THE PRESIDENCY REPUBLIC OF SOUTH AFRICA

SOCIO ECONOMIC IMPACT ASSESSMENT AND QUALITY ASSURANCE (CLUSTERS ONLY}:

This is to confirm that:

1. The Presidency has assessed the Socio-Economic Impact Assessment (SEIAS) Report as per the following:

* Initiating Department : Public Works and Infrastructure

* Name - Expropriation Bill

* Type of Assessment : Final Impact Assessment

2. A Final Sign Off Form will be issued once Clusters' Recommendations are addressed and Cabinet Submission is finalised.

3. Verified and signed off by SEIAS Unit:

Official Stamp and Date

24/10/2019

THE PRESIDENCY REPUBLIC OF SOUTH AFRICA

SOCIO-ECONOMIC IMPACT ASSESSMENT AND QUALITY ASSURANCE SIGN- OFF FORM

This is to confirm that:

1. The Presidency has assessed the Socio-Economic Impact Assessment (SEIAS) Report as per the following:

* Initiating Department : Public Works and Infrastructure

• Name Expropriation Bill

* Type of Assessment : Final Impact Assessment

2. The initiating department has been given feedback and incorporated all inputs as contained in the Final Socio-Economic Impact Assessment report.

3. Permission is granted to the Department to proceed with submission of the Expropriation Bill and the SEIAS Final Impact Assessment report to Cabinet.

4. Verified and signed off by SEIAS Unit:

Official Stamp and Date

19/11/2019

THE PRESIDENCY REPUBLIC OF SOUTH AFRICA

SOCIO-ECONOMIC IMPACT ASSESSMENT AND QUALITY ASSURANCE SIGN- OFF FORM (CABINET)

This is to confirm that:

1. The Presidency has assessed the Socio-Economic Impact Assessment (SEIAS) Report as per the following:

* Initiating Department : Public Works and Infrastructure

* Name : Expropriation Bill

* Type of Assessment : Final Impact Assessment

2. The initiating department has been given feedback and incorporated all inputs as contained in the Final Socio-Economic Impact Assessment report.

3. Permission is granted to the Department of Public Works and Infrastructure to proceed with the submission of the Expropriation Bill and the SEIAS Final Impact Assessment report to Cabinet.

4. Verified and signed off by SEIAS Unit:

Official Stamp and Date

2020/05/29

THE PRESIDENCY REPUBLIC OF SOUTH AFRICA

1. Please DO NOT ALTER the template and questionnaire

2. Date must be clearly indicated

3. Draft SEIAS report should have a watermark word DRAFT indicating the version and should be accompanied by the supporting documents (draft proposal, M&E plan and pieces of research work)

4. FINAL report will be in PDF format and will be inclusive of the sign-off

5. FINAL report will have the approval stamp of the DMPE on the front cover and will include the signoff

6. Sign off forms are only valid for a period of six months.

Please keep your answers as short as possible. Do not copy directly from any other document.

1. Conceptual Framework, Problem Statement, Aims and Theory of Change

1.1. What socio-economic problem does the proposal aim to resolve?

The proposed legislative reform measure is intended to empower the State to effectively remove the hitherto institutionalised socio-economic barriers to access property and natural resources. The removal of the socio-economic barriers alluded to above requires a special measure such as the Expropriation Bill, 2019 to grant the state extraordinary authority to compulsorily take immovable property from persons and corporations for use in the public interest.

The public interest in the main refers to land and water reforms, the creation of a sustainable environment and sustainable human settlements. The proposed legislative reform will furthermore enable South Africans to access property and natural resources on an equitable and fair footing.

Section 25(8) of the Constitution, 1996 permits the state to enact legislation that would facilitate the achievement of land, water and related reform in order to redress the results of past racial discrimination.

The Department’s mandate to review the Expropriation Act 63 of 1975 is derived from a Cabinet approval of 15 September 2004. This was the beginning of a process to address the identified socio-economic problem.

