agri Nuus/News
Reaction to new legislation a case of mistaken identity? THEO BOSHOFF, AGRI SA LEGAL OFFICER
Few topics have the potential to evoke quite as much emotion in South Africa as expropriation, land reform and the protection of property rights.
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his fiery cocktail was again brought under the spotlight in recent weeks as two legislative pronouncements threatened to light the powder keg. The Parliamentary Portfolio Committee on Public Works held public hearings on the controversial Expropriation Bill on the 28th and 29th of July and the president announced that the Property Valuation Act would come into operation on the first of August. This volatile combination lived up to its promise, as certain quarters declared it to be the end of the willing-buyer-willing-seller principle for land reform, unconstitutional or even the end of private property rights as we know it. If history is anything to go by, then the intention to use expropriation as a tool to effect social transformation is something that must be approached with the necessary circumspection. However, a sober analysis of the new legislative provisions reveals that this debate is one that should take place under the broader umbrella of land reform and transformative social policy. A rational deconstruction of the legislation in question shows that many of these sentiments may, perhaps, be misdirected to a certain extent.
Nature of the Expropriation Bill The Expropriation Bill does not introduce the concept of expropriation, it merely regulates it. Expropriation is a concept whereby the state can acquire property without the consent of the owner, subject to compensation. While this is undoubtedly an invasive intervention by the state, most foreign jurisdictions recognise this power as a necessary tool, which governments may exercise for public purposes, such as the construction of infrastructure. In the Unites States it is known as the right of eminent domain, while other jurisdictions refer to it as the state’s power of compulsory acquisition for public purposes. This concept is not foreign to our legal system either, and it is expressly recognised in section 25 of the Constitution itself. Section 25 states that the state may expropriate property in terms of a law of general application, subject to just and equitable compensation that must either be agreed upon between the owner and the state, or determined by a court. The debate as to whether or not the state should possess the power to expropriate property is therefore a constitutional debate; the Expropriation Bill can merely give effect to the constitutional provision but the state’s power to expropriate
is not entirely reliant on the promulgation of this bill. The function of this bill is to regulate the procedure and the manner in which compensation is to be calculated. The current Expropriation Act has a similar function; however, its provisions are not entirely aligned to the Constitution, as it dates back to 1975, almost 20 years before the Constitution came into force. The role of the new bill is to lay down a uniform procedure for all expropriating authorities in line with the right to administrative justice. While expropriation is by its very nature invasive, the procedures contained in the new bill do appear to promote thorough consultation and transparency that stack up well when compared to the procedures followed in foreign jurisdictions. Regarding compensation, the bill echoes section 25 (3) of the Constitution’s formulation for ‘just and equitable compensation’ almost verbatim. Legitimate concerns were raised during the public hearings in relation to mortgage bonds registered over property. Loans secured by mortgage bonds are usually calculated based on the market value that can be recovered from selling the property should the lender default. If just and equitable compensation is judged to be less than market value in a given situation, then it could place the property owner in a sticky situation if he cannot repay the full loan out of the compensation. In this regard the bill could do with an anti-insolvency provision, a route several foreign jurisdictions have chosen to follow. Bar a few minor improvements that could be made, the bill’s methodology does seem to mirror that of the Constitution.
Role of the Property Valuation Act The Property Valuation Act creates an in-house valuation capacity for the department of rural development and land reform. In principle, this seems like a good idea to prevent the state from paying exorbitant prices or >>> page 95 agri OKT/OCT • NOVEMBER ‘15 bladsy/page
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