This article is one in a series on expropriation that looks at some of the fundamental legal issues surrounding expropriation without compensation (“EWC”). A list of the earlier articles in this series can be found at the end of this article.
This instalment examines the proposed amendments to section 25 of the Constitution of the Republic of South Africa (“the Constitution”) as published for public comment on 6 December 2019. The call for comment with links to the draft legislation can be accessed here: https://pmg.org.za/call-for-comment/885/.
This discussion will be framed in three parts, the first dealing with the need to and desirability of amending the Constitution, the second dealing with the legal impact of the proposed changes
and the third dealing with recommendations for meaningful change. This article does not deal with the question of what amendments ought to be made to section 25 to promote land reform, as this falls beyond the mandate given to the committee dealing with and proposing this amendment.
It is necessary to thank the South African Research Chair in Property Law for the invitation to a discussion group on this issue (as well as all of the attendees at that discussion), as many of the issues listed below were discussed in detail and the thought processes that led to the content below became clear to me during that discussion.
PRELIMINARY REMARKS-GREAT TIMING
On 6 December 2019 Parliament released a draft bill which, if eventually approved by Parliament and the National Council of Provinces and signed off by the President, will come into operation of law at a later date yet to be determined. It might be passed in its present form, or with amendment, or it might not be passed at all. It’s concerning however that a piece of legislation with such a significant impact on the lives of every South African would be published for comment over the festive season when most are concentrating on their families and few are watching the news and bulletins. The deadline (of 31 January 2020) was subsequently extended on 30 January 2020 until the end of February 2020.
The same thing happened last year when the Expropriation Bill was released on 21 December 2018. One might infer from this pattern of timing that the government are attempting to “sneak through” an amendment with as little publicity as possible.
REHASHING THE CONTEXT TO THE DEBATE
Ignoring the timing for a moment, let’s take a step back to remind ourselves where we are in the debate.
- A Parliamentary Committee was put together to investigate whether our Constitution should be amended to provide for EWC. A public comment process was run, the findings from which were summarized in a report (available here https://www.parliament.gov.za/storage/app/media/Docs/atc/a3985fff-84d0-4109-80f4-e89064c8dede.pdf) in which 449,000 odd (valid) written submissions were considered, and in respect of which 65% of respondents voted not to change the Constitution.
- Oddly, however, the recommendation to come out of this process by the committee aforesaid was that the Constitution ought to be amended “to make explicit what was implicit” in the Constitution – namely that EWC can be carried out in terms of section 25 but that the section should be amended anyway, to make this ‘clearer’.
- The National Assembly thereafter adopted a resolution to amend the Constitution.
Flowing from the above, the Expropriation Bill was published for public comment in December 2018. This draft bill introduced amendments to national legislation aimed at removing the ‘old’ formula used to calculate expropriation under the Expropriation Act and insert a list of situations in which it might (not would always) be appropriate for the State to expropriate without compensation. This piece of legislation is the national legislation needed to facilitate all forms of expropriation – with or without compensation. It dictates how the process of expropriation is to take place. Its publishing and comment process was rather quiet (supposedly this was the aim, it being published on 21 December 2018.
- Then everything went quiet. Elections came and went. Three weeks short of a year later, the draft 18th Constitutional amendment (to amend section 25 of the Constitution) was published.
- It is rumoured that another version of the draft Expropriation Bill will shortly be released, which version contains changes that were made following the last round of comments roughly a year ago. However, as at date of publication, to my knowledge, no such Bill has been released for public comment.
- On 3 January 2020 the Beneficiary Selection and Land Allocation Policy was published by the Department of Development and Land Reform. This document gives context to who the government might benefit under land reform programs but appears to deal mostly with vulnerable categories of previously disadvantaged persons and then only in the rural context. It is expected that several more policies fleshing out what government intends to do to promote land reform will be published in the near future.
We now turn to consider the content of this draft amendment.
PART I: NEED FOR AN DESIRABILITY OF AMENDMENT
MAKING “EXPLICIT” WHAT IS “IMPLICIT”?
The preamble is used to interpret the content of the amendment bill, so its wording is important. The most striking feature of the proposed amendment (contained in the Preamble) is that it indicates that it is not necessary for legal purposes at all. The Preamble expressly explains that the rationale for the amendment is to make “explicit” what is “implicit” – namely that EWC is already possible in terms of the current formulation of section 25. It says that “section 25 of the Constitution of the Republic of South Africa, 1996, must be amended to make explicit that which is implicit therein, so that an amount of nil compensation is explicitly stated as a legitimate option for land reform”.
