In search of answers regarding the single most important political question facing South Africa today - land reform through Expropriation Without Compensation - the Joint Standing Committee on Constitutional Review held a colloquium of experts in Parliament.
A former Judge at the Constitutional Court and Anti-Apartheid struggle stalwart stated the current constitutional provisions already allowed for land expropriation without compensation provided the expropriations met the general limitations clause in section 36 of the Constitution. His view was that Section 25 was an empowering section that called for extensive land redistribution, giving the state very extensive powers in the public interest. However, while it was permissible to amend the Constitution, amendments should not destroy constitutionalism, and should be subject to judicial review.
A public interest lawyer with extensive experience in land and mining issues highlighted the findings of the independent High Level Panel headed by former President Kgalema Motlanthe that there had been institutional failure to implement land reform, including restitution. The emancipatory potential of Section 25 had not been realised and that had to be addressed.
The Institute for Poverty, Land and Agrarian Studies said the question of land in South Africa could itself be broken down into multiple land questions. Those comprised issues of land de-congestion in the former homelands; land for commercial farming; the agribusiness sector and its relationship with Broad-Based Black Economic Empowerment; long term farm dwellers and labour tenants.
The Director of the Land and Accountability Research Centre spoke on the land tenure rights of millions of people living in the former homelands as well as farm labour tenants and those in urban informal settlements. The plight of those people was covered by Section 25(6) of the Constitution, which promised to change the legally insecure status of their tenure rights to one of legal security. In terms of the Constitution, for people whose tenure was vulnerable because of past racial discrimination, tenure rights had to be deducted from the current formal owner, either by transferring ownership or deducting specific rights from the formal owner and transferring those rights to those with insecure tenure.
The presentation by Agriculture South Africa indicated that changing the Constitution would not fix the country’s problems but could instead exacerbate them. The major obstacle to land reform was not the Constitution but the failure amongst stakeholders to cooperate. Changing the Constitution would not fix anything but would create more problems. The commercial farming sector recognised the historic land dispossession of black people and was ready and willing to play a positive role in an orderly, legal process of land redistribution and security of land tenure in which expropriation without compensation was the last resort. Priority had to be given to food security and the development of agriculture through private-public partnerships.
The African Farmers Association of South Africa was in full support of expropriation without compensation not only for purposes of speeding up land reform but because expropriation of land without compensation was a strategic approach to the transformation of a whole industry. Expropriation should be the central legislative mechanism for dealing with the entire programme of agrarian reform and land resettlement for socio-economic and sustainable development in South Africa. It should also be a way of restoring food security as opposed to perpetuating the current status quo where the majority of black people were experiencing food insecurity.
The Banking Association of South Africa had not finalised its opinion of the process, but an official presented his view that expropriation would result in a significant write-off of debt and high levels of debt impairments, with a reduction in the value of property as security. Many investors would be looking to divest from property to avoid future losses. Expropriation could also set off a serious loss of confidence in the banking sector and trigger a further sovereign ratings downgrade. Land reform should happen in an orderly manner, failing which, close to R1.6-trillion worth of assets could be lost.
In its presentation, the Land Bank identified seven main issues which had a major impact on land reform, and each of which had its own basket of challenges. Lack of Access to Land by Historically Disadvantaged Individuals, implementation of the process, technical support, Market Access and Related Logistics were amongst the issues to be attended to.
The Congress of Traditional Leaders of South Africa began by warning that attempts to expropriate land ‘in black hands’ were unacceptable to the organisation and such a move could only happen in the year 4000, by which time the current traditional leaders would be ancestors. It was cause for concern that the state had ‘nationalised’ minerals without compensating communities who owned the land on which mining was taking place. It was time that communities began to demand the return of mining rights ‘illegally’ held by government. All mining licences should be revoked and handed back to the owners of the land.
Members of the Committee asked what could be done regarding the situation in Cape Town where poor people had occupied unused land close to the city centre and where the city council was selling off land to private developers instead of targeting it for social housing. They asked for comment on the real potential for abuse of expropriation without compensation and also on the danger posed by illegal occupations of land.
Members asked whether judicial review could be excluded in the implementation of expropriation without compensation and for clarity on the relevance of Section 36 as a limitation clause in relation to Section 25.
What should be done in a situation where up to 50 percent of a farmer’s property was occupied by former labourers? Was it not possible that traditional leaders could contribute to making the land scenario fair and equitable to all? The Committee asked BASA to explain why the banking sector was so fearful of expropriation without compensation. The Land Bank and BASA were requested to explain whether, in terms of international best practice, there were any alternatives available to assist emerging farmers when they could not qualify for financial assistance from mainstream commercial banks.
The Co-Chairperson of the Committee explained that expropriation without compensation was a done deal and the only question was whether the Constitution needed to be amended or not. The Committee’s main concern was how to allay the genuine fears of fellow citizens on the matter.
The two Chairpersons welcomed the guests and thanked them for attending. Co-Chairperson Smith read apologies from Dr M Motshekga (ANC), Ms T Mbabama (DA) and Mr M Maila (ANC).
