Expropriation Bill [B4-15]: consideration of submissions, with Deputy Minister; Agrément South Africa Bill [B3B-15] adoption

Public Works and Infrastructure

26 May 2015
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Chairperson went through the A-List and verified that the amendments had been effected in the Agrément South Africa Bill [B3B-2015]. Members moved to adopt the Bill, and it was adopted.

The Committee also considered submissions received on the Expropriation Bill. The period had run from 19 April to 6 May 2015, but due to the comments made in most of the submissions received, the Chairperson believed it would be better to extend the submission period. Most of the submissions had indicated that the period was inadequate. However, some stakeholders had been able to conduct their research and make the written submissions to the Committee. Nonetheless the Department was in agreement with the Committee to extend the submission period. An additional three weeks would be added from 7 June to 30 June.

A total of 28 submissions had been received from nine individuals and 19 organisations. The organisations included Afri-Business, the Afrikaaner Bond of South Africa, the Banking Association of South Africa, Business Unity, Cape Walls of South Africa, the Centre for Constitutional Rights, Ethekwini Municipality, ESKOM, the Institute for Poverty Land and Agrarian Studies (PLAAS), the trade union Solidarity, and the South African Chamber of Commerce and Industry. The South African Institute of Valuers and Webber Wentzel were the specialist institutions which had made submissions.

The submissions were summarised and analysed by a Parliamentary Researcher. The main issues emerging from the submissions centred on the effect the legislation would have on the economy and agriculture, the abandonment of the willing buyer, willing seller principle and how the market value would no longer be a consideration when offering compensation. In addition, the submissions suggested that the powers of the expropriating authority were too wide and should be limited to the Minister of Public Works.

The Institute for Race Relations had suggested an alternative which it said was preferable to the Bill tabled before Parliament by the Department of Public Works. The alternative Bill was based on the argument that some of the sections in the Bill tabled before Parliament were unconstitutional and would be in contradiction with the Bill of Rights. Other submissions from some institutions and organisations were in agreement with the submissions by the Institute of Race Relation on this issue. In addition, the Institute submitted that the powers of the courts should be extended, and that commencement of the expropriation process should start from the courts.

The Department had made a general observation that there were some very detailed submissions which were interesting but irrelevant to the purposes of the Expropriation Bill. Some of the submissions, particularly those regarding the office of the Valuer General, were unrealistic as it would take a number of years for the office to have full capacity. However, such an office would be beneficial to all government departments. Members were in agreement with the Department that some of the submissions were not really related to the Expropriation Bill.

Meeting report

The Chairperson said the Committee had met previously and gone through the Agrément South Africa Bill. The agenda for the meeting was to go through what the State Laws Advisers and the other Legal Advisers had compiled.

The Chairperson went through the suggested amendments.

On page three, line five of the Bill, it was suggested that number “10” should be omitted and substituted with number “9”.

In regard to Clause 5 on page four, line 41, “may” was to be omitted and substituted with “must”. In line 48 of the same page, the words “rendered and” were to be omitted and substituted with the word “rendered” followed by a comma.

Mr K Mubu (DA) said the first correction on page three, line number five, was correct.

The Chairperson proceeded to Clause 6 on page four, line 57. The suggestion was to omit number “28” and substitute it with “27”. On page five, line 14, after the word “thereof” the word “or” should be inserted. Clause nine on the same page, in line 48, the suggestion was to omit the second word “members” and substitute it with the word “members” followed by a comma.

On page six, line four, the word “standardization” was to be omitted and substituted with the word “standardisation”. In Clause 13 on page seven, line 36, the suggestion was to omit number “14” and substitute it with the number “12”. In line 38m the word “from” was to be omitted and substituted with the word “for”. In line 43 of the same page, the number “5” should be substituted with the number “4”. In Clause 14, in line 58 of the same page, the word “shall” was to be omitted and replaced with the word “must”.

On page eight, line 12, the word “shall” was to be omitted and substituted with the word “must”. In Clause 17, line 43, after the word “person”, the words “who is not a member of the Board” were to be inserted.

In Clause 19 on page nine, in line 31, the phrase “if a committee consists of more than one member, the” it was suggested to omit the “the”. The changes that were previously spoken to were thus reflected in the Bill [B3B-2015]. If Members were in agreement, a mover and a seconder for adoption were required.

Ms L Mjobo (ANC) moved.

Mr S Masango (DA) seconded.

