Expropriation Bill opens possibility of SA tragedy

Terence Corrigan says process is designed to favour the state over the property owner whose assets are targeted

Given its prominence over the past few years, the relative absence in electoral commentary on land reform – ‘the land question’ – might seem surprising.

In fact, while addressed in party manifestos, there is precious little to suggest that land has ever been a vote-winning issue: polling evidence shows that land reform may be supported in principle, but few envisage benefiting from it, certainly in an agrarian sense.

South Africa is an urbanising society with a population aspiring to a middle-class, upwardly mobile lifestyle, underwritten by steady, salaried employment.

However, this should not distract from the ongoing seriousness of the issue. The narrative advanced by the government, the ANC and a number of other interest groups has been that land reform was failing owing to inadequate powers on the part of the state. Give it more discretion to seize landholdings, and not only would historical injustices be addressed, but an economic revolution would ensue – creating a ‘Garden of Eden’, as President Ramaphosa once said (misunderstanding, incidentally, the meaning of the Biblical account). This argument was, of course, summarised in the idea of expropriation without compensation.

For others, such as the EFF and now MK, the issue has hinged less on an appeal to possible economic outcomes than to ideological dogma. This was about historical justice and dispossessing ‘land thieves’. To achieve this, they have called for a comprehensive state seizure of all land, under the principle of ‘custodianship’, much like what has been done with water and minerals. This having been done, the state (under management of a suitably revolutionary authority embodying ‘the people’) will allocate it to promote justice. Many in the ANC and the state advocate a similar model.

All of this is relevant since, electoral issue or not, expropriation, the conditions under which it may be used, and its impact on property rights, remain very much live issues. The flagship of this is the Expropriation Bill, recently passed by the National Council of Provinces and now awaiting presidential assent.

Less in the public eye than the contentious (and ultimately failed) attempt to amend Section 25 of the Constitution, the Expropriation Bill is arguably more important. A constitutional amendment would have made a powerful statement, and would have altered the bounds of what was constitutionally permissible (in other words, removing protections from state action that might previously have been relied on), but it is in legislation that the nuts and bolts of state action resides.

We at the Institute of Race Relations have taken a position against the Expropriation Bill. In broad terms, our concerns have been that the process is designed to favour the state over the property owner whose assets are targeted.

Of potentially greater concern is the question of custodianship. As noted, this is the position of several parties and has a firm beachhead in ANC thinking. It was, for example, the preferred option in the 2017 state land audit. It was also put forward by a senior government representative to an audience in Davos in 2019. Even the proposed Constitutional Amendment included obligations for the state to take custodianship of ‘certain’ land (undefined in either nature or extent).

A form of custodianship has also been the basis for redistribution policy: beneficiaries have explicitly been refused title, at least until they have demonstrated their prowess in farming to the satisfaction of officials who probably have little understanding of it themselves. Indeed, in the case of David Rakgase, the state went to court to renounce an agreement to sell. Its papers defined the principle in redistribution as being ‘that black farming households and communities may obtain 30-year leases, renewable for a further 20 years, before the state will consider transferring ownership to them.’ While these periods have reportedly been reduced, the principle remains clear: the state is the arbiter (and executor, and perhaps executioner?) of their rights over land.

Hence our concerns about the Expropriation Bill. It defines expropriation as ‘the compulsory acquisition of property for a public purpose or in the public interest by an expropriating authority or an organ of state upon request to an expropriating authority’. Compensation may be payable in this event, although the bill also makes generous provision for discounting this, including for ‘nil’ compensation.

The twist in this is that it separates the act of deprivation from the act of acquisition. In other words, it is quite possible to seize an owner’s property, but to do this in such a way that deprivation – losing a property holding – is not per the Bill regarded as expropriation, and therefore, not subject to compensation. The obvious deployment of this would be in seeking mass custodial takings.

This builds on a controversial 2013 judgment, in the case of Agri SA v Minister for Minerals and Energy, which denied compensation for lost mineral rights on this basis. Although declining to define what a custodian was, it nevertheless stated: ‘Whatever “custodian” means, it does not mean that the state has acquired and thus has become owner of the mineral rights concerned.’

While the judgment was careful to state that it applied only to the specific facts before it, it has provided some tempting legal reasoning that now finds its way into legislation awaiting the President’s signature.

The power this confers would make the mass taking of land – on a ‘custodial’ basis – a real possibility, with little immediate, direct cost to the state. The damage would, of course, follow in short order from the ‘uncertainty’ that such a dramatic step would occasion. Not only would it have severe repercussions for the use of land as collateral – and thus for commercial farming – but it would be subject to the burdens imposed by the incapacities and venalities of the South African state as it exists.

These are common cause and require no exposition, and are also a well-reported part of the experience of numerous land reform beneficiaries.

Indeed, the experience of South Africa’s minerals regime should be a caution against this path.

Whether it will be used as a caution remains to be seen. Coming back to its electoral politics, South Africa is exiting the period of one-party dominance, encumbered by the accumulated follies of misgovernance and corruption. Cheap populism, promising to put the oppressors in their place along with unspecific promises of immediate upliftment through resolution of ‘the land question’ and the undertow of ideological satisfaction will no doubt beckon – a prospect that is all too real if the ANC should turn to the EFF or MK as a coalition partner.

The outcome of this would be a seminal tragedy.  

Terence Corrigan is projects and publications manager at the Institute of Race Relations