The Draft Policy on the Expropriation Bill was subsequently gazetted for public comment in November 2007.This was followed by workshops and public hearings in Parliament during 2008;

The Expropriation Bill [B16-2008] was however withdrawn from Parliament in September 2008 to allow for further consultations. In March 2013 Cabinet approved that the revised draft Bill be gazetted for public comment;

NEDLAC adopted its task team’s report on the Bill in February 2014 which largely supported it

The Bill was submitted to Parliament for the second time in February 2015 and a year later, on 26 May 2016 the Expropriation Bill[B4D-2015] was passed into law. Following objections, the President refrained from assenting to the Bill and instead invoked section 79(1) of the Constitution to remit the Bill to Parliament.

Parliament deliberated on the matter and on 4 September 2018 rejected the Bill which signalled the rescission of the previous decision to pass the Bill.

Parliament then passed a motion to establish the Joint Constitutional Review Committee to look into the feasibility of amending section 25 of the Constitution to explicitly provide for expropriation of property with nil compensation.

The Expropriation Bill, 2019 seeks to particularly facilitate the achievement of land reform and sustainable human settlements by means of the insertion of clause 12(3) in the proposed legislation.

Clause 12(3) of the Expropriation Bill [B-2019] caters for expropriation with nil compensation in certain specified circumstances.

Clause 12(3) of the Expropriation Bill, 2019 is an extension to the general compensation scheme provided for in section 25(3) of the Constitution, 1996. Clause 12(3) provides as follows;

“ It may be just and equitable for nil compensation to be paid where land is expropriated in the public interest, having regard to all relevant circumstances, including but not limited to:

(a) When a court or arbitrator determines the amount of compensation in terms of section 23 of the Land Reform (Labour Tenants) Act, 1996 (Act No. 3 of 1996), it may be just and equitable for no compensation to be paid having regard to all circumstances;

(b) where the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value;

(c) where an organ of state holds land that it is not using for its core functions and is not reasonably likely to need the land for its future activities in that regard, and the organ of state acquired the land for no consideration;

(d) notwithstanding registration of ownership in terms of the Deeds Registries Act 47 of 1937, where an owner has abandoned land by failing to exercise control over it;

(e) 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.

(f) when the nature or condition of the property poses a health, safety or physical risk to persons or other property.

The proposed measure seeks to facilitate access to land on a non- discriminatory basis related to gender, sex, age, disability, religious belief and political affiliation has the potential to reduce unemployment1, poverty, homelessness, criminality and morbidity. The benefits thereof would be the promotion of entrepreneurship, food security and productivity of the nation in general.

1.2 What are the main roots or causes of the problem?

The legal regime had discriminated unfairly against black South Africans prior to 1994. This unfair discrimination hindered blacks from participating equally with their white compatriots in the economy. The Expropriation Act, 1975 is one of the legion of discriminatory legislative measures that were applied by the then governments to dispossess black South Africans of their properties and thereby reduce them to penury by denying them compensation or fair compensation, if at all.

A pointed example of the public purpose to which the Expropriation Act, 1975 and expropriation law before it were used was to acquire land for the South African Development Trust (SADT) with the objective of homeland consolidation. The results of the homeland system were the creation of a migrant labour system, lack of economic opportunities, poverty, overcrowding and generally the absence of the necessary amenities of life for the black populace.

1.2. What are the main root causes of the problem identified above?

¹ Stats SA media release of 30 July 2019 reports unemployment rate increased by 1,4% to 29,0% (Source- Stats SA QLFS- Q2:2019)

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1.3. Summarise the aims of the proposal and how it will address the problem in no more than five sentences.

The aim of the Expropriation Bill, 2019 is to foster a uniform expropriation dispensation for organs of state in the three spheres of government. This will be achieved through the reinforcement of the principles of co-operative government and intergovernmental relations and the introduction of an expropriation register.

