How land expropriation would work
The way in which land is expropriated is just as important as the outcomes that are achieved
Land expropriation without compensation: How will it work? This is just one of the questions doing the rounds. Others are: What exactly is land expropriation without compensation? What is the legal and moral justification for it? Does it threaten individual home ownership?
Since the ANC’s 54th national conference in December, land has recaptured the imagination of South Africans. Increasingly, the world is turning its gaze towards our land policy, wondering: Is South Africa going the “Zimbabwe route”?
Whereas the propertyless view this renewed focus on land with optimism, the propertied are sceptical about the legal and financial security of their property investments. Yet both the landed and the landless inhabit the same land. It is governed by a Constitution, which promises equality in an unequal order.
Here, I hope to navigate through the thicket of confusion, obfuscation and bluster by politicians.
Expropriation means the compulsory acquisition of land from a private person (individuals and juristic persons) by the state for constitutionally circumscribed purposes. Under section 25 of the Constitution, an expropriation is legally justified if it serves a public purpose or a public interest.
Although neither term is defined in the Constitution, courts have defined public purposes as “governmentrelated purposes” — like the building of schools or hospitals.
Public interest is much broader but includes the need for land reform. The decision to expropriate must be taken by the state and the ownership of land — initially — vests with the state, after which it may be transferred to another private individual or held by the state in perpetuity.
Expropriations are subject to payment of “just and equitable” compensation, which should strike a proper balance between the interests of a private landowner and the public interest. The state and the landowner must agree on the amount of compensation, failing which it should be decided or approved by the court.
In practice, the state usually negotiates the amount of compensation, using a “willing buyer, willing seller” approach. This presupposes a hypothetical willing buyer negotiating with a willing seller in the open market, and then asks what price the willing buyer would be prepared to pay. This is done primarily using the expert advice of property valuers.
This form of acquisition of land is state practice but it has no constitutional basis.
When determining compensation, courts do not fixate on the market value. Rather, they decide based on what would be just and equitable after considering the history of acquisition, the current use and the market value of the land.
Since the ANC’s policy is to allow expropriation without compensation, how will this be done? Of course, problems associated with the slow pace of land reform have little to do with the Constitution but everything to do with the failure to implement it.
There are two ways of achieving the goals of land expropriation without compensation in a manner that does not impinge on the Constitution. The first is through ad hoc judicial determinations in selected test cases brought before the courts. There is much to commend in this approach because it allows a proper balance to be struck between the various competing interests.
The scope for “just and equitable” compensation is sufficiently wide to allow zero compensation in appropriate cases — such as claims to land ownership by labour tenants.
The second method is to pass national legislation that will directly, clearly and unambiguously allow expropriations without compensation. There is ample constitutional justification for legislation that would entitle the state to expropriate land without compensation in certain defined circumstances. Section 25(5) is a constitutional injunction for a needs-based land redistribution programme, to enable everyone to obtain land on an “equitable basis”.
Until now, however, the state has not passed the legislation mandated by section 25(5). The net result is that land acquisition is driven by the judicially controlled land restoration programme, which is based on an adversarial mode of proof of the historical occupation of land after June 19 1913.
Problems of the arbitrary date of 1913 aside, any land restoration programme premised on proof of historical claims cannot address the hunger for land in the urban areas, where the greatest land needs reside.
Section 25(8) of the Constitution states that implementing this section may not impede the state from taking legislative and other measures to achieve land, water and related reform, to redress the results of past racial discrimination. Put differently, if the demands of compensation by private landowners impede land reform, they must yield to the greater public good of land redistribution.
Section 36 allows for the general limitation clause. Every right in the Constitution, including claims for compensation by landowners, is subject to limitation. Therefore, the state has the constitutional power to legislate to accelerate land reform, including passing laws to allow expropriation without compensation.
But what of the content of the legislation? Land expropriation without compensation, of course, must be pursued in the greater scheme of land reform. It should not create another round of dispossession, similar in effect to the dispossessions of 1913, when vast tracts of land belonging to African communities were arbitrarily declared “crown land”, or the 1950 Group Areas Act, when black people were pushed out of cities to make way for “white settlement”.
Land expropriation should empower the landless to acquire and productively use the land.
Many expropriations are still necessary for public purposes. And these will, more often than not, directly impact on the property rights of black people. There is little moral or historical justification for why these people should not be entitled to compensation.
By contrast, land taken for land reform purposes because its very acquisition was racist should not always attract compensation. Hence, a logical, balanced legislative scheme for expropriations should be based on a spectrum of considerations, including expropriations without compensation on the one side and expropriations with full or above market related compensation, where the circumstances demand.
Concerns have been raised about individual home ownership. Without a clear policy position by the government, a useful pointer is the text of the ANC’s December resolution. Its focus for expropriation without compensation appears to be “vacant, unused and underutilised state land, as well as land held for speculation and hopelessly indebted land”.
The idea seems to be that, although no land is outside the scope of redistribution, only a narrow category will be the target of expropriations without compensation.
Finally, on to the question of who will benefit. On paper, land reform is about reversing the legacies of apartheid and colonialism, such as poverty, food insecurity and the dominance of men in society. For land reform to counter these, the prime beneficiaries ought to be women and the poor.
But how do we ensure this in a climate in which political power renders true subaltern interests invisible? At the heart of land reform should be transparency about the beneficiaries. And land reform without the rule of law will entrench the marginalisation of the poor, the powerless and the landless.
Hence, the process of land reform is as important as the outcomes sought. Fair and transparent processes, underpinned by effective administrative and judicial institutions, will guarantee the success of the scheme of expropriations without compensation.