Draft Expropriation without compensation law is unconstitutional
7 March 2023
The IRR has made formal submissions to the National Council of Provinces (NCOP) to oppose the adoption of the Expropriation Bill. In doing so, the IRR’s aim is to uphold the Constitution as a real world guardian for people against the state's potential predations.
Unless it is thoroughly redrafted, the Bill will put Expropriation without Compensation (EWC) and other unconstitutional powers in the hands of government officials even if the very officials empowered to take away property have a reputation of opposing corruption rhetorically but not so much in practice.
The EWC Bill creates an expropriation first, review later system that will expose people to EWC and to expropriation below market value as the new normal. By contrast, the Bill of Rights requires court settlement first and expropriation only thereafter to comply with guarantees of equitable compensation (Section 25), administrative justice (Section 33) and access to court (Section 34).
International experience of EWC laws elsewhere shows what is at stake. In Venezuela, for example, EWC was initially limited to 'idle land', which placated many critics. But land was then invaded to make it ‘idle’ and EWC proceeded apace. This helped bring about economic collapse, hyperinflation, mass emigration (5.4 million), and an upsurge in acute poverty and hunger.
Besides such obvious defects as EWC and expropriation first, review later, the Bill has several objectionable definitions that open the way to real-world harms. 'Expropriation' is defined too narrowly, which opens the way to custodial takings without any compensation; the definition of 'disputing party' could prevent civil society organisations from intervening in court proceedings in the public interest; and 'expropriating authority' is defined so broadly that all municipalities – more than half of which are bankrupt – could exploit the Bill's EWC powers against hapless owners.
Despite these major defects, the IRR is not proposing that the Bill be thrown out. It must instead be thoroughly redrafted so that it can take the place of the current Expropriation Act, which is clearly unconstitutional.
The Expropriation Act was created in 1975 in a context that should make everyone in the NCOP think twice. In 1975 there was no supreme Constitution to protect property owners from expropriation by the state. Since there was no Bill of Rights, Parliament could sanction a system of expropriate first, review only later. Now this patently unconstitutional, but it is exactly what the Expropriation Bill seeks to allow, even as it also makes it possible for the state to expropriate property of many kinds for little or no compensation.
There are also major defects in the public participation process, for the NCOP has suddenly demanded that the public submit their written comments by means of a Google Sheet containing a number of set questions. This rigid framework effectively prevents commentators from making crucial points about the flaws in the Bill and the massive socio-economic damage it is sure to do.
There is also no final Socio-Economic Impact Assessment Report attached to the Bill. The rough draft that was attached is entirely deficient as it fails to address, among other things, a risk analysis of a major banking crisis arising from the Bill as people default on mortgages after their homes and businesses are taken without compensation.
Because of the profound and manifold impacts that this Bill would have across the country, it is essential for the legitimacy of public participation that public hearings be held by the NCOP in all nine provinces so that the voices of ordinary South Africans can be properly heard.
The IRR submission is not just robustly critical, it also offers a useful alternative expropriation bill. This alternative Bill will facilitate genuine land reform, and stimulate growth and jobs. All that the NCOP need do is follow the IRR’s proposals in developing a new expropriation bill that complies with the Bill of Rights and meets the needs of all South Africans.
This alternative version is also available on the IRR website.
Go to: https://irr.org.za/campaigns/
Issued by Gabriel Crouse on behalf of IRR, 7 March 2023
