Expropriation Bill [B4-2015]: deliberations on public comments, with Deputy Minister

Meeting report

Opening Remarks
The Chairperson welcomed the Deputy Minister of Public Works, Members and visitors, and reminded them that on the previous day, the Department had taken the Committee through the document (with proposed changes), giving an undertaking that the notes that the Deputy Minister had been referring to would be organised and distributed this morning. He was informed that this had been done and Members had the relevant documents before them.

The Ministry would lead the Committee through the refined document and the Committee would go through it section by section and discuss the relevant sections. Members also received a summary that had been prepared by the Committee's Content Advisor, which was a summary of what happened during the public hearings and some points and contributions that Members and stakeholders had been made in regards to aspects of the Bill.

Mr Jeremy Cronin, Deputy Minister of Public Works, said that the Department was hoping, with the assistance of the State Law Adviser and Parliamentary Law Adviser, that by next Tuesday there would be a draft B version of the Bill, rather than a separate document, so that it would be easier to follow. In addition, he stated that the Department had circulated a shorter document and when necessary, it would be referred to. It would give an indication of the flow process – timelines and so on.

Expropriation Bill [B4-2015]: deliberations

Preamble

Mr Cronin explained that the Department had added to the preamble, indicating that section 34 of the Constitution provided that everyone had the right to have any dispute that could be resolved by the application of law decided in a fair hearing before a court, or where appropriate another independent and impartial tribunal or forum.

Members agreed to this addition.

Definitions

Mr Cronin said the definition of “High Court” referred to the level of court that had jurisdiction to deal with expropriation matters. The Department was in two minds on whether to drop or include a reference to the magistrates' courts since they were more accessible and less expensive

Mr M Waters (DA) said that magistrates' courts were more accessible to the public and removing them would limit the community’s access to the courts and to justice, in the long term, which would inadvertently prolong the process. The issue of access should be handled differently, and there must be capable courts.

Ms A Dreyer (DA) agreed with Mr Waters but was concerned about the lack of consistency, if different courts across the country used different criteria in making different rulings, which would lead to divergent results. If there was absolute insistence on using magistrates' courts, then the limit involved should perhaps be R100   000, and everything above that should go to the high court.

Ms E Masehela (ANC) did not have a problem with the use of magistrates’ courts.

Mr K Sithole (IFP) sought clarity on whether the Deputy Minister was saying there was an intention to leave out magistrates' courts.

The Chairperson replied that the Deputy Minister had said there were two views on the matter in the Department.

Mr M Filtane (UDM) provided the Committee with a practical view of how costly it was to try to access a high court was, even in terms of logistics. Mthatha was 400km away from Grahamstown, and certain cases had to be considered only in the Grahamstown High Court. This was a challenge, even before thinking of the challenges of getting an attorney. Magistrates' courts must be accommodated. He proposed that there should be no difference in views in the Department, and the use of the magistrates' court must be considered. There should be no ambiguity in the Department on the accessibility of magistrates' courts, so that people did not only have to use the high courts. It was easier for the state to capacitate institutions than to find money for people to be able to access the high courts.

Dr Q Madlopha (ANC) said dropping the magistrates' courts would present challenges. She agreed that the use of the high court was very costly, and to say only the High Court should be used would close doors for members of many communities. Estates and houses valued above R125 000 were only considered by the Master of the High Court, and there were many instances where widows had lost their money and houses because they did not have the money to go to the high court. She also pointed out that lack of capacity should not be cited as the excuse for not including magistrates' courts and instead they should be capacitated. Magistrates in advantaged and disadvantaged communities must be empowered to be accessible to the majority of the community, not only those that were rich.  She appealed that recourse to both the high and magistrates' courts should be retained. She agreed that some magistrates' courts did not have capacity, but if they could be identified and capacitated. Even in most institutions, capacity was a problem, and they had not been dropped for this shortcoming.

Mr P Groenewald (FF+) thought the proposed amendment from the Department was stating the obvious, as property was within the jurisdiction of the high courts.

Mr Waters did not think anyone had any in-principle disagreement on the issue of access to the courts. The issue was how to ensure that there would be capable courts that people had access to. He asked if there was not some way of formulating this particular clause to accommodate issues of capacity, should that be the case.

