Menu

Expropriation without compensation: It won't hit the rich hardest

Featured

The rich - [Google Images] The rich - [Google Images]

An amendment to Section 25 of the Constitution to facilitate the introduction of a regime of expropriation without compensation would represent the most far-reaching intrusion into South Africa's Constitutional order undertaken since its adoption. Even among many who are sympathetic to the principle of compensation-free takings of property, the idea of tampering with the Constitution is viewed with some scepticism. After all, if one part of the order – and a part of the Bill of Rights, no less – can be altered to push a particular policy, what else may follow?

So, among the messages emanating from the African National Congress – at the National Forum for Dialogue on Land, Heritage and Human Rights in March, and more recently at its land summit two weeks ago – is the idea that a formula might be found to achieve its policy goals while preserving the integrity of the Constitution. The intention seems to be to 'test' the limits of Section 25 in allowing the state to expropriate land without compensation.

As Deputy Public Works Minister Jeremy Cronin put it in March: "Yes, we need to accommodate what is now an official ANC resolution that there needs to be the possibility of expropriation without compensation, but that possibility does not require changing the Constitution – it can be done via a statute, via legislative process invoking the limitation clause inside of the property clause itself, in referring to the broader limitations in the Bill of Rights."

Nothing final

 

Indeed, this position is aligned with the view that has become a widespread consensus among analysts: the Constitution in its current form, at least under particular conditions, would permit expropriation without compensation.

To be sure, there is nothing final about this stance. The ANC’s statement after its land summit indicated that a Constitutional amendment might still be on the table. But for those who feared that the endgame of this process would be the undermining of the Constitution, this is good news. Constitutionalists will take comfort in the thought that Constitutional governance would remain unviolated.

But celebrations may yet be premature. The Constitutional implications of this policy drive are but one cause for concern. Policy may be entirely Constitutional, but still reckless and damaging. So it is here.

South Africa still lacks any substantive certainty as to how this policy is to unfold. It has merely been restated with apparent enthusiasm that expropriation without compensation is a fast-approaching reality.

"We are going to take land," promised the president at the ANC’s land summit, "and when we take land we are going to take it without compensation."

This is unlikely to assuage the concerns of businesspeople and investors who are deeply sceptical of the outcomes of this policy – and have expressed these sentiments to the government. (In the absence of any real clarity, this will be a crippling obstacle facing the president's overseas investment envoys, who will likely have nothing to offer but personal assurances.)

One indication of the direction of thinking was provided by Ronald Lamola, a member of the party’s national executive committee, who said that an expropriation bill (suitably amended to enable expropriation without compensation) and a redistribution bill should be introduced.

While it is not immediately clear what a redistribution bill would encompass, the contours of the expropriation bill are well known. Although passed by Parliament two years ago, it was not signed into law by then-president Jacob Zuma because of concerns that it was vulnerable to challenge on the basis of insufficient consultation.

Its provisions were ominous. It attempted to shift the balance of power squarely towards the state, placing those whose property had been targeted at a distinct disadvantage, and making pushback difficult.

As the Institute of Race Relations wrote after the bill was passed: "The problem, in a nutshell, is that the Bill still empowers an expropriating authority, after completing some simple preliminary steps, to take ownership and possession of property by serving a notice of expropriation on the owner. Though disputes over the compensation payable must now, in the absence of successful mediation, be referred to the courts, the Bill still seeks to limit the right to dispute the validity of an expropriation. In addition, the Bill tries to put onus of proof in any such proceedings on the expropriated owner or holder of a right."

To bolt onto this the ability to seize property without even the obligation to offer compensation is a concerning prospect indeed. Property – all property, not just landholdings, but assets ranging from buildings to equity in companies to artworks – would be vulnerable to seizure.

Cruel irony

Perhaps the cruellest irony is that this would inevitably be far less a problem for multinational firms with deep pockets, and well-heeled land barons, than for ordinary people. Those with money or connections could retain the lawyers and attract the media attention that would provide some protection. The township shopkeeper or suburban bondholder could do no such thing.

The dangers inherent in expropriation without compensation have by no means passed because the Constitution has seemingly been granted a reprieve. On the contrary, they remain real and present.

It is this danger that impels the IRR’s campaign, launched this week, to give ordinary people the opportunity to oppose the government’s threat to take away property rights. In the run-up to the June 15 deadline for submissions to the Joint Constitutional Review Committee charged with considering public opinion.

The IRR's submission spells out the grave dangers the country faces, the fallacies that underpin the government’s argument in favour of Expropriation without Compensation (EWC), and the practical steps it should and could take to ensure successful land reform without having to undermine property rights.

Ronald Lamola commented some time ago that "we need legislation as forceful as war". Unless there is a strong enough counter-argument by the June 15 deadline for submissions to the Joint Constitutional Review Committee, what is in the offing may be just that – and equally destructive.

 


 

Source

Fin24

back to top

Industries

About us

Follow us

Follow us @BusinessNewsCT

BusinessNewsCT SA traders urged to focus on neighbours - https://t.co/9pWA71dbaE https://t.co/ALK60pYIei
1hreplyretweetfavorite
BusinessNewsCT Fear of failure hinders South Africa’s aspiring entrepreneurs - https://t.co/s9VatN0AlF https://t.co/5Fb2H565yi
1hreplyretweetfavorite
BusinessNewsCT Business confidence in agricultural sector remains positive - https://t.co/XO1h11M7iP https://t.co/OkEwgonirh
1hreplyretweetfavorite