STATED RATIONALE FOR AMENDMENT
The reason stated for amending unnecessarily, also appears from the Preamble. It is very concerning that the rationale for the amendment – as stipulated by the law-makers – is that the amendment is required in order to satisfy the “dispossessed” who are “of the view that very little is being done to redress the skewed land ownership pattern”. As above, if EWC is already possible then the amendment is being done not to actually assist any dispossessed persons but merely to make them feel that they will be assisted or that the government is capable (or more capable) of assisting them. This makes it embarrassingly plain from a simple reading of the Preamble that this amendment is being made purely to make the “dispossessed” think that they are going to be helped. In my view, this is disingenuous and disrespectful of the law makers, who appear, from the above, to be doing this purely to gain political favour.
Assuming that we know what is implicit in the Constitution (which academic authors dispute), and accepting the views of the majority of writers (that EWC is already permissible in terms of the Constitution and that amendment is unnecessary), and on the plain reading of the Preamble above, one must question the wisdom of the law makers who are sending a message to the rest of the world that in South Africa we are prepared to amend our Supreme law unnecessarily simply to make people feel better about their prospects of benefitting from land reform programs.
It is further concerning that it is stated as a fact that there is a “palpable” “land hunger” when in fact very little useful and credible research has been done into the issue of which persons require what types of land for what purposes. For example, it has been reported in several publications that the great majority of land claimants prefer to take money rather than land in the settlement of their claims, because money gives them more opportunity than land does. If this is true, it may be an indicator that the ‘land hunger’ is less a desire for land itself and more a desire for opportunity for wealth creation. In the report compiled by the Joint Constitutional Review Committee on the possible review of section 25 of the Constitution (15 November 2018) it was recorded that the majority of respondents (65%) indicated that they would not want the Constitution changed. If these two factors are an indication that there is less of a land hunger (or indeed no land hunger) then the rationale for the amendment falls away.
It is always open to the law-makers to make laws (for example, through the amendment of the Expropriation Bill) that strengthen and capacitate our nation’s commitment to righting the wrongs of the past through land reform. This is possible without any amendment of the Constitution and can, and should, be done in line with the existing formulation which does not need amendment.
PART II: EFFECT OF PROPOSED AMENDMENTS
THE “EXPLICIT / IMPLICIT” LENS
In order to interpret the amended version (once passed) one must consider the intention of the Legislature when bringing about the amendment. The Preamble declares that the intention is merely to make it explicit that EWC is possible for land reform purposes (and this is based on the assumption, which personally I accept as correct, that EWC for land reform was implicit in section 25 to start with). In order to understand then what the amended section 25 means, we need to ask what the existing section 25 means. Any interpretation of the amended section 25 that goes beyond the existing section 25 (either in limiting or in entrenching or furthering rights) will not be appropriate considering the stated interpretation of the legislature as expressed in the Preamble.
In light of this background it is also cause for concern is that the Preamble states that a purpose of the amendment is to “ensure equitable access to land and will further empower the majority of South Africans to be productive participants in ownership, food security and agricultural reform programs”. Food security (whilst an obvious concern for all in South Africa) might in some cases be very different to land reform – whilst this amendment is purportedly limited to permitting EWC for cases of land reform. The same applies to agricultural reform programs – they might be done in the context of land reform but they also might not be – they might be done outside of land reform wit a view to revolutionising the technology avialable to farmers. This formulation also gives the reader the impression that EWC is intended to target only farm land. The Preamble should be amended to remove these references or limit them to instances of land reform and to remove the impression that it only affects farm land.
It is also concerning that the preamble focuses on “the dispossessed” as the ‘target audience’ for the amendment, when there is a land reform mechanism very specifically for dispossessed persons – namely the land claims process. There are three main types of land reform: restitution (giving back what was taken), redistribution (moving assets from one person or group to another) and security of tenure (making or securing the land rights of those previously denied secure and full land rights). Land reform is aimed at addressing the wrongs of the past not only for those dispossessed but also those who were not afforded opportunities/rights that others were – and the Preamble should be inclusive of all such persons entitled to benefit from land reform. Some have also remarked that the Preamble gives the public the impression that amending section 25 will solve South Africa’s land reform problems, when it is actually not intended to change anything and only to clarify the present situation. It has been remarked that the Preamble needs to be toned down to make it clear that this is not the solution to South Africa’s land reform woes. It might be better to reformulate it in a more positive way to explain that the amendment is intended to clarify the legal status in order to make clear what the possibilities are in relation to future land reform legislation/programs. There should also be reference to this being only one of many other reforms aimed at dealing with the problem. An honest acknowledgment of the ‘real problem’ – that land reform is not happening at the pace that we want it to – should be referred to.
Any amendment to the Constitution will likely be effective for generations to come (due to the difficulty with which it is amended) and it will govern not only our present government (and its admirable objective of land reform) but also future governments (which might not have such admirable ends). The primary purpose of the Constitution is to protect citizens from the government wielding too much power and being able to infringe on their rights. Its wording should be such that although it empowers government to act (and to enact legislation to) achieve lawful ends, it should simultaneously constrain the government in the exercise of this power in instances in which it can reasonably be foreseen that the government might abuse or over-step the bounds of its power.