Alignment of the Expropriation Bill, 2019 to the Constitution, 1996 will ensure that the proposal gives effect to the administrative justice and equality provisions of the Constitution. This will ensure that every person affected by expropriation is given a fair chance to make representations and be heard, appeal or review any adverse decision or approach the courts to seek redress. This approach to expropriation of property in effect affirms the Rule of Law principle.

The Expropriation Bill, 2019 further obviates the possibility of an irrational expropriation by requiring consultation with affected parties. This approach is desirable to ensure that the economic potential of property identified for acquisition by an expropriating authority is unlocked as also the attendant viability aspects of such an acquisition. Issues such as the nature and extent of economic opportunities to be provided by a particular expropriation of property will thus be known in advance.

1.4. Please describe how the problem identified could be addressed if this proposal is not adopted. At least one of the options should involve no legal or policy changes, but rather rely on changes in existing programmes or resource allocation.

2. Policy/Legislative alignment with other departments, behaviours, consultations with stakeholders, social/economic groups affected, assessment of costs and benefits and monitoring and evaluation.

2.1. Are other government laws or regulations linked to this proposal? If so, who are the custodian departments? Add more rows if required.

2.2. Proposals inevitably seek to change behaviour in order to achieve a desired outcome. Describe (a) the behaviour that must be changed, and (b) the main mechanisms to bring about those changes. These mechanisms may include modifications in decision- making systems; changes in procedures; educational work; sanctions; and/or incentives.

a) What and whose behaviour does the proposal seek to change? How does the behaviour contribute to the socio-economic problem addressed?

The proposed regulatory measure is intended to align the authority of the state to use its dominant position to unilaterally acquire privately held property for use in the public interest with the values and provisions of the Constitution,1996.

The power of the state to expropriate in terms of the Expropriation Act 63 of 1975 is generally unfair to the private property owner. This is manifested by lack of administrative justice, disproportionate treatment of legal subjects and non-facilitation of equitable access to property and natural resources in the existing expropriation legislation.

b) How does the proposal aim to bring about the desired change?

The proposed expropriation legislation intends to introduce a uniform expropriation framework for organs of state in the national, provincial and local spheres of government.

This will be achieved through the implementation of uniform procedure and norms for expropriation. In order to facilitate the acquisition of privately owned property in a cost effective manner, compensation for expropriation will be determined at nil in certain specified instances to enable the state to meet its socio-economic objectives.

2.3. Consultations

a) Who has been consulted inside of government and outside of it? Please identify major functional groups (e.g. business; labour; specific government departments or provinces; etc.); you can provide a list of individual entities and individuals as an annexure if you want.

Consulted Government Departments, Agencies and Other Organs of State

Consulted stakeholders outside government

b) Summarise and evaluate the main disagreements about the proposal arising out of discussions with stakeholders and experts inside and outside of government. Do not give details on each input, but rather group them into key points, indicating the main areas of contestation and the strength of support or opposition for each position

2.4. Assessment of costs and benefits to stakeholders inside and outside of government

3.

3.1. Describe the groups that will benefit from the proposal, and the groups that will face a cost. These groups could be described by their role in the economy or in society. Note: NO law or regulation will benefit everyone equally so do not claim that it will. Rather indicate which groups will be expected to bear some cost as well as which will benefit. Please be as precise as possible in identifying who will win and who will lose from your proposal. Think of the vulnerable groups (disabled, youth women, SMME), but not limited to other groups.

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2.6 Describe the costs and benefits of implementing the proposal to each of the groups identified above, using the following chart. Please do not leave out any of the groups mentioned, but you may add more groups if desirable. Quantify the costs and benefits as far as possible and appropriate. Add more lines to the chart if required.

Note: “Implementation costs” refer to the burden of setting up new systems or other actions to comply with new legal requirements, for instance new registration or reporting requirements or by initiating changed behaviour. “Compliance costs” refers to on-going costs that may arise thereafter, for instance providing annual reports or other administrative actions. The costs and benefits from achieving the desired outcomes relate to whether the particular group is expected to gain or lose from the solution of the problem.

