Anthea Jeffery of the Institute of Race Relations is a leading authority on land expropriation (or EWC – expropriation without compensation). She has been advocating against land expropriation, spelling out the implications this may have on the already fragile South African economy. In an article published on BizNews earlier this year, Jeffery commented that ‘the mere threat of widespread expropriation, especially for ânilâ compensation, is enough to deter most direct investment and stall any prospect of economic recovery. Many South Africans are worried about what it may mean for their personal property, with fears of homes and assets being taken without anything in exchange. Below, the IRR’s Head of Policy research notes there is a ‘deep divide’ on the amendment bill. ‘The Ad Hoc invited several organisations to make oral submissions to it â but left out the IRR and many others that should have been included’. This article was first published on the Daily Friend. – Jarryd Neves
Deep divide on EWC constitutional amendment bill
By Anthea Jeffery*
Last week the Ad Hoc Committee charged with drafting the expropriation without compensation (EWC) constitutional amendment bill (the Bill) invited several organisations to make oral submissions to it â but left out the IRR and many others that should have been included.
Minutes of the proceedings, as drawn up by the Parliamentary Monitoring Group (PMG), provide an insight into the salient warnings sounded by various critics of the Bill, and how the ANC and EFF members of the committee responded to these concerns. (The quotes that follow are taken from the PMG minutes.)
Risks of a banking crisis
The Banking Association of South Africa (Basa) warned that the Bill could precipitate a banking crisis. According to Ms Bongiwe Kunene, managing director of Basa, South Africaâs banks hold mortgages over âland-based propertyâ that are valued at some R1.6 trillion. Hence, any âmarked decrease in the value of land-based propertyâŚcould destabilise the banking sectorâ and further reduce South Africaâs international credit rating.
Said Ms Kunene: âMany banking crises around the world had, as their starting point, a decline in land-based propertyâ, which undermined market confidence. âAn example was the 2007-2008 global financial crisis, which started from the downturn of land-based properties in the United States of America. It was therefore important that South African land reform initiatives, to the greatest extent possible, be implemented in a manner that limited any potential destabilisation of the financial markets.â
To which ANC and EFF members of the committee responded by noting that âbanks were there to make moneyâ; asking âhow much profit the banking sector was making and whether Basa was willing to share those profits with the marginalisedâ; and querying âhow many houses had been repossessed from black peopleâ.
Risks to investment and food security
The South African Property Ownersâ Association (SAPOA) cautioned that amending the Constitution to make explicit provision for EWC could âprovoke controversy and public debateâ. It could âlead to perceptions, worldwide and within the countryâ, that the Constitution could be changed relatively easily. Hence, âit might well result in a loss in confidence and a loss of investment.â
Agri SA said that the agricultural sector (taking account of both primary and secondary activities) contributed between 15% and 20% to South Africaâs GDP. It also made a âmassiveâ contribution to employment. However, the bill could âpotentially scare away investors and make it extremely difficult for farmers to access production credit. This, in turn, could impact on food security and the economy⌠Without secure ownership and clear and protected property rights, food security could not be guaranteed.â
To which an EFF member asked âwhether Agri SAâs members acknowledged that they had been beneficiaries of a âcrime against humanityâ, as holders of the landâ. The committee chair, an ANC member, queried whether âthere could be a fair situation without facilitating access to the 87Â percent [of land] which was in the hands of the minority and the stateâ.Â
The EFF added that China and Vietnam were among âthe best performing economies in the worldâ, even though there was âliterally no private ownership of the landâ. And the committee chair stated that âin Vietnam and China investors had not run away because the land was owned by the stateâ.
The Billâs inability to resolve land reform failures
The Helen Suzman Foundation said that Section 25 of the Constitution was not the reason for land reform failures. These stemmed rather from âcorruption, inefficiency and incompetence, an extremely slow pace of restitution, a minimal budget provision,âŚand an incapacity within the [land department] to perform its functionsâ.
Agri SA stated that âthe property clause was not an impediment to land reformâ. Rather, the key barriers to success included âa lack of adequate budgeting, policy uncertainty, the lack of a comprehensive, integrated support network,âŚcorruption, and poor settlement support systemsâ.
The Council for the Advancement of the South African Constitution (Casac) cautioned that âa change to the Constitution would not resolve the situation⌠The commission responsible for restoration and restitution of land rights needed a new mandate and additional resources. There had to be a focus on corruption and looting in land reform, as there were many indications that land had also become a site of corruption. Capture of the land reform programme by the elite presented a danger as great as the failure to distribute land to those who needed it the mostâ.
To which an ANC member responded that EWC could help resolve âcapacitation issuesâ. The Bill would enable the state to move away from restitution and the âimpossible [task of] finding the rightful, original legal owners of the landâ. By enabling a shift to redistribution, âthe EWC process could assist the state to provide land and to deal with the other challengesâ.
