The Ad Hoc Committee to Amend Section 25 of the Constitution met to hear the opinions of four experts: two experts in land valuations and two constitutional advocates who were familiar with section 25.
The first expert was a Land Valuer who had conceived a rather radical plan for resolving the matter of land reform entitled “Encouraging millions to become millionaires”. If section 25 were marginally changed, the Land Valuer stated that it could be done. The first thing was for the President, by decree, to grant perpetual tenure to all unregistered land users. The President had to turn South Africa into a world beating tax haven by replacing income tax and VAT with 100% tax on land rates and he had to declare a R2 500 per month basic income grant for everyone.
The problem of perpetual tenure was solved by simply saying that everyone who occupied 250 sqm of land would be given perpetual tenure. Everyone would immediately own land. 250 sqm was necessary because it was the smallest size of land that could provide fruit and vegetables for a family. Those whose land was taken had to be compensated over the next 16 years through land tax rebate. Only vacant or unused land with no man-made improvements could be expropriated.
Members asked which tier of government would be the recipient of land taxes: national, provincial or local government? Were occupied areas such as Sophiatown and District 6 to be left alone? What was his view of foreigners who owned land in South Africa? Some people would get 1 000 sqm, but what about those who owned more land? Members noted that secure tenure could happen if people had 250 sqm of land. How would that happen? Would it happen by decree? How would it work in the semi-arid regions of the land? What was the form of land register he envisaged for those who had 250 sqm?
An advocate, with many years of constitutional law experience, started from the assumption that the intention was to bring about drastic redistribution of land and that it was a political and constitutional imperative. There were three spaces in section 25 which allowed Parliament to legislate for redistribution. It was important to recognise that those three spaces were large and wide open. They went further than expropriation without compensation. He did not think that expropriation without compensation was necessary, but even if he were wrong, it was not enough. Much more would be needed to bring about redistribution.
A Constitutional Court judgement had already confirmed one space that had been overlooked: the taking of property constituted expropriation only if the state was taking it for itself. However, if the state took from some people and allocated to others, then it did not constitute expropriation and consequently was not subject to just and equitable compensation. Compensation simply was not required.
The advocate warned the Committee that if any amendments to make explicit expropriation without compensation were made, Parliament had to be very clear about what property it was referring to. The discussion was about land rights and the imperative for re-distribution went to land rights. But, if Parliament did not limit expropriation without compensation, that might impact on all sorts of other rights on which Parliament might not have intended to impact on.
He suggested that an Act of Parliament could create legislation that said that where land had historically been in white hands, that land could be presumed to be the results of privilege, unless proven otherwise by the owner. Then the problem of record keeping became the owner’s problem and did not lie in the state’s hands.
Members asked the advocate which of the three spaces he would select to make the Amendment. How would one redistribute land without going through the state? What modality could be used for the distribution? Would a different court think differently? What was the impact of the AgriSA judgement?
The Acting Valuer-General proposed that Parliament make current use more explicit in section 25(5). He suggested that the Constitution should refer to current use value as that would make it easier to determine market value. It was difficult too equate current use with market value. Value referred to a number and it would make his job a lot easier if everything in the formula for determining land value were in numbers. He added that if the Committee elected to look at all the factors that had to be considered in valuing land, only those factors that were practical and could be practically used, should be included. His big problem was that his officials were usually unable to determine the direct subsidies that had been received for a particular property. He also suggested that getting the current value of the property should be work that was shared between all state entities, including the South African Revenue Services. He acknowledged that theoretically one could get to zero compensation using the prescribed factors.
Members asked if the Acting Valuer-General had come up with a formula to implement the “just and equitable” criteria. What had the market reaction been to the implementation of the just and equitable rule? What were the formula indicators for the five points in the Constitution? How could other state institutions assist in determining land value? Did the Acting Valuer-General want to see his proposed changes in the Constitution or in the regulations?