Mr Cronin said the view coming from Members was that there was no opposition to retaining magistrate courts, but there had to be some guidance on the limits or conditions which applied to them. He would come back with a definition of magistrates' courts.

Mr Filtane assumed the approach by the Department and the Committee was to take the comments received from the public and retain the Land Claims court, and tribunal as suggestions.

Mr Cronin replied that the Land Claims Court was the high court.  In terms of access, the Department would introduce another document on mediation so that people would not have to travel 400km. The distance from Mthatha to Grahamstown was a serious problem.

The Chairperson wanted to hear from the Parliamentary and State Law Advisers

Ms Vuyokazi Ngcobozi, Parliamentary Legal Adviser, said the Committee must be mindful of the jurisdiction of magistrate courts. People approaching the high court often had to pay an attorney and an advocate and this should be taken into account.

Mr Gideon Hoon, State Law Advisor, said to talk of tribunals would mean the Committee would have to create another new chapter in this Bill, together with the Portfolio Committee on Justice, and this would take some time.

Mr Cronin said the property clause did not need to be changed to include any tangible things, as suggested in the comments received. As in any expropriation, property was defined in the scope of legislation that empowered the expropriating authority.

Ms Dreyer said that if her friend had a fleet of taxis which was her only source of income and the Department wanted to appropriate it, how would it then address challenges that might arise from that?

Mr Cronin replied that expropriation could be possible from the Ministry of Transport, but it would not be done illegally and unconstitutionally in an arbitrary way. He could think that it might apply on urgent grounds, such as if there was a war.

Mr Filtane said the word “expropriation” needed to be defined, as it was defined nowhere in the Bill, only in the definitions of expropriating authority. He asked for the definition of expropriation.

Mr Waters said that it could be that an irrational party might come into power in future and the word “property” needed to be defined again to exclude what could not be expropriated, rather than to leave it open for theoretical interpretation.

Mr Cronin believed the word “expropriation”, which derived from common law, did not need to be defined, although it was possible to define conditions under which property could be expropriated and consideration of compensation. He was not sure what would be gained from defining “property”. He sad no legislation, in its definitions, could solve the problem of unwise parties that might come in future. Rather than trying to define property, the Committee could perhaps focus on defining what property was capable of being expropriated and what empowered different spheres of government to expropriate property. It could thus avoid the situation where a farm could be expropriated but not taxis. He rather advised of the general application of the term property.

Mr Hoon said it was not difficult to try and define it, but the property clause explained what could be expropriated, and the procedures for compensation. The definition of “expropriatable property” that empowered different spheres of government had to be clear.

Ms Ngcobozi said there was nothing wrong in trying to define expropriation, but reference must be made to section 25 of the Constitution. The Bill unpacked “the hows and whats”. Defining expropriation would not add any value, in her view. She would be cautious to specifically define property, because by defining it, it would be confined. Reference would continually be made to section 25.

Mr Cronin suggested the addition of the following words, “other related reforms in order to redress the results of past racial discriminatory laws and practices,” to the definition of public interest, and asked the Committee to support this proposal. This was taken from subsection (8) of the property clause in the Constitution. 

Mr Waters thought it was unnecessary to include “public interest,” as the Bill’s main aim was expropriation for public purposes. “Public interest” was vague. Defining public interest would be open to challenge by ideologically- driven future governments. He suggested rather retaining and going by the term “public purpose.” The purpose for expropriation was for public purpose. He did not think that “public interest” was fundamental in this Bill.

The Chairperson said that section 25 of the Constitution referred to “public purpose” and “public interest”.

Mr M Dlamini (EFF) said there was nothing wrong with what the Department was proposing. What the Bill was trying to do was to make life easier. The Bill must be clear on what was being proposed and the term “public interest” was taken from the Constitution to make matters easier to understand for an ordinary person. The Department had made it clear that there were several pieces of legislation for several departments governing expropriation, and this Bill tried to bring them all under a uniform approach.

Mr Groenewald said the Committee was now repeating what it did the previous day.

Dr Madlopha said section 25 of the Constitution talked of public purpose and public interest, and there was nothing wrong with what the Department was proposing.

