Expropriation without compensation – there is no such thing

11 April 2017

Many irresponsible statements regarding expropriation without compensation have been made recently, also by senior politicians. The truth, however, is that our Constitution does not make provision for expropriation without compensation.

Section 25 of the Constitution requires just and equitable compensation to be paid in the event of expropriation. However, deprivation without compensation is permissible. Expropriation is a type of deprivation. The moment that state action is defined as expropriation, compensation becomes payable.

In many countries of the world compensation is also payable for constructive expropriation, i.e. where the state does not acquire the property, but the owner's rights are undermined in such a way that the value of the property is reduced or the owner loses rights in respect thereof. The concept is not a pertinent part of our law, but it is possible that the jurisprudence could be developed in such a manner that certain Deprivation is also regulated by the Constitution. Section 25 of the Constitution prohibits arbitrary deprivation.

Deprivation would be considered arbitrary if it does not pass the test of section 36 of the Constitution – the so-called limitation clause. Section 36 deals, amongst other things, with the concepts of rationality and proportionality. In simple language, it means that there must be a link between the legitimate objectives of legislation and the measures proposed for achieving those objectives. The measures may also not be unrelated to the objectives, and the courts may consider, among other things, whether there might be other less disruptive measures for achieving the same objectives.

Any deprivation of property without compensation constitutes a very serious breach of an individual’s rights. Property rights are a fundamental human right that is recognised as such by most international human rights conventions. Bear in mind that section 39 of the Constitution stipulates that when courts interpret the bill of rights, the values of an open and democratic society must be promoted. Courts must also consider international law as reflected in, among others, the international conventions on human rights. In most modern jurisdictions, land owners have a constitutional right to compensation.

In 2009, the Food and Agricultural Organisation (FAO) of the United Nations published a guide on international best practice for expropriation. The point of departure of the document is that forced acquisition of property could be abused and that measures should be in place to prevent this. The guide requires, among others, clear and transparent procedures for forced acquisition of property, and compensation that will ensure that the affected persons are not worse off after expropriation than they were before. It further states that affected persons must not only be compensated for the loss of land but also for improvements made and for the disruption that accompanies expropriation.

A heated debate is also underway over the calculation of compensation in terms of South Africa’s Constitution. The Valuer-General’s regulations that will be applied in respect of land acquisition by the state are being awaited. The regulations are expected to provide greater clarity on how the factors listed in section 25(3) of the Constitution should be used to determine just and equitable compensation. The fact is, however, that the result must be just and equitable, with any relevant factor being considered in this calculation.

A final issue that emerges relates to the implications of scrapping or amending section 25 of the Constitution. Section 25 cites a fundamental human right, which is protected in terms of international human rights instruments such as the United Nations’ Universal Declaration of Human Rights, the European Convention on Human Rights and the African Convention on Human Rights (African Charter on Human and Peoples’ Rights). No attempt has ever been made in South Africa to scrap or amend a fundamental human right that is protected under the Bill of Human Rights.

One of the constitutional principles contained in Schedule 4 to the Constitution stipulates that every person shall enjoy all universal fundamental rights and freedoms as enshrined in the Constitution, which must be protected. Scrapping or amending a section of the Bill of Rights would indeed be a very serious and radical step. In practice, it would mean that a two-thirds majority in the National Assembly must vote in favour thereof and that six of the nine provinces must also do so.

As long as section 25 remains in the Constitution, expropriation without compensation is not possible. Just and equitable compensation is payable in the event of expropriation. However, there remains some uncertainty as to how exactly our courts will deal with the concept of just and equitable compensation. International authority and best practice dictate that people who are expropriated may not be worse off after expropriation than they were before.

Deprivation without compensation is possible – regulatory steps will usually be utilised, but this will only be constitutional if it is not arbitrary because the Constitution prohibits arbitrary deprivation. This article also deals with the processes that must be followed to scrap or amend section 25. Such a step will be very drastic and not in line with the protection that international human rights instruments afford property rights as a fundamental human right.

Annelize Crosby is Advisor Legal and Land Affairs, Parliamentary Liaison, Agri SA