Don’t drink the Kool-Aid on this Expropriation Bill either

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The Expropriation Bill of 2020, which is essentially the same as its 2019 predecessor, was gazetted last week. It is intended to supplement the EWC (expropriation without compensation) constitutional amendment bill, which is now being rushed through the final stages of the public consultation process so that the Ad Hoc Committee can present it to Parliament for adoption before the end of the year.

Even without the EWC constitutional amendment bill, the Expropriation Bill (the Bill) will allow property of many kinds – not only land – to be confiscated by municipalities and other organs of state for no or inadequate compensation.

According to the Bill, ‘it may be just and equitable for nil compensation to be paid’ for expropriated land which:

is unused but is being held in the hope of it’s appreciating in value over time;
has been ‘abandoned by failing to exercise control over it’;
poses a ‘health, safety, or physical risk’ to others’;
is worth less than the state subsidies from which it has benefited; or
is owned by a state-owned entity which is not using it and consents to the expropriation.
This list, with its five examples, is intended to reassure South Africans that EWC will be sparingly used and justifiably applied. However, the circumstances in which ‘nil’ compensation may be paid for land are expressly ‘not limited’ to those set out in the Bill. They may thus extend far beyond this short list.

The Bill also empowers all municipalities – along with various other state entities at higher levels of government – to expropriate land and other property by following a set of specified procedures. These procedures are heavily skewed against the owner and in favour of the government.

Under the Bill, a municipality which wants to expropriate residential or other land – say, to reduce spatial apartheid and build RDP houses – must begin by investigating the property and negotiating for its purchase with the owner. If no agreement is reached, the municipality may issue a notice of its intention to expropriate. In this document, it must invite representations on the proposed expropriation and the compensation to be paid. The municipality is obliged to consider any representations received, but it need not respond to them or give reasons for rejecting them.

Preliminary steps

Once it has taken these simple preliminary steps, the municipality may issue a notice of expropriation. Under this notice, both ownership and the right to possess the property will automatically pass to it on the dates set out in the notice.

The date for the transfer of ownership could be a mere week after the service of the notice (the only time limit in the Bill is that this date ‘must not be earlier than the date of service’ of the notice). The right to possess the property could pass to the municipality within another week.

The owner may seek mediation or apply directly to the courts to challenge the validity of the expropriation (whether it is really ‘in the public interest’) and the amount of compensation offered (if this is truly ‘just and equitable’). However, most people will lack the means for such legal challenges and will find them particularly difficult to mount if they have already lost ownership and possession of their homes or other key assets.

Expropriated owners will also, it seems, bear the onus of proving that the compensation offered is insufficient – and may have to pay much of the municipality’s legal costs, as well as their own, if they fail to convince the presiding magistrate or judge of this.

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Expropriated owners will also be able to seek relief in the courts if the compensation remains unpaid for months (or years) after ownership and possession have passed to the municipality. They will likewise be able to raise administrative justice objections if the time between the service of the expropriation notice and the passing of ownership and possession is unreasonably short. In practice, however, most people will again lack the means for such litigation.

Fewer rights than criminals

Under the Bill, law-abiding home owners will have fewer rights than criminals illegally using a warehouse they own to store heroin and other drugs. Though the warehouse may be seized by the state, this can be done only after its use for criminal purposes has been proved and a court order for its confiscation has been obtained. But a home can be expropriated by a municipality by following the simple steps set out above – and without ever having to prove to a court that the expropriation is really in the public interest or that the compensation is truly just and equitable.

Perversely, the Bill acknowledges the need for a prior court order before a municipality can enter on to property it wants to investigate with a view to subsequently expropriating it. It also says that a temporary expropriation cannot be extended without a prior court order. But when it comes to the far more serious matter of a permanent expropriation, the Bill excludes the need for a prior court order.

Allowing municipalities and other organs of state to expropriate property in this way is clearly unconstitutional. By excluding the need for a prior court order confirming the constitutionality of a proposed permanent expropriation, the Bill contradicts:

Section 25 of the Constitution, which lays down important criteria for a valid expropriation;
Section 34, which gives everyone a right of access to court; and
Section 33, which guarantees the right to administrative justice.
Where the property expropriated includes a person’s home, the Bill also contradicts Section 26 of the Constitution, which requires a prior court order before eviction can occur.

Enormous ramifications

The Bill has enormous ramifications for the 1 million white and 8.7 million black South Africans who own houses, as well as for the roughly 17 million black people with informal rights to plots held in customary tenure. All these individuals will be vulnerable to expropriation by cash-strapped (and often corrupt) municipalities and a host of other state entities. Most will be unable to resist these takings, irrespective of whether they are constitutional or not.

Often, moreover, even the limited procedural safeguards set out in the Bill may not be fulfilled in practice. In the Groutville area of KwaZulu-Natal, for instance, the 3 000 or so hectares of land that Bheki Dlamini had inherited from his great-grandfather – and to which he had finally obtained the title deeds in 2002 – were expropriated in March 2013 by the KwaDukuza Local Municipality in return for R117 000 in compensation, which was offered but not paid. (Mr Dlamini claimed his house alone was worth R550 000 – while a much smaller 240 ha farm is currently on sale in nearby Stanger for R16m, though its value may not be fully comparable.)

The expropriation was carried out under the current Expropriation Act of 1975, which requires both prior investigation and the service of a notice of expropriation on the owner. However, the municipality failed to serve a notice of expropriation on Mr Dlamini (though it later said that it had held four public meetings in the area and advertised its intention to expropriate in the Natal Mercury on 2 February 2012). In December 2013, some nine months after the expropriation had taken place, Mr Dlamini heard rumours that his property was among some 50 plots that had been expropriated to make way for a new housing development.

He started asking the municipality for relevant documents, but his requests were repeatedly ignored. Some months later, he went to the deeds office in Pietermaritzburg, which confirmed that his property had already been registered in the municipality’s name. However, it was not until December 2015 that Mr Dlamini, through his attorneys, finally received a copy of the notice of expropriation.

Further confusion

In December 2016 – after the municipality had caused further confusion by claiming the expropriation had been carried out by the provincial housing department – he applied to the Durban high court to have the expropriation set aside. However, his application was dismissed in July 2019 on the procedural point that he had failed to act quickly enough or sufficiently explain his delay.

The municipality’s confiscation of land his family had owned for generations thus remains intact and Mr Dlamini has been left without a remedy – unless perchance he can successfully appeal against the high court ruling.

When the new Expropriation Bill was gazetted last week, Deputy President David Mabuza claimed that it will ‘address the injustices of the past and restore land rights’. In fact, the Bill is a draconian measure that can be used to strip millions of South Africans of their homes and other assets without the prior court orders, fair procedures, or equitable compensation that the Constitution requires.