Expropriation Bill [B4-2015]: deliberations with Deputy Minister

Meeting report

Expropriation Bill [B4-2015]: deliberations with Deputy Minister
Mr Jeremy Cronin, Deputy Minister of Public Works, welcomed everyone and indicated that the Department was still busy with the working draft of the Bill and the focus today would be on the additions and contributions that had already been made. Most Members would be familiar with those additions. The Department was not in any way suggesting that those issues that would be highlighted today were the only issues to be considered in the Bill as there might be other concerns that would need to be accommodated.

Preamble
The SA Institute of Race Relations (SAIRR) raised a concern that the Preamble made no reference to section 34 of the Constitution about one's right to go to court as well as the right to administrative justice when expropriating property. The Department had made it clear that the option of pursuing administrative justice was always taken into consideration but it was not absolutely clear in the Preamble.

Arrangement of Act
Deputy Minister Cronin indicated that in the outline of chapter headings, the Department had changed Clause 21 in Chapter 6 from 'Determination by court' to: 'Mediation and determination by court' and this was an attempt to introduce alternative dispute mechanisms.

Mr M Filtane (UDM) stated that mediation on its own could be the final product without either party approaching the court. The heading “Mediation and determination by court” should not create the impression that the one necessarily followed the other.

Deputy Minister Cronin said that this was a reasonable suggestion and therefore it would be taken into consideration.

The Committee agreed with the suggestion.

Clause 1: Definitions     
“court” 
Deputy Minister Cronin highlighted that on the definition of “court”,  the Department was legally advised that it would be useful to imbue the access to the Magistrate Court with the existing legislation and this was to give clear guidelines on when it would be permitted to access the Magistrate Court.

Ms A Dreyer (DA) indicated that there had been complaints about the capacity of the Magistrate Court across the country particularly the lack of consistency in terms of judgements. The Committee had made recommendations that the adjudication of some of the case should not be within the Magistrate Court but limited to smaller cases.

Mr K Sithole (IFP) commented that in the definition of “court”,  the sentence, “a Magistrate’s Court having competent jurisdiction, within whose area of jurisdiction a property is situated” implied that some courts had incompetent officials.

Deputy Minister Cronin responded that “competent jurisdiction” in this instance did not refer to incompetent officials but to geographical location. In other words it would be incorrect to take a matter to a Magistrate Court that was outside the area in which the property was located.

Mr Filtane said that one of the reasons why matters would be taken to court would be disagreement on the compensation amount. A safer option for the Committee would be to agree on the constitutional definition of a Magistrate Court.

Mr T Walters (DA) noted that the Committee was particularly concerned about achieving a balance between competent Magistrate Court and lowering the ability of poor people to access courts.

Deputy Minister Cronin responded that the Department of Justice and Correctional Services (DJCS) would need to prioritise balancing between the access to courts and a competent Magistrate Court and was already responsible for providing adequate training to deal with the particular kind of cases, especially expropriation of property.

Mr P Groenewald (FF+) indicated that it would be difficult for the Committee to impose a limit on the amount as there is legislation that determines the size of the disputed amount which can go to a specific court. This amount is R300 000 and below for the Magistrate Court. It would be helpful for the Committee to stick to the existing legislation.

Deputy Minister Cronin replied that the amount was addressed in the Magistrates Act and the amount was R200 000. It would be helpful for the Committee to leave this matter in the hands of the appropriate officials.

Mr F Adams (ANC) added that it would indeed be difficult for the Committee to impose a limit on the amount to be paid. Both courts can refer cases to one another depending on the amount in dispute.

Ms E Masehela (ANC) agreed that the Committee should not impose the amount to be paid. It was the responsibility of the Committee and the DJCS to ensure that the Magistrate Court was capacitated.

Ms Vuyokazi Ngcoboza, Parliamentary Legal Adviser, cautioned the Committee against deciding on the amount to be paid, particularly for the expropriation of property.

Deputy Minister Cronin said that the Department was in agreement with the Committee and it was just the matter of wording that needed to be corrected.

"expropriation"
Deputy Minister Cronin said that there was a concern from Members that the Department needed to provide a definition of expropriation. Therefore expropriation means: “the compulsory acquisition of property by an expropriating authority for public purpose or in the public interest subject to the payment of just and equitable compensation in accordance with the Constitution and the Expropriation Act”.

On the subject of in the public interest in the definition, Mr Walters asked for an explanation why the definition of “public interest” was wider in the Bill than in section 25 of the Constitution. It would be preferable for the Department to define public interest as it stands in the Constitution.