Property rights are protected in international law
Agri SA said: âSection 25 guarantees a fundamental human right [the right to property], which is protected in terms of international human rights instruments such as:
â The United Nationsâ Universal Declaration of Human Rights,
â The European Convention on Human Rights, and
â The African Charter on Human and Peoplesâ RightsâŚ
âNo attempt has ever been made in South Africa to amend a fundamental human right that is protected under the Bill of Rights. Fundamental rights are enshrined for a good reason â to protect individuals from government excesses that impact on their fundamental rights and to protect basic freedoms.â
In response, the chairman stated: âIn terms of international standards, those standards were set by colonial countries before the colonised had a say in international affairs â and that was why even now there was a demand for the restructuring of the United Nations Security Council.â
Committee views on why the Bill is needed
Comments made by ANC and EFF committee members also provide insights into their reasons for wanting the Bill. Many focused on historical injustices, saying:
- âParliament was trying to address historical wrongs and crimes against humanityâ (EFF);
- âthe land was illegally taken from the indigenous African peoplesâ and it was time to âgive back to Caesar what was Caesarâsâ (ANC); and
- âcolonisation was a legal confiscation of peoplesâ land through physical removal, violence and massacres, etc â and this was the problem the Bill was trying to resolveâ. (EFF).
ANC members also stressed the urgency of swift action, saying: âLook at the level of land invasions that the country has. [We do] not want a situation that might be interpreted as a âZimbabwean situationâ. People will invade and take land forcefully â which we want to avoid.â Since people all over the country wanted land, âthe government was trying to avoid people fighting violently for land, otherwise people were prepared to do itâ.
A possible change to the Bill to limit the role of the courts
Back in January 2020, the ANC announced that its national executive committee (NEC) had endorsed a recommendation âthat the power to determine issues related to expropriation of land without compensation should reside in the executiveâ. In response, committee chair Mathole Motshekga commented that, if the courts were to determine compensation, âit would take another 25 or 50 years to sort out land reformâ.
Against this background, SAPOA told the committee: âAll nil compensation cases should be put before the court by the state, so as to avoid exclusion based on the costs of litigation. The burden should be on the state to prove that it was just and equitable that nil compensation should be paidâŚ. There needed to be an assurance that all the facts would be taken into account when nil compensation was applied. The proper place to do that was not through an administrative official, but through the courts.â
To which an ANC member asked whether SAPOA was âsatisfied with the inequality in the countryâ and with âthe current status quo of the indigenous and those who invaded the land?â.
The role of the courts was further endorsed by Basa and others, and also by the South African Catholic Bishops Conference. But another ANC member then queried whether this would not result in âendless appeals by people who were not in favour of the expropriation process and would flood the courts to challenge a decision that would have been taken politicallyâ.
IRR comment on the need for a âgreat resetâ on the public participation process
A fortnight ago, the IRR called for a âgreat resetâ on the public participation process on the Bill, which has been flawed from the start. Some 204 000 written submissions have been largely overlooked by the committee, while many organisations that should have been invited to make oral presentations, including the IRR, have been left out.
In addition, it has been government policy since 2015 for all new bills to be preceded by a comprehensive socio-economic impact assessment (SEIAS) â and for a final SEIAS report to be attached to every bill when it is released for public comment. But this has not been done with the EWC constitutional amendment bill, even though it is the most important measure to come before Parliament since the 1996 Constitution was adopted.
According to the governmentâs own SEIAS guidelines, it is particularly important that a final SEIAS report should âidentifyâ and caution against proposed legislation where âthe burdens of change loom so large that they could lead to excessive costs to society, for instance through disinvestment by business or a loss of skills to emigrationâ.
The Bill put forward by the committee is likely to trigger precisely such âexcessive costsâ, in the form of both disinvestment and emigration. Changing the Constitution to allow EWC is also inordinately dangerous in the face of the prolonged Covid-19 lockdown, which has caused enormous damage to an already struggling economy.
The PMG minutes of the committeeâs proceedings underscore the urgent need for a proper SEIAS report and a complete restart to the public consultation process. This is vital so that all South Africans â as the Constitution requires â are empowered to âknow aboutâ the issues raised by the Bill, and are given âa meaningful opportunity to be heardâ in the making of this crucial law.
- Dr Anthea Jeffery holds law degrees from Wits, Cambridge and London universities, and is the Head of Policy Research at the IRR. She has authored 11 books, including Peopleâs War: New Light on the Struggle for South Africa and BEE: Helping or Hurting? She has also written extensively on property rights, land reform, the mining sector, the proposed National Health Insurance (NHI) system, and a growth-focused alternative to BEE.
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