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South Africa: Parliament to Debate Expropriation Bill

(Feb. 12, 2016) On February 2, 2016, the Portfolio Committee on Public Works in the South African Parliament adopted the Expropriation Bill, which seeks to repeal and replace the 1975 Expropriation Act and align “the process and procedure for expropriation of property by organs of state” with the current Constitution. (Public Works Committee Adopts Expropriation Bill, PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA (Feb. 2, 2016); Expropriation Bill, Memorandum on the Objects, B 4B-2015, South African Government website.)  The vote on the legislation in the Committee followed strict party lines, with the ruling African National Congress voting in favor and the opposition parties (the Democratic Alliance and the United Democratic Movement) opposed.  It now moves to the floor of the National Assembly for debate and the final vote.  (Lethabo, Expropriation Bill Adopted, Despite ‘No Votes’ from All Opposition Parties, BOOKS LIVE (Feb. 5, 2016).)  The Economic Freedom Fighters, also an opposition party in the National Assembly, decided not to vote.  (Id.)

The Constitution

The South African Constitution prohibits “arbitrary deprivation of property.” (Constitution of the Republic of South Africa, 1996 – Chapter 2, Bill of Rights (4 Dec. 4, 1996, in force on Feb. 4, 1997), § 25, South Africa Government website).  The Constitution permits expropriation only when it is done “for a public purpose or in the public interest” and subject to compensation on the bases of agreement or a court decision.  (Id.)  The Constitution also provides that:

  … [t]he amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including –

a. the current use of the property;

b. the history of the acquisition and use of the property;

c. the market value of the property;

d. the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

e. the purpose of the expropriation.  (Id.)

Key Provisions of the New Legislation

Like the Constitution, if adopted in its current form, the legislation would permit  expropriation by the state only in limited circumstances.  It provides that notwithstanding any law providing otherwise, no expropriation may take place “arbitrarily or for a purpose other than a public purpose or in the public interest.”  (Expropriation Bill, § 2.)  According to the legislation, the term “public interest” “includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources in order to redress the results of past racial discriminatory laws or practices.”  (Id. § 1.)   The term “public purpose” is defined as including “any purposes connected with the administration of the provisions of any law by an organ of state.”  (Id.)

In circumstances where expropriation is permitted, certain procedures must be followed.  For instance, an expropriating authority that intends to take over control of a piece of property must notify all known persons that would be affected by such action in the prescribed manner and publish the notice in the Official Gazette and local newspapers.  (Id. §§ 7 & 24.)  Except in specific instances where urgent expropriation is necessary, the legislation requires the expropriating authority to attempt to reach an agreement with the owner or holder of an unregistered right in the property.  (Id. §§ 2 & 22.)  After notification is sent, the persons that would be affected by the expropriation have 30 days to engage with the expropriating authority in reaching an agreement.  (Id. § 7.)  If the parties are unable to reach an agreement on the appropriate compensation, the matter is settled in court. (Id. § 21.)

Like the Constitution, the legislation would also put in place a mechanism for determining the amount of compensation.  It states that the amount paid “must be just and equitable reflecting an equitable balance between the public interest and the interests of the expropriated owner or expropriated holder … .”  (Id. § 12.)  In addition, in determining the payable amount, all “relevant circumstances,” including “the history of acquisition and use of the  property,” its market value, and the extent of “direct state investment and subsidy” in its acquisition and improvement must be considered.  (Id.)  The legislation further spells out considerations that must not be a factor in the process of determining the payable amount, including the owner’s opposition to expropriation or any enhancements done to the property as the result of its unlawful use.  (Id.)

Reactions to the Bill

Some critics argue that the legislation accords the executive body unfettered powers to expropriate property and violates the constitutional clause on property rights.  A key part of this criticism concerns the lack of sufficient judicial oversight of the expropriation process.  According to Anthea Jeffery, head of policy and research at the South African Institute of Race Relations, the legislation would allow the expropriating authority to take private property without any judicial oversight (except in matters of compensation) by simply serving notice of expropriation without first obtaining a court order to that effect.  (Anthea Jeffery, Anthea Jeffery: New Expropriation Bill Is Out – and It Is Still Unconstitutional, BIZNEWS.COM (Feb. 18, 2015).)  She argues that, among other defects, the legislation violates the constitutional provision prohibiting the eviction of persons from their homes without a court order.  (Id.; Constitution § 26. )  She notes that in order to be in compliance with the Constitution, the legislation must be amended to require the expropriating authority to obtain a court order before issuing an expropriation notice and that the order should certify that:

  • the proposed expropriation is authorized by a law of general application and is not arbitrary;
  • it is objectively in the public interest or for public purposes;
  • the compensation proposed is indeed just and equitable, reflecting a proper interpretation and application of all relevant factors; and
  •  no person will be evicted from his home without express judicial authorization. (Jeffrey, supra.) 

The legislation has also been criticized for being too vague.  This is mainly directed at what appears to be the most important term within the legislation, ”property.”  The legislation borrows a definition from the 1996 Constitution, which simply defines the term as something not limited to land.  (Constitution § 25.)  According to the members of the Democratic Alliance, the definition is unclear and could be expanded beyond land to include intellectual property and shares of stock.  (Jenni Evans, Expropriation Bill Nears Completion, POLITICS WEB (Jan. 26, 2016).)

On the other end of the spectrum are those who deem the legislation too timid.  A key group in this category is the Economic Freedom Fighters, which “wants expropriation without compensation to white owners‚ claiming that land was stolen from black south Africans.”  (Lethabo, supra.)