The Warsaw Network
An open letter to the Ambassador of South Africa in Poland
07.02.2020

Ambassador of the Republic of South Africa to the Republic of Poland

 

Dear Mr. Ambassador,

The ad hoc committee gazetted the draft Constitution Eighteenth Amendment Bill, 2019 on 13 December 2019 with a view to concluding public comments on 31 January 2020. 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.

Public participation

The public participation process that has brought South Africa to this point where an amendment to the Constitution seems imminent, has been flawed in both substance and procedure. This is particularly the case in light of the inadequate time period allowed by the ad hoc committee for the public to provide comments on the Amendment Bill, and in light of the foregone conclusion reached by the Constitutional Review Committee before it even set out to invite public comments.

Good faith public participation is a prerequisite for the validity of any new legislation, policy, or regulation. If this is not done, government lacks a mandate to continue. In the case of the present constitutional amendment, no national consensus has been reached on the apparent necessity of changing the Constitution, and if it has, this has certainly not been evident from the public participation process. As a result, government is acting without a mandate.

Defects in the Amendment Bill

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. Our primary submission to Parliament, then, is that the Amendment Bill ought to be abandoned, along with any plans to make changes to South Africa’s constitutional law.

In summary, this submission elaborates several contextual and environmental problems surrounding the Amendment Bill, as well as problems in the suggested amendment text itself.

The environmental problems are, firstly, the notion that the Constitution should be amended because little has been done to redress the wrongs of Apartheid. This is fallacious reasoning, 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 inanimate Constitution for the failure of government to act is inappropriate, when the success of the constitutional project depends on compliance and adherence from government.

Secondly, the notion that the Amendment Bill simply makes explicit what is already implicit in section 25, is 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.

Thirdly, 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. This is a matter of justice, hence why much of government’s rhetoric is not impeachable. 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 going 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. Restitution is a moral and constitutional imperative, but redistribution and nationalisation offend against the idea of property ownership. Government’s rhetoric must match its actual intentions, otherwise the public is deceived.

Fourthly, the preamble to the Amendment Bill emphasises this 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.

Fifthly, the ad hoc committee accepts the recommendations of the Constitutional Review Committee as a matter of faith, despite the aforementioned defects in the process of that committee to reach its conclusions and make its recommendations. The ad hoc committee should be more critical, given the sensitive nature of the work and responsibilities it has been tasked with.

Finally, the ad hoc committee 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 facieindication that one 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 problems with the Amendment Bill itself are, firstly, the very idea of introducing a notion of ‘expropriation without compensation’ into South Africa’s constitutional law. 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 (in the case of legitimate owners whose property is being nationalised or redistributed) or holdership (in the case of bona fide holders whose property is being restituted to the legitimate owners) of those who held the property. 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 wish to acquire or invest in real property in South Africa forthwith, when their ownership is being denied by government.

Secondly, the Amendment Bill offends international law in that it will treat owners and holders of expropriated property unequally from others whose property is not expropriated, and this unequal treatment will be of an arbitrary nature.

Thirdly, as alluded to above, 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. The Amendment Bill will place property owners and holders on the same level as white-collar criminals as far as security of ownership is concerned.

Finally, and most importantly, the Amendment Bill, in its current form, delegates to Parliament an unrestrained discretionary power to determine the circumstances under which no compensation need be paid in expropriation cases. In those circumstances, the courts may decide whether it is just and equitable for no compensation to be paid. It has however come to pass that the Amendment Bill may be changed to empower the executive, not the courts, to make such determination. Both possibilities, however, 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. To allow Parliament, invariably the dominant parties in Parliament, to decide whimsically which circumstances might justify expropriation without compensation, is remarkably dangerous. Should the Amendment Bill proceed, itself must include a closed list of such circumstances.

Alternatives to the Amendment Bill

The Amendment Bill is not only dangerous to South Africa’s constitutional order and potential for prosperity, but it is unnecessary. Government already has the means to bring about far-reaching, substantive land reform that will benefit the economy in general, and those most disadvantaged by Apartheid in particular.

The greatest number of victims of Apartheid land law are inhabitants of the peripheral townships located outside urban areas. They are characterised by underdevelopment and low levels of service delivery. Their suburban counterparts – of which they should rightly be considered part – are developed and receive adequate service delivery. The reason for this underdevelopment is the lack of property rights, moreover ownership. During Apartheid, so-called migrant workers from the homelands settled here, but because of racially discriminatory law, could not own the property. They had to rent it from the local municipality. Twenty-six years after the end of Apartheid, it is an injustice that this state of affairs continues unabated. Government has it within its immediate power to affect the transfer of title deeds to those who are entitled to them in townships, without weakening property rights.

Government has also made repeated reference to so-called “megafarming”, whereby an increasingly small amounts of wealthy farmers are gaining control of an increasingly large area of agricultural land. This, it is argued, drives up the price of land and makes it difficult to emerging, mostly black, farmers to own agricultural land. However, government’s own policies are partly to blame for the megafarming phenomenon. The Subdivision of Agricultural Land Act, and its potential successor the Preservation and Development of Agricultural Land Bill, both disallow agriculturalists from subdividing their land into smaller, more affordable plots, and selling them, without going through a complex bureaucratic process of attaining permission. Instead of weakening the constitutional property rights provision, government can instead repeal the Subdivision Act and make it easier for potential and emerging farmers to purchase land.

It has been well-documented that all three spheres of South Africa’s government, including State-owned enterprises, themselves are in possession of vast quantities of land throughout the country. Much of this land is either unused (often in the case of reserved municipal land) or underutilised (invariably the case in farms owned by the State). Rather than interfering with private property rights, discouraging investment and undermining human dignity, government could freely distribute this land to deserving families and entrepreneurs.

Another initiative by government that is commendable is an online platform that would allow agriculturalists to make their property available to others. Such voluntary schemes ensure that coercion is avoided, ensuring peaceful coexistence, and interdependent development.

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