Mr Filtane said he was partially happy with the definition of expropriation up to “in the public interest”. However, it would be important to provide a clear definition of the process whereby the expropriation of property took place without just and equitable compensation, especially in cases where the owner was reluctant to comply with the process of expropriation.

Mr M Dlamini (EFF) added that the definition of expropriation in the Bill was correct as the Constitution does provide a clear explanation for the process of expropriation. He suggested that the Department should rather delete the part: “subject to the payment of just and equitable compensation” and just add “according to the Constitution and the Act”.

Deputy Minister Cronin responded that it was possible for the Department to delete “subject to the payment of just and equitable compensation” as long as it included that expropriation must be in accordance with section 25 of the Constitution and the Act which included compensation.

Ms Ngcoboza expressed a concern previously raised in the Committee that it could be difficult to provide a definition of expropriation that is consistent with section 25 of the Constitution and this was part of the reason why the Bill did not have a definition for expropriation. The Committee should avoid providing a definition of expropriation which could be interpreted as an amendment of section 25 of the Constitution.

Mr M Dlamini (EFF) said that the advice that had been provided by parliamentary legal advisers had tended to be questionable and it was impossible to accept that the Committee could not provide a definition of expropriation merely because “it would be difficult”.

Mr Filtane agreed with Mr Dlamini. He said that Parliament is referred to as the highest institution in the country and there are capable legal experts that could assist Members in the regulation of relationships and behaviours between institutions and persons. Members should do the right thing and provide a clear and appropriate definition of expropriation.

Deputy Minister Cronin corrected Mr Dlamini, saying that Parliament was not the highest institution in the country as South Africa was a constitutional democracy.

Ms Masehela pointed out that there was no definition of expropriation in the Constitution but just an explanation and this was one of the reasons why it was difficult for the Committee to come up with an appropriate definition. She wanted to know if it was compulsory that there should be a compensation for all the expropriation that would be undertaken.

Deputy Minister Cronin replied that the Constitution and the Act was clear that the state will be obliged to make compensation for any property that had been expropriated.

Mr Adams indicated that it would be better for the Committee to stick to the existing explanation of expropriation in the Constitution.

Deputy Minister Cronin responded that the Department would still need to provide a clear definition of “public interest”. He cautioned the Committee against providing a definition of expropriation which could be inconsistent with the Constitution. Therefore the Department was not enthusiastic about providing the definition of expropriation unless Members felt that this was essential.

Ms Dreyer expressed a concern about the proposal to delete the sentence “subject to the payment of just and equitable compensation” as there was already a lot of anxiety from farmers about the possibility of expropriation of land without compensation. It was important to make laws that would be just and equitable for whoever would be in power in the future and not just the current government.

Mr Dlamini said that Members were here to do what was legally right and therefore it was irrelevant for the Committee to cater for people that had unfounded fears and anxieties.

Deputy Minister Cronin responded that the Department was making legislation that would affect everyone and there was a DA Premier that had expropriating powers and there are also DA municipalities that had expropriating powers and the Bill covered everyone regardless of the existing power relations. The Department had not introduced any changes to the definition of “public interest” and there is a court to redefine and change the existing definition of “public interest”.

Ms Dreyer indicated that most of the institutions that had made submissions to the Committee complained that the concept of "property" was too broad and needed to be narrowed down as the existing Bill also referred to 'intangible property' and "not limited to land".

Mr Walters added that the existing definition of “property” affected almost everyone as it implied that even pension and saving funds could also be expropriated and it was important that this definition was clarified. There was concern about the ambiguity in the definition of “owner” especially the issue of “legal disability” in clause 31.

Mr Groenewald suggested that the Department should consider providing a definition of “sketch plan” in clause 8(4)(b) in order to make it clear what this entailed in the Act.

Mr Dlamini expressed approval about how the DA Members seemed to incessantly focus on the technical matters of the Bill as the Constitution covered most of the issues that had asked about so far. The main priority at the moment should be on whether Members would be able to reach a consensus on the content of the Bill in order to be approved by the Committee.

Ms Dreyer stated that there was lack of clarity on the definition of “valuer” particularly since the definition of “valuer” was limited to land but the definition of “property” went beyond land.

Ms Masehela suggested that the Committee needed to concentrate on the proposals that had been made by the Department and Members could only raise such issues to the Department at a later stage.

