COSATU submission regarding the Expropriation Bill
Draft COSATU Submission on the Expropriation Bill [B16-2008]
PRESENTED TO THE PORTFOLIO COMMITTEE ON PUBLIC WORKS - 18 JUNE 2008
COSATU welcomes the opportunity to make an input on the Expropriation Bill (The Bill). We believe that the Bill is long overdue. This Bill reflects a considerable shift from the willing buyer-willing seller strategy that the government was using as the main instrument of land acquisition. Land reform is explicitly provided for in the constitution. Section 25(2) authorises and regulates expropriation: all expropriation should be for public purpose or in public interest. Section 25(4) states that public interest includes the nation’s commitment to land reform and to ensuring equitable access to all South Africa’s natural resources.
We strongly believe that expropriation is the only meaningful intervention to that the government may use to fast-track the land reform process. This would necessarily entail increased utilisation of powers of expropriation especially where blockages arise. It is for this reason that we support the objectives of the Bill.
Ownership of resources such as land is highly skewed, favouring whites as a result of systemic dispossession, forced removals and various discriminatory land laws implemented by the apartheid government. Expropriation for land reform purpose, especially where it relates to agrarian reform, remains a highly contentious subject in South Africa that evokes negative emotions from white South Africans, particularly white land owners. This has underpinned the reluctance of Government to act decisively in implementing land reform objectives. The Zimbabwe experience is usually cited by those opposed to land reform to discourage any effort that is meant to genuinely address the land question. This completely disregards the role that increasing inequality can play in promoting instability in a country.
Those opposed to expropriation argue that the reluctance to expropriate land for land and agrarian reform programme may also have been due to the fact that there is a vibrant land market in South Africa. Such a view ignores the current experience with escalating prices for land purchased for land restitution claimants acting as a disincentive against implementation of land reform.
2.1 Land reform
The 1993 constitution and final 1996 constitution introduced a new phase, recognising for the first time, the right to have land restored as a constitutional right. An important principle was that was land reform should not be limited to the scrapping of discriminatory legislation; it had to involve “a major transformation of the whole legal system in order to restore rights to the land where possible".
The Reconstruction and Development Programme (RDP) that was adopted by the government in 1994 set a target of redistributing 30 percent of agricultural land owned by whites to black ownership by 1999. However, by 2007 government had managed to redistribute only four percent of that land . This target has now had to be revised to 2014.
The government’s failure to meet its initial target of transferring 30 percent of agricultural land to black people was also severely constrained by the introduction of the GEAR macroeconomic policy framework in 1996, which was characterised by fiscal austerity. As a result expenditure on land reform declined in real terms, which when combined with the willing buyer-willing seller approach further slowed the land reform process.
Land reform is generally accepted to entail 3 categories, namely restitution, redistribution, and/or security of tenure. Land reform is therefore more than a mere land claim-driven process where ancestral land is claimed back by people who were dispossessed, as it also refera to the acquisition of land for distribution to the landless, and the securing of tenure to ensure protection for those who occupy or use land but do not have formal recognition of their rights. Most of the land that has been transferred from white farmers has been through the restitution programme, with implementation of other categories receiving lower priority.
The passing of the Restitution of Land Rights Amendment Act of 2003 was hailed as breakthrough in speeding up the land reform process. The Act allows the Minister of Land Affairs to expropriate land without a court order for land reform purposes. However, it has failed to deliver. The Department of Land Affairs was only able to carry out its first expropriation in March 2007 in the form of the Pniel Farm near Kimberley that was owned by the Lutheran Church.
There is general consensus even from government officials that the pace of the land reform process is too slow. Many reasons have been given for this ranging from blaming the principle of willing seller-willing buyer principle to the failure of the state to utilise other instruments at its disposal to fast-track the process.
Further it should be noted that the willing buyer-willing seller principle is problematic as it assumes that there is a completely voluntary transaction between a buyer and a seller. However, upon a critical examination and analysis of this principle, it is clear that willing sellers have a monopoly in the market place. They determine the price of land that suits them regardless of the budgetary constraints that the government, as a buyer, has. In this regard, the so-called willing sellers have a veto power. Thus, land owners can actively avoid offering their land for sale for land reform purposes by demanding exorbitant prices.
The debate over land and the efforts to find a balance between those disposed and the rights of current occupiers should be seen against the background of suffering, injustice and poverty created by an enormous and ill-advised programme of social engineering carried out by white nationalist governments over a period of forty years.
2.2 Key Strategic Industries
Property is not limited to land. COSATU believes that in order to deal with socio-economic and developmental challenges facing the country, the State must play an active and direct role in the economy. Expropriation should be used to:
- Renationalise all key strategic industries that previously to belonged to including SASOL and Mittal Steel.
- To rescue businesses that cannot be allowed to collapse for national reasons especially where employers claim that their businesses are failing and they need to fire workers or cut their pay.
- Nationalise sectors that are specified in the Freedom Charter, such as the banks, monopoly industry, and mineral wealth.
2.3 Unregistered Rights Holders
COSATU welcomes the fact that holders of unregistered rights will now be eligible for financial compensation for expropriation of properties where they have lived for many years. Often, farm workers and other farm dwellers become unintended victims of land reform processes especially if the process involves restitution as their rights of occupation may clash with those seeking restitution. Despite the number of post-1994 laws that have made provision for the protection of rights of farm workers and tenants, these were not registered in the deeds register, thereby rendering their limited rights all the more vulnerable especially if land they occupied was sold or earmarked for restitution.