Mr Waters said the Bill must be used concretely to deal with the expropriation that was required. He proposed that the Bill be tightened up, rather than having expropriation generalised.

Mr Cronin said the Constitution specifically defined public purpose and public interest. This was the general guidance to be followed. Expropriation must be done for purposes of transformation in South Africa.

Mr Cronin said the SA Geomatics Institute wanted the Bill to define “land surveyor” and ”valuer”, but this was unnecessary as these terms were defined in the Land Survey Act.

Powers of the Minister of Public Works to expropriate

Mr Cronin said that after the proposal from the SA Institute of Race Relations (SAIRR) and Webber Wentzel, Clause 3(1) had been rephrased to say “subject to the payment of just and equitable compensation, the Minister in the execution of his or her mandate may (i) expropriate property (ii) expropriate property at the request of an organ of state.”  The Minister of Public Works therefore would not expropriate taxis.

Mr Cronin said the SA Geomatics Institute wanted a definition for delegated official, but this was covered in the Public Service Act of 1994.

Mr Filtane said a possible reason for the SA Geomatics Institute suggestion might be concern that if delegation was given to an official, and the official was suspended, it could create a problem. An official  must be accountable whether he was on suspension or not. Some people were suspended for two years, earning salaries, pending investigations.

Mr Cronin said delegation was about enabling an official and not what the SA Geomatics Institute was proposing.

Investigation and valuation of property

Mr Cronin said the Department could not take the proposals from Legal Resources Centre (LRC) on clause 5(1) and (2) as it felt that it would be encroaching on another Department’s mandate.

Mr Filtane said this clause had to do with what the Committee discussed yesterday. If expropriation affected a community, it may not receive just and equitable compensation. If people were moved, they should be put in a position that they were before, if they had a dam or road, they must still have them after the expropriation.

Mr Waters said the underlying principle was that the rights of the community would be affected and there had to be checks and balances to prevent unintended consequences. His view was that a clause should be created that covered unintended consequences affecting the rights of individuals, such as loss of service delivery.

Mr Cronin said the Committee had discussed proposals relating to clauses 5(4) and clause 6 the previous day.

Ms Dreyer recalled that she had raised the point yesterday about what would happen if the municipal manager failed to respond, because of laziness or any other reasons. The Department would then assume there was no adverse effect on housing or future engineering service. That was a wrong assumption, just because the municipal manager has not responded. The Department must find other alternative means of obtaining information as expropriation would have an effect on the municipality and it could not be allowed to go ahead if the municipal manager failed to respond.

Mr Cronin replied that the expropriating authority was required to carry out an investigation prior to even issuing a notice of expropriation.

Mr Filtane agreed with Mr Cronin, and said Ms Dreyer was proposing a negative presumption.

Intention to expropriate and expropriation of property

Mr Cronin said while clause 7(2) helpfully required the expropriating authority to give the affected owners and holders adequate advance notice of its intention to expropriate, and its reasons for doing so, it did not require any indication of the date on which ownership or possession was intended to pass to the state. To this extent, the clause fell short of ensuring the standard of procedural fairness demanded by the right to administrative justice enshrined in section 33 of the Constitution and codified by the Promotion of Administrative Justice Act (PAJA). The Department had been very cautious not to put in timelines because it wanted to avoid the situation where it could give notice of expropriation and the individual could damage his property, yet the actual appropriation could happen only some years later. The Department was seeking advice from the Chief State Law Adviser and legal counsel regarding the rephrasing of this clause. The Department would come back with an attempt to redraft this clause.

Mr Cronin said the Department agreed with the SA Property Owners’ Association (SAPOA) suggestions regarding the amount claimed as just and equitable compensation should a property be expropriated, and the need for furnishing full particulars as to how the amount had been made up, in clause 7(4)(a).

Mr Cronin also said the Department was seeking advice on rephrasing Clause 8(3)(d) and (e), on suggestions by Webber Wentzel.

Mr Filtane said the Department could put out a notice that it wanted to build a school, with no timeframe attached, and this could mean the entity would lose property for purposes that may not be fulfilled. He asked what recourse the previous owner of a property could take if the government failed to do something on that piece of land. He also asked how the interests of the public could be protected if a person was displaced two months before an election, and there was change of government. The new government could say it did not have plans to build a school in that area, but instead had other plans. In such a case, even though it was still government involved, the affected person should have some recourse. There must be a clause somewhere that forced the government to carry out the purposes of expropriation within a specific time.

