South Africa’s Issues on Land Expropriation Without Compensation

Introduction

In South Africa land issue is seen as a critical part of the reformed agenda in the White paper on Land reform of 1991.[1] Commencement of land reform signaled the start of new land dispensation for South Africa, however till this day land reform is still facing constitutional and socio-economic issues such as people being removed forcefully and land ownership being based on race. Although number of legislations were made from 1994 and all the acts that paved the way for the constitution to look at specific aspects that related to land reform, developments have been slow. There is an increase in expropriation of land without compensation in public discourse and legislative reform. This affects the protected property rights under section 25 of the Constitution.[2]

The Expropriation Act 13 of 2024 has gave focus on the legal framework presiding over expropriation.[3] This Act, provides expropriation with nil compensation and addresses historical land injustices. To South Africans who never had land even after 1994 this is justice to them, and for property owners and investors expropriation without compensation may undermine their confidence so this shows great constitutional unpredictability. To ensure that land reform is implemented in accordance with constitutional values and the rule of law, careful judicial and legislative balancing must be made.

This article argues that South Africa’s Constitution already give a balanced framework able to facilitate equitable land reform while property rights are being protected. Rather than needing extensive constitutional change, supported by clear legislation and offering the most suitable mechanism for accomplishing transformative justice.

Legal framework Governing Expropriation in South Africa

Looking at section 25 of the Constitution known as property clause, in which it’s purpose is to ensure that property rights are included among the fundamental rights that are guaranteed by the Bill of Rights.[4] This section also protects private property while promoting social justice and equal access to land. Section 25(1) “deprivation” is an uncompensated, regulatory restriction or limitation on the use, enjoyment and exploitation of property in terms of legislation.[5] This section state that no one may be deprived of property except in terms of law of general application and that no law may permit arbitrary deprivation on property.

Section 25 doesn’t protect the existing property interests only it goes beyond. Section 25(2)-(3) expropriation is a compensated state acquisition or demonstration of property.[6]  Section 25(2) allow expropriation only in terms of law of general application for public purpose of in the public interest, subject to the payment of compensation that is just and equitable.[7] Individual property rights must be must be balanced against broader societal interests.

Section 25(3) provides that compensation be just and equitable, reflecting an equitable balance between the public interest and the interests of those the property owners.[8] Having regards to all relevant circumstances, including, the current use of the property; history of the acquisition and use; market value; extent of direct state investment and subsidy acquisition and beneficial capital improvement and the purpose of the expropriation.[9]

Significantly in section 25(4) it states that the public interest as includes the nation’s commitment to land reform and equitable access to natural resources.[10] This shows that land reform is not only a political object but constitutional obligation. The Constitution in sections 25(5), 25(6) and 25(7) provides for three categories of land reform namely; land redistribution, land tenure reform and land restitution.[11] Section 25(8) states that no supply may hinder the state from taking legislative measure on accomplishing land reform.[12] The constitutional framework balances between giving protection to private ownership and restoring justice, it doesn’t show preference on either interest there is fairness.

The Expropriation Act 13 of 2024

Before the new Act was put into place, expropriation was governed by the Expropriation Act 63 of 1975 which made the market value to have power.[13] The Expropriation Act 13 of 2024 replaces this outdated Act, constitutional values and the requirements of section 25 are aligned with expropriation procedures.[14] The Act requires property owners to be given notices by the expropriating authorities, engage in significant consultation, relevant circumstances must be investigated and before expropriation occurs procedural fairness must be ensured.

For this Act to rule that compensation is nil, the Act pick out limited situations where nil compensation may be just and equitable after all relevant constitutional factors are considered, rather than creating an automated rule allowing expropriation without compensation. This includes, abandoned land; land owned by the state but held for speculation and land posing significant public risks.[15] This represent the constitutional requirement that compensation must be determined according to justice and equity rather than predetermined formulas.

