Monday, 5 March 2018

Land reform in South Africa

Land Reform in South Africa

In modern democratic South Africa, land reform is one of the most important issues of our time, and although the hatred and pain of the apartheid era will never be forgotten, an effective and expedient land reform programme may enable South Africa to move forward – and to do so collectively.

The Natives Land Act of 1913 was the first major legislative step taken by the white minority to segregate - and to dispossess black persons of land.  Of course, as advocates Tembeka Ngcukaitobi and Alan Dodson point out, the 1913 legislation was not the start of forced removal of black persons from land – this practice was by then widespread – the Natives Land Act of 1913 did however ensure the white minority had access to around 92% of land, while the “natives” were left with only 8%. 

Later, legislation such as the 1950 and 1966 Group Areas Acts ensured the systematic and methodical oppression and segregation continued unabated - with many hundreds of thousands of forced removals.  Essentially, black South Africans were deprived of the right to own land – and the best land was exclusively for the use of the white minority. 

The deeply entrenched socio economic problems caused by laws of this ilk (and by colonial and Afrikaner rule) are not fixed by supposed equality, and the birth of a constitutional democracy.  To be sure: the current socio economic crisis will not be resolved by land reform alone either – but a successful land reform programme may enable some of the past hurt to ease, and for some dignity to be restored to the majority of South Africans – a successful land reform programme is arguably the key to a successful and prosperous South Africa post 2020, particularly when it seems South Africa may have chosen “reconciliation over justice” in the early 1990’s.
Addressing the legacy of apartheid era laws was a key focus in both the so-called interim Constitution of the Republic of South Africa of 1993, and the now effective Constitution of the Republic of South Africa of 1996. Section 25 of the Constitution is the property clause (see below at the end of the article for full reproduction of the clause).

As it stands, expropriation may only occur if: i) in the public purpose or interest; and subject to compensation.  The amount of compensation must be just and equitable.  In theory, the amount of compensation can be zero.  However, it would be fair to say that a landowner may not agree that expropriation without compensation is just and equitable – this may well lead to litigation that could take years to resolve.  Consequently, some propose that section 25 of the Constitution must be changed – to facilitate land reform.

On 27 February 2018 the EFF proposed a motion in parliament to amend the constitution to expressly facilitate expropriation of land without compensation.  After some ANC amendment, the motion was accepted by the National Assembly: 241 in support, and 83 against. 

What does the motion mean? Ultimately, by 30 August 2018  amendments to section 25 of the Constitution must be proposed to parliament following discussion and engagement – the EFF say that section 25 makes it “practically impossible” to achieve land reform.  The ANC think section 25 “may be hindering” land reform. 

In addition, the EFF propose that the State act as custodians of land.  Land reform should not be confused with the EFF’s overall position, which is: “custodian of all South African land”.  The two do not go hand-in-hand:  the State can effectively achieve land reform without having to act as custodian of all land, and can certainly achieve land reform without having to destabilise the economy and livelihood of millions of South Africans.

As others have stated, the constitution as it stands is not incompatible with land reform.  Corruption and bureaucratic ineptitude are, in my view, the primary factors behind the slow pace of land reform.  It has been said that “expropriation of land without compensation has historically destabilised economies, as it destroys investor confidence and scares foreign investors.”   Although this may be so, given South Africa’s unique history, and the oppressive laws outlined above, expropriation without compensation may well be necessary – but not in all cases.   If one considers that in South Africa there are a handful of corporations and families that hold large tracts of land (some of this unused), together with the fact that the South African government is said to hold between 14% and 21% of land in South Africa, it will be just and equitable (in terms of section 25 as it stands) in certain instances to expropriate without compensation, alternatively, to expropriate and pay only a percentage of the actual market value.

In my view, section 25 does not require amendment – policy must be implemented more effectively: section 25 as it stands is no impediment to land reform nor is it a hurdle to expropriation without compensation.  The so-called willing-buyer, willing-seller principle is not contained in section 25, and if the current section was implemented effectively, it would be able to facilitate economic and social change.

However, in order to foster greater clarity - and to speed up the pace of land reform - some argue that section 25 requires amendment to expressly provide for expropriation without compensation.  In certain circumstances, expropriation without compensation will be just and equitable.  In other situations, however, it may well be that compensation is justified.  Is amendment really required?  Particularly where the government reportedly holds up to 21% of all land available in South Africa.  Is it necessary to remove private ownership when the preponderance of data suggests that this will be a catastrophic mistake?  How can South Africa avoid the same pitfalls suffered by neighbouring Zimbabwe?