A second advocate stated that his personal view, borne out of his involvement in land matters was that there was no need to change the Constitution. Despite a clear constitutional reality, the country had failed to pass legislation pursuant to sections 25(6), tenure security, and 25(5), access to land, which was redistribution. However, in light of the Committee’s obligation to make an Amendment, he presented proposals for various amendments. He provided extensive reasoning for his proposed changes to section 25 but warned that Parliament could not allow the taking land without compensation as the default position as there were times when it would be unacceptable, as in the Xolobeni and Hlabisa situations.
The advocate proposed to strengthen the judicial arm or to allow another independent and impartial tribunal or forum, headed by a judge with four or five other members, and set up for five years, to deal with the issues of land reform without delay. He proposed the delinking of expropriation without compensation so that land would be transferred as soon as it was expropriated. Going to court about compensation would happen after the expropriation had taken place. The three processes had to be handled separately: expropriation was the business of the state, compensation was the business of the judiciary or an independent tribunal, and valuation was the work of the Office of the Valuer-General. He suggested adding to section 25(5) [with due regard to the economic and social circumstances of the intended beneficiaries] so that land distribution did not enrich the elite.
Members asked what he meant by a tribunal and whether it would be sufficiently independent if it were set up by an Act of Parliament. The idea of delinking expropriation and compensation was helpful, but would that proposal not affect nation-building? The judiciary should be a last resort, but was it possible that there might be judges who were not transformed or progressive? Did the advocate support the restitution process and what were his views on that process? During the CRC process, there had been a call for a ceiling for the amount of land above which no one could own land. Did the advocate have a comment? Did the advocate think that banks should be compensated if they held mortgages on land expropriated without compensation or expropriated for less than the mortgaged amount?
The Chairperson welcomed Committee Members and informed them that four experts would brief the Committee on what was possible in respect of amending section 25 of the Constitution. She had given a specific question to the experts. The question was a guide and not intended to straitjacket the experts.
Minutes of 1 March 2019: the adoption of the minutes, with technical amendments, was proposed by Mr P Mnguni (ANC) and Ms Didiza, as they were the only two Committee Members left when the meeting had been adjourned the previous week.
The Chairperson explained that Mr Peter Meakin, a Land Valuer from Cape Town, had been unable to present the previous week as the meeting had not had a quorum at that point. She had therefore invited him to speak first. His input had been circulated to Members. The other presenters for the day would be the Acting Valuer-General, Pelekolo Mwiya, Adv Wim Trengove and Adv Tembeka Ngcukaitobi.
Presentation by Mr Meakin, Land Valuer
Mr Meakin stated that he was a professional land valuer and been in the land business for nearly 50 years and could be sued if anything that he said that day was not realisable. He was presenting quite an ambitious plan which he had entitled “Encouraging millions to become millionaires”. There were nine million unemployed people in the country and if section 25 was marginally changed, it could be done.
The first thing was for the President by decree to grant perpetual tenure to all unregistered land users. He had to demand that nine million gated no-tractor farm sub-divisions of 1 000 sqm be created to pave the way for nine million life-time jobs. The President must turn South Africa into a world beating tax haven by replacing income tax and VAT with 100% tax on land rates and to declare a R2 500 per month basic income grant. The final task was to clear away the rusty iron shacks. That was the basis of his presentation.
Granting perpetual tenure happened by simply saying that everyone who occupied 250 sqm of land would be given perpetual tenure. Everyone would immediately own land. 250 sqm was the smallest piece of land that could provide fruit and vegetable for a family. Neighbours would have to indicate boundaries with stones until formal boundaries could be drawn up.
Those whose land was taken had to be compensated over the next 16 years through land tax rebates.
Only vacant or unused land, with no manmade improvements, could be expropriated. A company by the name of Frost and Sullivan had established that only 10% of unused land would be required.
Mr Meakin suggested that unused or vacant land be described in section 25(4) as land “having lain fallow for more than one consecutive year and is unoccupied or unimproved. Arable land used as pasture for the rearing of animals is deemed to be unused or vacant because it could otherwise be used for job creation as market gardening.”
