As a property law scholar who finished my doctorate in law nine years ago on the issue of compensation for expropriation under the Constitution, the current talk on expropriation without compensation interests me. It also frustrates me, because apart from the political manoeuvering, there seems to be a general misconception about the specific legalities of the process out there.
From a property law perspective, the following information will hopefully empower people to have meaningful conversations when sitting around the table to talk about the issue.
Expropriation is a way for the state to acquire property. Only the state has this power, and while courts have hinted that the state might consider using the power, nobody and no court can force the state to use its powers. Once the state decides to use its powers, the person from whom the property is taken cannot choose not to be expropriated.
The protection for the owner (and other holders of rights) is found in the Constitutional requirements (it must be done in terms of a law of general application, it must be for a public purpose or in the public interest, and just and equitable compensation is payable), and the procedural and other guidelines in legislation.
Private individuals cannot expropriate property. For private beneficiaries to get access to the land, the state needs to expropriate the property and then transfer it to the beneficiaries. While the transfer of land to private beneficiaries is not usually permissible in expropriations (it must be for a public purpose), it is allowed in South African law because it needs to be in the public interest and public interest is defined as land reform interests.
In the U.S., the idea that property can be transferred to private individuals or corporations is controversial, even if the result of such a transfer is economic development.
The power to expropriate is not an extraordinary power. Most states have the power. States need this power to acquire property also for projects like building roads. While the power to expropriate property does interfere with private property rights, this is an acceptable limitation of private property because it is for a public purpose (the loss of your private property is necessary for a public project) and because private owners are compensated.
The Germans put this beautifully: the individual is protected from state interference with the property because the individual guarantee of rights in property is replaced with a guarantee of value. Consequently, when there is an interference with private property, you have a guarantee of value.
The general rationale for the payment of compensation is that one individual cannot be expected to carry the burden for something that benefits the public at large. Land reform and addressing inequality are arguably to the benefit of all.
When it comes to the calculation of compensation, the constitution lists five factors that need to be taken into account when determining "just and equitable" compensation, but this is not a closed list of factors.
One of those factors is market value. The criticism is that in spite of the transformative aspirations of the Constitution, the courts tend to give centrality to "market value" when determining compensation. This might be because the legal culture for the payment of compensation is stuck on market value.
This is why it is so crucial that a test case is brought before the Constitutional Court. The Mhlangesweni case was two weeks away from being heard – and would arguably have sent compensation practices in a different direction, had it been heard. But instead, in a questionable move, the state settled the case for full market value.
The problem was not in the law, but in the politics that prevented the case from being adjudicated on. This is arguably one of the unanswered mistakes that the government made – a government that now, instead of mastering the political will to implement the measures that we already have, contemplates not revisiting or using the mechanisms that are actually there at their disposal.
It should also be noted that "property" in the Constitution is not limited to land only. In fact, the constitutional idea of property goes wider than the private law idea of property and includes things like licences.
When the state expropriates property, it takes ownership of the property, and it is bound to use the property for the public purpose for which it was expropriated. While this is a sticky point in our law (see "the Harvey case"), the Expropriation Bill clause 23 makes provision for that. When we sit around the negotiation table, this can be a very valuable mechanism to ensure that the property expropriated is used for the purpose expropriated. In the same vein, it is doubtful if placing something in the custodianship of the state is expropriation without compensation.
Likewise, to expropriate property and then give people leases in their land instead, is probably also not "without compensation" (see Froneman in the AgriSA case). These might be legal nitty gritties, but they are important because the consequences are different, and they do not match the slogans and hashtags that are trending out there.
Land reform is important; it is necessary; it is urgent. Conversations around this issue are important. But when we have these conversations, we must know the content of what we are proposing. We need to make informed decisions that take into account the consequences. We have not made much progress in the past 24 years, and a good diagnostic report on the ills is before Parliament in the form of the high-level report.
If the conversations we are having now are elevating that report to the necessary urgency, then we are on the right track. Expropriation without compensation is not a panacea for the land-reform ills. It also does not guarantee the needed political will to drive the process. The report indicates that the problems lie with post-settlement support; with the problem of identifying beneficiaries; with elite capture and traditional leadership. It is complex – we cannot simplify it to one-liner slogans.
Where do we go from here? A good start is to enact the Expropriation Bill. The government can start to implement and seriously consider the findings of the high-level report before the end of August. And in my diagnosis, we can have honest conversations about the lack of reconciliation.
Apologising for apartheid is not enough – that apology needs to be made material with reparation. Let's address that.