New Expropriation Bill gains momentum

Property rights in South Africa are in for a shake-up with government’s controversial Expropriation Bill becoming a step closer to law.

For more than two years, government and industry players have been in discussions to appropriately align the bill to the Constitution’s provisions for property rights.

The biggest change to the Expropriation Act of 1975 is the introduction of a clause stating that a property might be expropriated not only for public purposes but also in the public interest. Furthermore, the bill will allow the State to take ownership and possession of a property by notice to the owner.

The amended bill is a slight improvement over its predecessor which was deemed too draconian. The Expropriation Act of 1975 made provisions for expropriation solely for public purposes. For example, expropriating land for a new train station development would largely trump individual land rights. The old Act also didn’t take into account that the State’s actions must be administratively just, meaning that the State should consider the impact of its actions on the broad citizenry.

The bill is gaining momentum, with Parliament’s Public Works Committee passing it on Tuesday. The bill still needs to debut at the National Assembly for debate, then move to the National Council of Provinces dealing with Public Works matters before it can be sent to the president for assent.

AgriSA’s head of legal policy Annelize Crosby says the bill is not yet final as “there may be some changes to it.” But it has been passed by the Public Works Committee with several grey areas.

The insertion of a definition of expropriation under the amended bill is a hot button issue, as it refers to the State as owner of the land upon expropriation instead of being a custodian for disadvantaged individuals. This definition paves the way for the government to not offer compensation for individuals deprived of land.

“The moment you define expropriation you limit the scope of what can be considered to be an expropriation by the State,” says Crosby.

In the event of the State making an intention to expropriate, compensation must be “just and equitable.”  The bill also makes provisions for the State to conduct an investigation into the merits of expropriation before issuing a notice of intention to expropriate.

Head of special research at the South African Institute of Race Relations Dr Anthea Jeffery has raised concerns about the bill, largely that it would be unconstitutional for the State to “simply take ownership and possession of a property via notice.” The government needs to first get a court order confirming that the expropriation is in line with the Constitution and that it is for public purposes or in the public interest, Jeffery explains.

The amended bill might allow the government to delay paying compensation (which might not be a market-related value) until possession has been passed to the State. The bill also mentions that no compensation is payable until an amount has been agreed with the State or decided upon by a court. “Litigation is costly and takes a long time, so most people will be under pressure to agree to what the State proposes,” she argues.

Deputy Minister for the Department of Public Works Jeremy Cronin recently told Moneyweb that changes to the bill will provide clear guidelines for expropriation by the State.

“The new bill is essentially about describing in terms of what is administratively a just process as required by the Bill of Rights in the Constitution. The Bill of Rights calls for a law of general application when it comes to expropriation and that is what we are trying to do,” says Cronin.