Mr Meakin would make a change to section 25(5) by adding: “The market value of the property, excluding the value of any unused/vacant land, the land rents of which are deemed to belong to the state.” He would include a gradual replacement of income tax and VAT with land rents, a rates and taxes type user-charge, excluding improvements, to foster conditions which would enable citizens to gain access to unused/vacant land on an equitable basis.”
In section 25(5)(3), with reference to compensation, he had added “[and indirect] state investment and subsidy” because it depended on various ways in which the state might have assisted, such as building a dam.
Mr Meakin stated that the key to his system would be doing away with income and other taxes, including VAT, and replacing those taxes with the land rent. The less people were taxed on work and income, and the more land was taxed, the better the country would progress. Income tax was the cause of companies going bankrupt. The Bible, capitalists and communists all supported land tax.
He gave examples of farmers around the world who had become successful small-scale farmers, adding that bio-tensive farming reduced carbon emissions. He suggested that retrenched workers could all become small-scale farmers.
Finally, it would be necessary to clear out the rusty corrugated iron suburbs and replace them with high density housing.
The Chairperson had picked up from the presentation the number of ways in which Mr Meakin believed that section 25 could be amended and clarity could be enhanced, but he was also suggesting additional clauses be added. He had suggested that section 25(3) should indicate a number of factors that had to be taken into account when there was compensation to be paid, such as indirect subsidies as well as the type of land. He had proposed the use of vacant land. He had suggested a land tax and had justified why it would be a better proposition and would encourage food security and small-scale food production. He had also suggested social housing in urban areas. Secure tenure could happen if people had 250 sqm of land. How would that happen? Would it happen by decree? How would it work in the semi-arid regions of the land? What was the form of land register he envisaged for those who had 250 sqm? She noted that it was an interesting proposal.
Mr V Smith (ANC) stated that his questions were limited to constitutional changes. The other stuff was the ‘how’ part. Which tier of government would be the recipient of land taxes: national, provincial or local government? Currently rates and taxes provided for the income of municipalities. Who did Mr Meakin see as getting those taxes? In respect of the proposal to use only unused and vacant land, was he suggesting that used land, like Sophiatown and District 6, had to be left alone? Everyone knew the history of that land. His reading of that was that those who had experienced the forced removal from Sophiatown and District 6, had to leave it because used land was sacrosanct. That was what he was reading from the proposed amendment to section 25(4).
Ms M Semenya (ANC) welcomed the presentation. Mr Meakin had not spoken about foreign-owned land. What was his view of foreigners who owned land in SA? That was a big problem. He had spoken about a minimum amount of land, but did he have a view on a ceiling for land that could be owned? Some people would get 1 000 sqm, but what about those who owned more land?
The Chairperson recapped and said that Ms Semenya had asked about a cap on land ownership and about foreign-owned land.
Mr Meakin said that National Treasury made the proposal for a land tax and that had been endorsed by the Davis Tax Committee (DTC). As far as he could understand, that meant that it was government policy. The land rent would go to the state because it needed the revenue to function. He meant that national government would get the rent.
It was difficult for him to answer the question about forced removals because he could only say that whoever had the deeds to the property, had the right to stay there, even if it was the not the right people because that was not a section 25 issue.
The Chairperson explained that section 25 also dealt with land restitution as well as land distribution. The Land Restitution Act said that people could claim their land back, even if someone else was staying on the property or they could get compensation. Should the land that was owned before forced removals not be given back to the people who had been removed? Was the proposition that new owners on land, such as District 6, should not be removed?
Mr Meakin had not understood the subtlety of the issue about occupied land such as Sophiatown and District 6. Those who had been removed were damaged and would not pay normal taxes but would get subsidies. All he could say about foreign-owned land was that foreign owners would pay taxes on the land. They would pay far more in land rent than they had had to pay in terms of income tax in SA. In terms of farm size, small farms were seen as starter farms. If people wanted more land, they would be allocated larger farms.
