AfriBusiness announces five point plan to combat property rights crisis

Property rights are under fire in South Africa. This is the opinion of various business leaders and experts participating in the AfriBusiness Property Rights Conference in Pretoria today. AfriBusiness has released a report at the conference in which 14 Bills, policies and court verdicts were pointed out which aim to limit, undermine or dismiss property rights outright.

According to AfriBusiness CEO, Cornelius Jansen van Rensburg, the report points out that the ANC government is planning to make good on its promises of expropriation.

The report also makes it clear that government's redistribution policy is not only targeting agricultural land but all types of property ownership. "This legislation has been formulated in such a way that a legal precedent is set which will be made applicable to all property," Jansen van Rensburg said.

The strategy is to undermine property rights in a systematic way. The state first limits property rights by means of carefully crafted legislation and then assumes de facto control over property when it is too late to oppose the move.

Specialists participating in the conference included the Russian economist Prof Yuri Maltsev, economist Dawie Roodt, Dr Anthea Jeffery of the Institute for Race Relations, the CEO of the Free Market Foundation, Leon Louw, legal specialist Willie Spies, and Piet le Roux of the Solidarity Research Institute. All participants supported the findings of the report and believe that there is reason for grave concern over property rights in South Africa. 

In order to combat the onslaught on property rights, AfriBusiness has proposed a five point plan. The plan includes the following steps:

1. Legitimate and orderly land restitution should be available for those who have lost property rights in the past, but this should be applied in such a way that the current owners do not lose their rights. According to AfriBusiness the best way to expand property rights is to transfer full ownership of land to the residents of informal settlements and RDP houses. The Free Market Foundation has already launched a successful programme in this regard, and AfriBusiness has encouraged business leaders to participate in this programme. It is crucial to protect the existing rights of owners of land and other assets.

2. Government's objective of restitution must be questioned. Restitution is increasingly associated with ANC nepotism, poor service delivery and corruption. The property rights of South Africans are undermined in the name of restitution. In terms of this policy, affluent business people and property owners are portrayed as the enemy. It has become necessary to use research, pressure groups and publications to expose transformation and restitution as mechanisms used by the political elite for self-enrichment. 

3. Legal action should be taken to protect the legal basis for property rights. AfriBusiness is already working on a series of strategic legal actions aiming at setting legal precedents for the protection of property rights. AfriBusiness has established a legal fund to this end.

4. Entrenchment of personal assets against abuse by the state has become necessary. AfriBusiness proposes that individuals and business people should discuss the report with their legal and financial advisors and take the necessary steps to protect their interests against action by the state. It is possible to employ mechanisms such as entrenchment, diversification, strategic debts and operational restructuring for protection against state hostility.

5. Political and economic pressure at international level has become essential. AfriBusiness will submit the report to the following:

o International companies with interests in South Africa

o The executives and chairs of listed JSE companies

o Local chambers of commerce

o The international chamber of commerce

o Embassies

o Organised businesses and associations in South Africa

The aim of the report is to focus the attention on the onslaught on property rights in South Africa. Public opinion can be mobilized in support of property rights and pressure can be exerted on policy makers.

"Property rights are the cornerstone of a healthy and expanding economy. Without these rights South Africa will never be able to rise from the morass of poverty and unemployment," Jansen van Rensburg said.

AfriBusiness has also warned against adopting a fight-or-flight response to this challenge. It is still possible to act proactively in this regard. Rational and circumspect decisions are necessary.

In the end property rights will not be determined by politicians alone, but also by ordinary citizens. Active and organised civil institutions have and important role to play by mobilizing communities for the protection of property rights, Jansen van Rensburg said.

The full report can be accessed at www.afribusiness.co.za

Summary of legislation:

1. The National Development Plan has as its aim the transfer of 20% of the agricultural land in a district to black recipients, at only 50% of the value as determined by the state (in terms of the Property Valuation Bill).

2. The verdict of the Constitutional Court in April 2013 in the case of AgriSA v the Minister of Minerals and Energy distinguishes between "deprivation" and "expropriation". After the verdict the state is able to dispossess and redistribute property, as long as the state does not assume ownership of the property and act only as custodian.

3. The Green Paper on Land Reform aims a radical redesign of property rights, with inter alia a type of freehold on land which will drastically limit the rights of owners. Within this context a Land Management Commission is proposed, which will have discretionary powers regarding disputes over title deeds.

4. The policy proposal by the Minister of Land Reform, Gugile Nkwinti, for "Strengthening the rights of workers working the land" aims to transfer 50% of the land to the workers, commensurate with their term of service. No compensation will be paid to the owner.

5. The Expropriation Bill poses that expropriation may be used for the public interest and public goal. The Bill is not only applicable to land but will cover all types of property. Public interest and public goal are determined in an ad hoc manner and both have restitution as aim.

6. The Promotion and Protection of Investment Bill allows state intervention in investment processes. The Bill explicitly provides for expropriation at less than market value. All in the name of so-called restitution. Any property used for commercial purposes is targeted by the Bill.

7. The Infrastructure Development Bill aims to eliminate so-called inequalities in infrastructure. The Presidential Infrastructure Coordinating Commission is granted the authority to expropriate in the public interest and for the public goal.

8. The Spatial Planning and Management of Land Use Act aims at centralized planning of land ownership. It proposed so-called spatial justice by integrating low and high cost housing in residential developments.

9. The Extension of the Security of Tenure Amendment Bill expands the rights of occupants and their dependents. Evictions are strictly controlled and the Amendment Bill means a significant loss in control over property.

10. The Restitution of Land Rights Amendment Bill creates further political and economic uncertainty regarding the future of property rights.

11. The Rental Housing Amendment Bill proposes stricter regulation of the rental property market. Rental Tribunals will be established to hear disputes and will be able to determine increases in rent.

12. The National Water Amendment Bill and Policy Review prohibits the trading of water rights and proposes a use-it-or-lose-it principle for water rights. Equality (including racial transformation) becomes the criterium for the allocation and re-allocation of water rights.

Statement issued by Cornelius Jansen van Rensburg, CEO: AfriBusiness, June 3 2014

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