The Chairperson read out the following:

The Portfolio Committee on Public Works having considered the Agrément South Africa Bill referred to it and classified by the JTMS as a section 75 Bill reports it with amendments.

The Chairperson said the report of the Portfolio Committee on Public Works, having considered the Agrément South Africa Bill, referred it for classification by the Joint Tagging Mechanism (JTM) as a section 75 Bill.

The Chairperson requested a mover and a seconder to adopt the report.

Mr F Adams (ANC) moved to adopt the report.

Mr Mubu seconded.

Submissions on Expropriation Bill [B4-2015]

The Chairperson said the second item on the agenda was getting a sense of the submissions received on the Expropriation Bill. The two-week period granted to members of the general public to make submissions had been extended by a week. The public had three weeks to make submissions. The Committee would go through the submissions that had been received up to 6 May 2015. Ms Inez Stephney, Researcher at Parliament, would take the Committee through the submissions.

Mr Mubu asked the Chairperson how long the extended submission period was, and whether the extended period had elapsed already.

The Chairperson asked the Committee Secretary to speak about the dates.

Ms Akhona Busakwe, Committee Secretary, said that the initial submission period had been two weeks for all interested parties to make submissions on the Bill as it was advertised. The period had run from 19 April to 6 May 2015. However, due to the comments made and the interest shown, the Chairperson had been of the view that the period needed to be extended. An additional three weeks would be added to ensure that everyone was satisfied with the time period.

The Chairperson said an underlying point in the submissions had been that there was inadequate time to conduct the necessary research and make the submissions. Some submissions had indicated that the period might not be the legally required period, but this had been verified and it had been found that the period was within the period specified by the Act of Parliament. The Chairperson did not wish for the time period to become an issue and have it legally challenged. Then concentration would be diverted from the substantive issue, which was the Expropriation Bill. It was better to avoid situations where individuals could make allegations that they were unable to submit something because of an inadequate time period. Hence, the decision to extend the submission period had been made.

Mr Jeremy Cronin, Deputy Minister of Public Works, thanked the Chairperson for correctly reflecting the sentiments of the Department and the Ministry. Rather than hurry, late submissions had been allowed. Some people had been able to meet the two weeks deadline, but had felt a bit rushed. The extension was welcomed, but the Bill should not take forever. At the same time, it should be ensured that everything was being done as properly as possible. He assumed that if the submission period was being extended by three weeks, it had to be a decision of the Committee. Also, the period would commence not from the date of the decision but from the publication date. The Committee Secretary could perhaps assist in the matter regarding the publication dates.

Ms Busakwe stated that to allow the processes to take place in terms of running the adverts and getting the necessary approval, she advised that the Committee should look at the first advert going out on Sunday 7 June 2015. It would allow the three weeks to elapse on 30 June 2015. This would also be during the Constituency period, as Members would be going on Constituency leave from 26 June 2015. There would be time for the Researchers to go through the submissions and when Parliament returned in July, the Committee would be ready to conduct public hearings.

Mr Masango wished to verify whether the adverts would only be published in the newspapers. Was radio being used as well? Also, were local newspapers in other areas being used, as the Bill was very important?

The Chairperson responded that adverts were in the so-called national newspapers, but obviously the Committee should also be looking at advertising on radio stations. When talking of local media, Members needed to be able to guide the Committee as to what was meant by local media. Local could be in Gauteng or the Western Cape, but it was important to look at a balanced exposure to a wider scope of people. Members’ suggestions would be welcomed and these could be forwarded to the Committee Secretary.

Mr M Filtane (UDM) asked how the delay or postponements would affect the intended consequences of the amendments. It was becoming clear nowadays that people who were not traditional readers of newspapers had access to social networks. Was it not about time to start making use of the social networks? Youngsters were not into reading the Sunday Times, since many youngsters would rather use social networks to get information.

The Chairperson said the intention was to amend the Expropriation Bill so that it was in line with the constitution. As such, the delay enhanced the outcome of the amendment process. Giving people more time to engage with the process was of greater benefit. If the process had been rushed within the two weeks, then the impact could have been negative. The extension was to try to reach as many people as possible. In regard to social media, the Committee Secretary was very adapt in that area and she would rightly address it.

Mr K Sithole (IFP) was concerned that the Bill was very sensitive. If the extension period was three weeks then perhaps it should just be extended to a month to ensure everything was well communicated. He said that while checking the submissions and the sensitivity of the Bill, many of the submissions had to be checked again. He wanted to find out if there was a way to inform organised unions, to ensure that they made an input.