The Chairperson reminded him that the question was whether there would be a limit on the amount of land a person could own.
Mr Meakin responded that that was not a section 25 matter. But everyone who was not in social housing or living in town needed a minimum of 250 sqm to build a house and grow their own food.
Mr M Maila (ANC) asked about each municipality allocating the 1 000 sqm stands. What about the fact that municipalities were not the same sizes and that land was not the same in KwaZulu-Natal and the Northern Cape?
Mr Meakin concurred with Mr Maila but said that not many people would want to go to the semi-arid land. He added that he was only talking of market gardening and not about running a herd of goat on 1 000 sqm.
The Chairperson noted that some of his proposals might be of more interest to the Portfolio Committees of Agriculture, Forestry and Fisheries and Rural Development and Land Reform. He had, however, made firm proposals to amend section 25(4) and sections 25(5). He had suggested such amendments, but he had proposed other factors that might be of more interest to other portfolio committees. He had proposed a mechanism that was not in section 25, i.e. land rent (land tax). The Committee might say that it was interesting information but might not fit into what the Ad Hoc Committee was doing but it could be value-added information.
Mr Meakin interjected that he understood but that section 25(5) made it clear that the state had to make land available and could do it in any way that it wanted to. Taxation would be the simplest.
The Chairperson agreed and thanked him for his input.
Mr Meakin responded that at least no one threw anything at him.
The Chairperson assured him that that would not happen but added that the Members had to be mindful of many things in their deliberations.
The Chairperson called on the Acting Valuer-General to present. However, he was unable to get his presentation to show on the screen. She requested Adv Trengove to make his presentation while the Acting Valuer-General prepared his presentation.
Presentation by Wim Trengove
Adv Trengove, presenting in his private capacity, thanked the Chairperson for inviting him. He stated that it was a privilege and an honour to present to the Committee.
He started from the assumption that the intention was to bring about drastic redistribution of land and that it was a political and constitutional imperative. The overriding objective was to redistribute land in order to redress the race imbalance in land brought about by colonisation and apartheid. It was a larger and more important project than restitution of land. The starting point was to recognise the overriding imperative for land redistribution, and it was so important that if it was necessary to amend the Constitution, then that had to be done. The question was whether it was necessary and then, if so, how it was to be done.
When considering that question, one had to recognise that there were three spaces in section 25 which allowed Parliament to legislate for redistribution. It was important to recognise that those three spaces were large and wide open. They went further than expropriation without compensation. He did not think that expropriation without compensation was necessary, but even if he were wrong, it was not enough. Much more would be needed to bring about redistribution.
Adv Trengove referred to the three spaces in section 25. The first space was one that had not been recognised in the Committee’s report. It was the space created in the Constitutional Court’s judgement in the case of AgriSA vs the Minister of Minerals and Energy. It was a landmark case in the Constitutional Court. It was a divided judgement, but the Chief Justice and the majority of the Court held that the taking of property constituted expropriation only if the state was taking it for itself. That was a critical point. The taking of land constituted expropriation and, hence compensation, only if the state took for itself. However, if the state took from some people and allocated to others, then it did not constitute expropriation.
That had profound implications because it meant, amongst other things, that if Parliament legislated the imperative of redistribution by legislating for direct redistribution, that is the taking of land from some and allocating it directly to others, it had two important implications. The first was that legislation for redistribution did not constitute expropriation and two consequences would follow. The first was that taking for redistribution was not subject to the just and equitable compensation requirement of section 25 because that requirement was for expropriation and not for redistribution. In other words, compensation was not required. The second implication was that merely to provide in the Constitution for expropriation without compensation was not enough as it did not promote redistribution. The Constitutional Court had recognised that redistribution was not expropriation because it was not taking by the state for itself and then it was not enough to say the state may expropriate without expropriation. The space to create legislation had been recognised by the Constitutional Court.
