Submission on Constitution Eighteenth Amendment Bill, 2019

07 February 2020
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The ad hoc committee gazetted the draft Constitution Eighteenth Amendment Bill, 2019 on 13 December 2019 with a view to concluding public comments first by 31 January 2020, then by the end of February. The Amendment Bill has as its stated intention the objective of amending section 25 of the Constitution of the Republic of South Africa, 1996 to allow government to expropriate private property without being required to pay compensation.

While this submission does point out the flaws in the Amendment Bill and suggest how they might be rectified, it must be made clear that the Free Market Foundation opposes this enterprise of amending the Constitution per se. The Constitution already makes ample provision for substantive land reform, and amending the Bill of Rights to satisfy (ostensible) passing political passions sets an incredibly dangerous precedent for future generations. The notion of expropriation without compensation offends the doctrine of constitutionalism.

This is fallacious that the Constitution should be amended because little has been done to redress the wrongs of Apartheid, as section 25 deals mainly with land reform and obliges government to take positive action in expanding and entrenching property ownership for the previously disadvantaged. Blaming the Constitution for the failure of government to act is inappropriate, when the success of the constitutional project depends on compliance and adherence from government.

he notion that the Amendment Bill simply makes explicit what is already implicit in section 25 is also incorrect. Expropriation without compensation is not possible under the Constitution as it now stands, and neither is it in any open and democratic society around the world. But even if it were already possible, the Amendment Bill does not merely clarify the text, but introduces new, undesirable elements into the Constitution, like the parliamentary discretion to whimsically determine under which circumstances property may be expropriated without payment.

The rhetoric surrounding the Amendment Bill and government’s campaign to bring about an amendment to the Constitution has been almost exclusively focused on restitution. Restitution means property that was illegitimately taken from its owner in the past, is returned to that owner or their descendant. The problem is that the rhetoric surrounding the Amendment Bill conceals the reality of the amendment. To date, government has had a policy preference for redistribution and nationalisation (as opposed to restitution), meaning that should the Amendment Bill be adopted, it is likely to be utilised to take land from often-legitimate owners, and give it to persons unrelated to that land. Alternatively, government itself is simply going to assume ownership or ‘custodianship’ of the property, and lease it to ordinary South Africans. Both these situations are unacceptable.

The preamble to the Amendment Bill emphasises the fundamental importance of property ownership, but the amendment itself will drastically undermine the institution of ownership. The requirement to pay compensation when property is expropriated is an essential safeguard for the human dignity, economic interests, and personal liberty of property owners, not to mention for the economy as a whole. In the absence of this requirement, security of ownership becomes precarious, because of government’s newfound power to seize property without having to pay for it. As a post-Apartheid society, we should be engaged in the strengthening of ownership, not weakening it.

The ad hoc committee also notes that the financial consequences for the State of adopting the Amendment Bill will be “none”. This is a profound and shocking statement. Despite being required to do so, the ad hoc committee did not publish a socio-economic impact assessment on its proposed Amendment Bill, and this is at least a prima facie indication that an assessment was not conducted. There is therefore no reason to believe that there will be no financial consequences for the State. Indeed, the opposite has been shown to be true, given the economic downturn in the agricultural sector and the seemingly unbreakable resistance of foreign and often local investors to invest in the South African economy. This has led to a marked reduction in revenue collection, and will continue to do so unless the Amendment Bill is shelved.

The content of the Amendment Bill is deeply problematic.

Expropriation without compensation is a contradiction in terms, as compensation has been conceptually married to expropriation since the time when the doctrine of expropriation was developed. By revoking the right to compensation, government denies the prior ownership of legitimate owners. They are therefore liable to losing their livelihoods and having their human dignity ignored. The economy, too, will not survive such a perversion of constitutionalism, as no rational investor or developer will in future wish to acquire or invest in real property in South Africa, when their ownership is being denied by government.

Expropriation without compensation is unheard of among the open and democratic societies (a standard to which our Constitution strives) around the world, and every country that has attempted to implement it, has become a poor, repressive society. The only universally recognised instance of expropriation without compensation, is where the property of persons who have been convicted of an offence, and the property was used in the commissioning of that offence, is seized by government.

Most importantly, the Amendment Bill, in its current form, delegates to Parliament an unrestrained discretionary power to determine the circumstances under which the courts may decide that no compensation need be paid in expropriation cases. The Amendment Bill may be changed to empower the executive, not the courts, to make such determination. Both possibilities are unacceptable. This clause in the Amendment Bill makes it evident that it does not merely confirm what the constitutional text already implies, but introduces a detrimental, anti-constitutional, regime into the text.

A number of viable, property rights-respect alternatives are available to government. It can finally recognise the ownership of millions of South Africans who live on municipal land by transferring title deeds, it can repeal laws and regulations that make private sector-led land reform difficult, like subdivision laws, and it can transfer the many hectares of unused or underutilised government land to deserving persons.

It is evident that government has many tools at its disposal. Expropriation without compensation is offensive to constitutionalism, and should not be considered a valid route to a prosperous future.

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