The Chairperson said that obviously the Expropriation Bill was a Bill of magnitude, and the time period that had been previously given had resulted in the submissions which had been received. When Mr Sithole said he had seen nothing substantive in the submissions, it was a view held by Mr Sithole. The Committee could not dictate to the public on what to send as submissions. The Chairperson agreed with Mr Sithole that Members needed to decide if the three-week extension period was adequate. When advertising, the Committee would be most interested in the major stakeholders in society, such as trade unions and the business community. If possible the adverts should reach a wider scope of people, including ordinary people. It had been said in the context of the meeting, which the Expropriation Bill would affect not only business and important people -- ordinary communities would also be affected by it. Spokespersons were aware of the submission period, so they could also engage in the process.

Ms E Masehela (ANC) thought the three weeks given to the extension period was quite sufficient because it was adding to the time that people had been given before.   Adding the three weeks of the extension period to the first three weeks given previously meant the public was given six weeks to comment, which was quite enough.

Mr Mubu agreed with Ms Masehela and the Chairperson, and said it was important to take into account that this was a very good opportunity. The Committee would be dealing with some submissions which would really test the Committee’s understanding of the Constitution. The Committee had to be very careful on how it handled it. It was also important to give people enough time to handle the submissions. He asked whether the public hearings would have to be shifted to a later date, since the closing date for submissions had been extended. He did not know how all the remaining activities would be crammed into the Committee’s programme, as the Committee Secretary had already mentioned Parliament would be in recess for a period of time.

The Chairperson responded that the Committee would have to look at the Parliamentary programme. The Committee Secretary would also look at the most appropriate dates emanating from the programme and share them with Committee Members. He did not think it would be in the Committee’s best interests to look at the Parliamentary programme beforehand. He asked if that responsibility could be left to the Committee Secretary. She would communicate to Members at the earliest opportunity and the information would be emailed to Members later in the day.

He requested Ms Stephney to lead the Committee through the submissions received thus far. He added that Members had been given copies of all submissions, but he would like them to go through the submissions in plenary. He asked if the Researcher could quickly go through what had been received and what the basic issues articulated had been. When more submissions were received, they would be sent to Members as quickly as possible.

Ms Stephney said the Expropriation Bill aimed to align the existing Expropriation Act number 63 of 1975 to the Constitution, particularly to Section 25, which was also sometimes known as the Property Clause. The Clause was found under the Bill of Rights in the Constitution between pages 11 and 12. She said she would elaborate on these sections when presenting certain areas.

The Portfolio Committee had called for written submissions from the public from 20 April to 6 May 2015. It had received a total of 28 written submissions. Nine were from individuals and 19 were from organisations. The organisations included Afri-Business, the Afrikaaner   Bond of South Africa, the Banking Association of South Africa, Business Unity, Cape Walls of South Africa, the Centre for Constitutional Rights, Ethekwini Municipality, ESKOM, the Institute for Poverty, Land and Agrarian Studies (PLAAS), the trade union Solidarity, and the South African Chamber of Commerce and Industry. There were also submissions from specialist institutions, such as the South African Institute of Valuers and the legal fraternity, particularly Webber Wentzel.

The overarching concerns raised by the submissions were as follows:

  • the effect the legislation would have on the economy and agriculture;
  • the abandonment of the willing buyer and willing seller principle;
  • the market value was no longer the only consideration when offering compensation.

The submissions suggested that the power of the expropriating authority was too wide and should be limited to the Minister of Public Works.

The Institute of Race Relations had managed to inform a range of different people about the alternative Bill. The institute believed the alternative Bill should just look at the existing Act and that certain areas should be amended to align the Bill to the Constitution.

The overarching views of the Expropriation Bill in the submissions could be categorised as follows:

  • There were general comments of concern relating to the possible extent of the effect of the Bill, as indicated earlier;
  • Comments dealt with specific definitions and clauses in the Bill, highlighting concerns and or providing alternative formulations for interpretations to these sections;
  • Legal interpretations of the Bill, particularly as it regulated case law;
  • Technical legal interpretations by valuers, land surveyors, surveyors and geo-information professionals;
  • Suggestions were also made that the existing Expropriation Act number 63 of 1975 remained in force, but amendments should be included to put it in line with the obligations of the Constitution.