The second space for legislation for redistribution, even by if it were done by expropriation, was the space created in section 25 itself and had been thoroughly recognised by the Committee and all the presenters, but it was a second and separate space. That space assumed that redistribution was brought about by expropriation and that expropriation was subject to the just and equitable requirements of section 25 but section 25 qualified itself by striking a balance between the individual interest of the owners on one hand and the nation’s imperative for redistribution. So, the need would often outweigh the compensation requirement.
The third space available to Parliament to legislate for redistribution was by way of limitation of section 25. That third space was not given sufficient recognition. The whole scheme of the Bill of Rights was that all rights were expressed in wide and unqualified terms, such as right to life, right to privacy, because all those rights could be limited by legislation. There were no absolute rights because they were subject to limitation and it would be foolish to look at the right itself as if it were an absolute right.
Section 25 was also subject to limitations. Precisely because it had so many qualifications built into it, one tended to forget that it was also subject to the overriding capacity of Parliament to limit as with all other sections. That was what section 25(8) made quite clear that the formulation of property rights in the section were not meant to be conclusive but were all subject to limitation under section 36, which was why the section said that nothing was understood to mean that the land rights may not be limited. If Parliament were to limit property rights for the sake of redistribution, that would be as high and as urgent a priority as one could imagine, which meant that Parliament would have great latitude to limit the rights of section 25 if it were done in pursuit of the imperative contained in the section on land redistribution.
Adv Trengove recapped the three sections. One would have to identify what one wanted to achieve to determine whether an Amendment was necessary. Merely to say that Parliament wanted expropriation without compensation was not good enough, firstly because the Constitution already allowed that but, secondly, because expropriation without compensation was not enough. Redistribution under the AgriSA judgement by taking from some to give to others was not expropriation without compensation.
Lastly, one had to consider, if any amendments were made at all, what property one was speaking about. The discussion was about land rights and the imperative for re-distribution went only to land rights, and that meant agricultural land, rural land and urban land and even land occupied by other people. But, if one talked expropriation without compensation, did one want to apply it when one was talking about people’s homes, businesses, pensions and intellectual property rights, and so on. One had to be conscious that amendments made for the sake of land distribution might impact on all sorts of other rights on which one might not have intended to impact.
The Chairperson thanked Adv Trengove who had thrown a challenge. He had examined the report and commented on that and had helped by showing where clauses in section 25 were implicit and could be made explicit which is what the Committee had been requested to do. He had identified three spaces for Parliament to do its work. He had made it clear that section 25(8) was a limitation, but the current interpretation of section 25(8) did not see it as a limitation. He had also warned of unintended consequences on other rights.
Ms T Mbabama (DA) asked him to repeat his explanation of the second space which she had not quite grasped. He had spoken about expropriation not impacting on redistribution. Could he expand on that as she had not quite got that, especially if government took the land and kept the title and only leased the land?
Dr A Lotriet (DA) agreed that Adv Trengove had shown the Committee a new approach. She also asked about the AgriSA judgement, and asked, if it was not expropriation when the land was redistributed, what was it when the state kept the land but leased it? Did she understand Adv Trengove when he said that there were three spaces and so everything could be done – restitution, redistribution and land reform- without having to amend the Constitution?
Mr Smith agreed with Adv Trengove that expropriation was not enough. The Committee had been very clear on that and that was why there was the restitution and redistribution legislation.
Mr Smith accepted that the Constitution was good enough, and he believed that most people in Parliament agreed with that view. However, if one went to the ground as the previous Committee had done, people on the ground did not see that and had asked that it be made explicit. Those involved in discussing constitutional change had to stop talking to themselves. The people on the ground did not see things the same way. All they wanted was to see it on a piece of paper that they would get land. Those who owned land did not want anything done. It was only the ones who did not have land, or who had suffered, who wanted the change. He said that it was exclusionary. He wanted Parliament to make it allowable, without a challenge being possible.
Mr M Maila (ANC) appreciated the presentation but it was taking the Committee backwards. It would have been more relevant in the Constitutional Review Committee where they had had to decide whether to change the Constitution. The decision had already been taken to make a change. The Committee just had to decide on the change to be made.