To contextualise the day’s meeting, Mr Smith said the process had begun with the 27 February 2018 National Assembly resolution on Expropriation Without Compensation (EWC) which instructed the setting up of a Joint Committee on Constitutional Review to look at Section 25 of the Constitution. The Committee was to establish whether Section 25 as it existed was adequate for the state to effect EWC or whether a need existed to make amendments to the Constitution for purposes of EWC. The resolution also instructed the Committee to consult widely (including a public hearings programme scheduled to begin in late June 2018) and therefore the Colloquium was in keeping with that aspect of the mandate. The experts who would present were:
- Justice Albie Sachs, former Judge at the Constitutional Court and Anti-Apartheid struggle stalwart
- Mr Henk Smith, Land Rights Attorney
- Prof Ruth Hall, land rights advocate and researcher at the Institute for Poverty, Land and Agrarian Studies at the University of the western Cape (UWC)
- Dr Aninka Claasen, Director at the Land and Accountability Research Centre (LARC) at the University of Cape Town
- Mr Dan Kriek, Agriculture South Africa (AGRISA)
- Dr Vuyo Mahlati, African Farmers association of South Africa (AFASA)
- Mr Pierre Venter, Banking Association of South Africa (BASA)
- Dr Litha Magingxa, The Land Bank of South Africa
- Kgosi Litsiri Phaahla, Congress of Traditional Leaders of South Africa (CONTRALESA)
According to Mr Smith, there were two schools of thought on EWC. The one view was that amending the Constitution was necessary for the effective implementation of EWC and the counter view was that Section 25 was adequate in its current form and therefore made a Constitutional amendment quite unnecessary.
Each side would have to come up with compelling reasons why the Committee should, at the end of the consultative process, decide in its favour. Mr Smith said the national consensus was that land reform, including restitution, redistribution and security of tenure, had to be accelerated to restore the dignity of South Africans. Also, widely accepted as a corollary was that land reform should not compromise food security and should, in fact, enhance agricultural productivity.
EWC had caused anxiety and panic in society and the Committee was not oblivious to that. With others it had heightened expectations. That meant that Parliament had to approach the matter with sobriety and maturity. Mr Smith cited President Ramaphosa’s view that EWC should not be seen as a threat but rather as an opportunity to create lasting stability in the country.
Mr Smith said the meeting was a learning or induction exercise in preparation for the upcoming public hearings when the Committee would engage broader society on the issue. He assured the invited speakers that the Committee had no intention of challenging people’s views or making final decisions but wished to listen and ask questions in order sharpen its thinking on the myriad issues around land reform.
Judge Albie Sachs
In his submission, former Constitutional Court Judge and Anti-Apartheid stalwart, Albie Sachs said the first thing to note was that the Constitutional Court had not yet ruled on EWC as far as it applied in Section 25 of the Constitution, and whatever he would say would be subject to that fact. The first case dealing with Section 25 (albeit not on land issues) before the Constitutional Court had involved the First National Bank. The judgement stated that huge past injustices, including land dispossession, had to be taken on board when interpreting Section 25. The new constitutional era in South Africa had rendered obsolete the old approach to property where the right to property was heavily protected. This judgement had set the foundation for the Constitutional Court’s approach when it came Section 25.
According to Justice Sachs, Section 25 therefore should not be seen as ‘freezing the status quo’ of entrenched property rights as in older democracies around the world, but as promoting and facilitating redistribution of land, giving the state extensive powers of expropriation. Justice Sachs said there was ‘no doubt about it’ that when read together, including the preamble of the Constitution, the clauses of Section 25 required and imposed a duty on the state to act and to provide access to land in various ways. Although Section 25(8) appeared to be a limitation clause against EWC specifically, and indeed referred to Section 36 - the general limitation clause in the Constitution, Justice Sachs was of the opinion that Section 25(8) reinforced the power to implement EWC. However, that interpretation had not been judicially tested and would require a court decision. Section 26 was also relevant for EWC because of the huge need for urban land for housing in South Africa.
Justice Sachs said it was a matter of urgency that Parliament passed a new Expropriations Act in which the constitutional context of the parliamentary resolution of 27 February 2018 was explained. The new Act should specify the instances where EWC would be implemented and should include a mechanism to prevent the arbitrary use of EWC by those in power for personal gain or inappropriately. Instances of EWC could include the expropriation of land - sometimes without compensation or sometimes with minimum compensation - where people owned multiple farms, some of which might not be in use. EWC could also transfer ownership of land to farm workers, and in urban areas, land held for speculative purposes could be targeted to alleviate the crying need for housing. This would involve the ‘denting’ of market principles but it would be an orderly, legislative dent compared to a catastrophic situation where people just took over land willy-nilly.
In summary, Justice Sachs said his view was that there were creative legal ways to effect EWC and address serious past injustices and the courts should be allowed to test those mechanisms to ultimately decide on the constitutional issues. This would create bigger buy-in from the general public and bring the nation closer together instead of dividing it any further.
A public interest lawyer with extensive experience in land and mining issues, Mr Smith highlighted the findings of the independent High Level Panel headed by former President Kgalema Motlanthe that there had been institutional failure to implement land reform, including restitution. The emancipatory potential of Section 25 had not been realised and that had to be addressed. That could be done through a survey of case law on all issues related to land, including mining and fishing rights, land occupations in urban areas, security of tenure for farmworkers, and several other issues. Recent court judgements on the above had been historic and indicated the general direction of policy and legislation regarding the implementation of EWC.
Questions and comments
Mr M Paulsen (EFF) asked Justice Sachs whether Section 25 (8) made it possible for the state to be the sole custodian and ‘final arbiter’ of all land in South Africa. Mr Paulsen asked that Mr Smith comment further on what could be done regarding the situation in Cape Town where poor people had occupied unused land close to the city centre and where the city council was selling off land to private developers instead of targeting it for social housing.
Mr S Swart (ACDP) said he had appreciated the Chairperson’s opening remarks that the meeting was an information gathering exercise and that the constitutional review process was not ‘a done deal’. He said it was important to understand that Section 25 was indeed transformative and that the market was only one of the ways to effect expropriation. The section allowed, through a judicial process, expropriation with ‘minimal’ compensation. He asked Justice Sachs to comment further on the real potential for abuse of EWC and also on the danger posed by illegal occupations of land. He asked Mr Smith to provide the Committee with a list of all the cases cited in his presentation. Mr Swart said there was a lot of pending legislation on the matter under scrutiny and asked whether Justice Sachs had had a look at, for instance, the Expropriation Bill which had been in the pipeline for close to ten years.
