Keep calm and carry on. If the weight of commentary around the Expropriation Bill could be summed up in a phrase, that would probably be it. Among those whose interests stand to be directly affected – bodies in the agricultural value chain – the sense is that the bill represents a reasonable solution to the fraught matter of expropriation without compensation (EWC). This is incorrect.
EWC signals a threat to property rights, and with this hanging over the country, businesspeople – South African and foreign – are going to be wary of committing their money.
A piece circulated by economists associated with the Agricultural Business Chamber was upbeat about the Bill. According to Agbiz, the bill sa ‘sound process’, and acknowledges the right to appeal to courts. ‘Nil’ compensation is but one possibility, within certain strictures. Importantly, the bill establishes a process that makes sure that ‘expropriation is always the last resort’.
Subsequently, the KwaZulu-Natal Agricultural Union (Kwanalu) produced an analysis along similar lines. This was then taken up and republished by the Milk Producers’ Organisation.
It emphasised that nil compensation was a possible option under particular circumstances, although not a compulsory one. ‘Full access’ to the courts is permitted to deal with disputes. ‘Expropriation,’ it notes, ‘is also a measure of last resort and the state must first attempt to reach an agreement with the landowner.’
Creditably, it does point to some clear shortcomings. Among them are that the definition of expropriation is ‘a serious cause for concern’, as it would enable the state to seize property on behalf of others and walk away from compensation obligations. (We at the IRR have warned of the possibility of this being used to effect a compensation-free seizure of all land, with the state as custodian.) The grounds on which nil compensation may be awarded are ‘not limited to’ the grounds presented in the bill, and may include others. How abandoned land will be identified is unclear.
So, in the view of Agbiz, KwaNalu and the MPO, parts of this bill are problematic. But would it be fair to say that, as a whole, the bill is fundamentally sound?
No. The bill as a whole must be seen understood for the possibilities it opens up despite the nominal protections it offers. And the prospects for abuse are large.
The key here is to understand the process. The state will identify the land it wants. It must then negotiate with the owner, and, if this fails, issue a notice of intention to expropriate. It must invite representations. These are to be considered, but need not be responded to.
This having been done, the state will issue a notice of expropriation. This will specify the dates on which possession and the right to own will pass to it. This might be done expeditiously – indeed, perhaps in weeks or even days. The only limit on this is that the date ‘must not be earlier than the date of service’ of the notice.
Yes, this can be fought in court. But this could be very expensive, and may have to be done after the property has been taken. Where the property is a farm or other income-producing asset, this will mean loss of that income too. (And also, be aware that this is not confined to land, but could be used to take any assets.) It may simply make more sense to take what is on offer.
Perhaps the focus on the idea of EWC – and the government’s enthusiasm for it – has masked a slew of associated dangers that have arisen through the overall policy drive. For the threat, here, is not that no compensation will be offered, but that it will be meagre and inadequate, backed by a system that is weighted in favour of the state. It is not only the quantum of compensation that is at issue, but the latitude afforded the state to take property from those subject to it. It is, in other words, about weakening property rights in general.
The bill makes recourse to expropriation easy and convenient. In the hands of institutions – such as municipalities – that have not shone as exemplars of probity and good governance, it stands to be a very dangerous weapon. Indeed, Agbiz notes in its analysis that a turbulent political context exists around the bill, and the threat it poses will depend on the extent to which the state uses it.
One can’t help seeing this in conjunction with the report on last year’s presidential advisory panel on land reform and agriculture, which puts forward a proposal for redistribution as follows:
‘Each municipality needs to identify which land is to be redistributed, with the input of local residents and the support of Department of Rural Development and Land Reform, taking into consideration the capacity and corruption concerns at municipal level as raised in the Operation Phakisa reports. Area-based planning and beneficiary selection processes will determine whose land needs are to be prioritised and therefore what categories of land are required. … Individual owners of properties that meet the criteria of land required for redistribution, or for tenure upgrades for farm dwellers, may offer their land as donations, or enter into negotiations with the state, failing which the state may proceed to expropriate.’
Following on from this, what the state wants, the state will get. Keep calm and hand it over, perhaps? The Expropriation Bill creates a situation in which acquisition takes place with the threat of expropriation ever-present. Perfunctory negotiations will not likely be a significant barrier.
The farming and agribusiness community are priceless national assets that the country can ill-afford to lose. The powers the bill places in the hands of the state, and the slanting of the relationship between the state and its subjects, places these assets in great jeopardy. In fact, it places all property under threat.
Those interested in the future of the country cannot afford to rely on unsteady official goodwill. Keep calm, certainly, but be vigilant and be prepared to assert robust opposition to this measure.
Written by Terence Corrigan, project manager at the IRR. Readers are invited to join the IRR by sending an SMS to 32823 (SMSes cost R1, Ts and Cs apply).