SECTION 25 (2)
There are numerous problems with the proposed reformulation.
- The amendment limits instances of EWC to those for ‘land reform’. As explained above land reform is a broad concept that includes more than just the redistribution of property or the restoration of land taken from those dispossessed. Because there is no definition or guidance given as to what constitutes ‘land reform’ there is little certainty as to what kinds of property and when such property may be effected. This may be clarified by national legislation and/or programmes but it also might not be. Seeing that the purpose of the amendment is to clarify the existing position, there should be more certainty as to what ‘land reform’ is in order for the amendment to have any real meaning. Here we need to remember that we are supposed to be explaining what presently land reform is, not creating a definition for future purposes that includes other things/acts not already included.
There has been a lot of debate as to the express inclusion of land and improvements as both being subject to EWC. In terms of our common law of property any improvements that have acceded to the land are regarded as part of the land anyway but this only deals with things that have become affixed to the land in a certain way that meets the accession test. There might be movables that are part of the operation on the land (if we are looking at farming, think about water tanks, milk trucks, portable dams, centre pivots, and tractors) that are of no use or value to the land owner after expropriation and which it might be argued that they should be compensated for, together with the land itself. Seeing that this amendment is only aimed at land, including improvements within the scope of property that is subject to EWC goes beyond the mandate of the amendment. This on its own, however, does not necessarily invalidate it. If Parliament sees fit to include this in the amendment, then it is at liberty to do so, provided that a proper public participation process was run on it (which, to my mind, did not happen because the public participation process was run in relation to EWC and land, and not movable property which are not part of the land).
It has been argued that if improvements are to be subject to EWC there should be greater clarity as to what ‘improvements’ are, as this could reasonably be interpreted to include non-corporeal property such as development rights in terms of zoning or building plan approval, or section 25 real rights to develop in terms of the Sectional Titles Act.
If it is accepted that improvements are to be included along with land in this subsection, the word ‘any’ should refer to ‘all’ – otherwise this allows the state to pick and chose which of the improvements are subject to EWC. It is submitted that the principle should apply to all improvements equally.
The reference in the proviso to a court that may determine that nil compensation may be paid in certain circumstances should be removed, as this can be interpreted to give the impression that a court may, in a process other than the standard review that will follow upon a dissatisfied land owner taking a rejected offer of compensation to court for review, make such a determination. This might then create an additional remedy for aggrieved landowners that does not already exist, which would go beyond the stated purpose of clarifying the meaning of section 25.
The words ‘nil compensation’ would ordinarily be contrasted to the words ‘without compensation’, the former referring to the right to compensation but at nil, where this is just and equitable, and the latter referring to no right to compensation at all. The phrase ‘nil compensation’ ought never to be interpreted to mean ‘without compensation’ such that the right to have the compensation being just and equitable is removed completely, as this will violate the provisions of section 25(3) and 36 of the Constitution. To the extent that there is any danger in the phrase being interpreted this way, it should be made clear in section 25(2)(b) that the determination of nil compensation must still be just and equitable within the meaning of 25(3) and 36.
There are questions as to whether the word ‘determined’ refers to a determination by a court or by an administrator, the concern being that the proposed formulation of section 25(2)(b) restricts the activities of the state inasmuch as only a court may ‘determine’ that compensation may be set at nil. This would remove the right of the state to issue an expropriation notice at nil (which right we must accept already exists, if EWC is already implicit in section 25). When we appreciate that the purpose of the amendment is not to create, or detract from existing rights, but only to clarify what section 25 already says, this phrase can only be understood as meaning that a court can ratify or approve a determination of an administrator within the existing expropriation framework. If there is any danger of an incorrect interpretation, this should be reformulated.
The proviso limits the state inasmuch as it provides that lists of circumstances in which EWC can happen must be set out in legislation. It might be appropriate to set these out rather in programs/policies.
SECTION 25 (3A)
It is easy to see how, if national legislation is to be enacted to spell out specific circumstances in which a court may determine that the amount of compensation is nil (as provided by amended clause 3A), the government might amend national legislation (which is much easier than amending the Constitution) to include a list of circumstances in which a court may determine that nil compensation can be paid and in doing so abuse or over-step the bounds of its power. However, government can do this (enact national legislation) regardless of whether or not section 25(3A) is inserted. In order for the promulgation of such legislation to meet constitutional muster however it would have to be lawful under section 25(2)(b) to begin with.
The question is thus whether this provision – 3A – is intended to restrict the right to utilize EWC to instances only where the government has determined the circumstances in which it might happen in national legislation (bearing in mind that, in light of the ‘explicit/implicit lens’ we need to ask what the current formulation of section 25 provides for and merely clarify it).