The Chairperson understood the complexity of the question raised by Mr Filtane. However, the Bill could not cater for all eventualities.

Mr Walters said there must be checks and balances inserted by somewhere including a reasonable period of time from the day of expropriation.

Dr Madlopha said the concern of the Committee was that there were delays in government implementation. While the Bill could not be prescriptive of the time, the government must be cautious about expropriating a property. It must be ready to implement within a reasonable time after the process had been concluded.

Mr Filtane said he believed that from the moment property was in the hands of government, the project must be implemented, so as not to disadvantage the community. There was no law that the Department must do anything with the property after having expropriated property.

Mr Walters said the difficulty was coming up with a reasonable time to force the state to use property after having expropriated, to avoid unintended consequences.

The Chairperson said the issue of time must not become a bone of contention. He suggested that the Committee move on to other issues.

Mr Cronin said while there was no time stated in the Bill as to when implementation must start taking place, section 23 of the Bill provided for the withdrawal of expropriation. Nothing could prevent a person from approaching the courts to say it was administratively unfair if the expropriated property was not being used. In practice, however, he reminded Members that there were many delays that Eskom, for instance, had encountered, involving environmental impact assessments (EIAs) and community protests. For this reason the Department had been very cautious about putting in a time frame.

Dr Madlopha said that when the Bill referred to public interest, it meant that expropriation would happen to meet a need that emanated from the public --for example, intending to build a school. However, if expropriation was withdrawn, yet the need for a school in a community was still there, the issue of reasonable time then became important, and the expropriation should not be withdrawn before the community need was met. The government sometimes withdrew projects because of budgetary challenges, after having had workshops with the communities on projects that would be forthcoming. Public interest for that particular project must be looked into.

Mr Cronin said the proposal by the SA Geomatics Institute on clauses 8(4) (b) and (c) and clause 9 did not require any changes to the Bill, as it was acknowledged that the required act must comply with the Land Survey Act.

Compensation for expropriation

Mr Cronin said the Department did not agree with the need to strike down clause 12(2)(b), as suggested by the SA Geomatics Institute, as it was an international practice.

Ms Dreyer said the Department may need to look more closely at the concerns raised by another institution that the property must be paid for at full market value upon expropriation.

Mr Cronin replied it was an assumption by many that the Department would not give market value compensation. There were several factors in the Bill and the property clause of the Constitution that guided compensation. Paying above market value was unconstitutional.

Ms Dreyer asked if it was not possible to write, into the Bill that compensation would not be below market value, to allay such fears.

Mr Cronin said that there were other things that drove market value - for example if the community knows that a dam was to be built, the demanded cost of the property to be expropriated would rise, despite the fact that it may be unused land. All the Department wanted to see was just and equitable compensation with all relevance circumstances taken into account.

Mr Filtane said clause 12(b) seemed to run against section 25(3) of the Constitution.

Ms Dreyer asked how the Department responded to the comments by Webber Wentzel

Mr Cronin replied that expropriation was more on land issues than general property and the Department did not want to centralise expropriation nor how to determine compensation.

Mr Hoon said that the Bill of Rights was written in a flexible way. When writing legislation, it was very dangerous to be too specific.

Ms Dreyer said a clause covering financial loss to the person must be written so that it did not allow for the expropriated owner to suffer any loss due to expropriation by the state.

Dr Madlopha said clause 12 covered all matters, saying that compensation must be just and equitable. It also stated that the current value of property would be used to determine” just and equitable” compensation for property.

Mr Walters asked how opportunity cost would be accommodated into the Bill.

The Chairperson said there was no one who said the compensation the person received was just and equitable.

Ms Dreyer said she also thought it was not right for an owner to make a profit by having her property expropriated by the state.

Mr Filtane said a person might have started a business, and projected that in year three would have made R1 million. Government compensation may not cover this.

Dr Madlopha asked what would guide the parties when there was any disagreement.