Insofar as expropriation is concerned, some of the key questions are these: should expropriation without compensation be the default position? Does it apply to both commercial and residential property? Will compensation ever be justified?  Will all land owners be treated the same?  i.e.:  rich, middle-class, poor; land purchased pre-1994, land inherited from generations past etc.  What happens if land is expropriated where a bank holds a mortgage bond over the property?  Does expropriation without compensation necessarily entail the end of private land ownership?  There are many more questions – the Constitutional Review Committee has a mammoth task on its hands.

Advocate Ngcukaitobi, counsel in land reform disputes, and author of the recently published The Land is Ours feels that land reform has failed due to: weak institutions, corruption, and failure to give effect to the Constitution; and that to ensure land reform is successful, and expedited, a proper legislative framework should be enacted.  In addition to that, I would add that the State should only employ the best staff to work on this mission-critical project – and pay them accordingly.  It also appears that inept bureaucrats, working in a web of administration and approvals weakens the process, and ultimately frustrates land reform, rather than facilitates it.  The entire system must be aggressively sped-up  – but in order to ensure a transparent and corruption free system, the documents and decisions must remain public record and open for inspection.  The overriding principal: the poor must benefit.  Many of the richest families in our society, and some large local companies will have to hand back a certain amount of land to the people – in an equitable manner, that is in the public interest.

To sum up, what we require is at least the following:

  • Elimination of corruption.
  • Simplification of administration and reduction of bureaucracy in land-reform programme.
  • Review of current teams implementing land reform – a committee / commission / change-management team– whatever you want to call it – a group of multi-disciplinary specialists to be appointed and fast-track existing claims. Hire only the best staff for this critical project. 
  • A review of the 2017 land audit by 2020 – and consistent reviews every three years: we must ensure comprehensive and transparent land figures are available (see November 2017 Land Audit Report).
  • Start by appointing an interim committee to operate until August 2018 (when Constitutional Review Committee must report) to urgently distribute existing claims and speed up the process.  Adequate funds must be released and deeds made available to the commission / team.
  • Appoint oversight committee, containing neutral experts – some foreign – with no political affiliation in South Africa: we need to think long term and in a pro-poor manner.

Can South Africa achieve expropriation without compensation in a manner that doesn’t destabilise our economy and/or prejudice the rule of law?  Yes – absolutely.  If it is managed in such a way that it doesn’t interfere with agriculture, and follows ethical, clear, reasonable guidelines (this will ensure the economy remains relatively stable – an economy thrives on satiability and consistency – the ability to predict – the land reform programme must provide economists with these conditions).

Consider this: some single families in South Africa own many hectares of land – some of it unused.  Professor Ruth Hall, writing for City Press – via News24 – reports that one single white family received close to a billion Rand (a massive proportion of South Africa’s national budget) in a land claim settlement.  How can that ever have been in the public interest?  Or equitable?  Surely apartheid conditions - with reprehensible segregation and land laws - have given this family the ability to profit on such a grand scale?  Should this decision be reviewed?  Should some of this land not be given to the people of South Africa without compensation?

A handful of elite companies own significant portions of land – often, with large tracts remaining unused.  Take a drive along the KwaZulu-Natal coast lines – observe the rural areas between Gauteng and the Eastern Cape, monitor the large swathes of land – empty – between Bloemfontein and Cape Town: South Africa has vast expanses of unused land.  It has significant – often world leading – technical capacity.  We have the tools to find a solution that will not interfere with agriculture – and one that will not cause our economy to go into a tail-spin.  As Peter Bruce in the Business Day states, we must think out of the box.

Finally, key to land reform in my view, are four things.  One, eliminating corruption.  Two, competent and ethical staff.  Three, effective legislative framework. And four: objective, non-partisan oversight – ideally with neutral experts. The mandate is clear: land reform in a pro-poor manner that does not fundamentally effect land ownership. South African has the capacity, has the land – and hopefully has the political will to achieve a solution – one must be found in the forthcoming political processes.

These views are my own and do not represent the views of the University of KwaZulu-Natal nor do they represent the views of Thomson Wilks Inc.

Section 25 of the Constitution reads as follows:

25 Property
(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.

(5) The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis.

(6) A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of
Parliament, either to tenure which is legally secure or to comparable redress.

(7) A person or community dispossessed of property after 19 June 1913 as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to restitution of that property or to equitable redress.

(8) No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination provided that any departure from the provisions of this section is in accordance with the provisions of section 36(1).

(9) Parliament must enact the legislation referred to in subsection (6).