Mr N Koornhof (ANC) asked both Justice Sachs and Mr Smith to clarify whether or not the Constitution should be amended and whether judicial review could be excluded in the implementation of EWC.
Mr T Godi, Chairperson of the Standing Committee on Public Accounts (SCOPA), said it would have helped to have a legal person who held an opposite view to Justice Sachs and Mr Smith so that when a law to implement EWC was challenged, most of the possible legal attacks would have been anticipated. Was it not an admission by the ruling party of the ambiguity of Section 25 regarding EWC that people were still grappling with how to interpret the section?
Mr S Mncwabe (NFP) asked Justice Sachs to make a judgement between using the executive arm of government to test the final legislation on EWC through the Constitutional Court, as against a situation where Parliament itself could deal with a challenge to the legislation via a public petition. He also asked for clarity on the relevance of Section 36 as a limitation clause in relation to Section 25.
Ms M Mothapo (ANC) said she was in full agreement with Justice Sachs that the preamble of the Constitution, especially when it mentioned addressing the imbalances of the past, was quite relevant concerning EWC. She also echoed Mr Swart’s request for a list of all relevant cases and written material on land reform to be made available to the Committee to ensure that it was well supplied for the task at hand.
Co-Chairperson Mr Smith proposed that Section 25 (8) be amended by including the following words: ‘which may include expropriation without compensation...to achieve land, water and related reforms’. He argued that adding those words could strengthen the clarity of the section regarding EWC and render it unchallengeable.
Response from Judge Sachs and Mr Smith
Mr Smith talked about his visit to a recently occupied piece of land in Cape Town where he said there had been an orderly takeover. He said the occupation would soon be followed by the creation ‘out of nowhere’ of a ward under the EFF or the ANC or the DA. This was the reality of South Africa and it was not going away any time soon. The question was how institutions responded, in terms of policy and legislative arrangements across all spheres of law and government, in acknowledgement of the social conditions reflecting (and reflected by) that reality. Mr Smith said judicial review could never be excluded from the law of the land, but also pointed out that the existing Expropriation Act was too cumbersome as it involved a series of 13 administrative steps which needed to be addressed in cases of expropriation, and all of which could be individually challenged in a court of law.
Responding to the Co-Chairperson has proposed amendment to Section 25 (8), Mr Smith said although he appreciated the wisdom of the suggestion, the subsection was really a reassurance or confirmation clause, while the crucial ‘operating provisions’ occurred earlier. Reassurance or symbolic clauses were of political value and it would be a worthwhile exercise if a comprehensive list of such assurances across the whole political spectrum could be put together in a piece of legislation.
Justice Sachs said although the Chairperson’s proposed amendment could be a creative way of bringing EWC into focus by expressly spelling it out in Section 25 (8), the amendment would still be subject to Section 36. It would be very dangerous to give the state carte blanche to expropriate. Controls and criteria were absolutely necessary, and Section 36 was one of those. He admitted that he had not looked at the long-delayed Expropriation Bill, but he understood that it was not in line with current demand and until it could adequately respond, his view was that a further delay was acceptable.
Regarding judicial review, his opinion was that the constitution granted a hierarchy of protection against amendment – with a minimum requirement of a two thirds majority relating to any amendment and a three thirds majority requirement in relation to foundational principles (such as non-racialism). Even further, the ‘foundational features’ doctrine as espoused by Justice Ismail Mahomed (late Judge of the Constitutional Court) held that even with a hundred percent majority, no court would allow the foundational features of the Constitution to be amended because you cannot have constitutionalism without an independent body to ensure that the Constitution was applied. Without judicial review, there was no constitutional state.
Presentation by Prof Ruth Hall
Prof Hall, representing the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape (UWC), said the question of land in South Africa could itself be broken down into multiple land questions. Those comprised issues of land de-congestion in the former homelands; land for commercial farming; the agribusiness sector and its relationship with Broad-Based Black Economic Empowerment (B-BBEE); long term farm dwellers and labour tenants, and many others. She said Section 25, contrary to what the DA, the National Party, the IFP and other pro-property parties had demanded during constitutional negotiations in 1995, did not insulate and prioritise private property. Instead Section 25 was a mandate for transformation and the only provision that protected the right to private property was subsection 25 (1), which referred to deprivation.
However, it should be noted that even subsection 25 (1) was a negative right in that it protected only against discriminatory laws. It allowed deprivation through a law of general application. The key issue was whether to implement EWC through a case by case basis or through a blanket law that applied to everyone. The reality was that although the state had powers of expropriation, it had chosen not to use them. ‘Willing buyer, willing seller’ did not appear in the Constitution. On land restitution, the state was bogged down in an onerous, bureaucratic quagmire and was facing a backlog stretching almost two centuries into the future, unless something drastic was done. With regard to security of tenure on farms, despite the Extension of Security of Tenure Act (SEAT), more people living on farms had been evicted in the first 10 years of democracy (1994-2003) than in the 10 years before.
On land redistribution, after years of experimenting with different types of grants for poor people, the state had in the last ten years started buying up farms and allocating them on a leasehold basis. Prof Hall said this had very important implications for the EFF’s proposal that the state should be the custodian of all land in South Africa, as during her research in the Eastern Cape, she had not come across a single case where the state had managed to issue a farm lease. Which was not surprising given the great deficiencies in the land administration system, compounded by dwindling budget allocations to the land distribution programme as a whole. It was 0.4 percent of the national budget.
