Source: The Conversation – Africa – By Zsa-Zsa Temmers Boggenpoel, Academic, Stellenbosch University
South Africa has a new law to govern the expropriation (or compulsory acquisition) of private property by government for public purposes or in the public interest.
The passing of the Expropriation Act 13 of 2024 followed a parliamentary process that began in 2020.
The act repeals the apartheid-era Expropriation Act 63 of 1975, and aims to align expropriation law with the constitution. It sets out the procedures, rules and regulations for expropriation. Besides setting out in quite a detailed fashion how expropriations are to take place, the act also provides an outline regarding how compensation is to be determined.
In South Africa’s colonial and apartheid past, land distribution was grossly unequal on the basis of race. The country is still suffering the effects of this. So expropriation of property is a potential tool to reduce land inequality. This has become a matter of increasing urgency. South Africans have expressed impatience with the slow pace of land reform.
Property rights and land reform
There is much debate in the country about the provisions of the new act. The debate is mostly about the extent to which it affects existing private property rights. Some argue the act is unconstitutional. Others welcome it as a necessary step in the right direction.
I’m a professor of law with a keen interest in this area of the law, and recently edited a book on land expropriation in South Africa by leading experts. My view is that an expropriation act that is aligned with the constitution should be welcomed, to enable land reform to work effectively.
Read more:
Land reform in South Africa: what the real debate should be about
Land reform also needs a capable and proactive state that implements the legal framework in such a manner that prioritises expropriation as a mechanism to ensure land reform.
So far, expropriation has not been used effectively to redistribute land more equitably, as part of land reform.
I am not convinced that the act, in its current form, is the silver bullet to effect large-scale land reform – at least not the type of radical land reform that South Africa urgently needs.
Understandably, the act will have a severe impact on property rights. But it still substantially protects landowners affected by expropriation. Only in very limited cases would they not be compensated.
Protections for land owners
The act says that property must not be expropriated arbitrarily or for a purpose other than a public purpose or in the public interest.
Public purpose means by or for the benefit of the public. For example, expropriating property to build roads, schools and hospitals. Public interest is broader and includes the nation’s commitment to land reform.
“Arbitrary” would usually mean without reason or justification.
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The act further requires that an expropriating authority – an organ of state or person empowered by the act or any other legislation – must first try to reach an agreement with the owner to acquire the property on reasonable terms before considering expropriation.
This gives some power to a landowner, even though expropriation does not normally require consent. The act also says a specific expropriation must always be authorised by a law.
No compensation?
Section 12 of the act deals with compensation for expropriation. It is arguably the most controversial part of the new legislation. Section 12(1) does not appear to be problematic and is largely the same wording as section 25(3) of the constitution. This part of the property clause sets out what must be taken into account when compensation for expropriation is determined.
Section 12(3) of the act refers to “nil compensation” – when nil rand (monetary) compensation may be paid. There is no explicit reference to nil compensation in the current wording of section 25 of the constitution. It’s a new thing in the Expropriation Act.
However, courts have toyed with the idea that section 25 of the constitution already provides room for a reduction in compensation.
The circumstances in which nil compensation could be granted in terms of the new act are in fact very limited. Section 12(3) leaves the discretion to the expropriating authority to determine when it may be just and equitable to pay nil compensation. However, the act lacks guidelines on how such a discretion must be exercised.
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The scope of section 12(3) is also limited in some respects. For one, it is restricted to land. Only where land is expropriated would nil compensation be an option. Therefore, not all forms of property can be expropriated without compensation. The notion of property under section 25(1) of the constitution is generally wide and includes various rights and interests, which are broader than just land. For instance, personal rights, mineral rights and licences are included under the section 25(1) notion of property.
This wide understanding of property is not applicable to section 12(3), which refers to “land” being expropriated.
Section 12(3) is also limited to the expropriation of land “in the public interest”. Nil compensation is therefore envisaged only in the context of expropriation of land undertaken in the public interest, and not also for a public purpose.
Three of the four categories listed in section 12(3), where nil compensation is envisaged, are linked to the way in which the property was being used prior to the expropriation. Land used in a productive manner is therefore not evidently envisaged under section 12(3).
Nil compensation is not necessarily limited to the instances listed. Still, the amount of compensation must – in all instances – be just and equitable.
Novel approach
The act forces South Africans to engage with the idea of nil compensation in a much more direct manner.
The presence of a clause dedicated to nil compensation provides new clarity on when this could apply.
It is hard to determine whether this act will pass constitutional muster without seeing how expropriation under it will work in practice. It remains to be seen whether it will have the far-reaching consequences that many fear, or call for.
Zsa-Zsa Temmers Boggenpoel does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Land seizure and South Africa’s new expropriation bill: scholar weighs up the new act – https://theconversation.com/land-seizure-and-south-africas-new-expropriation-bill-scholar-weighs-up-the-new-act-244697