General comments had been received. For instance, one individual had indicated that market value should not be emphasised but instead aspects of historical interest should be looked at. A suggestion had been made that the value of the mortgage bond should be adjusted to exclude in the market the housing price value, because land was often offered to all for free. However, it was unclear how all this would be achieved, because the submission made by the Banking Association of South Africa highlighted that the sector had mortgage exposure of approximately R2.3 trillion in immovable properties. Around 70 per cent of this represented mortgages to the agriculture sector.

It had been suggested that the sole focus of the Department of Land Affairs (DLA) should be on the transfer of land, and its only targets should be the hectares of land distributed. It was also suggested that the DLA’s other mandates should be shifted to other departments. Another submission from a commercial farmer looked at public interest and suggested an alternative interpretation. He proposed that instead of just having hectares transferred to beneficiaries, the beneficiaries should also receive some kind of mentorship. The farmer elaborated by stating that he had a mentorship programme in place. One of the areas of the mentorship programme was providing on-site mentorship particularly concerning management aspects of commercial farming. In addition the farmer provided surety for production loans for cash crops on 100 hectares. The farmer’s final suggestion was that all farmers should embark on such mentorship initiatives and it should be compulsory, especially if on a large commercial enterprise. The farmer suggested this would improve transformation, and the gap between commercial farmers and farm worker beneficiaries would be narrowed.

The submission by Webber Wentzel also provided detailed comparisons of provisions contained in legislation on land acquisition or expropriation in a number of Commonwealth countries. The submission highlighted the following;

  • Both the 1975 Expropriation Act and 2015 Bill did not provide details of when ownership or possession passes;
  • The compensation was calculated by the Minister of Public Works in terms of the 1975 Act and the expropriating authorities in terms of the 2015 Bill;
  • Application to the courts was made by the owner within 60 business days and the legal costs were borne by the losing party;
  • The matter was dealt with under the jurisdiction of the magistrates or High Courts

Another suggestion was that the Auditor General should report annually on all expropriation undertaken and completed. The reporting should include all related costs. The 2015 Bill did make provision for an expropriation register under Chapter 7 in the Bill, titled “Related Matters”. Clause 26 (1) of the Bill indicated that the Director General should ensure that the register of all intended and withdrawn expropriations, all decisions not to proceed contemplated by all expropriating authorities was open, maintained and accessible to the public. Any expropriating authority should hand in notice of any expropriation or intended expropriation.

The Institute of Race Relations indicated that the alternative Bill was preferable to the Bill tabled before Parliament by the Department of Public Works. Some individuals and organisations such as the Cape Chamber of Commerce and Industry, the Afrikaaner   Bond, A C de Viliers, Solidarity as well as the Transvaal Agricultural Union of South Africa, also agreed with the issues raised by the Institute of Race Relations. They indicated that Clause 17 (3) which required cost payment by the current owner, was unconstitutional. However, it was unclear whether the argument related to a dispute or the amount of compensation received where the owner would then require an intervention by the Court.

One of the things that had come through in the Institute of Race Relations’ submission was that the Institute wanted to extend the powers of the courts. One of the suggestions was that before the Minister initiated a notice of expropriation, for example, the courts should actually be approached to find out if it was constitutional. A number of additional clauses to the Bill had also been provided. One of the Clauses was that the constitutional principles covered expropriation and the possible eviction of people from their homes. In this instance, all the provisions of the property clause, from one to eight, were included apart from clause 25 (6) and (9), which reads as follows; 25 (6) indicated that “a person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws and practices is entitled to the extent provided by an Act of Parliament either to tenure which legally secures or to comparable redress”. In terms of Clause 9, Parliament should enact the legislation referred to in sub-section nine.

The Institute also looked at Clause 26 (3) on housing, where a person might not be evicted from their home or have their home demolished without an order of the court. After considering all the elements of the circumstances, no legislation may permit arbitrary eviction. However, in the Institute of Race Relations submission, 26 (1) and (2) were not mentioned, and these read as follows; “everyone has the right to have access to adequate housing and the State must take reasonable legislative and other measures within the available resources to achieve a progressive realisation of   this right”.

An additional clause looked at by the Institute of Race Relations was the provisions in terms of clause 25 (a) to (e) in the Bill of Rights. Under 25 (c), the provisions indicated that market value, for example, was one of the aspects that needed to be looked at when expropriating. This section had actually been moved to the top by the Institute because in the Constitution, it was at 25 (3) (c). In the Institute’s suggestions they wanted the section to be the main consideration. followed by the other aspects.

