Expropriation without compensation: Democratizing South Africa’s economy?
South Africa is debating the most contentious constitutional amendment proposal yet – the property clause. While the ruling party supports the amendment, its success is far from certain. While the ANC may attempt to hasten the amendment process with a view to shore up support in the 2019 general elections, public participation requirements and the possibility of an application to the Constitutional Court may delay the amendment – writes Letlhogonolo Mokgoroane.
In February 2018, the South African National Assembly adopted a motion that Parliament’s Constitutional Review Committee (Committee) investigate mechanisms through which land can be expropriated without compensation. The motion was first proposed by the Economic Freedom Fighters (EFF), a political party founded primarily by former youth members of the ruling African National Congress (ANC), and amended by the ANC before its adoption. The Committee has been mandated to propose the necessary constitutional amendments. In line with the parliamentary motion, the Committee has been receiving written submissions, has conducted consultations across South Africa and held oral hearings with selected organized groups. The Committee is established in line with the constitution to regularly review the constitution and is composed of members of the National Assembly and the National Council of Provinces. It currently has 26 members, including 14 from the ANC, and the others representing the various opposition groups.
The South African Constitution has undergone 17 amendments since its enactment in 1996. Nevertheless, the proposed amendment to section 25 is the most contentious yet and touches on one of the core compromises during the transition from apartheid to constitutional democracy.
The rate of transfer of land from the white minority to the black majority has been abysmal.
As it is currently formulated, the property clause prohibits the ‘arbitrary’ deprivation of property and guarantees the right to compensation in cases of expropriation of property, including land. The constitutional policy and provisions have been understood to be based on the market principle of willing-buyer-willing-seller, subject to the expropriation provisions. More than two decades after the enactment of the Constitution, the rate of transfer of land from the white minority to the black majority has been abysmal. A 2017 Department of Rural Development and Land Reform’s Land Audit Report concluded that white people continue to own most of the land, with ‘Black Africans’ (80% of the population) owning only 4% of the land. Considering these statistics, the proposed amendment assumes the failure of the wiling-buyer-willing-seller approach and seeks to specifically allow expropriation of land without compensation to accelerate the rate of land transfer.
Public consultations on amendments to the property clause
Section 25 – the property clause – of the Constitution was one of the most controversial parts of the constitutional negotiations and drafting process. On the one hand, the liberation organizations argued against a property clause that would guarantee existing property rights on the basis that this would hamper efforts by the democratic government to carry out land reform. It was also argued that to entrench existing property rights in a new South African Constitution would legitimize and entrench, as a human right, the consequences of generations of apartheid and dispossession. On the other hand, the apartheid government and its supporters argued strongly for the inclusion of a clause to ensure land would not be nationalized and transferred to the land-hungry majority without compensation to current owners. As a compromise, the constitution prohibits the ‘arbitrary deprivation of property, but allows expropriation of property for a public purpose or in the public interest, subject to compensation. The amount of compensation is calculated considering several factors, listed in section 25(3) of the Constitution, including historical injustices in land distribution as well as the market value of the property.
The Committee has conducted public consultations countrywide, and received written and oral submissions.
The February parliamentary motion seeks to prescribe in the constitution the possibility of expropriating land without compensation. Accordingly, in line with the motion, the parliamentary Constitutional Review Committee called for written public submissions on the review of section 25 and other necessary amendments to the Constitution. The Committee also held hearings in all the nine provinces of South Africa from 26 June to 4 August 2018. Once this process was complete, the Committee held a meeting to discuss who would be invited to make oral submissions. This included religious groups, academics, the private sector, advocacy groups, the agricultural sector, professional bodies and cultural movements. Further, a decision was made that no political party and government department would be called upon to make oral submissions, apparently with a view to separate political party issues from parliamentary matters.
The amendment may require changes to the foundational values.
At the oral submissions, the Land and Accountability Research Centre (LARC) submitted that the proposed amendment would not adequately deal with structural and systematic problems in land reform and that this amendment could adversely affect many of the positive strides already achieved. Moreover, Stellenbosch University (which houses the South African Chair in Property Law) submitted that any amendment of section 25 for expropriation without compensation of land would, firstly, require an amendment of foundational values in section 1 of the South African Constitution; and, secondly, other provisions such as the right to adequate housing, just administrative action and the general limitation clause would also need to be amended. Other submissions articulated that the past 24 years for land reform programs had been very disappointing, but that this is not the fault of the Constitution but of political failure to implement an adequate and effective land reform policy.
AgriSA, a federation of agricultural organizations, submitted that they oppose amending the Constitution. They said that the slow pace of land reform has largely been due to conflicting policy between different spheres of government and lack of political will and accountability. The South African Institute of Race Relations (IRR) echoed AgriSA’s sentiments and argued that private property rights were internationally recognized as fundamental human rights and the nationalization of land was not plausible and feasible, despite the fact that nationalization of land is not anticipated. They, further, submitted that section 25 was about fairness, and that expropriation without compensation would violate the fairness principle and would harm the economy. The review process has brought together two unlikely partners opposed to the reforms, Afriforum, a right-wing group that claims to represent parts of the white minority, which considers the reform drive as based on wrong historical information and racist sentiment, and the Zulu King, who administers in trust vast areas of land.