Since 1994 just under 10 percent (including land restitution) of commercial farmland had so far been redistributed from white to black hands, but the process was now ‘pretty much’ at a halt. Also, in failing to pass legislation facilitating the subdivision of large farms, the state had advantaged big commercial farmers at the expense of their small-scale counterparts. Also, there was a lot of corruption in partnerships between big commercial farmers, small scale farmers and the state, where even multinational white-owned businesses were profiteering from land reform, while the actual beneficiaries were kept off the land.
Without a means test to determine who benefits from the land redistribution programme and no knowledge of how the state made decisions on this question, land reform in South Africa was ripe for corruption and patronage. On top of that, there was no monitoring and evaluation system.
In summary, Prof Hall said EWC was not the only challenge facing South Africa on land reform. Other key land reform questions included the following: who are the primary beneficiaries of land reform? How could ordinary citizens hold the state accountable for its decisions? Against this background Prof Hall called for the following legislative interventions:
- an Expropriation Bill to bring legislation in line with the Constitution
- a Land Records Bill to enable people to record and register their property rights
- a Land Reform Framework Bill to counterbalance the expropriation power of the state with the power of citizens to hold the state to account.
Dr Aninka Claasen
Dr Claasen, a veteran land rights campaigner and Director of the Land and Accountability Research Centre (LARC) at the University of Cape Town (UCT) gave a presentation on the land tenure rights of millions of people living in the former homelands as well as farm labour tenants and those in urban informal settlements. In terms of the law, the plight of those people was covered by Section 25(6) of the Constitution, which promised to change the legally insecure status of their tenure rights to one of legal security.
All of those people lived on land the owner of which was someone other than themselves. In many instances the state was the nominal owner as in the former homelands or the actual owner, as in municipal city land, of occupied land in the urban areas, or absentee landlords. In addition, there were farm dwellers or workers who had lived for generations on land owned by white farmers.
In terms of the Constitution, for people whose tenure was vulnerable because of past racial discrimination, tenure rights had to be deducted from the current formal owner, either by transferring ownership or deducting specific rights from the formal owner and transferring those rights to those with insecure tenure. That was straightforward in relation to land nominally owned by the state.
Accordingly, in line with Section 25 (9), the state had enacted the following four pieces of legislation to meet that obligation:
- The Prevention of Illegal Eviction from Unlawful Occupation of Land Act (PIE) to prevent arbitrary evictions
- The Labour Tenants Act to provide security of tenure to labour tenants
- Extension of Security of Tenure Act to provide further security of tenure to farm dwellers
- Interim Protection of Informal Land Rights Act (IPILRA) to protect against deprivation of informal rights to land
However, those laws have not been effectively enforced and instead South Africa has had widespread evictions from farms, urban land and buildings, and from rural communal areas where mining was taking place. Farms and cities were the ideal case for EWC as people already had countervailing rights to land they occupied. Owners could not be compensated for rights that, in practice, already vested in others, such as labour tenants and people occupying buildings in city centres. Urban land was also ideal for EWC as it was well situated land owned by the state, parastatals or absentee owners.
Dr Claasen said EWC was not enough in and of itself. It needed to be tied to the realization of the rights of particular people, whether in terms of 25(6), 25(5) or 25(7). EWC had to deliver recorded rights to those who had obtained land, or their tenure would remain insecure and subject to state failure or abuse by traditional leaders, slum lords and others in powerful positions in society. When it came to those resident in the former homelands, who comprised a third of the entire South African population, Dr Claasen raised a glaring lacuna. There was no law other than IPILRA to give effect to Section 25(6), meaning that Parliament was in breach of 25(9). That had led to the current controversy about who owned the land in the former homelands - traditional leaders or ordinary people? There was no law providing guidance on this matter.
Were the state to transfer title of ‘communal’ land to traditional leaders, as opposed to the people who have inherited it over generations, it would have to first expropriate the customary ownership rights of the families occupying the land with regard to customary law property rights. A sad situation also obtained in the former homelands where rural people’s land surface rights were confiscated by the Mineral and Petroleum Resources Development Act (MPRDA). The MPRDA was meant to rein in white land owners and mining companies. But it had had a disproportionate impact on black land rights. Whites had been able to negotiate surface leases because their property deeds were recognised, while black people were not treated as owners or as having beneficial rights on their land.
In connection with the above matter, Dr Claasen cited a number of highly emotional court cases, including the important 1 June 2018 Supreme Court of Appeal judgement in Gongqose and Others versus The Minister of Agriculture, Forestry and Fisheries, where the court held that fishing rights could not override customary rights except in terms of legislation dealing specifically with customary law. That applied to all customary rights – not just fishing rights. Judgement was still being awaited in the Xolobeni and Bakgatla cases on the MPRDA versus customary land rights.
Evictions, and failures to enforce tenure security laws highlighted the problem of political will. The poor and vulnerable had suffered because of the interests of elites - white farmers in the case of farm labour tenants, mining houses, and traditional leaders in the case of mining on communal land.
Dr Claasen echoed Prof Ruth Hall in that the debate about EWC could not be only about how the land was obtained. It had to be about who got the land, and on what terms. Lastly, Dr Claasen declared her support for the proposal by Prof Hall that the power of the state to expropriate had to be counterbalanced by the power of people to hold the state accountable in matters of land.
Questions and Comments
Mr Koornhof asked whether, in land restitution cases where the community had got their land back but had signed an agreement with the former owner to continue using the land, those agreements should be revisited. He also asked for Dr Claasen’s opinion on what to do in a situation where up to 50 percent of a farmer’s property was occupied by former labourers.
In relation to communal land and the question of ownership, Ms Mothapo said her opinion was that it was state land which traditional leaders held in trust for the community. She wondered whether parts of Dr Claasen’s presentation might be misleading where Dr Claasen asserted that ‘communal land already has owners’.