For instance, when the UIF was extended to domestic workers:

- The implementation costs were that employers and the UIF had to set up new systems to register domestic workers.

- The compliance costs were that employers had to pay regularly through the defined systems, and the UIF had to register the payments.

- To understand the inherent costs requires understanding the problem being resolved. In the case of UIF for domestic workers, the main problem is that retrenchment by employers imposes costs on domestic workers and their families and on the state. The costs and benefits from the desired outcome are therefore: (a) domestic workers benefit from payments if they are retrenched, but pay part of the cost through levies; (b) employers pay for levies but benefit from greater social cohesion and reduced resistance to retrenchment since workers have a cushion; and (c) the state benefits because it does not have to pay itself for a safety net for retrenched workers and their families.

2.7 Cost to government: Describe changes that the proposal will require and identify where the affected agencies will need additional resources

a) Budgets, has it been included in the relevant Medium Term Expenditure Framework (MTEF) and

b) Staffing and organisation in the government agencies that have to implement it (including the courts and police, where relevant). Has it been included in the relevant Human Resource Plan (HRP)

Note: You MUST provide some estimate of the immediate fiscal and personnel implications of the proposal, although you can note where it might be offset by reduced costs in other areas or absorbed by existing budgets. It is assumed that existing staff are fully employed and cannot simply absorb extra work without relinquishing other tasks.

2.8 Describe how the proposal minimises implementation and compliance costs for the affected groups both inside and outside of government.

For groups outside of government (add more lines if required)

For government agencies and institutions:

2.9 Managing Risk and Potential Dispute

a) Describe the main risks to the achievement of the desired outcomes of the proposal and/or to national aims that could arise from implementation of the proposal. Add more lines if required.

Note: It is inevitable that change will always come with risks. Risks may arise from

(a) unanticipated costs; (b) opposition from stakeholders; and/or (c) ineffective implementation co-ordination between state agencies. Please consider each area of risk to identify potential challenges.

b) Describe measures taken to manage the identified risks. Add more rows if necessary.

Mitigation measures means interventions designed to reduce the likelihood that the risk actually takes place.

c) What kinds of dispute might arise in the course of implementing the proposal, whether (a) between government departments and government agencies/parastatals, (b) between government agencies/parastatals and non-state actors, or (c) between non-state actors? Please provide as complete a list as possible. What dispute-resolution mechanisms are expected to resolve the disputes? Please include all of the possible areas of dispute identified above. Add more lines if required.

(a) Dispute between government departments and government agencies

- Disputes between government agencies could arise from competing/conflicting service delivery interests.

(b) Disputes between government agencies/parastatals and non-state actors

- These could arise from the divergence of interests in respect of the purpose for the proposed expropriation or compensation or non- compensation for an expropriation.

(c) Disputes between non-state actors

- In the land reform context, these types of disputes, between landowners and claimants, could rear their head where a choice must be made between the restoration of specific dispossessed property, alternative land and/or financial compensation based on the argument of the non- feasibility of restoration of the dispossessed property.

Note: Disputes arising from regulations and legislation represent a risk to both government and non-state actors in terms of delays, capacity requirements and expenses. It is therefore important to anticipate the nature of disputes and, where possible, identify fast and low-cost mechanisms to address them.

Would it be possible to establish or use more efficient and lower-cost dispute- resolution mechanisms than those now foreseen? These mechanisms could include, for instance, internal appeals (e.g. to the Minister or a dedicated tribunal) or mediation of some kind.

2.10 Monitoring and Evaluation

a) When is implementation expected to commence after the approval of the proposal?

- Implementation is expected as soon as the Bill is passed into law. There are already human and material resources to implement the law as this will be a continuation from the previous expropriation legislation, namely, Expropriation Act 63 of 1975

b) Describe the mechanisms that you will apply to monitor the implementation of the proposal after being approved.