Deputy Minister Cronin responded that the Department would prefer to retain the definition of “property” as was defined in the Bill and Constitution so as to make the point that property was not just limited to land but other intangible materials. It was important to remind Members that property might not be full ownership but servitude which is quite a typical case in the expropriation for public purpose.

Clause 3 Powers of Minister to expropriate
Deputy Minister Cronin clarified that in relation to the powers of the Minister to expropriate, it was impossible for any organ of state to request the Minister of Public Works to be the expropriating authority on its behalf in some areas where it is outside of the mandate of the Minister of Public Works to expropriate.

Mr Dlamini once again suggested that the Department should delete the part: “subject to the payment of just and equitable compensation” in clause 3(1)(a) in order to be consistent with the similar deletion that had been done in Chapter 1.

Mr Filtane partly agreed with Mr Dlamini but suggested that there should be an addition of “according to section 25 of the Constitution” as any law needed to be aligned to the Constitution.

Mr Sithole said that the word “may” in clause 3(1)(a) should be deleted and replaced by “must” as the word “may” created an impression that there was uncertainty of authority.

Mr Walters disagreed with the suggestion and proposed that the sentence should remain as it was as it did provide clarity and certainly clarified the intent of the legislation.

Ms Masehela indicated that the intent of removing “subject to the payment of just and equitable compensation” was because this was included under the Definitions which the Committee suggested that this was supposed to be broad and not limiting.

Mr Dlamini stated that the Bill was mainly based on section 25 of the Constitution and therefore this was already providing clear guidelines on how the Bill should be executed going forward.

Ms Ngcoboza added that whether the Committee decides to delete “subject to the payment of just and equitable compensation” was irrelevant as long as reference was made to section 25 of the Constitution. The inclusion of the word “may” in clause 3(1)(a) was to emphasise that the Minister may expropriate the land where necessary.

Deputy Minister Cronin wanted to put it on record that the Constitution and the Act is quite clear that compensation should be just and equitable and therefore there was no harm in including or removing the sentence “subject to the payment of just and equitable compensation” in clause 3(1)(a) as long as section 25 of the Constitution is highlighted. The Department would prefer to keep the word “may” as it was once again irrelevant whether the word had been included or omitted. He pointed out that the Department had inserted “no adverse effect” in clause 6(6) and this was to highlight the fact that the expropriation of property should not have an adverse impact on the owner. There was also an addition of “should be or should not be expropriated” in clause 8(5)(a) and this was to emphasise that the Department was still exploring the possibility of expropriation at this stage.

Mr Sithole wanted to know if there was any specific reason for stipulating "within 20 days" in the Bill for agreement on mediation as there could be unforeseen circumstances that could cause further delay. Why not 30 days?

Deputy Minister Cronin replied that 20 working days was essentially a month and it was agreed that this was an adequate time.

Ms Dreyer asked if the Department had made any progress on the need to rephrase Clause 8(3)(e) as there was a suggestion that the Department would need to seek legal advice in order to make a decision.

Deputy Minister Cronin firstly apologised for not indicating in the first place that indeed the Department was seeking legal advice on the reshaping of clause 8 and the Department wanted to avoid the situation where the property would be in limbo between expropriation and being taken into possession by state-owned entities (SOEs) and this was a complicated but important area.

Mr Filtane requested that the Department come back to all the issues that still required clarity so as to be addressed and possibly included in the Bill.

Deputy Minister Cronin replied that the Department will certainly come back to all the outstanding matters that still required clarity.

Deputy Minister Cronin repeated that what came out substantially was that the Department had changed the heading in Clause 21 to “Mediation and determination by courts” and this was an attempt to introduce alternative dispute mechanisms. There had been the suggestion in this meeting that it should be enumerated separately in order not to create the impression that the one necessarily persisted and the other followed and this was entirely up to the Committee to decide as this was insignificant. The Department was still undecided on the time limit that could be imposed on the agreement to mediation as the general feeling was that it could be unwise to impose time limits.

Mr Walters said it was not in anyone’s interest to unduly delay the process of mediation and this was whether it was the owner, the state or the intended beneficiary of expropriation and therefore it was important to put in a solid process that was well-determined. The Department was silent on where the mediators would be coming from and the process that was to be followed in the determination of the mediators. He requested the Department to provide Members with the process flow of the mediation process so as to be entirely clear about the whole process.

Deputy Minister Cronin replied that on where the mediators would be coming from, would be dependent on the nature of a property and the Department was not keen on explaining this process in the legislation as it was always variable.

