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7 issues complicating ANC's expropriation without compensation stance

2017-12-22 00:18

The issue of land expropriation without compensation announced as ANC policy on Wednesday evening, comes in the midst of the party having lost support over time and the populace on ground level possibly having felt the party has not been leftist enough on the issue.

This is the view of Bulelwa Mabasa, director and land claims expert at Werksmans Attorneys.

She said she understands that a political party can state what its policies are, but in her view it is disingenuous to make such announcements about land expropriation without compensations without dealing with what has been dogging the process for so many years already.

New ANC president Cyril Ramaphosa indicated that he is committed to land expropriation without compensation in a way that doesn’t undermine the economy, agricultural production and food security.

"The 2019 elections are in less than two years and something has to happen. Ramaphosa's announcement on land expropriation without compensation aligns with the policy of radical economic transformation," Mabasa told Fin24 on Thursday.

"There is a radical element to Ramaphosa's statement. The same kind of radicalness contained in President Jacob Zuma's fee free education statement ahead of the ANC election conference."

In Mabasa's view, there is a measured policy shift regarding land reform as the ANC has in the past consistently said compensation is very important in expropriating land. This which resulted in the formulation of section 25 of the Constitution, which guarantees "just and equitable compensation".

Eradicating compensation would, therefore, require an amendment to the Constitution by a two thirds majority in parliament - which the ANC does not have. The question is, therefore, whether the EFF and other smaller parties would vote with the ANC in this regard.

Slow pace of expropriation

"Legally we know the slow pace around issues of expropriation has been a big challenge. For the first 10 to 15 years the cost of expropriation had to be borne by government and - in my view - the ANC mistakenly went the way of 'willing buyer, willing seller', while the Constitution only talks about what is 'just and equitable'," said Mabasa.

"So, government ended up paying much more than it should have."

Another issue raised by Mabasa is uncertainty regarding how people will be identified for the purposes of expropriation without compensation.

"One can say that land had been expropriated in the past under the Native Land Act, but it is unclear which land will now be identified for expropriation and on what basis. All these issues have to be cleared up," said Mabasa.

"Yes, one can say [some of] that land is now owned by white people, mining houses and corporates, but some of them might have share incentive schemes involving black people, for instance."

Less than 1% of fiscus

She pointed out that the ANC has only allocated less than 1% of the fiscus to land reform.

"So, we can then ask whether the land issue is just a convenient tool for political reasons or if there is a real will to address it. The ANC should not then have adopted the willing buyer, willing seller approach in the past," said Mabasa.

Another important issue to address, in her view, is that one has to ask whether the ground has sufficiently been laid for expropriation and what that would mean for investor confidence - especially investors who have invested in land.

"Issues around expropriation remain problematic. There have been land expropriations over the past 23 years where it has not benefitted anyone economically. This is because there is no policy that guarantees what when someone is given land, he or she will be supported with skills development and funding," said Mabasa.

"The issue brings in so much baggage if it is not dealt with fundamentally."

She emphasised that there are other examples in the world of expropriation without compensation and of economies that thrive on leasehold, for instance.

"But in the context of wanting our economy to improve, the question is whether we have enough certainty to encourage investor confidence. I think where we are currently at with the land issue, not enough expropriation that works has been done," she explained.

In her view there are 7 issues to keep in mind on expropriation without compensation:

Not an easier process

Eradicating the notion of compensation will not make expropriation any easier, in her view.

The first hurdle with any expropriation is that a landowner must be given an opportunity to object. For instance, the courts must make it possible for such an objection to be made.

"It is not just about money. Someone has to say he or she agrees on expropriation for a public purpose, for instance," she said.

ANC steady decline

The ANC's majority has been on a steady decline and it would require a two thirds majority in parliament to achieve a Constitutional amendment regarding land expropriation without compensation.

It is uncertain whether or not the EFF and other smaller parties would be inclined to vote on this issue with the ANC.

Available land

There is no certainty about which land is available or has been earmarked for purposes of expropriation, Mabasa pointed out. SA's current database and research conducted on land provided no certainty as to who owns what land.

"Currently our deeds registry and law do not make it compulsory for someone buying or selling land to say what his or her race is. We know the intention is to introduce the concept regarding agricultural land, but that is still only a bill and not legislation yet," she explained.

"The concept of a land register requires an indication of race, who owns the land and how much land is owned. So, this announcement [of Ramaphosa] comes with legal uncertainty regarding the ability to know who owns what land."

Investor confidence

There has been no indication on how investor confidence will be boosted or encouraged under the circumstances [of land expropriation without compensation], according to Mabasa.

"Given that we have certain policies and projects by government departments - for instance renewable energy projects - how will that affect those investors leasing or buying land for that purpose? How does land expropriation without compensation affect current projects geared at economic growth?" she asked.

Support lacking

She said there is no legislation or policy that obliges the state to provide institutional and financial support to those awarded land. In fact, the current track record is woeful, in her view.

"Until and unless the usage of land is combined with an understanding that people are going to farm, own the land and have a desire to work the land, the long-term effect of farming commercially is very demanding," said Mabasa.

"People [receiving land] must be supported financially and have skills development. Land must be given for public benefit and to be productive. Unless we have that in our law, enforcement and support, we will be back to square one."

Legal framework

She said the issue of expropriation without compensation is not a new concept in SA. It is even possible under the current Constitutional law to find that "just and equitable" compensation would be in certain cases providing no compensation. That would, however, be in very specific situations.

An example would be where someone obtained land for free in the past and it can be proven that he or she never improved the land.

"However, to have a policy position of expropriation without compensation, no matter what, takes away any discretion. It says there will be now compensation under any circumstances. That does not take [other] factors playing a role into account.

Serious skills deficit

Ramaphosa's pronouncement on land expropriation without compensation comes in the context of a serious skills deficit in relation to land in general, said Mabasa.

"We are talking about the land issue in the context of extreme poverty in SA. Already a lot of people getting land rather opt for compensation and not to take the land. One must, therefore, also not impose something on people."

She knows the issue of expropriation without compensation is a sentimental one, but in practice people are opting more and more for compensation rather than land.

"As much as we make it about land, people basically just want to get out of poverty," said Mabasa.

"We also need to consider issuing people with title deeds to land as so much land is community owned and they cannot use it to get a loan, for instance."

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January 21 2018