Industry voices oppose new turn in land expropriation debate

Organised business bodies including Business Unity South Africa (Busa), the Banking Association SA and the South African Property Owners Association (Sapoa) on Monday voiced concern around a new proposal by the ANC that the courts be cut out as the final arbiter on expropriated land and more power be given to ‘the executive’, effectively the state.

Cas Coovadia, acting CEO of Busa and MD of the Banking Association SA, told Moneyweb both organisations would “totally oppose” such a move.

“At a time that we need policy certainty, we don’t need such surprises coming up … The issue of land expropriation without compensation [EWC] is already contributing to uncertainty in the market and hurting business confidence,” he noted.

“We understand that it is on the agenda and needs to be addressed, but the latest move will add to concerns. We will oppose such a risky move, which aims to take power away from the courts and hand more power to the executive in addressing land reform,” Coovadia said.

Neil Gopal, CEO of Sapoa, said while the commercial property industry body is in support of a “win-win scenario” in dealing with land reform, the proposal to remove the courts from the decision-making process would be a “dangerous” move.

“Land acquisitions should take place within the law and follow a fair administrative procedure … Disputes need to be settled in the courts, and no one should be evicted without a due court process,” he added.

“If the courts are removed from this process, the protection of property rights in South Africa is likely to diminish, resulting in a downward investment in agriculture as well as in property investments.”

The controversial new proposal in the EWC debate came out of the ANC’s two-day National Executive Committee (NEC) lekgotla, which concluded on January 20. However, there was just one line in President Cyril Ramaphosa’s post-lekgotla statement on the actual proposal, with most of his attention focused on the challenges facing state-owned enterprises.

“We are encouraged that the Lekgotla endorsed the recommendation that the power to determine the quantum of compensation for land expropriation should reside in the executive,” the president said at the time.

More details of the proposal came to light later in the week as ANC NEC members – including Dr Mathole Motshekga, chair of parliament’s ad hoc committee on the constitutional amendment bill related to land reform, and ANC Secretary-General Ace Magashule – spoke publicly about what the shift in its position could entail.

Court processes ‘arduous’

In an interview with TV news station eNCA, Motshekga pointed out that the move is aimed at speeding up land reform, which often faces “arduous court processes”. Magashule was even more vocal on the proposal during an address at an ANC event in Port Shepstone on the KwaZulu-Natal South Coast on Sunday.

“That power to expropriate land belongs to cabinet. That power to expropriate land belongs to the minister,” eNCA reported Magashule as saying. “That’s why we must clearly, when we amend the Constitution, give that power to the minister, to cabinet because what the courts will do is to interpret the law,” he added.

Meanwhile, Coovadia has called for more decisive action from Ramaphosa to establish more policy certainty, as the country’s economy teeters and faces a downgrade of its last investment grade rating.

“We understand that the EWC debate still needs to go through the parliamentary processes and that the ANC has a right to express its views and arguments. However, President Ramaphosa needs to lead and be clear about important policy issues that affect the economy and investment in the country.

“We can’t have irresponsible statements at this crucial time, especially with ratings agency Moody’s watching us so closely,” added Coovadia. “The SA economy is facing less than 1% growth this year and investment is critical right now.”

LISTEN: Bulelwa Mabasa – director at Werksmans Attorneys and a member of the President’s Land Reform Advisory Panel – talks about the land reform changes on SAfm Market Update with Moneyweb:

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