Expropriation without compensation?

Chantelle Gladwin-Wood and Tenielle Combrinck

Broadly speaking, land reform is the name given to a process driven by the government in terms of which previously disadvantaged persons who have either lost land or access to land or some form of security of tenure through apartheid, or who do not currently have any such access or tenure as a result of the disadvantages they suffered under the apartheid system, are given some form of access to land or rights or tenure in land.

There are a number of different programmes aimed at enhancing, protecting and restoring rights to land for those who suffered under apartheid.

Some of the better known examples would be the process of the restitution of land via the Land Claims Court, the automatic upgrading of rights of leasehold to rights of ownership, and the redistribution of land (for example, of RDP houses by municipalities).

In the latter process, the government purchases land from those who have it and distributes it at no cost to those who don't.

The latter is the topic of the most controversy.

EXPROPRIATION

The South African government is authorised in terms of the Constitution, read together with the Expropriation Act, 63 of 1975, to expropriate land or rights in land from anyone in South Africa.

Land or rights in land can be expropriated only for a public purpose or in the public interest. This prohibits expropriation for reasons that are not truly for the benefit of all South Africans.

As it stands, the Constitution provides that all expropriations are subject to the payment of just and equitable compensation, but no-where in our law can you find an explanation of what "just an equitable compensation" actually means.

There are several guidelines that have been developed by the courts over time, and there is also a list of factors in the Constitution that must be taken into account by the courts when determining what "just and equitable" means in any given situation.

Even with these guidelines and factors, the meaning of "just and equitable" is so vague that it is very difficult to predict what a court will determine as "just and equitable" on a case-by-case basis.

THE DEBATE OVER COMPENSATION

Some people are of the view that any title to land or any right to land acquired by white persons under the apartheid government should be expropriated at no or very little compensation, because the beneficiaries benefited unduly at the expense of the balance of the population for so many years while the apartheid government remained in power.

A contrary view is that expropriation should be done at as close to market value as is just and equitable in the situation, to avoid the situation where the government could justify cheap land grabs (or expropriation without any compensation whatsoever) with a simple reference to the owner being white, or having acquired title under the apartheid government.

This debate has been raging for almost 20 years and is likely to continue raging for many years to come, unless the Constitutional Court lays down more concrete guidelines as to what exactly "just an equitable" means.

WILLING BUYER, WILLING SELLER MYTH

Many people mistakenly think that land redistribution has ground to a halt because expropriation can occur only where there is a willing buyer and willing seller. This implies that the sale price will be market related (otherwise the seller wouldn't be willing), and that the government has the funds and is willing to pay the market related sale price. This is incorrect.

The first part of the expropriation process is to attempt to negotiate a sale with the owner of the land, but if this fails, the government is authorised to exercise its rights in terms of the various laws and expropriate the land, subject to the payment of compensation that it deems just and equitable.

The owner of the property will need to refer the matter to court if he/she/it is not satisfied with the amount of compensation. But the expropriation process is certainly not prohibited by the disagreement between the parties on the amount of compensation.

ANC CALLS TO AMEND THE CONSTITUTION

The ANC has made no secret of its intention to arrange a vote calling for an amendment to the Constitution to allow for expropriation to take place without compensation. The ANC is of the view that this would speed up land redistribution.

However, in order to achieve this, two-thirds of the National Assembly (parliament) would need to vote to accept this amendment, and thereafter a majority of the nine councils of provinces would need to vote to adopt this amendment. Seeing that such an amendment would almost certainly scare off all foreign investment overnight, that it would return our hard fought and hard-won democracy to the position where a portion of our population is being discriminated against on the basis of their skin colour, and further that such an amendment would inevitably open the litigation floodgates if it were passed, the authors are of the view that it is very unlikely that this will eventuate during our lifetimes.

That being said, plan for the future carefully. We would wager that those affected by the land grabs in Zimbabwe either didn't see it coming, or reacted too late.

Chantelle Gladwin-Wood is a partner, and Tenielle Combrinck an associate, at Schindlers Attorneys, Notaries & Conveyancers.