Ms Stephney read section 25 (3) (c) of the Bill of Rights in its entirety so that it was clear what the Institute had suggested. The section read as follows: 25 (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. In the Constitution it said the current use of the property must be the first consideration. The second was the history of the acquisition and use of the property. The third was (c) the market value of the property and (d) was 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 which basically just indicated it was for public purposes. Sections (a) to (d) were of importance when consideration was given in terms of how compensation was determined.

As indicated earlier, the Institute suggested that the Minister should approach the courts first before initiating or sending out a notice of expropriation. In Clause 7, it said “the expropriation authority must proceed to seek a High Court order confirming the constitutional validity of the proposed expropriation”. In this instance it was actually instructing, as it said “must and not even “may”. In terms of this, it was actually extending the timeframes that would be required for expropriation because, as indicated earlier, most of the submissions by the Institute revolved around the role of the courts in the expropriation processes. This appeared to be a counter way in which the Institute was suggesting that expropriation be exercised, as well as in terms of how compensation was determined.

Ms Stephney said there were a number of definitions that people had suggested in the submissions. These included the definition of property, as well as public interest. There were a number of suggestions in terms of how the Bill might be improved when looking at certain aspects.   For example, a valuer looked at a term and indicated it was best to actually delete the term in relation to land, given that a valuer determined a wide range of items besides land. She added that what the valuer provided in terms of the Property Valuers Profession Act had also been included in the analysis. One of the submissions indicated that valuers should be looked at in terms of this Act.

An additional concern was in respect of natural resources. This was also covered in the Institute of Race Relations’ submission, which expressed concern about natural rights which it believed should not be expropriated arbitrarily.

Chapter two of the Expropriation Bill read “Powers of the Minister of Public Works to Expropriate”, and as indicated earlier, the submissions were concerned that the Minister’s powers were too wide. It was suggested that the power to expropriate should be limited to the Minister only.

Investigation and the valuation of property seemed to be an important area that people were concerned about. It was believed that the investigation which was undertaken by the expropriating authority could be biased, especially with the creation of the office of the Valuer General, so it was suggested the office should be created prior to the enactment of the Expropriation Bill. Upon creation of the office of the Valuer General, policies and procedures should be in place to provide certainty on the approaches used to determine compensation to all parties. It was suggested that if this was not done, it would result in a large number of court cases. It was further suggested that the DPW should interact with other departments such as the Departments of Rural Development and Land Reform and Human Settlements, as well as entities such as the Commission on Restitution of Land Rights.

The statutory responsibilities of the office of the Valuer General were as follows; the provision of fair and consistent land values for rating and taxing purposes; determining financial compensation in cases of land expropriation under the Expropriation Act or any other policy and legislation in compliance with the constitution;   the provision of specialist valuation and property-related advice to government; setting standards and monitoring service delivery; undertaking market and sales analysis which would set the guidelines, norms and standards required to validate the integrity of the valuation data. As suggested before by another submission, the office should create and maintain a data-base of valuation information.

The office of the Valuer General would be important, given that it would determine compensation which would require more than simply the market value. Just equitable should also be taken into consideration. One submission suggested that this could be problematic because according to research it was difficult to determine what was just and equitable. However, as was indicated in the Bill of Rights, Clause 25 (3) the amount of compensation and the manner of payment should be just and equitable. It should reflect an equitable balance between the public interest and those affected, having regard to all the relevant sections that were currently in use by the property market valuers.

Referring to the intention of property expropriation in chapter four of the Expropriation Bill, the Ethekwini Municipality and ESKOM had cautioned against the negative effect of long and drawn out legal action. This would harm the reliability of effective service delivery, as they were of the view that there would be a loss of time and financial strain. Eskom suggested that the adjudication process should be simplified and expropriation applications should be finalised within reasonable time frames.

Ms Stephney said in Chapter Five of the Bill, which was compensation for expropriation, the majority of submissions indicated a concern that market value would be abandoned and the compensation offered to the property owner would be below the market value. There was a particular concern that the willing buyer, willing seller principle did not form part of the 2015 Bill. The Afrikaaner Bond, Agri SA and the Institute for Race Relations were particularly concerned about this.

There was also a suggestion that the land tenure system was flawed and that instead of having to use VAT, unused land should be taxed. This was a way for the government to generate income. Compensation would therefore be limited to land rates, less any gains made in tax free earnings and wealth. There was a very elaborate suggestion on how this could be done. However, the submission did indicate that this should be rated by the National Treasury in Parliament.

