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27/02/2018 13:01 SAST | Updated 27/02/2018 13:01 SAST

Expropriation Without Compensation: This Is The Legal Framework

It is doubtful that an amendment to the Constitution to change the so-called property clause will be a panacea to our land-reform woes.

Siphiwe Sibeko / Reuters

The South African Constitution, and even more so the so-called "property clause", was the result of a compromise; the end product of rigorous negotiations.

With the property clause, the inevitable need to protect then-existing property rights were posed against the need to ensure that land shall be shared among those who work it. It was also evident from the start that this would mean that large-scale reforms would be necessary to provide equitable access to natural resources, and that this would have some impact on established private (land) rights.

Section 25 of the Constitution does not guarantee private property. What it does, is to set out the requirements that must be met when the government interferes with private property rights.

Our Constitution, and the Constitutional Court's interpretation thereof, tried to ensure that this process is not a zero-sum game.

The Constitutional Court tried to ensure that section 25 be approached in a balanced manner, which both guarantees to some extent the protection of property from state interference [à la section 25(1) – (3)] while supporting land reform measures [à la section 25(5)-(9)].

It tried not to juxtapose these rights in a hierarchical fashion, but rather as a creative tension that should be balanced and reconciled as far as possible. This means that any constitutional property law issue must be understood in terms of this creative tension that aims at balancing rights and reconciling opposing claims.

This includes the debate on compensation for expropriation under the Constitution.

In the absence of an acquisition strategy that utilises expropriation for acquiring land, we cannot with certainty say that it is the current expropriation practices that stand in the way of land reform.

Section 25 of the Constitution does not guarantee private property. What it does, is to set out the requirements that must be met when the government interferes with private property rights. It gives the government the power to expropriate property, but only when it is for a public purpose (like building a road) or in the public interest (which in terms of section 25(4) includes land reform).

This must be done in terms of a law of general application (such as the Expropriation Act of 1975) and against payment of just and equitable compensation. Most states have the power to expropriate, in order to ensure that an owner refusing to sell does not preclude the state from performing public functions.

The state can, of course, also acquire land without compulsion, on the basis of contract and negotiations. In fact, to date that has been the policy of the ANC government (laid down in the 1997 White paper on South African land policy). This is the so-called "willing-buyer-willing-seller" policy, which translates into a market-based approach to land reform. To date very few parcels of land have been acquired in terms of expropriation.

The use of the 1975 Act is problematic, but interpretative acrobatics can make it possible to have an interpretation and an expropriation practice in line with the Constitution

In the absence of an acquisition strategy that utilises expropriation for acquiring land, we cannot with certainty say that it is the current expropriation practices that stand in the way of land reform. In fact, the judiciary recently lamented on the fact that so few cases on the issue have been brought before court.

What often confuses the "willing-buyer-willing-seller" terminology is that when land is acquired by expropriation, "market value" compensation in terms of the 1975 Act is determined by guessing the amount that "a willing buyer would pay a willing seller" for the property. This is of course a legal fiction, because courts have to guess – usually based on evidence of comparative sales – what an imaginary buyer would pay an imagery seller of the land.

So once expropriation is used as a method of acquiring land for the state, we seem to be stuck at determining the market value of land. This despite the fact that the market as a determinant of "value" has been replaced by "just and equitable" compensation.

But the possibility of having a comprehensive, progressive land-reform programme under the current Constitution remains. If only there is a will.

True to the tension in the property clause, the requirement is that it must strike a balance between the interests affected (that of the landowner) and that of the public (which can arguably be land reform).

Having to pay full market-value compensation for every expropriation might make the land reform project unaffordable.

The use of the 1975 Act is problematic, but interpretative acrobatics can make it possible to have an interpretation and an expropriation practice in line with the Constitution. Experts in the field have been anxiously awaiting the promulgation of the Expropriation Bill, a third since 2008.

In the meantime, we celebrate short victories like the judgment of Ngcukaitobi AJ in the Land Claims Court, only to be disappointed again with a conservative judgment in the Supreme Court of Appeal that overturns it.

But the possibility of having a comprehensive, progressive land-reform programme under the current Constitution remains. If only there is a will.

The Constitution provides the framework in which all other legislation and administrative actions must be understood and measured. It also is the source of the state's power to expropriate property. When property is then expropriated for land-reform purposes, the process is as follows: one would make use of the specific act (for instance, the Restitution of Land Rights Act of 1994, which authorises the state to expropriate property for the purpose of settling restitution claims).

Would an amendment to the Constitution's section 25 therefore provide a panacea for our land reform woes? I doubt it.

The Expropriation Act of 1975 provides for the exact procedure of expropriation, as well as the calculation of compensation (that must be reconciled and interpreted in line with the Constitution).

And since expropriation is an administrative action, it also needs to comply with the provisions of the Promotion of Administrative Justice Act of 2000.

To say that expropriation is a highly technical and lengthy process is perhaps an understatement. And to think that the provision of not paying compensation would shorten the process is equally naïve.

Would an amendment to the Constitution's section 25 therefore provide a panacea for our land reform woes? I doubt it. Looking at the findings of the High Level Report, the problem with land reform lies elsewhere. The panel found that "government should use its expropriation powers more boldly, in ways that test the meaning of the compensation provisions in Section 25(3)".

It seems unwise to want to make the step from not using expropriatory powers to a situation where there is an amendment to section 25, without utilising all the steps in between.

It seems unwise to want to make the step from not using expropriatory powers to a situation where there is an amendment to section 25, without utilising all the steps in between. Even if section 25 is amended, we still have no guarantee that the state will make use of its expropriatory powers.

From where I sit, it looks like we don't speak to each other's needs.

On the one hand, there are South Africans who need to have their dignity restored with access to land. They want to see that the reconciliation process comes to a logical conclusion, which includes some form of handing back.

On the other, there are people who talk about the need to have economic and food security. This might be because the land-reform process was, purposively or not, divorced from the Truth and Reconciliation Commission and the process of nation building.

And don't forget politicians, who will use the issue to gather support.