deviations from the fundamental rights of property ownership that we enjoy in South Africa, as they are currently enshrined in our constitution.
Miltons Matsemela Inc.
14 October 2020