In terms of the 1975 Act, which related to payments of amounts offered as compensation, she read what was suggested in its entirety. It indicated that “the Minister shall pay on the date on which an amount in terms of section 10 (1), (2) or (4) is offered as compensation, or if the state has not yet taken possession of the property, on the date from which it takes possession”. This meant that compensation should be paid as soon as possible. This was another issue raised by the Institute of Race Relations which basically narrowed the time frame in which the expropriating authority could send out a notice, conduct investigations and make payments. The Institute suggested this be done within 15 working days, as compared to the 20 or 30 days set in the current Bill and the 1975 Act. However, for the person whose land or property was being expropriated, it wished to have the time extended from 60 to 100 days.

In terms of Chapter Six -- determination by a court for expropriation and withdrawal of expropriation -- as indicated earlier, the Institute for Race relations wanted the courts to make the first determination whether expropriation was constitutional. Another submission suggested that the court could not both decide and approve the amount of compensation. It was suggested that the power to decide on compensation should rest with the expropriating authority, with the court exercising approval when approached.

One of the clauses that appeared in the Institute of Race Relations’ alternative Bill was that there should be an investigation prior to a High Court application. The High Court should hold a hearing on the constitutionality of the intended expropriation. The High Court should actually confirm this constitutionality, and if it was rejected then the expropriation authority was required to withdraw the expropriation. In terms of this suggestion, it would mean that the whole process was null and void.

Ms Stephney said there was a section on urgent expropriation in terms of the Expropriation Bill which included that if a property required an urgent basis, an expropriating authority may use the property on a temporary basis for a period not exceeding 12 months. One of the reasons put forth as an urgent expropriation was in the event of disaster. An expropriation authority should make a written offer of compensation to the owner or holder within 45 days of a notice to use the property temporarily. If the offer was rejected, the expropriating authority may approach a court to request an extension of the period for temporary use. It was indicated in 22 (9) of the Bill that an expropriating authority may at any time during the temporary use of the property, commence with the expropriation of the property and must comply with all relevant provisions of the Act. While circumstances would dictate the decision to commence expropriation, it should be clarified, although it had been indicated that one of the reasons would be for disaster management. A suggestion was made in the Institute of Race Relations’ alternative Bill that withdrawal should not be done in an arbitrary manner. If it happened, there should be some kind of consequence. The concern about payment that was just and equitable, which was emphasised by the Institute of Race Relations, indicated where most of the time frames were tightened for the expropriating authorities. In most cases as indicated earlier, the expropriating authorities were given 15 working days to pay compensation. This would put a lot of pressure on the expropriating authority to comply. This was where the Institute’s alternative Bill indicated that the notice of expropriation would be automatically set aside if the requirements in the institute’s Bill were not met.

It had been explained earlier that the Institute for Race Relations’ alternative Bill placed a great emphasis on the role of the courts in the expropriation process. It was unclear from its provisions as to how practical this would be and especially if it meant that once a person went to court, the process would be halted. If it was decided that one should first go to court to determine if it was constitutional in the first instance, prior to an expropriation authority sending out a notice for these proceedings to actually take place, it would mean extending the whole process. Therefore in terms of determining the amount that had to be paid, one had to go to court and more time would be lapsing.

Ms Stephney said those were just a few submissions and suggestion made in them. What had come through was that the major issue of concern in many of the submissions was the issue that the willing buyer, willing seller element would be discarded. The other area of concern was the issue of unregistered rights. In the 1975 Expropriation Act, clause 22 only indicated the determination of unregistered rights of land expropriated. The clause stated that “if a notice of expropriation relates to the expropriation of land, all rights in respect of such land not registered or recorded against the title deed thereof or in an office referred to shall terminate on the date of expropriation and the State shall, subject to the provisions of sections 13 and 19, not be obliged to pay any compensation for such rights”. However, in the Expropriation Bill [B4-2015], unregistered right was defined as a right in property, including a right to occupy and use land which was recognised and protected by law, but was neither registered nor required to be registered.

Ms Stephney added that she had not looked closely for the legal constitutionality of the submissions made, as these would be analysed by the legal adviser. Most of the submitters had also requested that they be provided with an opportunity to make oral presentations to elaborate further on their written submissions.