The Chairperson called on Adv Maseko to ask her questions. She stated that she was calling her Adv Maseko, as she had been accepted as an advocate of the High Court the previous day.
Adv L Maseko (ANC) agreed with Mr Smith and Mr Maila but asked Adv Trengove if he had to amend the Constitution, which of the three spaces he would select to make an Amendment.
Mr P Mnguni (ANC) congratulated Adv Maseko. He also welcomed the presentation. He asked Adv Trengove if he believed in restorative justice.
Mr Mnguni said he was a lay person, but he understood restorative justice. He asked because he saw Adv Trengove pushing aside the issue of restitution. Land reform constituted three parts: restitution, redistribution and security of tenure. Did he believe in restitution and, if not, what would be his take on the unanimous Constitutional Court judgement on 28 July 2016 delivered by Judge Madlanga which had alluded to forced removal? Did Adv Trengove think that each part of the land reform should be juxtaposed against another aspect of land reform, e.g. restitution should be juxtaposed against redistribution or should each aspect be seen in its own right?
On the issue of expropriation and the route of redistribution, the practicality was that the land would have to go through the state’s hands. How would one redistribute land without going through the state? What modality would there be? Would it not be through compensation? Would a different court think differently?
Ms Semenya stated that the Committee had been asked to consider the nation-building process when considering the Amendment to the Constitution. Was that possible?
The Chairperson thanked Adv Trengove for his input. She was humbled by the way in which he had framed the input. He had suggested the start was to look at what the country was seeking. One of the issues to be dealt with was that redistribution was an issue that had to be continuously addressed.
She noted that Adv Trengove had spoken of the three spaces and she thought people might not have understood the impact of the AgriSA judgement. People might have not put it in the context of land reform, which was why no one had seen the space defined by the court. Perhaps it would require a law of general application to make the precedent clear to everybody. Secondly, he had looked at section 25(2) and 25(2)(b), in particular, which dealt with the ability of the state to expropriate. While it allowed the state to expropriate, it locked the state into a kind of agreement between the state and those effected which took into account the ‘just and equitable’ compensation of section 25(3). It was the ‘just and equitable’ requirement which had led to the frustration of disagreement on land prices.
The Chairperson added that Adv Trengrove had noted that subsidies had to be taken into account, but no one knew how much the state subsidy or diesel subsidy, etc. had been as there were no records of those subsidies. The state could not consider subsidies when there was no evidence of subsidies paid. Section 25(2)(b) and section 25(3) had created the confusion.
However, Adv Trengove touched on section 25(8) which not everyone had seen as a limitation. Could it mean that the state would have to have legislation to show how the limitation should happen, or were there other sections in the Constitution adequate enough to explain section 25(8)? Could he please clarify?
Adv Trengove replied that he had to state upfront that he did not diminish the importance of restitution of land. One of his proudest cases had been the restitution of land to the people of the Richtersveld that he had fought up to the Constitutional Court. Restitution was the primary form of redistribution and primary form of land reform. Restitution was the first process in land reform but the point that he was making was that it was not enough. Redistribution was a far bigger problem. If there was any misunderstanding about that, he wanted to put it right.
He turned to the question of whether redistribution could be effected without expropriation. The AgriSA case was about a matter in which land had been taken from AgriSA and handed over for mineral rights. The Constitutional Court had determined that that was not expropriation. It was the re-jigging of mineral rights. The state was just a vehicle for the redistribution of property rights from some people to others, and provided its role was merely to act as a vehicle, that was not redistribution and, therefore, did not trigger the compensation clause.
The Chairperson had asked him if he could be wrong. Adv Trengove admitted that he was often wrong so he could be wrong but, for purposes of the presentation, he had re-read the judgement and it was very explicit. He provided the references in the judgement: paragraphs 58, 59, 67, 69. The judge had made it very clear that expropriation was the taking of property by the state for itself.
The imperative of nation building was a crucial part of the project, but one could not really have effective nation building until the country had done justice to the entire nation, which meant restoring the balance of land-owning in the country, which had been destroyed by colonialism and apartheid.
