WeeklySA_AdminCONSTRUCT: SA’s land reform issues go significantly deeper than the Constitutional method of determining compensation, and will not be solved solely by this law, argue the writers of this article…
By Bulelwa Mabasa and Thomas Katberg
President Cyril Ramaphosa signed the Expropriation Bill into law on 23 January 2025. The newly assented to Expropriation Act No. 13 of 2024 (“Expropriation Act“) comes 50 years since the implementation of the old 1975 Expropriation Act (“1975 Act“). The content contained in the new version of the Act has gone through a myriad of iterations, with the first version published in 2008, later in 2015 and the current version first published in 2020.
There is little in the public domain that demystifies the concept of “expropriation” as a legal construct. Simply put, expropriation is a tool used by governments in varying jurisdictions across the globe, to take private property for public use, with compensation.
In South Africa, the 1975 Act was used to acquire property solely for a public purpose, which includes examples such as the construction of public infrastructure such as public clinics, public schools, laying power lines and more recently the construction of the Gautrain.
What is the role of compensation in expropriations?
Intrinsic in the legal definition of expropriation, is a requirement for compensation to be paid. In other words, expropriation is inextricably linked with compensation. The amount and methodology of calculating compensation differs in varying jurisdictions. Some quarters argue therefore that the concept of “expropriation without compensation” is a legal absurdity. The 1975 Act provided for market value compensation commonly referred to as “willing buyer will seller compensation”.
What does the new Expropriation Act say about compensation?
In contrast, the Expropriation Act now makes provision for “just and equitable” compensation. The concept of “just and equitable” compensation was introduced already in our law 29 years ago when the Constitution was promulgated. Just and equitable compensation is made provision for in section 25(3) of the Constitution, and lists factors to be taken into account in calculating just and equitable compensation. Between 1975 to date, South Africa has been expropriating using a financial model that was at odds with the Constitution.
The Expropriation Act therefore now aligns itself with the Constitution. Factors that must be taken into account in the calculation of just and equitable compensation are the current use of the property, the history of its acquisition, improvements made in the property, if there was any State investment made on the property and the purpose of the expropriation.
The outcome of the application of the just and equitable method of calculation, is based on the facts of each case. Whilst it may be possible to arrive at nil compensation, it would only be in extremely rare circumstances that would enable nil compensation. It is also arguable that expropriation without compensation as a concept, may be susceptible to a constitutional challenge.
The second most important factor that is contained in the Expropriation Act, is the inclusion of a State power that enables the State to acquire property, not only for a public purpose, but also in the public interest.
This mirrors the Constitutional property clause, which defines the public interest as including the nation’s commitment to land reform. This means that expropriations to make land available to enable citizens to gain access to land for land reform purposes now have a statutory basis in addition to the Constitutional basis, which has been in effect since 1996. The inclusion of land reform objectives in the Expropriation Act aligns with section 25 of the Constitution.
In essence, this means that since 1996, the Constitution has mandated a model of equitable balance whereby the public interest (including the nation’s commitment to land reform) and the interest of the landowner must be balanced. In other words, if, on a consideration of all relevant factors, it would be just and equitable to pay less than market value for an expropriation, the Constitution not only justifies, but mandates, doing so.
What does the Expropriation Act say about expropriation without compensation (“EWC”)?
It is arguable that the Expropriation Act may be interpreted to go further than the Constitution by expressly stating that expropriation may be nil in certain circumstances.
As such, the Expropriation Act expressly introduces the concept of EWC in our law. A few caveats should be noted in this regard . EWC applies only to land, as opposed to other forms of property, i.e. real rights such as mining rights, limited real rights, intellectual property, and movable property. The Expropriation Act does not contain a special definition for ‘land’. This is in contrast to the Constitution that provides that property is not limited to land.
EWC applies only where land is expropriated in the public interest as opposed to for a public purpose. This suggests that EWC will be applicable mainly (or perhaps only) to expropriations for land reform purposes, and expropriations in the context of access to natural resources such as minerals and water. Again, in these contexts, the only form of property that can conceivably be expropriated without compensation is land, and not the real rights or limited real rights attached thereto, such as mining rights or water use licences.
In section 12(3), the Expropriation Act lists four circumstances in which it may be just and equitable for EWC may be paid. These include where the land is held for speculative purposes and is not being used by the owner; where the land is held by an organ of state that is not using for its core functions and the organ of state is not likely to require the land for its future activities, and the organ of state acquired the land for no consideration; where an owner has abandoned the land by failing to exercise control over it despite being reasonably capable of doing so; and where the market value of the land is equivalent to or less than the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.
These particular circumstances may justify EWC, but must be considered in light of all relevant circumstances, which would no doubt include the factors in section 25(3), which are mentioned above.
Is EWC the answer to South Africa’s land reform problems?