- The proposed legislative measure intends to introduce an expropriation register. In terms of this approach, the record of all expropriations across the three spheres of government will be maintained. The Register will also enable government to avail information on expropriations to interested parties.

- The existing internal monitoring and evaluation reporting system will also be employed to capture performance, lessons learnt and matters for policy consideration

c) Who will be responsible for monitoring the implementation of this proposal?

- The internal monitoring and evaluation unit of the department will monitor performance in terms of this proposal in the same manner as all other programmes of the department.

d) What are the results and key indicators to be used to for monitoring? Complete the table below:

e) When will this proposal be evaluated on its outcomes and what key evaluation questions will be asked? Below please find evaluation questions for your consideration:

i. What was the quality of proposal design/content? (Assess relevance, equity, equality, human rights)

ii. How well was the proposal implemented and adapted as needed? (Utilise the Monitoring and Evaluation plan to assess effectives and efficiency)

iii. Did the proposal achieve its intended results (activities, outputs and outcome) as per the Monitoring and Evaluation plan?

iv. What unintended results (positive and/or negative) did the implementation of the proposal produce?

v. What were the barriers and enablers that made the difference between successful and failed proposal implementation and results

vi. How valuable were the results of your proposal to the intended beneficiaries?

f) Please provide a comprehensive implementation plan

g) Please identify areas where additional research would improve understanding of then costs, benefit and/or of the legislation.

- Notices of expropriation;

- Assessment of compensation;

- Urgent expropriations;

- Withdrawal of decision to expropriate; and

- Dispute Resolution

For the purpose of building a SEIAS body of knowledge please complete the following:

1. Briefly summarise the proposal in terms of (a) the problem being addressed and its main causes and (b) the measures proposed to resolve the problem.

2. Identify the social groups that would benefit and those that would bear a cost, and describe how they would be affected. Add rows if required.

3. What are the main risks from the proposal in terms of (a) undesired costs, (b) opposition by specified social groups, and (b) inadequate coordination between state agencies?

- The risks from undesired costs may emanate mainly from litigation;

- Commercial farmers could be the main opponents of this legislative measure simply because it seeks to level the landownership playgrounds. The disproportionate distribution and access to resources is the key reason for the current socio-economic gap dilemma facing government;

- The lack of dexterity in programme co-ordination has been the greatest undoing which often led to duplication and a wastage of resources.

4. Summarise the cost to government in terms of (a) budgetary outlays and (b) institutional capacity.

- The requirement for the maintenance of an expropriation register will inevitably require a separate budget and human resources.

- There are also budgetary implications for the training of officials in the implementation of the legislation and for the Alternative Dispute Resolution process.

5. Given the assessment of the costs, benefits and risks in the proposal, why should it be adopted?

- The introduction of the measure will reduce the risk and cost of litigation substantially since it will be conforming to the provisions of the Constitution,1996;

- The proposed legislation promotes dialogue between organs of state and the party affected by an expropriation;

- The strong position of the state bestowed by the proposed legislation is mitigated by strong checks and balances in the measure itself and the Constitution.

6. Please provide two other options for resolving the problems identified if this proposal were not adopted.

7. What measures are proposed to reduce the costs, maximise the benefits, and mitigate the risks associated with the legislation?

- Enhance public participation in legislation making;

- Insert the nil compensation provision in the Expropriation Bill,2019; and

- Introduce the court adjudicated alternative dispute resolution mechanisms through the proposed Land Court Bill.

8. Is the proposal (mark one; answer all questions)

9. Which of the National priorities would be most supported by this proposal?

PRIORITY 1: Economic transformation and job creation (X) PRIORITY 2: Education, skills and health

PRIORITY 3: Consolidating the social wage through reliable and quality basic services PRIORITY 4: Spatial integration, human settlements and local government (X) PRIORITY 5: Social cohesion and safe communities (X)

PRIORITY 6: Building a capable, ethical and developmental state

PRIORITY 7: A better Africa and world.

ENDS