As to the question of how to make the AgriSA judgement explicit, Adv Trengove suggested that the scheme of the Constitution would require that those things be made clear by parliamentary legislation, as was the case in all constitutional rights. That was the pattern of the Bill of Rights which was a living document. In the Constitution, the rights are simple and clear, such as the right to life. It was simple but profound. The Constitution recognised that the content of the rights would evolve over time. The implications of the Bill of Rights in which the rights were formulated in conceptual terms, meant that Parliament had to give flesh to the rights from time to time. For example, the concept of cruel and inhumane punishment would evolve over time as the meaning of concepts changed over time. The Constitution was not designed to spell things out.
Adv Trengove accepted that the Chairperson was correct in saying that all the implications of property rights were well and good but if historical factors were unknown, it created a huge problem. He admitted that he had not given that point a great deal of thought but suggested that an Act of Parliament could create legislation that said that, where land had historically been in white hands, that land could be presumed to be the results of privilege, unless proven otherwise by the owner. Then the problem of record keeping became the owner’s problem and did not lie in the state’s hands. Such legislation would simply imply that the need for land reform was more important than the rights of land owners.
Adv Trengove responded to the question about the second space built into section 25. He juxtaposed that space between the first space where the AgriSA judgement had said that redistributing land by taking from one and giving to others was not expropriation. The third space was that Parliament could limit the rights to property. The space in-between was the limitations built into section 25. Section 25 was not a one-liner as were other rights in the Bill of Rights, e.g. the right to life. Section 25 made it clear that if the state took land for itself, it had to pay a just and equitable price, i.e. one that struck a balance between the rights of owner and on the other side the heavy and compelling counterweight of the nation’s imperative for redistribution. The national imperative would always limit the importance of compensation on the side of the person whose land was being taken. The nation’s imperative for redistribution would always be a heavy and compelling counterweight in the scale of ‘just and equitable’. Parliament had to legislate to give effect to that limitation.
He was of the opinion that the latest Expropriation Bill did not do justice to the right of Parliament to suggest how to strike such a balance, and should be far more aggressive. It was a poorly formulated attempt to strike a balance because it looked at only one provision of the Act. He strongly urged Parliament to re-consider that legislation.
Adv Trengove was very clear that if government took property and kept ownership so that it could lease the land; that was expropriation, which meant that it would be subject to the compensation requirement of section 25(2). As far as the three spaces were concerned, he accepted the political decision to amend the Constitution for political reasons, but he did not see any legal need to amend the Constitution. One had to measure the need in law and the outcome that Parliament wanted to see. One had to measure one against the other. A mere Constitutional Amendment would not result in land reform and redistribution. Only Parliament could legislate for that. He suggested that Parliament needed to be clear on the outcomes that it desired, and then make a judgement.
In responding to Mr Smith, Adv Trengove said that he would defer to the politicians on the matter of the political imperative. He could only say that he had a bias in favour of the Constitution as he had spent his life defending and protecting the Constitution, but the politicians knew about the political imperative of making people understand that the Constitution allowed for redistribution. He added that the consideration of being more explicit in the Constitution applied to all rights in the Bill of Rights. What people really need to be shown was the legislation that Parliament had drafted to give effect to the Constitution.
Adv Trengove accepted the decision of Parliament to make an amendment, but Parliament still had to decide what it wanted to achieve before it could know what amendment to make. He had to ask what Parliament wanted to achieve. Likewise, he could not tell Adv Maseko what the best amendment would be because he did not have clarity on what Parliament wanted to achieve. If the sole purpose was to take land from some and give it to others, he did not think that an amendment was necessary.
