Issued by Ismail Joosub, on behalf of the FW de Klerk Foundation, on 03/04/2024

On Wednesday, 27 March 2024, the National Assembly (“NA”) approved the Expropriation Bill [B23-2020] as amended by the National Council of Provinces (“NCOP”), with 205 votes in favour and 108 against. The passage came amidst significant debate and controversy, with opposition parties such as the DA, Freedom Front Plus and IFP expressing concerns over the Bill’s constitutionality and procedural irregularities. Despite opposition, the ANC, with its majority in the House, supported the Bill, citing it as a balanced approach based on international best practices.

The Bill, which allows for expropriation without compensation in certain instances, has faced scrutiny and threats of litigation from various quarters. However, the parliamentary legal adviser affirmed the Bill’s constitutionality, along with the majority of the committee as they endorsed it as compliant with constitutional rights.

With its adoption by the National Assembly, the Bill now awaits presidential assent, potentially becoming law and allowing for “nil compensation” in specified expropriation cases, including state land and abandoned land.

Passage through the NCOP

On 19 March 2024, the NCOP passed a revised version of the Bill during its plenary session. This version maintains provisions for EWC, despite the rejection of the Constitution Eighteenth Amendment Bill (B18-2021) in December 2021, which aimed to amend section 25 of the Constitution (property) expressly to allow for EWC. Notably, the NCOP proposed amendments to the Bill, but none addressed the fundamental concerns surrounding EWC or its potential conflict with the Constitution.

Procedural Irregularities

The passage of the Bill through the NCOP raises concerns about procedural irregularities. The Bill’s progression, despite the absence of constitutional amendments permitting EWC, suggests a departure from the established legislative process. Moreover, amendments made to the C-list of the Bill lack transparency and fail to adequately address stakeholder feedback. 

Mandates for voting on the Bill had been hastily assembled, with some provinces, including Gauteng, Eastern Cape, and Limpopo, bypassing full provincial legislature involvement. Instead, decisions have been made by legislative committees, side-lining the voices of citizens and their elected representatives. Gauteng, for instance, resorted to an eleventh-hour online meeting to finalise the mandate, circumventing established procedures. This approach undermines proportional representation and disenfranchises thousands of citizens.

Section 251(1)(b) of the Standing Rules of the Gauteng Legislature, for instance, prescribes that every final mandate required in terms of Schedule 2 of the Mandating Procedures for Provinces Act must indicate whether the provincial legislature votes in favour of or against, or abstains from voting on the Bill. 

From what we have seen, decisions regarding the Bill were made by legislative committees within provinces, rather than by the full provincial legislatures. If the final mandate did not clearly express the position of the provincial legislature, it would not meet the requirement outlined in the legislation.

These irregularities undermine the principles of democratic governance and raise doubts about the legitimacy of the legislative process.

‘Nil Compensation’

Land can be expropriated for ‘nil compensation’ in specific circumstances outlined in clause 12(3) of the Bill. These circumstances include:

1. Situations where the land is not being utilised by the owner for development or income generation, but solely for the appreciation of its market value (clause 12(3)(a));
2. Where an organ of state possesses land that it is not using for its core functions and has acquired the land without consideration (clause 12(3)(b));
3. Additionally, ‘nil compensation’ may apply when the owner has abandoned the land, as indicated by a lack of control over it (clause 12(3)(c));
4. When the market value of the land is equal to or less than the state’s investment or subsidy in its acquisition and improvement (clause 12(3)(d)); 
5. Lastly, if the property’s condition poses health, safety, or physical risks to individuals or other property, ‘nil compensation’ may also be justified (clause 12(3)(e)).

These provisions grant authorities the discretion to expropriate land without compensation under specific circumstances outlined in the Bill.

Threat to Section 25 of the Constitution

The Foundation reiterates its longstanding concerns about the Bill’s impact on section 25 of the Constitution, which guarantees property rights. By permitting expropriation without compensation, the Bill directly undermines the constitutional protection afforded to property owners. Section 25 enshrines the principle that property rights are fundamental to a free and prosperous society, laying the foundation for wealth creation and economic stability. The Foundation warns that any legislation contradicting section 25 risks destabilising the legal framework and eroding investor confidence.

Furthermore, in clause 3, the lack of clear definitions and the broad powers granted to the Minister of Public Works to expropriate property in the public interest or for a public purpose further exacerbate the risk to property rights. Another destructive provision, clause 17(3) of the Bill, dictates that any delay in payment of compensation to the expropriated owner will not prevent the passing of the right to possession to the Government. What this means is that even where a fee may be agreed, it may result in a de facto nil compensation where payment can be delayed for years, whilst the property has already been expropriated.

Unconstitutionality of the Bill

The Foundation maintains that the Bill, in its current form, is unconstitutional. Simply, the Bill violates several sections of the Constitution. Section 25, which guarantees property rights and mandates compensation for expropriation, is breached by the Bill’s failure to require a prior court order for permanent expropriations. This omission disregards the requirement for just and equitable compensation established by the Constitution. 

Additionally, the Bill contradicts section 33, which safeguards the right to administrative justice, by allowing disputed expropriations to proceed without judicial oversight. Moreover, the absence of a prior court order infringes upon Section 34, which ensures the right of access to court. 

Furthermore, the ‘nil compensation’ clauses conflict with core constitutional rights and lack clarity, undermining the rule of law. The Bill’s narrow definition of “expropriation” also raises concerns as it potentially enables the state to seize large swaths of  land without compensation. 

Overall, these constitutional breaches render the Bill unconstitutional and in need of significant revision to align with constitutional principles and protect property rights.

Conclusion

In conclusion, the passage of the Bill through the NA and NCOP represents a concerning development in South Africa’s legislative landscape. The Foundation reiterates its objections to the Bill’s provisions for expropriation without compensation and highlights the associated procedural irregularities. 

The Foundation calls for a robust, transparent legislative process that upholds the principles of constitutionalism and respects property rights. Any legislation must prioritise the advancement of South Africa’s democratic ideals and socioeconomic prosperity, rather than undermining the fundamental rights enshrined in the Constitution.