Discussion

The Chairperson thanked Ms Stephney for taking the Committee through the submissions received thus far. As stated earlier, the submission period would be extended and hopefully there would be more inputs from all stakeholders. He felt this was as far as the Committee would be able to go as far as the submissions were concerned. He invited Members for a comment or two and not necessarily to discuss the merits or demerits of what Ms Stephney had highlighted. Her presentation was merely to highlight and there would be an opportunity at an appropriate time to go through all the submissions. The Committee would also decide at a later stage on whom to call to make oral submissions, in addition to the written submissions received.

He invited the Deputy Minister for a comment.

The Deputy Minister agreed with the approach. He said it might be useful to make a number of general observations from the Department’s side. He thanked the Parliamentary team, particularly the Research team, for a very useful summary which helped the Department as well. He indicated that the Department was doing a similar exercise for its own purposes. The exercise was not completed and had been delayed until all the submissions had been received. The Department was not amending the 1975 Act -- the proposed Bill was a new Act. The Institute for Race Relations had suggested that it would be a better route to amend the Bill, and that was their opinion. However, that was not what the Committee was busy with. The correct constitutional procedures had been undertaken in terms of having the Bill tabled in Parliament and now in the Committee. It was not an amendment of the 1975 Act, but an entirely different Bill.

Secondly, an ex-member of a party was suggesting changing the Constitution. He appealed to all parties present not to go in that direction. The main objective was to produce a constitutionally compliant piece of legislation. It could be debated as to what was constitutionally compliant. The Department was of the view that the Constitution was in order and the property clause in particular offered guidelines to what the Department was trying to achieve in terms of the general law for expropriation.

Thirdly the Department had made a general observation that there were some very detailed submissions which were interesting but irrelevant to the purposes of what was being done. There was an interesting submission by Peter Nickon about value added tax. That was interesting, but that became a whole money Bill, not a general law of application. Some of the other submissions also gave quite a lot of interesting detail -- for instance, mentorship for people who were beneficiaries of land reform. This sounded like a good idea, but the Bill was not dealing with land reform. As valid and interesting as the submissions were, caution had to be taken to prevent being overloaded with such submissions.

The Deputy Minister said another matter that had to be looked at was that a number of issues had been raised that the Bill was silent on clause 26 of the Bill of Rights, which dealt with evictions, or clause 33, which dealt with administrative justice. As a Committee and from engagements, the Department did not wish to produce legislation which contradicted clauses 26 and 33. This was obvious, but whether in the process specific references to either those clause were included -- which the Committee might advise the Department to do -- or to specific Acts such as the Promotion of Administrative Justice Act (PAJA) Act, the Department could not do anything in legislation or expropriation which would counter any of the other constitutional clauses. The property clause had been focused on because that was absolutely pertinent and just cause on the general laws of application. He added that the Department had an open mind to these applications and was not trying to dodge section 33 or section 26, for instance.

The Parliamentary Researcher had started off a little bit political and not neutral when suggesting that the courts should have a bigger role. The Department was in agreement with the suggestion, but at the same time the role of the Executive should not be expropriated. This was a detail that would be explored. In the Department’s view, Executive action should not be held hostage at every point. Everyone was aware that Court procedures were lengthy. The issue was just flagged, which was not to say that the role of the courts should not be included in the Bill. Courts should not be making Executive decisions, but rather evaluating the justice around the work.

The Deputy Minister added that the Department thought that some of the submissions in the name of the Constitution were trying to change the Constitution and the property clause. The submissions were trying to assert that property market values were more powerful in determining compensation. Looking at section 25 of the Bill of Rights, the list of factors to be taken into account when it came to compensation was a list which was not in any order of priorities. In any case, market value was there and existing use of property structures was also on the list.

The issue of willing seller, willing buyer and market value were not the same. Typically, willing seller meant way above market value, and was very often so in cases such as this. So when talking of market value and willing seller, willing buyer, the issues were being conflated. Secondly, in the Department’s view, initially the need to acquire property in the public interest preceded with the interested buyer, and hopefully finding an interested seller. That was the quickest route to go. Expropriation was the case when there was no willing seller, so trying to bring in the concept of willing seller, willing buyer into expropriation did not make any sense. If there were willing sellers and willing buyers, there would be no need for expropriation. Therefore, one should not go for the willing seller, willing buyer approach. The Department was of the view that market value, and willing seller, willing buyer were two separate issues which were being conflated at times.