Mr Mncwabe elaborated on Ms Mothapo’s comments by asking why Dr Claasen thought there was a ‘controversy’ regarding ownership of communal land, because as far as he knew, traditional leaders were only custodians of land owned by the people.
Addressing Prof Hall, Mr Paulsen said her presentation had seemed to focus more on rural land issues whereas he thought the ‘real bone of contention’ was urban and peri-urban land, where the highest population density occurred and where land hunger was at its worst. He asked Dr Claasen for her view as to why land activists had not called for a moratorium on all evictions, as that issue was such a highly destabilising force in society.
Mr Swart raised a concern about the potential for abuse of land reform by ‘narrow interests’ and other powerful actors in society. How could this be prevented to ensure that EWC really benefited those most in need?
Mr Godi said it was somewhat regrettable that both Dr Claasen and Prof Hall had devoted a large part of their presentation to an analysis of the present state of land reform. It would have been good to also hear more on what needed to be done after EWC had been implemented, as it seemed a great deal of institutional capacity would have to be strengthened to carry out EWC. He warned against a situation where the legislative machinery on EWC was ready and available, yet the state failed to deliver or delivered to the wrong people.
Responses from Prof Hall and Dr Claasen
Prof Hall said it was an ‘outrageous’ miscarriage of justice that nearly a million people had been evicted from farms in the first ten years of democracy despite a battery of laws meant to protect tenure rights. To address that situation, she directed the Committee to the findings and recommendations of both the Motlanthe High Level Panel of Experts and the Human Rights Commission on the plight of the 2.8 million people who lived and worked on farms.
Replying to Mr Paulsen’s observations on urban land hunger, she agreed that a mistake had been made when the land reform programme became focused only on agrarian reform and urban land was allowed to fall off the radar, despite the rapid rate of urbanisation in South Africa. Expropriation, including EWC from one arm of government to another through the Government Immovable Asset Management Act, would be inevitable and essential for purposes of giving people access to well located, site and service land.
In response to Mr Swart and Mr Godi, Prof Hall reiterated her argument that arming the state to deliver EWC should go hand in hand with obliging the state to respond to those whose economic circumstances demanded the most urgent redress regarding the land.
Dr Claasen replied to Mr Koornhof’s question on retired farm workers using up productive farmland for residence by pointing out that ESTA provided for the state to either acquire part of the farm for people to live on or to acquire land outside the farm. However, that provision had never been used. All the laws meant to protect people’s precarious tenure rights contained alternative forms of redress, and the question was where and how the state actually decided to use its power, including allocation of budgets.
To Mr Godi, she replied saying the issue of institutional capacity was ‘heart breaking’. During her stint as part of the Motlanthe High Level Panel, she had heard stories of ‘intimate corruption’. She had heard testimony from people about how they had to sleep with officials to access RDP houses or jobs. She asked: how did one develop any kind of institutional capacity in the midst of such a ‘tragic breakdown of public service’?
Dr Hall said the answer could be a system where land reform became a transparent process where not only officials and politicians played a role, but local committees of ordinary people were included to monitor the system. The proposed Land Records Bill would go a long way towards making that a reality. A key feature of that proposed law would be that recorded rights would not be individual, exclusive rights but determined according to who else made use of the same rights, which would be more in line with inclusive, family-based customary law systems of ownership of land.
Regarding the question of who owns communal land, Dr Claasen said a large part of the problem was the idea of elevating title deeds above customary rights to the land and making a title deed seem more valuable. Whereas customary law accepted that multiple people could have overlapping rights to the land without contradiction, title deeds on the other hand provided exclusive individual ownership of a specific piece of land which, in communal areas, was given to either a specific person or a specific traditional leader or body.
Clearly there was a massive controversy on this question if one looked at the widespread challenge to the Communal Land Rights Act (CLARA), which the Constitutional Court struck down in its entirety in 2010. In addition, Dr Claasen said, the Motlanthe Panel had heard ‘massive’ complaints to the effect that what was happening in communal areas was the opposite of what people knew customary law to be. The main complaint was that people claiming to act on behalf of communities were entering into deals with big mining companies without those communities being consulted or without community buy-in. Dr Claasen said it was worth noting that not a single person had stood up to question the legitimacy of the system of traditional leadership.
Cases either currently before, or already decided by, the Constitutional Court bore witness to the above problem. Dr Claasen cited the court’s two judgements on the Bakgatla Ba Kgafela (with a third one still pending) and the Commission of enquiry probing billions of Rands gone missing in alleged Community Property Association (CPA) corruption in the North West Province. She also mentioned the case of the Public Protector’s report on the Bapo Ba Mokgale, where R600 million had gone missing under the watchful eye of the Premier of North West.
The valorisation of title deeds as the highest form of ownership was to a large part responsible for the above disputes and conflicts, because title deeds allowed exclusive ownership of land rights as opposed to a more inclusive kind of ownership which made for more social stability.
Presentation by Agriculture South Africa (AGRISA)
Mr Dan Kriek, representing AGRISA, said his organisation was in support of an orderly and legal process of land reform and understood the moral argument behind EWC. Mr Kriek said the view of AGRISA was that there was no need for more plans but to implement what was already available. Mr Kriek said the major obstacle to land reform was not the Constitution but the failure amongst stakeholders to cooperate. Changing the Constitution would not fix anything but would create more problems.
Mr Kriek said his view was that South Africa was going the wrong way with regard to property rights. Instead of weakening property rights, the country should make them stronger by giving the previously disadvantaged full title to the land in order to unlock the full financial value of the asset. That could be the biggest empowerment exercise in the history of South Africa.