The Committee is yet to finalize its report and recommendations to Parliament.
After a lengthy and riveting public participation process, the Committee was tasked to provide a report to Parliament. The Committee was supposed to submit its report at the end of September 2018. However, they requested an extension to complete their work. The request for an extension was lodged by the Committee to the Speaker of Parliament but there has been no response. The delay in the finalization of this process is, in part, because some members of the Committee feel that it would be premature to consider the draft report on the public participation process as there still needs to be a decision made on whether further oral submissions are to be accepted, while other members of the Committee say that no further oral submissions are needed. Further, some members in the Committee did not receive the draft report that summarizes public consultation process thus far, nor could they access all the written submissions. Moreover, some members feel that there was not enough time to properly consider each written submission in the period given, especially since it was stressed upon them that they have a legal duty to apply their minds to the submissions. In addition, a service provider was appointed to summarize the written submissions and to give a presentation. However, they were unable to fulfill their obligations as some members felt that the service provider lacked credibility.
ANC Resolution on amending the property clause: Preempting the work of the Committee?
As the Committee was busy conducting the public consultations, speaking after a two day meeting of the ANC national executive committee, Cyril Ramaphosa, the chair of the ANC and President of South Africa, and one of the chief negotiators and drafters of the Constitution, announced in July 2018 that the ANC has decided to amend the Constitution to allow for expropriation without compensation. In this statement he said:
A proper reading of the Constitution on the property clause enables the state to effect expropriation of land with just and equitable compensation and also expropriation without compensation in the public interest. It has become patently clear that our people want the Constitution be more explicit about expropriation of land without compensation, as demonstrated in the public hearings.
Some government entities have indicated interest to conduct ‘pilot’ expropriations.
He continued to say that the ANC will, through the parliamentary process, finalize a proposed amendment to the Constitution that outlines more clearly the conditions under which expropriation of land without compensation can be effected. The President noted that the intention of the proposed amendment is to promote redress, advance economic development, increase agricultural production and food security. The ANC resolution appears to indicate a fait accompli for the work of the parliamentary Constitutional Review Committee. In line with the sentiment that the Constitution already allows expropriation without compensation, some government entities have indicated interest to conduct ‘pilot’ expropriations, which will almost certainly be challenged in court.
Timing of the proposed amendment: An ANC electoral strategy?
South Africa is set to organize elections for national and provincial legislative assemblies in 2019. Several South African commentators have argued that the decision to implement the resolution to amend section 25 of the Constitution, particularly the provision dealing with expropriation without compensation, is a strategic move to counter the EFF ahead of the elections. The ANC had dominated all elected positions since the advent of democracy. However, in the last local elections in 2016, the ANC votes decreased and went to other opposition parties, such as the EFF, IFP and the Democratic Alliance. The ANC vote share was the lowest since 1994, and the party lost control of three metropolitan areas – Johannesburg, Tshwane (Pretoria), and Nelson Mandela Bay to opposition parties. This loss of dominance has since placed the ANC under pressure to ensure that the situation of the local elections does not repeat itself in the upcoming general elections.
In addition, the EFF gained significant political support in the last national elections as a party that promised to advocate for a constitutional amendment to allow expropriation without compensation and for the most part have kept that promise by speaking on land expropriation consistently throughout its establishment and existence.
The South African Constitution establishes distinct constitutional amendment procedures for different provisions. In principle, an amendment to the property clause will require approval by 2/3 of members of the National Assembly, as well as approval of at least six of the nine provinces in the National Council of Provinces. The ANC controls eight of the nine provinces. So it should have the numbers to push through a constitutional amendment in the Council. Nevertheless, support in the National Assembly is not guaranteed. The ANC has 249 of the 400 seats in the Assembly. Even assuming full support from the EFF, which has 25 seats, the amendment will be short of the 267 seats required to pass the amendment. In particular, if the amendment to the property clause is argued to have implications to any of the founding provisions in chapter 1 of the Constitution, as it has been suggested during the oral hearings, the amendment would require the support of 75% of the members of the National Assembly, which is 300 of the 400 votes. This will be a tougher threshold to cross.
It is not clear if the ANC will have the numbers to push though the amendments, and the amendment may not be finalized before the 2019 national elections.
Moreover, the property clause is of paramount importance to the majority of the people in South Africa. The Committee needs to ensure that there is sufficient public consultation to avoid a possible invalidation of the amendment by the Constitutional Court on grounds that there was not enough public participation as ruled in LAMOSA, which dealt with the Restitution of Land Amendment Act. The Court has, through Ngcobo J, emphasized the necessity of providing ‘meaningful opportunities for public participation in the law-making process’, and ‘the duty to take measures to ensure that people have the ability to take advantage of the opportunities provided’.
While the ANC may attempt to accelerate the amendment process, taking into consideration the magnitude and significance of the proposed amendment and the need for sufficient public participation in a country of more than 55 million people, the amendment is unlikely to be finalized before the 2019 national elections. In addition, the Committee has lamented that they require more time to apply their minds to the submissions already made and that they may be a need for further written and oral submissions. The question remains, will this proposed amendment see the light of day post elections?
Letlhogonolo Mokgoroane has clerked for Justice Madlanga at the Constitutional Court. He currently works in the Policy Development and Advocacy Unit at Sonke Gender Justice.