Nedbank warns of 'classic banking crisis' if expropriation without compensation is allowed
A "classic banking crisis" can be triggered by the amendment of Section 25 of the Constitution, Nedbank CEO Mike Brown told the Joint Constitutional Review Committee on Friday.
The committee was listening to oral presentations in Parliament on whether an amendment of the section was necessary for the expropriation of land without compensation.
Brown said the Constitution should not be used as a "scapegoat" for the government's failure to effect land reform.
He said land reform should be done in an orderly, pragmatic and sustainable manner to avoid the creation of a systemic risk to the banking sector.
He also pointed out that the Constitution already struck a "careful and well-considered" balance between the protection of property rights and redress.
"The Constitution has not been an impediment to land reform."
Brown and Tanya Cohen of Business Unity South Africa said international investors were preoccupied with the land issue in South Africa.
"I can assure you the uncertainty around the outcome (of the constitutional review) is already impacting investor confidence," Brown said.
'We will not hurt anybody'
Cohen also said that the possibility of expropriation without compensation created uncertainty, which was also bad for investor confidence.
She said they recognised the need for land reform and that the pace has been too slow.
The sooner policy certainty could be attained, the better, she said, saying that what has been achieved in terms of land reform over the past 24 years was "sub-optimal".
But EFF MP Veronica Mente said the "scare tactics" of the business sector was aimed at derailing the process.
"We will not hurt anybody," she said, adding that the aim was to develop everyone.
CEO of Sakeliga (formerly AfriSake) Piet le Roux said property that was expropriated without compensation was not expropriation, but confiscation.
He said amending the Constitution to allow "confiscation" could send South Africa down the same road as Zimbabwe.
He added that, if an amendment was allowed, it would be no longer be a "legitimate constitutional text".
But EFF MP Nazier Paulsen took issue with Le Roux and said: "So let's say in your little wet dream, we don't amend the Constitution. How are your members going to change their behaviour?"
Paulsen said he wanted to caution Le Roux on the "irresponsible use" of the word confiscation: "It is another scare tactic."
'You are talking to professors, my brother'
However, committee co-chairperson asked Paulsen to refrain from using harsh language.
"You are talking to professors, my brother," he said to Paulsen. Le Roux was accompanied by Professor Koos Malan of the University of Pretoria's public law faculty.
Peter Setou of the Vumelana Advisory Fund, a non-profit organisation supporting land reform, asked the committee to proceed with caution and submitted that expropriation without compensation would not expedite land reform.
Sheldon Magardie of the Legal Resources Centre told the committee that the Constitution allowed expropriation without compensation and that land occupied by labour tenants and unoccupied land could currently be expropriated without compensation.
"There is a pressure cooker on the boil and an amendment to Section 25 will not address the problems," he said.
SB Mabuala of the Limpopo Communal Institute supported an amendment but added the caveat that expropriation without compensation must be done without compromising food security.
"It is very sad that our banks are saying that amending the Constitution will discourage investors," Mabuala said.
"Why are they not discouraged when they see the pathetic living conditions of our people?"
'We heard over 40 presentations'
The Banking Association of South Africa (Basa) said security of tenure made it easier for people to interact with the banking sector. Basa does not believe it is necessary to amend the Constitution.
The John Langalibalele Dube Institute also did not support an amendment.
In a statement after the meeting, Lewis Nzimande commended the presenters who delivered submissions to the committee.
"We heard over 40 presentations over the last four days. These oral presentations emanate from the more than 700 000 written submissions the committee received."
Nzimande said the vast majority of the presenters clearly had it in mind to take the process forward, whether they were for or against the amendment of the Constitution.
"We had a few hiccups, but it was expected when the emotive issue of land is discussed. It was important however, that all parties respect one another's views and are not insulting or condescending," said Nzimande, in probable reference to the submissions by Black First Land First and AfriForum earlier in the week.
The committee is expected to meet on Wednesday to adopt a way forward with its programme.