On EWC, he said he would restrict himself to saying that no one should expect commercial farmers, as individuals, to bear the brunt of something that was in the national interest, and therefore compensation should be paid. Depriving people of a fundamental human right such as the right to property would put South Africa out of step with the world. Referring to the land audit results produced by AGRISA (previously criticised by Prof Hall, amongst others) in 2017, Mr Kriek said that, despite accusations of being racist, the audit had been meant to provide clarity on land reform. If a racial impression had been created, he said he was prepared to apologise fully.
Mr Kriek said some credit should be given to the government for buying up land, although he pointed out that the lack of general support for beneficiaries remained a serious failure. It was also important that the role of the open market in land reform, as identified in the Constitution, should not be overlooked, as statistics showed that black people had bought 4.2 million hectares of land without government assistance.
Mr Kriek said he did not believe the country would take the ‘extreme’ route of EWC, as AGRISA was not ‘alarmist’ but he warned that as the country’s population grew, and agricultural production failed to keep up, the country could be in trouble from ‘food shedding’. The second part of the ANC resolution on land reform had to be taken very seriously as it warned against land reform jeopardising food security.
In sum, Mr Kriek said the commercial farming sector recognised the historic land dispossession of black people and was ready and willing to play a positive role in an orderly, legal process of land redistribution and security of land tenure in which EWC was the last resort and priority was given to food security and the development of agriculture through private-public partnerships. He suggested practical steps to achieve the above, including the following:
- finalising the Expropriation Bill
- getting consensus on the land audit figures
- implement the recommendations of the Motlanthe High Level Panel
- making well situated urban state land available for housing for the poor
- passing the Land Framework law
- establishing a Land Ombudsman Office
- a proper monitoring and evaluation system
- setting up proper financing mechanisms
Presentation by Dr Vuyo Mahlati
Representing the African Farmers Association of South Africa (AFASA) Dr Mahlati said her presentation was not AFASA’s official submission to the Committee but a document to highlight certain perspectives from which the organisation saw EWC.
Dr Mahlati began by observing that both land audits from AGRISA and government had shortcomings. In any case, AFASA ‘s position was that black people in general, and in particular black women, had had a raw deal with regard to land. Government failure on land reform was something AFASA took as a given. Dr Mahlati said even the sometimes lauded government policy of buying farms on a farm-by-farm basis had been a ‘total disaster’. The approach had shown poor strategic thinking and had resulted in corruption (across the whole public/private spectrum) and in government owning mostly marginal land.
AFASA was in full support of EWC not only for purposes of speeding up land reform but because EWC was a strategic approach to the transformation of a whole industry. EWC should be the central legislative mechanism for dealing with the entire programme of agrarian reform and land resettlement for socio-economic and sustainable development in South Africa. EWC should also be a way of restoring food security as opposed to perpetuating the current status quo where the majority of black people were experiencing food insecurity.
Dr Mahlati said AFASA had found that the Expropriation Bill did not specify EWC for purposes of public interest and therefore urged that the language of the Bill be made as unambiguous as possible on that score to guard against legal challenges by those who had deep financial resources and were hell-bent on defeating land reform through endless law fare.
Dr Mahlati said AFASA had come up with several proposals regarding the land reform programme and EWC. Some of them were:
- comprehensive compulsory acquisition legislation (empowering the president to achieve the objectives of a transformative comprehensive resettlement plan)
- new legislation to provide for expropriation of certain categories of land without compensation
- expropriation of certain categories of land with compensation in line with Section 25 of the Constitution
- publication by the president of a schedule of all land earmarked for expropriation
- dedicated state capacity and resources to execute expropriation swiftly and efficiently
- Pro-active Land Acquisition Strategy (PALS) farms had to be transferred to current leases with full title
- 50/50 equity share schemes should be scrapped and subjected to a value for money audit to determine who benefited and on what basis
- land and agricultural financing institutions e.g. the Land Bank, the Industrial Development Corporation had to be repositioned
- government incentive schemes to support black participation in mainstream agriculture had to be reviewed and increased
- water rights should be linked to the farm not an individual
- there had to be investment in irrigation schemes.
Presentation by the Banking Association of South Africa (BASA)
Representing BASA, Mr Pierre Venter said his presentation was not NASA’s mandated submission on the issue as the official document was still awaiting board approval.
Although BASA was in full support of orderly, legal land reform, the challenge was how to make it work for the poor without increasing poverty itself. The South African banking sector held around R1.6 trillion in property backed loans (R133 billion in the agricultural sector) and should land reform undermine property rights that would lead to all sorts of economic nightmares. If there was a decrease in the value of property either due to amended legislation or market uncertainty, this would not only destabilise the banking sector but also lead to a ratings downgrade of the country’s sovereign debt.
Although farming debt had increased in the last seven years, investment had meanwhile declined, meaning that the agricultural sector was becoming less competitive compared to its counterparts globally. The shock of EWC on the banking sector would produce high levels of debt write-off and impairment (arrears); a reduction in the value of property as security, and significant disinvestment in property to avoid future losses.
Mr Venter outlined two BASA supported initiatives designed to fast track land reform. In alignment to the National Development Plan (NDP) land reform targets of transferring 20 percent more agricultural land to black beneficiaries, BASA, together with the Agricultural Business Chamber (AGBIZ), had created a voluntary, commercial-based land reform financing model in 2015. The model included the upskilling and mentorship of black beneficiaries, as well as land transfer. The model also allowed farmers to not only own their farms, but to acquire neighbouring farms, thus ensuring that farms were viable economic units. Mr Venter said the plan had unfortunately not managed to get off the ground due to an unfunded mandate.
