Is the Expropriation Act a solution to South Africa’s land reform challenges?

The Expropriation Act has been received with mixed reactions from various groups across the world.

Some, probably influenced by certain misconceptions, remain strongly opposed to the Act’s purpose, while others have strongly defended it.

The Act aims “to provide for the expropriation of property for a public purpose or in the public interest; to regulate the procedure for the expropriation of property for a public purpose or in the public interest, including payment of compensation;

“To identify certain instances where the provision of nil compensation may be just and equitable for expropriation in the public interest; to repeal the Expropriation Act, 1975 (Act No. 63 of 1975); and to provide for matters connected therewith.”

Those who oppose the Act

Ayanda Khumalo, a partner at Webber Wentzel, said the provision for nil compensation when it is just and equitable is of particular concern to those opposed to the Expropriation Act.

“The key objective of the Act, as explained in its preamble, is to give effect to the constitutional promise of land reform, which, over 30 years post the Constitution’s adoption, has not really materialised. Is the Act a solution?”

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Section 25 of the Constitution

Khumalo added that Section 25 of the Constitution, known as the property clause, prescribes in section 25(1) that no one may be deprived of property, except in terms of a law of general application (a law that applies to everyone equally), and any such law may not authorise the arbitrary deprivation of property (deprivation of property without due process).

“Section 25(2) permits the expropriation of property for a public purpose or public interest, and Section 25(4) clarifies that “public interest” includes the country’s commitment to land reform.

“Section 25(3) provides for the payment of just and equitable compensation in the event of expropriation, “reflecting an equitable balance between the public interest and the interests of those affected“. Section 25(3) also prescribes the circumstances to be considered when determining just and equitable compensation.”

These include the property’s current use, the history of its acquisition, the market value, the extent of state support in the acquisition and improvement of the property, and the purpose of the expropriation.

This provision is mirrored in the Act to determine just and equitable compensation.

Is the Act years late?

She said the Act was many years late. “The constitutional assembly, tasked with crafting our constitution just over a quarter of a century ago, would have probably been the most appropriate forum to challenge the vision the Act seeks to realise.”

She added that the main point of contestation is that the Act provides for nil compensation when it is just and equitable.

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However, this aligns with the Constitution, as Section 25 does not prescribe what just and equitable compensation ought to be but rather provides guidance for its determination.

“Therefore, it is conceivable that compensation could be nil in appropriate circumstances.

“Fortunately, the Act does provide guidance to determine when nil compensation may be justifiable.

“This includes whether the property is held for speculative purposes; is owned by an organ of the state but not used for core functions and is unlikely to be needed in future; has been abandoned; or has a market value equivalent or less than what the state has invested in the property.”

Is the Act a backdoor mechanism for expropriation

Nkosinathi Thema, senior associate at Webber Wentzel, said some argue that the Act could be seen as a backdoor mechanism for expropriation without compensation for the purpose of land reform.

“This, however, should not necessarily be contentious as the Act clearly outlines its intent in this regard.

“What ought to be probed is whether the Act will help resuscitate the failing land reform process.

“From our perspective, three concerns emerge: first, the government department granted the power of expropriation; second, the potential impact for informal land rights holders; and third, the possible effects on successful land claimants.”

How the Act works

According to the Act, the minister of Public Works is granted the authority to expropriate on behalf of other organs of state upon the request of the minister responsible for that organ of state.

Ostensibly, then, the Land Claims Commission, responsible for overseeing land claims, may request the expropriation of land through the Minister of Rural Development and Land Reform. If circumstances permit, this could be for nil compensation.

Thema said implementing the Act is at the discretion of the Minister of Public Works, who may or may not be satisfied with a particular request from the Department of Rural Development and Land Reform.

“In our assessment, it may perhaps have been preferable for the expropriation power, aimed at transforming property relations in South Africa, to reside with the Minister of Rural Development and Land Reform.”

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Informal land rights holders

He said on the issue of informal land rights holders, the Act treats informal land rights holders as ordinary land rights holders.

The terminology used is ‘unregistered rights’, which the Act defines as “right[s] in property, recognised and protected by law […] which does not require registration and includes a right to occupy or use land”.

“According to the Act, when gathering information for expropriation, the expropriating authority must establish whether unregistered rights over the property in question exist.

“Thereafter, the process followed mirrors that of ordinary right holders. This, in effect, means that the land held by informal/unregistered holders may be expropriated in terms of the Act.”

Post-expropriation relief

He noted that the Act also contains some post-expropriation relief, which permits the holders of informal rights to claim compensation.

“Notably, the Interim Protection of Informal Land Rights Act (IPILRA) may not be available as protection since the limitation on the deprivation of informal land rights in IPILRA is subject to the Expropriation Act of 1975.

“The Act will now stand instead of the 1975 Act. We hope that informal land rights holders will not be subjected to nil compensation. This would, at least, be somewhat of a silver lining in all the uncertainty.”

A risk for land claimants

Khumalo and Thema said that regarding successful land claimants, the Act poses a risk of land deprivation.

It is conceivable that when land is not used effectively, if at all, and circumstances militate in favour of expropriation, then the awardees could be deprived of said land within the parameters of the Act.

“This risk is not as remote as may perhaps be argued. For example, the Mineral and Petroleum Development Act permits expropriation of land for purposes of mining, and there are recorded instances of newly reinstituted land being subject to prospecting, bulk sampling and mining rights and thereby limiting the holders’ rights, if not depriving them entirely.

“The Act does not create a carve-out for such instances, and the mechanisms for recourse contained in the Act may not be a sufficient safeguard.

“This will likely result in tension between successful claimant communities and the state.”

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