The Deputy Mister said the Department was of the view that some of the submissions on the office of the Valuer General were interesting, but completely unrealistic. In terms of the 1975 Act, expropriations were happening already. The office of the Valuer General had not yet been established. The current draft Bill stated that the Department of Rural Development and Land Reform must in any case purchase or expropriate or whatever, but must use the office of the Valuer General. The office was for all valuation purposes, so it could become useful to the rest of the government offices. The DPW employed valuers, as it leased out and purchased properties, and needed to do valuations. The Department could not wait for the office of the Valuer General, which would require a number of years to have full capacity to deal with all the state’s requirements. Although it would be wonderful to have a professional, well-resourced office of the Valuer General that serviced the entire state, it was very unrealistic.

The Department had picked up on what might be a drafting issue. This was the idea that the Department was extending powers to every man and woman to be able to expropriate. The Department was neither limiting existing expropriating powers, nor extending expropriating powers to other entities. It had been noted in some of the submissions that the intention was not that clear. The Department would come back to this later with more details. The Department had engaged senior counsel in light of the submissions received, and would also depend on the State Law Adviser. If the Committee wished, the Department would be happy to submit the senior counsel’s views on constitutionality. The Department wished to be very constitutional with the legislation, which seemed to be very complicated.

The Chairperson thanked the Deputy Minister for his input. He said there was one area where he would disagree with the Deputy Minister. From the Chairperson’s understanding, the Deputy Minister had stated that in her contribution, the Researcher was becoming political. In regard to that, the Researcher had actually been speaking in relation to the submission by the Institute for Race Relations which had spoken about the powers of the Minister. The Deputy Minister’s articulation suggested that this was the Researcher’s view, which was not correct.

As the Deputy Minister had been given a chance to give an overview of what the Department and Ministry were thinking, it was only fair that Members were also given a chance to give remarks on the process that the Committee had undergone. He advised that Members should adhere to what he had initially said -- that it was not a substantive discussion of all submissions received. He was not asking Members to speak about each and every submission, but just a broad view.

Ms Masehela said she had gone through the submissions circulated to Members more than once, and it was a bit difficult to understand some of the issues. However, with the inputs made by the Deputy Minister and the Reseacher, one had a bit more clarity. She was sure that reading the submissions again now, and what was coming, Members would have more insight than before.

Mr Masango said the analysis from the Researcher had been really helpful. As the Minister had indicated, some of the issues submitted had nothing to do with expropriation, particularly issues concerning taxation. He had received the analysis only yesterday and he would go back to read it again with his colleagues to see if there was really more useful information in the submissions. He differed with some of the submissions totally and agreed with some. As such, there was no need to go through the submissions that day.

Mr Filtane said his viewpoint was that looking at the overall purpose of the Act, its very purpose could be defeated if it did not provide details when it came to compensation and provided some kind of framework. The benefits that had been enjoyed by an owner over many decades should not be excluded when valuation had to take place. If he were the valuer, he would demand books from day one so that everyone could see what was contained in the tax returns. If a lot of money had been made, then why was the person being compensated? If the owner was being compensated, what about the people who had been making the land productive? They should also be getting a share of what was being paid in compensation.

Mr Sithole appreciated the work done by the Researcher -- she had done a marvellous job. The information provided by the Deputy Minister was helpful in understanding the aims of the Expropriation Bill. Issues that needed to be discussed in detail would be discussed later.

Mr S Jafta (AIC) said he had a concern with what was in the submissions. It was apparent that some of the individuals and organisations which had made the submissions had also requested to make oral submissions. Would the Committee also consider them coming with oral submissions, or would this be addressed when conducting public hearings?

The Chairperson said at that juncture all he could say was that he would look at the oral submissions possibilities, and the written submissions, and give guidance to the Portfolio Committee.

Mr Mubu said that there were a number of articles that had appeared in newspapers about the issues and already one could tell that this would be a really heated debate. One writer who wrote in the Business Day, named John Kieper, said that the Bill amounted to giving carte blanche to all corrupt and bankrupt municipalities and all others to declare an open season to urban and rural property all over the country. The writer had gone on to say that all the three leading supporters of the Bill -- Radebe, Nxesi and Cronin -- were leading members of South Africa’s Communist party and getting the Bill through Parliament would be one of their greatest scores.

The Chairperson thanked all stakeholders and all the legal advisers for their time and effort to make the Committee’s work much easier. He thanked all the officials and the Deputy Minister of Public Works.

The meeting was adjourned.

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