It has been suggested that the purpose of 3A is to create an obligation on the state to promulgate national legislation that requires the circumstances to be spelled out in which EWC can take place – to limit the powers of the state to the effect that EWC can only take place in terms of national legislation and never in terms section 25 alone.
However, if we adopt the view that it is already implicit in the Constitution that EWC is possible (not only in relation to land reform but in other contexts too) it stands to reason that 3A, if it restricts the government’s right to utilize EWC to only those instances in national legislation, would be going beyond the pale of the ‘explicit/implicit’ mandate. It must then be accepted that its purpose is merely to ‘make clear’ the situation.
Interpreted in this light, section 3A has no effect whatsoever on the present set of rights/obligations that flow from section 25.
PART III: RECOMMENDATIONS
The amended section will be interpreted in years to come in light of the stated purpose in the Preamble to the amendment bill and the debate that led up to the adoption of the final version (whatever that may look like). This article is intended as a contribution to that debate – not as a suggestion as to how the problem of the slow pace of land reform and the growing distress of those most affected by it can be remedied. That being said, in summary of the above, I would make the following recommendations to Parliament on the wording of the proposed amendment in order to restrain the future interpretation thereof to be in line with its stated purpose of merely clarifying the legal position at present, such that the amendment is not interpreted as creating or strengthening or detracting from any rights that presently exist.
- In the first place there is no need to amend the Constitution to give effect to EWC. The Constitution already permits this, in relation to land reform and other reasons for expropriation.
- It would be ill advised to amend the Constitution merely to ‘clarify’ what it actually says because this sends the message to the rest of the world that we are ready to mess with our supreme law simply to reinforce a particular political rhetoric with a view to mollifying a dissatisfied public.
- If there is to be an amendment, that amendment cannot create, further or diminish any existing rights, as this would then go beyond the stated purpose in the Preamble of ‘clarifying’ the present legal possibilities in terms of section 25.
- To the extent that there is an amendment, the Preamble needs to be amended to:
- Remove the impression that EWC affects only farm land and expressly state that it affects all land urban and rural;
- Remove all reference to those ‘dispossessed’ as this only refers to one form of land reform and could be interpreted as excluding land reform initiatives not aimed at restitution;
- Remove all references to the purpose of the amendment being to mollify ‘the dispossessed’;
- Include an honest reference to the reason that accelerated land reform is needed – due to the current pace not meeting our society’s expectations and needs;
- The reference to a land hunger should be removed entirely as it is not clear that it exists, what this is or how it necessitates an amendment to the Constitution;
- Section 25(2)(b) ought to include a reference to nil compensation being just and equitable, reference to the court should be removed, it should be clarified that a determination at nil compensation may be made by an administrator but ratified or approved by court, the reference to improvements should be removed (for now – due to a lack of proper public participation having been followed on this score), and should, in future, ‘improvements’ be included it is necessary for clarification on what would constitute such and that any such reference would apply equally to all improvements.
- Section 25(3A), which mandates national legislation be enacted to expressly provide specific circumstances for EWC at nil compensation, is a power already in the scope of the national legislature. As such, in its current form, subsection 3A has no effect on the current rights and obligations which flow from section 25, and arguably entirely unnecessary.
PROCESS GOING FORWARD
Whatever the final version looks like, the President would be advised to send it to the Constitutional Court for validation before signing it into law to avoid protracted and expensive litigation that plunges South Africa into uncertainty.
ARTICLES IN THIS SERIES (IN CHRONOLOGICAL ORDER)
The Debate over Expropriation without Compensation (April 2017) available at https://www.schindlers.co.za/news/the-debate-over-expropriation-without-compensation/
Public Purpose and Public Interest in the Context of Expropriation (May 2017) available at https://www.schindlers.co.za/news/public-purpose-and-public-interest-in-the-context-of-expropriation-of-property/
Expropriation without Compensation? (June 2017) available at https://www.schindlers.co.za/2017/expropriationwithoutcompensation/
Expropriation #1: Amendments to Section 25? (Sept 2018) available at https://www.schindlers.co.za/news/expropriation-1-amendments-to-section-25/
Expropriation #2: Tenants and Occupiers (Oct 2018) available at https://www.schindlers.co.za/news/expropriation-2-tenants-and-occupiers/
Expropriation #3: The Land Hunger (Dec 2018) available at https://www.schindlers.co.za/news/expropriation-3-the-land-hunger/
Expropriation #4: The Expropriation Bill of 21 December 2018 (Jan 2019) available at https://www.schindlers.co.za/2019/expropriation-4-the-expropriation-bill-of-21-december-2018/
Written by Chantelle Gladwin-Wood and Marc Gevers
07 February 2020