In addition, BASA was in talks with the Department of Agriculture, Forestry and Fisheries (DAFF) concerning the Integrated Development Finance Policy Framework which sought to integrate all ‘on farm’ agricultural finance for sub-commercial farmers. The proposed ‘Blended Financing’ model was aimed at establishing a partnership between DAFF and private sector financiers supported by both BASA and AGBIZ and premised on sound business principles to mentor and upskill beneficiaries. Collectively those models could not only speed up land reform but could also focus on on-farm finance - working capital, inputs, crops, livestock, implements, vehicles and infrastructure.
The Land Bank
In his presentation, Dr Litha Magingxa of the Land Bank identified seven main issues which had a major impact on land reform, and each of those had its own basket of challenges. The main areas were:
1. Lack of Access to Land by Historically Disadvantaged Individuals (HDIs)
- unaffordable land prices to HDI’s resulting from a free market regime
- finding and availing land that had agricultural potential
- lack or limited Security of Tenure
- land transfer was a long / protracted process
- cumbersome legislative process
- inadequate infrastructure to support the programme.
2. Project Research and Planning
- questionable credibility of business plans and technical assessments
- lack of access to professional experts
- skills / know-how limitations and lack of agricultural knowledge
- no proper financial planning
- beneficiaries not involved in whole value chain.
3. Investment (funding)
- lack of affordable access to finance by land reform beneficiaries – the funding structure of Land Bank was ‘commercial’
- not enough equity on beneficiaries’ balance sheets
- lack of grant funding to support projects
- inadequate recapitalisation financing
- mismatch in tenure where land was procured through lease arrangements
- inadequate risk insurance for projects
- lack of risk mitigation instruments or structures
- lack of appetite for investment by private capital
- loss of existing commercial relationships
- skills limitations and lack of agricultural and business management knowledge
- lack of access to professional experts
- not connected to support system such as cooperatives
5. Technical Support (Ongoing Operations)
- project planning and management
- lack of access to professional experts
- lack of agricultural knowledge
- managing the whole value chain from plant to sale
6. Market Access and Related Logistics
- loss of existing commercial relationships
- not connected to support system, e.g. cooperatives
7. Monitoring and Evaluation
- Lack of technology and business support systems
Dr Magingxa capped off his presentation with the following set of critical questions, designed to assist and guide the Committee going forward:
- how to avoid the errors of the last two decades?
- how to foster alignment within existing government framework for optimal benefit?
- how to design beneficiary qualification criteria that ensure that limited financial resources are directed at viable enterprises?
- how to leverage private sector resources in the process?
- what institutional arrangements are necessary to govern the redistribution process?
- how to measure ourselves at the end of the process?
Presentation by Kgosi L Phaahla on Traditional Leadership
In a statement read before the Committee, Kgosi Phaahla of the Congress of Traditional Leaders of South Africa (CONTRALESA) began by warning that attempts to expropriate land ‘in black hands’ were unacceptable to his organisation and such a move could only happen in the year 4000 by which time he and his colleagues would be ancestors.
Citing a number of Acts through which he claimed the state had, in an agreement with CONTRALESA in 2017, undertaken to transfer land to traditional leaders, Kgosi Phaahla was adamant that such transfer should take place before land in white lands was expropriated. He also said it was cause for concern that the state had ‘nationalised’ minerals without compensating communities who owned the land on which mining was taking place. It was time that communities began to demand the return of mining rights ‘illegally’ held by government. All mining licences should be revoked and handed back to the owners of the land.
On EWC, Kgosi Phaahla said he was still struggling to understand what it meant and preferred to call it the dispossession of whites of their rights over land and the repossession of a ‘stolen precious asset’. In any case, CONTRALESA was of the view that expropriation had always been part of Section 25 of the Constitution and section 42 E of the Restitution of Land Rights Act of 1994, but the government had never bothered to test it. As for the Land Claims Commissions, they had ‘chickened out’ every time the opportunity to expropriate had presented itself.
CONTRALESA, however, was in support of EWC as the current white owners had acquired the land without paying a cent. CONTRALESA’S only condition was that EWC had to be applied only to land in white hands, and anything contrary to that would be met with hostility.
Questions and Comments
Mr Swart directed his first comment at Kgosi Phaahla and asked him to comment on the Ingonyama Trust matter. To AGRISA, he asked whether the state could be trusted with complete custodianship of the land. Mr Swart also requested suggestions on how the Committee could be of assistance regarding security of tenure in farms and the reported lack of funding around leases.
Mr Paulsen asked Dr Magingxa whether he knew what had ultimately happened to emerging farmers after the Land Bank had turned down applications for assistance. Addressing Kgosi Phaahla, he said he understood that CONTRALESA might have a problem with the state being sole custodian of land, but was it not possible that traditional leaders could contribute to making that scenario fair and equitable to all? What would it take for traditional leaders to appreciate the benefits of the state being the sole custodian of the land? Given South Africa’s history of political violence and the highly influential position in society enjoyed by traditional leaders, Mr Paulsen expressed concern that Kgosi Phaahla could make hostile threats in response to EWC. Mr Paulsen declared that whether people liked it or not, EWC ‘was going to happen’ and the question was how traditional leaders could work with the state as opposed to working against it.
At that point, the Co-Chairperson, Mr Smith, intervened to stop an exchange between Mr Swart and Mr Paulsen in which the former objected to Mr Paulsen’s comment that EWC ‘was going to happen whether one liked it or not’. Mr Swart maintained that EWC was not a given. However, Mr Smith said, indeed, it was the case that EWC was ‘a given’, but what was not a given was that the state would become sole custodian of all land.
Mr O Sefako (ANC)(North West), the Chairperson of the Select Committee on Land and Mineral Resources in the National Council of Provinces, asked the BASA to explain why the banking sector was so fearful of EWC.