Ms Masehela indicated that the stipulation of the 20 days for the agreement on mediation was appropriate as this was an adequate time to consult one another and reach an agreement.

Mr Filtane asked if there was a common understanding that the stipulated 20 days referred only to working days and therefore, practically a month.

Deputy Minister Cronin replied that it would be best that some of the matters are left to regulation especially the 20 days that had been referred to for the agreement on mediation. The Department was reluctant to say that the mediation process itself must take 20 days. There are very complicated cases and this was more to trigger the process so as to avoid undue delays.

Mr Dlamini asked whether the mediation process was more to do with the payment process or ascertaining if the expropriation was to be undertaken.

Mr Walters stated that the Department would be compelled to provide a definition of' property' since it had been indicated that the matter on where the mediators would be coming from was dependent on the nature of the property.

Deputy Minister Cronin agreed that indeed there is a direct link between the definition of 'property' and who the mediator should be and therefore in particular expropriation cases, the definition of property in terms of the Minister of Agriculture, Forestry and Fisheries would become useful to the kind of mediator that would be required. Essentially, the Department was in agreement with the suggestion of Mr Walters but also did not want to change the definition of property in the general law of application.

Ms Dreyer asked the motivating factor for indicating that “the expropriating authority and claimant share the mediator’s cost equally” in section 21(e) as there was an agreement in the previous meeting that one could not burden the claimant for carrying the cost of a court case. The Deputy Minister had also admitted that the state would carry the cost for court cases.

Deputy Minister Cronin replied that Ms Dreyer was partly right and the Department was intending to remove section 21(e) in its entirety but the intention of the Department is not for the state to bear the cost necessarily. This should be part of the decision in the mediation process.

Ms Masehela suggested that the Department needed to retain section 21(e) as the expropriation process might be delayed more than necessary because one knows that they would not be paid anything towards the whole process.

Deputy Minister Cronin said that the Department was cognisant of the fact that poor communities are also affected by expropriation and mediation was not the major problem in the budget of SOEs and there might cases where the state would be required to bear all or the significant cost of mediation. There would be cases where there would be no need to share the cost of mediation and the more mediation is used the better in terms of unnecessary delays.

Mr Dlamini asked what was intended to be achieved by Chapter 6 as this was not clearly explained.

Deputy Minister Cronin indicated that the Department had observed that the property owners mostly preferred the court process than mediation especially those with strong lawyers. On the question on Chapter 6, expropriation in this case had already happened and 80% of the compensation had already been paid but there is still a disagreement between the parties on the compensation and therefore the Department suggested the process of mediation rather than the cost of courts and delays. There was also a possibility of introducing mediation on compensation or if there is a disagreement to mediation, then the expropriating authority must refer the matter to a competent court to decide and approve a just and equitable compensation.

Ms Masehela mentioned that Chapter 6 seemed to have been divided into three aspects where the focus is on “mediation and determination by courts” but there is also a focus on “urgent expropriation” and “withdrawal of expropriation” as you move along from page 18 to 19 as clearly demarcated on the Bill.

Mr Filtane indicated that the indigent policy needed to be taken into consideration for legal costs for those who are poor, especially where a whole community was being relocated.

Deputy Minister Cronin agreed that there was confusion on Chapter 6 and the suggestion would be to have separate chapters for “mediation' and 'determination by courts”, “urgent expropriation” and “withdrawal of expropriation”. The focus of the Department was on mediation as this was a shorter process than having to go through the legal route. The consensus had been that the Department should rather delete clause 21(e) as the poor would also be accommodated in the Bill. The mediation process cannot take place in cases where one party is not present and in a case of the land expropriation of a whole community, then that community must have a representative in the mediation process.

Mr Dlamini suggested that there should be recourse in cases where one party was unhappy with the process of mediation, even though the expropriating authority had followed all the necessary processes.

Mr Walters supported the suggestion made by Mr Dlamini and this could be accommodated in a separate clause on mediation and this would be made easier by the fact that the Department was already considering the restructuring of Chapter 6.

Deputy Minister Cronin responded that the Department was taking note of the point made by Mr Dlamini, especially on the provision of recourse in the case where one party was unhappy with the mediation process. It will need to apply its mind further on the matter.

The Chairperson thanked everyone present for the various inputs and the Committee would reconvene on 08 September 2015 to continue with the deliberation on the Bill

The meeting was adjourned.