While some people support this legislation, others compete that having limited knowledge concerning nil compensation may deter agricultural investment, investors may lose confidence and increase legal proceedings concerning property rights. However, the Act protect judicial oversight and procedural fairness throughout the expropriation process.

Land Reform Legislation

There are several statues which are made to address historical injustices in which South Africa’s constitutional obligation to land reform is supported by. The restitution process in South African law takes place in terms of the Restitution of Land Rights Act 22 of 1994, made known in terms of sections 121 to 123 of the interim (1993) Constitution which aims to return pieces of land which was taken forcefully from specific people during the apartheid era.[16]

The Land Reform (Labour Tenants) Act 3 of 1996 protects labour tenants from unlawful evictions and those that qualify may obtain ownership of stronger tenure rights.[17] A labour tenant is a person who; has the right to stay at the farm, providing labour to the owner and a person who’s family stayed at the farm and used the land for crops and grazing.[18] Whilst the Extension of Security of Tenure Act 62 of 1997 (ESTA) protects occupiers, who is a person staying on the land which does belong to them, person planning on using the land for business purposes and a person who has an income in excess of the prescribed amount.[19] The Act requires lawful eviction procedures and judicial oversight.[20] Together these categories of land reform have showed the success rate has been low.

Case Law Analysis

The South African Constitutional Court have decided that in a series of landmark settlements property rights are protected, however they not complete in that case they must be explained the constitutional value of equality, human dignity and social justice.

In the case of First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service 2002 (4) SA 768 (CC) the Judge pointed out that it is not going to be productive to try and define property, it’s going to be difficult.[21] There is no comprehensive definition of property. After the South African Revenue Service seized vehicles belonging to First National Bank aiming to recover customary debts owed by third parties argument arose.

The court accepted the test for arbitrary deprivation, if the law is procedurally unfair or there is not enough cause for deprivation.[22] The issue that arose was did the seizure constitute an arbitrary deprivation on property under section 25(1). When we look at what the court said about this case, we can conclude that everything that falls into definition of property will be termed to be property for purpose of section 25.

In the case of Agri South Africa v Minister for Minerals and Energy the court differentiated between deprivation and expropriation.[23] The court rejected the argument that was made by the Agri South Africa where is stated that the legislation successfully expropriated privately owned mineral rights without compensation. The reason for this is because the rights for ownership was not only for the state but for the people of South Africa.[24]

Critical Evaluation

In some countries they focus only on protecting private ownership, however in South Africa the purpose of section 25 is to balance competing constitutional values. Under section 25(3) we find that the amount of the nil compensation and the time and manner of payment must be just and equitable, there must be an equitable balance between the interests of those affected and the public interest.[25] For nil compensation to reflect an equitable balance, all five relevant circumstances shown on section 25(3) must be meet. 

The Expropriation Act 13 of 2024 replaced the old apartheid era legislation with procedures consistent with constitutional democracy, however it raises constitutional risk because there is not enough advice on proportionality.[26] Because of uncertainty famers investments may be discouraged, food production will decrease, the economic growth will be affected negatively. Clear legislative advices must be provided governing circumstances, in which nil compensation may be constitutionally justified.[27] For land reform to succeed it depends on political commitment, institutional competence and public confidence not only on constitutional interpretation. 

Comparative Perspectives

Comparative legal analysis shows how in other jurisdiction the issue with regards to land reform and expropriation is dealt with. South Africa and some African countries have experienced colonial dispossession which makes regional comparisons relevant.

Zimbabwe’s land reform programs are a good example of expropriation in Africa. During the 80’s the government used the “willing buyer, willing seller” approach this resulted in inequalities of land ownership continuing. The Fast-Track Land Reform Programme after 2000 was then introduces by the government, which allowed compulsory purchasing of commercial farmland without compensation.[28] This resulted in agricultural collapse, the legality of expropriations was challenged before domestic an international court by many landowners. To avoid such outcomes that’s way South Africa’s Constitution requires compensation.