Mr Mncwabe asked Kgosi Phaahla to comment on former President Motlanthe’s recent comments that Eastern Cape traditional leaders were the only ones in South Africa who understood that they were not owners of communal land.
Mr F Beukman (ANC) asked the Land Bank and BASA to explain whether, in terms of international best practice, there were any alternatives available to assist emerging farmers when they could not qualify for financial assistance from mainstream commercial banks.
Mr Koornhof asked whether AGRISA had a solution to the problem of land tenure for farm labourers. Commenting on the bleak picture projected by BASA in its presentation on how the banking sector could be affected by EWC, Mr Koornhof asked whether BASA was not overreacting.
Ms Mothapo asked Kgosi to compare and contrast the role played by the community versus the one played by the institution of traditional leadership - not the traditional leader - in development.
Referring to the Land Bank and BASA, Co-Chairperson Smith said he did not understand how the two organisations could ever hope to transform the farming sector if emerging farmers continued to be regarded as inherently high risk. In this case, the banks should somehow forget about profit (at least temporarily) and start thinking about transformation. Speaking of AGRISA’s reminder that the market was still a powerful mechanism of land reform, Mr Smith asked if people really thought the market could ever be ‘nice to us’.
Mr Smith reiterated that EWC was definitely going to take place, and the Committee’s main concern was how to allay the genuine fears of fellow citizens on the matter.
Responses and closing remarks
Dr Magingxa said the Land Bank was absolutely opposed to the state being sole custodian of land. The Land Bank would like to see state acquired land being put into as much production as possible. It was true that the Bank’s loan book was 90 percent white, but Dr Magingxa said it was exciting that at last this conversation had begun because it allowed people to look afresh at what the real objective of the Land Bank was. What was expected of the institution? And what support mechanisms were in place to ensure that it fulfilled those expectations? However, Dr Magingxa said that, in the meantime, the Bank was going ahead with initiatives focused on small scale and emerging farmers as part of delivering on its mandate as a development finance institution.
Mr Venter said there was a need for the financial sector to deepen its penetration especially in the smallholder, emerging farmer environment, hence BASA’s ongoing engagement with DAFF on a partnership model to assist small scale farming to become commercially viable.
He assured the Committee that BASA acknowledged that EWC would happen in certain cases, but the key concern was that it be done in ways that did not undermine market confidence and allow negative perceptions to drive the market. Was BASA overreacting? Mr Venter said no, as the upcoming official submission on EWC would show different economic scenarios that had been drawn up, some of which were less bleak than the one in the presentation.
Kgosi Phaahla said it was true that some ‘rotten apples’ had given traditional leadership a bad name. The general rule however was that traditional leaders understood that, without the people, they were nothing and in instances of land registration, the land was registered in the name of the community, not in the traditional leader’s name.
Although he agreed that certain practices of the Ingonyama Trust were incorrect, Kgosi Phaahla said that did not necessitate expropriation of the land. His view was that the Trust only needed to be transformed for everyone to feel that they had a stake in it. He rejected former President Motlanthe’s comments regarding traditional leadership in the Eastern Cape and maintained that what obtained in the province was the same as in others. He speculated that Mr Motlanthe’s positive comments regarding the Eastern Cape resulted from a lack of proper consultation with traditional leaders. Kgosi Phaahla was adamant that, as far as he knew, the Motlanthe High Level panel had ‘never’ consulted traditional leaders in Limpopo, which was where Kgosi Phaahla came from.
In response to Ms Mothapo’s request for an explanation on the role of the institution of traditional leadership in community development, Kgosi Phaahla said the traditional council consisted of the heads of all clans in the community. Clan heads represented the concerns of all the families from which they came. That was how the traditional council became the democratic organ of the community and no traditional leader could go against the decision of a traditional council. Most people confused a traditional council with a royal council which only made decisions pertaining to the royal house or family.
Dr Mahlati proposed that an urgent need existed for the development of a national spatial framework. for both urban and rural land as a critical component of land reform. On title deeds, Dr Mahlati said there was no way one could hope to operate in the modern economy without a title deed, and AFASA was busy working on ways to make that a reality. It was also important to note that banks were reducing the majority of South Africans to ‘junk status’ by denying them chances to participate in the economy of this country. Dr Mahlati said although government delivery systems had failed, it was still incumbent on citizens to help make those systems more effective, as otherwise EWC could never succeed on its own without government playing a big role.
Mr Kriek also assured the Committee that AGRISA was not over-reacting to the imminence of EWC. However, the concern was that when the Chairperson said EWC was a given, a message was going out to the market place and people became extremely nervous. In the meantime, President Ramaphosa was calling for investment, which, in turn, demanded policy certainty. A delicate balance was therefore necessary on the matter. On farm labourers, Mr Kriek said there were various forms of partnerships and some of them ended up in farm workers actually becoming land owners. Regarding state custodianship of land, Mr Kriek said AGRISA was definitely not in support of the policy as government departments simply knew nothing about the practicalities of farming. Did AGRISA trust the state? Mr Kriek said that, rather than trusting the state, it was better to trust the constitution, the ultimate guarantor of rights. Mr Kriek said the 1913 Land Act should teach all South Africans the kind of history we came from and strengthen the resolve to act now lest coming generations looked back on us and condemn us as strongly as we condemned the waste of time and resources engendered by past conflicts and injustices.
Co-Chairperson Smith again reminded the meeting that EWC was a ‘done deal’ and therefore the market, and South Africans in general should accept that. The process was being undertaken maturely and was designed to ensure stability and prevent unnecessary panic. Mr Swart said it was clear that the broad consensus was that the constitution in its present form allowed EWC, and that cases could be tested in a court of law. Mr Paulsen, however, objected and said he was not part of any broad consensus.
The meeting was adjourned.
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