How to provide responsibly for expropriation without compensation

If the Constitution is to be amended to provide for expropriation without compensation (EWC) – something South Africans of all stripes should oppose in principle – there are either safer or more dangerous ways to go about it. If government simply removes the right to compensation, the economy will tank on the heels of wealthy South Africans scattering to the four corners of the world. If government, however, goes about this responsibly, with a healthy respect for constitutionalism and property rights, section 25 of the Constitution may end up being strengthened rather than weakened.

Section 25(3) currently provides that “just and equitable” compensation must be provided when property is expropriated, and section 25(8) provides that no other part of section 25 may impede the State from redressing the results of past discrimination on condition that such departure from the provisions of the property provision complies with section 36. Section 36 allows the rights in the Bill of Rights, including the right to compensation, to be limited in pursuit of a legitimate government objective. These two provisions – section 25(3) and 25(8) – it is argued, thus already hypothetically provide for lawful EWC.

President Cyril Ramaphosa has embraced this position and has said that the process currently underway to amend the Constitution will simply “clarify” the already-existing position. In other words: nothing new. 

Ramaphosa has also repeatedly stated that government will ensure any amendment of this nature to the Constitution will not be harmful to investment potential, economic growth, or food security. Assurances like this by politicians are not enforceable in law and are therefore usually not worth the paper they are written on (recall Robert Mugabe said in 1980 that “We will not seize land from anyone who has use for it”). It is theoretically possible, though, for these three areas of the economy to be protected if the amendment is worded in a sufficiently narrow way, so as to keep the basic principles of the Constitution, and its identity as a rights-protecting and not rights-infringing instrument, intact. 

Private property rights are an imperative in any free and developing society. On every index of human development, freedom, the Rule of Law, and ease of doing business, etc., countries that rank highly have entrenched systems of secure property rights. Invariably, the countries at the bottom of these indices have virtually no, or very weak, protection for private property.

If South Africa wishes to attract foreign investment and develop into a prosperous first world country, section 25 of the Constitution, if anything, must be strengthened – not weakened – to promote legal certainty. As the President himself has said, the amendment “would need to reinforce the fundamental principles of the property clause”, including the prohibition of arbitrary deprivation of property and for that, as a default rule, compensation must be paid for expropriation.

I submit, thus, that the amendment to the Constitution must make explicit provision for EWC only in the following circumstances:

Unused or underutilised property owned by any sphere of government;

Property that has been abandoned, in other words, the owner cannot be found or has consciously decided to abandon the property;

Property of which the market value is less than the debt owed by the owner to government with no reasonable prospect of the owner being able to pay in the near future;

Property that was acquired under Apartheid property dispossession law and the current owner knows this to be the case, and finally;The property in question can be expropriated without compensation if it is reasonable and justifiable in an open and democratic society based on dignity, equality, and freedom. Essentially, in this circumstance, the expropriation must comply with section 36, which allows for the limitation of rights in certain circumstances.

Above all, the amendment must provide that any property expropriated for land reform purposes must, as a matter of course, become the private property of citizens or communities, and not the property of the State or quasi-State entities.

Under no circumstances, furthermore, must government be given a general power to expropriate without compensation, and, under all circumstances, the judiciary must be empowered to decide whether a denial of compensation was fair and just. If government is given a general power to pursue EWC and the courts’ jurisdiction to review such decisions is ousted, there will be no legal certainty. Expropriation without compensation must, thus, always be constrained by explicit and narrow provisions in the Constitution.

The ideal scenario will be to leave the Constitution alone. Section 25 makes generous provision for land reform; something the government has not taken advantage of. Constitutionalism, as a doctrine dedicated to limiting the excesses of government power, is undermined when governments go about fiddling with their constitutive instruments, especially when they divest citizens of established rights such as the right to compensation.

Under Apartheid, South Africans had very few rights to enforce against a sovereign Parliament. Today, we must ensure we protect our supreme Constitution to avoid going back to that dark time of our history. If anything, section 25 must be strengthened. Any amendment to weaken it should be out of the question.

Martin van Staden is Legal Researcher at the Free Market Foundation and is pursuing a Master of Laws degree at the University of Pretoria.

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