Mr Walters said that if somebody had invested in a property, in five years he could have invested differently. The Bill must also maintain investor confidence. The Committee could not sum up an eloquent formulation

Mr Cronin said colleagues were raising different scenarios, but clause 21 covered this. In regard to Mr Filtane’s suggestion, he said that all relevant circumstances would be taken into account in determining compensation. The just and equitable compensation argument already took this into account. He did not want to discourage investor confidence, but also said the state must be careful of investor compensation. It could not guarantee that all financial losses would be covered.

Mr Cronin said the suggestion to add institutions in clause 14(2)a was not necessary, because the reference to “person” included both a natural person and juristic persons.

Mr Cronin said Webber Wentzel had commented that clause 15(3) was regrettably inconsistent with section 25 (2)(b) of the Constitution, and that property may not be expropriated without being subject to compensation – whose amount, time and manner of payment should have been agreed to by those affected, or decided or approved by a court. The Department was seeking legal advice on rephrasing this clause.

Dr Madlopha asked for clarity on this.

Mr Cronin said the Department was not trying to prevent people from approaching the courts, but it was necessary to consider the position where there was no response after 30 days. In cases where people could not afford to approach the courts, the government could be held liable for infringing the principles of  administrative justice as the person was placed in a situation where it would not be reasonable to accept the compensation but they also could not respond in thirty days. The expropriating authority may then approach the courts.

Dr Madlopha asked what would happen when the expropriating authority approached the high court when the expropriated owner was poor, and the high court required the owner to be part of the proceedings, and who would fund the person to appear before the high court.

Mr Filtane proposed that the government must go through the route of mediation before proceeding to the high courts, to help the poor.

Mr Walters said the process must always start with mediation and interaction, with the intention that the case should not end up in court. The issue that the Committee was dealing with was lack of access to finance and lack of access to the courts. 

Mr Cronin said clause 21(1) of the Bill provided alternatives like mediation. If the expropriating authority and the expropriated owner could not agree on just and equitable compensation, they may reach a mediated settlement. There were also Reserve Bank dispute settlement mechanisms that could be adapted.

Dr Madlopha said the issue of mediation was fair, because courts were expensive.

Mr Walters said this issue could be successful only with the guaranteed availability of the mediators. He did not think every department had professional mediators available. He viewed the assumption of having accepted an offer, if there was no response within thirty days, as highly problematic.

Determination by court, urgent expropriation and withdrawal of expropriation

Mr Cronin said the proposal by SAIRR on clause 21(1) had been covered in the preamble.

Related Matters

Mr Cronin said the issues raised by SA Geomatics Institute in relation to clause 24(1)(c)(i) and 24(2)(b) would be covered in the regulations

Mr Cronin said the Department agreed with the proposal from SA Geomatics Institute on the introduction of the expropriation register.

Mr Dlamini suggested strongly that the Department must include a definition of expropriation, as suggested by Mr Filtane earlier on. He did not think it would be difficult to include a definition, even though it was covered in the Constitution. He pointed out that not everybody had a copy of the Constitution available to them.

Mr Walters said the expropriation process must give information to people on how their lives would be affected by the expropriated property, socially and economically. There were still some clauses that needed to be discussed, covering issues of public interest and public purposes

Mr Cronin replied it would be good to define expropriation, but since bills were legislated by Members, it was their responsibility to popularise them to their constituencies. Some of the issues discussed in this meeting and on the previous day would be used in polishing up some clauses and the Department would reflect further on that. At least 80% of the value of an expropriated property must be paid on expropriation. The reason for that was that there might be outstanding issues, such as water bills, on the expropriated property.

Mr Walters said he would accept the formulation of 100% expropriation, except in circumstances such as municipal rates being outstanding.

Mr Cronin said he would indicate to the Committee areas where there needed to be draft amendments for improvements.

Ms Masehela commented that 80% payable at expropriation meant that the whole amount was available and payable, subject to no outstanding obligations. Given that “expropriation” was the main key word in this Bill, then he suggested that it should be defined, if defining it did no harm.

Mr Sithole said the submission by traditional leaders had not been included in the submissions noted by the Department.

Dr Madlopha said she did not have a problem with 80% being paid at expropriation.

The Chairperson said the Department must flag  issues that needed to be discussed further. Members must also identify other issues that needed to be discussed on Tuesday next week.

The meeting was adjourned.