 For distribution the Namibia’s government relied on the “willing buyer, willing seller” approach to obtain commercial farmland.[29] Private property is protected is protected by the Namibian Constitution while it allows expropriation in the public interest, granted that compensation is paid.[30] Namibia has failed to achieve meaningful redistribution at adequate pace and investors have lost confidence. Both Zimbabwe and Namibia don’t have a solution to land inequality, however the South Africa’s constitutional framework allows expropriation in the public interest while it protects against arbitrary deprivation of property.

Conclusion

Land reform is one of the biggest issues that South Africa is still facing, however the passing of the Expropriation Act 13 of 2024 has updated the expropriation framework.[31] This article clearly shows that expropriation without compensation is not fundamentally unconstitutional under section 25, but due to inadequate safeguards the Expropriation Act 13 of 2024 risks unconstitutionality.[32] It argues that the factors on section 25 (3) of the constitution gives the right legal framework for balancing the public interest and the property rights in equitable land reform. The Constitutional Court Studies showed that property rights are protected but not absolute, they must be explained regularly with the constitutional value of equality, dignity and restorative justice. For land reform to succeed it must be guaranteed that redistribution occurs lawfully, fairly and transparently in that way property rights will be protected, transformative justice will be achieved, and South Africa’s constitutional commitment will be fulfilled.

Reference(S):

Cases

• First National Bank of SA Limited t/a Wesbank v Commissioner, South African Revenue Service 2002 (4) SA 768 (CC)
• Agri South Africa v Minister for Mineral and Energy 2013 (4) SA 1 (CC).

Legislation

• Constitution of the Republic of South Africa, 1996.
• Expropriation Act 63 of 1975.
• Expropriation Act 13 of 2024.
• Extension of Security of Tenure Act 62 of 1997.
• Land Reform (Labour Tenants) Act 3 of 1996.
• Mineral and Petroleum Resources Development Act 28 of 2002.
• Restitution of Land Rights Act 22 of 1994.

Secondary Sources

• Land and Housing, Study Guide (LAH3701)

[1] LAH3701, study guide, page54.

[2] Constitution of the Republic of South Africa, 1996, s 25.

[3] Expropriation Act 13 of 2024.

[4] LAH3701, study guide, page55.

[5] LAH3701, study guide, page58.

[6] LAH3701, study guide, page58.

[7] Constitution of the Republic of South Africa, 1996, s 25(2).

[8] Constitution of the Republic of South Africa, 1996, s 25(3).

[9] LAH3701, study guide, page56.

[10] Constitution of the Republic of South Africa, 1996, s 25(4).

[11] LAH3701, study guide, page60.

[12] Constitution of the Republic of South Africa, 1996, s 25(8).

[13] Expropriation Act 63 of 1975.

[14] Expropriation Act 13 of 2024, s 12.

[15] nil compensation.

[16] LAH3701, study guide, page63.

[17] Restitution of Land Rights Act 22 of 1994.

[18] LAH3701, study guide, page62.

[19] LAH3701, study guide, page62.

[20] Extension of Security of Tenure Act 62 of 1997.

[21] LAH3701, study guide, page57.

[22] First National Bank of SA Limited t/a Wesbank v Commissioner, South African Revenue Service (2002 (4) SA 768 (CC) para51).

[23] Agri South Africa v Minister for Mineral and Energy 2013 (4) SA 1 (CC).

[24] Mineral and Petroleum Resources Development Act 28 of 2002.

[25] LAH3701, study guide, page56.

[26] Expropriation Act 13 of 2024.

[27] Legal Culture and Transformative Constitutionalism (1998) 14 South African Journal on Human Rights.

[28] Constitution of Zimbabwe Amendment (No20) Act 2013.

[29] Werner W, Land Reform in Namibia (Legal Assistance Center 2001).

[30] Constitution of Republic of Namibia, Article 16.

[31] Expropriation Act 13 of 2024.

[32] Constitution of the Republic of South Africa 1996, s 25.