Expropriation Act in South Africa: What lies ahead for South Africa?

by Blessing Tavonga Mandima

Introduction

Land redistribution has been topical in South Africa. It probably reached its highest temperatures around 2017, when the governing political party, the African National Congress (ANC), adopted the principle of land expropriation without compensation at its 54th National Conference in Gauteng. In 2018, Parliament held public consultations on whether the Constitution was impeding land restitution on the grounds of Clause 25, which protects property rights. At that point, a more conservative approach was taken and the Expropriation Bill was passed.

After further national consultations, the National Assembly adopted the Expropriation Bill in September 2022 and sent it on to the National Council of Provinces for various small amendments. The bill was ultimately passed by Parliament on 27 March 2024 and has been awaiting the president’s signature ever since. On the 24th of January 2024, the President announced that he signed the Expropriation Bill into law. This write-up will give an overview of the key aspects of this new law and what this could mean for South Africa’s future.

Unpacking the law

Section 25 of the Constitution of the Republic of South Africa, 1996, provides as follows:

‘‘Property 25. (1) No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.

 (2) Property may be expropriated only in terms of law of general application— (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.

 (3) The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including— (a) the current use of the property; (b) the history of the acquisition and use of the property; (c) the market value of the property; (d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and (e) the purpose of the expropriation.

 (4) For the purposes of this section— (a) the public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources; and (b) property is not limited to land.”

It is clear that the Constitution of South Africa does provide for lawful expropriation of property for a public purpose or in the public interest, subject to compensation that is just and equitable. The Constitution is the supreme law of the land and all laws enacted must be in alignment with the Constitution.

The Expropriation Act, Act 13 of 2024 defines expropriation as follows: “the compulsory acquisition of property for a public purpose or in the public interest by an expropriating authority, or an organ of state upon request to an expropriating authority, and ‘‘expropriate’’ has a corresponding meaning. An expropriating authority is limited by its definition to an organ of the State or a person empowered by the Act to expropriate property in terms of the Act.  It is important to note that the definition of expropriation here negates to mention of compensation. The Minister is given the power to expropriate property on behalf of an organ of state by section 3 of the Act if the organ requests in writing for the Minister to do so and the Minister is satisfied that it is for a public purpose or in the public interest.

 “Public Interest” is defined as, “the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources to redress the results of past racial discriminatory laws or practices. This makes it clear that the main intention behind this new legislation is to provide an avenue for land redistribution to the black majority that was dispossessed of land during colonisation and to redress the wrongs of the past by giving equitable access to natural resources, mainly land to the Indigenous people. “Public Purpose” is defined as, “any purposes connected to the administration of any law by an organ of state, in terms of which the property concerned will be used by or for the benefit of the public.

The process of expropriation of property, specifically land is well detailed in the Expropriation Act. Sections 5 and 6 of the Act provide for the investigation and evaluation of the land that is contemplated to be expropriated. Section 5 of the Act stipulates that expropriating authority is empowered to appoint an individual to go and visit the property, with the owner’s consent, to survey the area and determine its area and to authorise a valuator to go and evaluate the property. According to section 6 of the Act, the expropriating authority is mandated to act in consultation with the municipality and write a letter to the municipal manager requesting the contemplated expropriation and stating reasons why it is deemed necessary. This is an important checkpoint for the expropriating authority, however, there could be a power imbalance if it is the Minister who is carrying out the expropriation.

Furthermore, section 7 mandates that the owner/mortgagee/holder of a right to the property must be served with a notice of intention to expropriate property and that this notice must be published in the Gazette. This creates transparency in the process and also allows the owner of the property to lodge any objections to the intended expropriation within 30 days of the notice. This allows the owner to exercise their right to be heard and is a good administrative practice provided for by this statute. The offer for compensation will be in the notice of intention to expropriate and the owner/mortgagee/holder of a right to the property has the option to accept the compensation offered or to dispute it.

If the expropriating authority decides to expropriate the property, it will proceed in terms of section 8 of the Act which provides for a notice of expropriation. If it is land, the notice must be served on the municipal manager of the municipality where the property is and the Director-General responsible for rural development and land reform together with the owner/mortgagee of the land. The notice will have clear documentation stating the date of expropriation, the reason for expropriation, and the area of the land that is being expropriated, together with the amount for compensation and how it was calculated. The owner of the land is also mandated to surrender the title deed to the land within 30 days of receipt of the notice. The effect of expropriation is that the right of ownership and possession transfers automatically to the expropriating authority, or to the name of the person on behalf of whom the property was expropriated on the date of expropriation stated on the notice and the expropriating authority can take possession of the land on a later date.

The most contentious aspect of this legislation is the issue of expropriation without compensation which is permitted under section 12 (3) of the Act. It is only permitted under certain circumstances such as:

“(a) where the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value;

(b) where an organ of state holds land that it is not using for its core functions and is not reasonably likely to require the land for its future activities in that regard, and the organ of state acquired the land for no consideration;

(c) notwithstanding registration of ownership in terms of the Deeds Registries Act, 1937 (Act No. 47 of 1937), where an owner has abandoned the land by failing to exercise control over it despite being reasonably capable of doing so;

(d) where the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.”

It is submitted that these conditions for non-payment of compensation are very rational and fair as the owner would have either neglected to develop the land or abandoned it completely and this is just. The process for expropriation meets the criterion as it offers due process, the right to be heard, and compensation in circumstances where it is just and equitable to do so.

Reactions across the political divide

There is already pushback from the Democratic Alliance, which is in coalition with the ruling party ANC, and an uproar from the newly elected President of the United States Donald Trump of this new law and its likely implications. South Africa has been accused of confiscating white-owned land based on discrimination and of violating the human rights of the white community in South Africa.

President Cyril Ramaphosa has shut down these accusations and reiterated that there is no ‘confiscation of land’ law that has been enacted and that the expropriation that is provided for in the Constitution is what will be implemented peacefully and without favour. There is plenty of fearmongering that has been made to South Africa, warning them against land redistribution and saying that it will turn into land grabbing and lead to the economic decline of the country, just like Zimbabwe. However, many are hopeful that this law is the beginning of the implementation of justice and equitable access to resources for all and that those wronged by apartheid will be vindicated peacefully.