The move away from the ‘willing buyer, willing seller’ model to the ‘just and equitable’ model of compensation will impact expropriations for land reform and will make compensation more affordable for the state. However, it is a misconception to think that EWC is the answer to all land reform problems.
EWC as it is set out in the Expropriation Act would only be applicable in very limited circumstances, and would only apply to land which is not in productive use. EWC will have no significant impact on land reform in urban and developed areas. South Africa’s land reform issues go significantly deeper than the Constitutional method of determining compensation, and will not be solved solely by the promulgation of the Expropriation Act.
Who has the power to expropriate?
The Expropriation Act vests the power to expropriate in the Minister of Public Works, currently Minister Dean MacPherson. Minister MacPherson has already indicated that “no expropriation without compensation of private property will happen under his watch”.
Whilst the Expropriation Act vests in the Ministry of Public Works, other pieces of legislation, such as the Mineral and Petroleum Resources Development Act No. 28 of 2002 (“MRPDA“) and the Restitution of Land Rights Act No. 22 of 1994 (“Restitution Act“), vest the power of expropriation in the Minister of Mineral Resources and the Minister of Land Reform and Rural Development respectively. The Expropriation Act also contemplates that an expropriating authority may be any other organ of state.
Is the Expropriation Act constitutional?
The constitutionality of the Expropriation Act is contested. Section 25(2) of the Constitution provides that property may only be expropriated for a public purpose or in the public interest, and must be subject to compensation, which must be agreed between those affected or must be decided or approved by a court.
On 7 December 2021, the Constitution Eighteenth Amendment Bill, which aimed to amend this provision of the Constitution to reflect that compensation could be nil, failed to pass in the National Assembly. Some commentators and academics are of the view that EWC is implicit in the Constitution, and that the Constitution therefore implicitly recognises that it would in some circumstances be just and equitable for compensation to be nil. Others argue that compensation is an integral component of expropriations and that to expropriate property without any compensation is more analogous to a confiscation and akin to deprivation.
This question is by no means clear, and it is likely that the Expropriation Act is likely to be challenged upon its commencement. Indeed, both the Democratic Alliance, ActionSA, Afriforum, and the Cape Independence Group have indicated their intentions to challenge the Act.
* Bulelwa Mabasa is head of the Land Reform Practice at Werkmans Attorneys and Thomas Karberg is a senior associate
Comment
STOP THIS VIOLENCE
The killing of women and girls because of their gender was the most brutal manifestation of violence in the world with reports that estimated 140 women and girls died globally at the hands of their partners or close relatives every day.
And in South Africa, the police have confirmed that a total eleven women were killed every day – murders driven, amongst others, by unequal power relations and gender stereotypes, according to the South African Medical Research Council.
The latest statistic in Gauteng is 30 -year-old Wits University student, Olorato Mongale, who was collected by someone, initially called John, on a date from her place at a lodge in Kew only to be brutally murdered and her body dumped in a field in Lombardy west , Johannesburg. Before leaving, Olorato seemed to have had a premonition as she informed a friend that she was being collected by someone in a white Volkswagen Polo.
This information was vital enough to trigger the police into immediate action shortly after news of her murder. They traced and located the vehicle at a panel – beater’s workshop in Phoenix, Durban as well as the prime suspect, Philangenkosi Makhanya, who was killed in a shootout with the police at his hideout in Amanzimtoti . Another suspect, Fezile Ngubane , handed himself over to the police at the KwaMashu police station on Friday. Bongani Mthimkulu, who is also being sought by the police, was still at large at the time of going to press. Violence against women and children is a plague that continued unabated throughout the world. A report by the United Nations Women and UNODC on Global estimates of intimate partner and family member femicides, found that a total 85 000 women and girls were killed intentionally in 2023 and 60 percent of these homicides were committed by an intimate partner or family member.
Women and girls are also human beings. They cannot be bullied and subjected to torture and even death by their partners simply because of their gender or unequal power relations. Our mothers and sisters are under siege from criminals who have no regard for human life.
Olorato Mongale was just a young , brilliant university student preparing herself for a bright future. What kind of people are these who can kidnap a defenceless young woman, murder and dump her lifeless body on a field ? These are beasts that have to be traced , arrested and sentenced to long prison terms. We urge members of the public to help the police in bringing these culprits to book.
Women organizations have been pleading with the government to introduce robust legislation, improve data collection and a zero-tolerance culture to stop the scourge of gender-based violence. There has also been calls for denial of bail and imposition of harsher prison terms by our courts for those convicted of these offences.
Real men must stop remaining silent and protect women and girls in the fight against this plague. This crime is not inevitable. It can be prevented as long as men join the fray because their silence is tantamount to complicity in the crime.
Our mothers and sisters have had enough.
They no longer have voices to scream for help nor tears to shed.
