“A sure recipe for economic disaster” - Sakeliga criticises Expropriation Bill in Parliament
24 March 2021
“I get the sense that the idea with this Expropriation Bill is to introduce regular expropriation in the country, regularly under market value, and that is a sure recipe for economic disaster,” said Piet le Roux, Sakeliga CEO, during his presentation to the Portfolio Committee on Public Works and Infrastructure, which is responsible for the Expropriation Bill.
In its verbal presentation on its written submission, Sakeliga warned Parliament that the proposed Expropriation Bill falls foul of international best practice, of the standards of the Constitution, and of constitutionalism. According to Sakeliga the bill should be comprehensively reconsidered.
Le Roux warned that even just the proposal of expropriation without compensation is economically damaging. “In any expropriation regime where the spectre of expropriation at less than market value hangs over such an economy,” noted Le Roux, “you will see the quality and quantity of investment, the incentive alignment in the country, as well as the currency, all follow the downward slopes toward many of the failed examples that we have seen,” such as Venezuela and Zimbabwe.
Le Roux reiterated what Sakeliga presented to the ad hoc committee to amend section 25 of the Constitution at its hearing on 23 March: that expropriation is conceptually married to compensation. Without compensation, we are not dealing with expropriation, but confiscation. Furthermore, by utilising the terminology of expropriation for “nil” compensation, and implying that compensation is in fact paid but the amount is simply R0.00, Parliament is exposing itself to allegations of fraudulent misrepresentation (the fraus legis doctrine). In this way, Parliament would be attempting to achieve something unconstitutional and unlawful (expropriation without compensation) by dressing it up in the garb of legality (expropriation with compensation, but the compensation is “nil”).