Beneficiaries of land reform have been mostly victims of dispossession from 1913. However, land deprivation started in the seventeenth century. By the time the notorious Native Land Act was passed, white settlers in South Africa had appropriated more than 90 percent of the land surface.
We propose that victims of unfair and illegal evictions should also be recognised as holders of unregistered rights.
3. Specific Comments on the Bill
While much of the controversy surrounding this Bill has centred around its implications of expropriations based on public interest as a direct objection to the land reform process, the Bill is also intended to be implemented in respect of expropriations for public purposes. We place considerable value on both objectives, and note that the public purpose related expropriations would ensure a necessary mechanism to facilitate the state’s role in intervening to achieve broader socio-economic and developmental objectives.
In relation to the ”definition” section of the Bill under clause 1 we propose the following:
- There is a need to insert a definition of “expropriated holder” in order to provide more certainty as to who would qualify for their recognition of their rights under this Bill.
- Linked to our concerns about the lack of clarity in respect of the definition of “expropriated holder", it would also be necessary to provide a definition for “unregistered rights”. Here our concern is that persons in this category may not only have unregistered rights but may also not have any formal contractual documents to prove the genuineness of their claims. A properly worded definition should help clarify their rights and prevent abuse by landowners who would maliciously deny their claims.
We suggest that the distinction between “public purpose” and “public interest” needs to be further clarified. This should link “public purpose” to the carrying out of public services, while “public interest” should emphasise the State’s role in enabling non-state actors to achieve an objective that is in the public interest.
3.2 Powers of Expropriation
Clauses 2 and 3 respectively set out the powers of expropriation of expropriating authorities and the Minister.
The Expropriation Act No. 63 of 1975 included provisions to grant the Minister power for temporary use of any property for public purposes. It is not clear why the current Bill does not provide for temporary expropriation. For example, in a disaster or drought situation, a farm may have a life saving source of water for a community and without a temporary use provision, the State may first have to undergo a lengthy process of expropriation rather than one designed for greater speed and temporary use. There are many other others circumstances where the State has a legitimate reason to expropriate for the temporary use of private property.
3.3 Composition of the expropriation advisory boards
Clause 7 provides for the composition of the National and Regional Expropriation Advisory Boards. Taking into account the socio-economic nature of their work and its implications for communities, we believe that provision should be made for inclusion of relevant stakeholders including organised labour, community as well as affected marginalised groups such as women and youth.
3.4 Investigation and valuation of Property, intention to expropriate and expropriation of property
Clause 12(4)(e), as well as clause 10(2)(a), call upon the owner to provide names and addresses of holders of unregistered rights. We are concerned that certain landowners may maliciously withhold information that would benefit holders of unregistered rights. Accordingly we support the provisions that make it an offence to provide misleading information. Further we would call for increased emphasis on the role of expropriation authorities in actively investigating these matters.
We believe that it is also imperative that there is a need for an active process to raise awareness amongst holders of unregistered rights about their rights and their entitlement to compensation. We propose that the Department of Public Works in collaboration with the Department of Land Affairs initiate a campaign to educate rural communities about this legislation, which would facilitate better implementation in the long term
3.5 Compensation for Expropriation
Chapter 5 provides for compensation for expropriation. In this respect we believe that the so-called Geldenhuys formula needs to be reviewed because it relies heavily on the market price of the property. This would make budgeting for land reform more difficult for the government.
Post-1994 land reform measures have been directly constrained by the limited application of section 25(3)(c) of the Constitution to the virtual exclusion of all the other factors listed under section 25(3), and in respect of which the state has failed to rise to the challenge of giving meaning to in the course of the land reform process.
Clause 10 (2)(b)(iv) acknowledges direct state investment and subsidy in acquiring the property in question. We propose that this should be a prominent feature in the determination of the price that the owner may receive as a result of the expropriation. Commercial agriculture was heavily subsided by the apartheid government. Our proposal is that this factor must was be key in the determination of compensation.
There is a tendency by some disgruntled white land owners to vandalise equipment on land that is earmarked for restitution once they have been compensated. This is done in order to perpetuate the myth that blacks cannot run commercial farms. It should therefore be made an offence to vandalise equipment with additional provisions being made for deducting the loss incurred from the applicable compensation.
In clause 10(7) “any owner who fails to comply with any request in terms of subsection (2) (a) or (5) (c) is guilty of an offence". The definition of an owner according to clause 1(h) “includes any lawful occupier of the land concerned”. This may include farm workers and dwellers. There are some practical difficulties with postal services for farmers and dwellers that may need to be resolved before making it an offence not to be able to supply their names and addresses in a reply to the state.
It is COSATU’s view that the Expropriation Bill presents an opportunity to make a fundamental departure from using the much criticised strategy of willing buyer-willing seller to acquire land for land reform purposes. However, provision for expropriation is not new in our legislative framework. The Restitution of Land Rights Amendments Act of 2003 provides for the Minister of Land Affairs to expropriate for land reform purposes. However, it took government more than three years to declare its intention to expropriate land using the Restitution of Land Rights Amendment Act. This underlies the need for the requisite political will implement expropriations legislation, even in the face of hostility of those with vested interests in maintaining the status quo.
Further COSATU believes that expropriation of land should not be limited to restitution, but should also be used in respect of other legs of land reform such as tenure security and redistribution.