The Chairperson said that if she had understood correctly, the DA question related to the current situation where the state had acquired land for restitution but because of the fear that the land might be sold off by the Communal Property Associations, it had qualified the title which prevented people from getting the title on their land as had occurred in places such as Makhathini Flats, Lambasi and Port St Johns. The state had not transferred the land but had allowed people to stay and pay nominal fees. In rural SA, the 13% of land that Africans had remained on, had always been held in trust by the state and that had not changed. The Ingonyama Trust in KwaZulu-Natal was another example where title had not been transferred. How would he regard that situation in the light of the AgriSA case?
Mr Smith said that, as a non-legal person, he had a question. Had any case dealing with the willing buyer/willing seller ever gone to court and had the court ever sided with the landowner? And what was the judgement? Or was that just a red herring? He was not aware of any such case.
The Chairperson noted that Adv Trengrove had said that the best way of making explicit what was in section 25 was via legislation. The state could say that where there were no historical records, certain things had to happen. Did he think the caveat that he had made could be a sentence in the Constitution or would it have to go into legislation?
Adv Trengove responded to the question relating to where the state had acquired land and transferred that land, subject to limitation. It could be structured in two different ways and depending on how it was structured, it might or might not constitute expropriation. If the state took land for itself, kept ownership, and gave the community access to the land, that would constitute expropriation. However, if the state gave the land to the people in a community trust or some communal vehicle and the deed stated that the land belonged to community, but added a limitation, such as the community could not sell the land, it would not be expropriation. If one were sensitive to the differences between the two, it was quite easy to put a limitation on a title deed.
Adv Trengove told Mr Smith that the Courts had sided with owners but that was because the current Land Act did not give effect to the Constitution. The legislation did not give proper and aggressive effect to the Constitution and so owners had been able to challenge the compensation.
His proposed solution of creating a presumption of benefit derived from white privilege in the past could not be a sentence in the Constitution. Parliament would have to legislate because it was about the rules of evidence. It was a typical rule of evidence. It would be progressive legislation, but rules of evidence did not belong in the Constitution.
Ms Semenya asked what the Committee should do about the people who had bought land that they should not have had as the land had only become available because of forced removals.
Adv Trengrove agreed that the product of white privilege might not be direct white privilege but broader and more general privilege. It was not only direct and immediate privilege. That was why he suggested that white people should bear the burden of proof that they had not received a direct or indirect benefit.
Presentation by the Acting Valuer-General
Mr Pelekelo Mwiya, the Acting Valuer-General (VG), was accompanied by Mr Thapelo Motsoeneng, the Acting Chief Operating Officer at the Office of the Valuer-General (OVG). Mr Mwiya informed the Committee that Mr Motsoeneng would make the presentation and he would respond to questions.
Mr Motsoeneng informed the Committee that the 2014 Land Valuer Act had been established in a market economy and that was the environment in which the Land Valuer worked in. He noted that owning property was central to accessing funding in South Africa as SA had a functioning market system for property.
The Chairperson pointed out that the Committee knew the current debates around land value, but she needed to hear what they were proposing. Parliament had instructed the Committee to change section 25 to make it explicit. What sort of amendment was the OVG proposing and where should the amendment be placed?
Mr Motsoeneng stated that the OVG was proposing that the legislature make it more explicit that current use value be used to determine market value as that was a number. Using a number to determine the value of the property would make it easier for the Valuer-General. Factors such as subsidies were clear as that was a number. However, the Constitution simply referred to “current use” and the proposal of the OVG was to amend the Constitution to refer to “current use value”. That meant that the property would be evaluated in terms of how it was currently being used.
Mr Motsoeneng stated that he could tell the Committee of the two years that the OVG had been working on how to use the current use value. He could present it on a case-by-case basis, if the Committee requested it.
If the Committee elected to look at all the factors in the Property Value Act, it should only include those points that were practical and could be practically used. The OVG had a template for valuers to use when they went out to do valuations. Inevitably, the valuers would come back and say that they had been unable to determine what the direct subsidies had been on a particular property. Subsidies and support given to farmers had come from many different sources. No matter that it was included in the Constitution and the Property Value Act, the valuers were usually unable to find the amounts of those subsidies.
When determining the current use of property, the land-valuer relied on the farmers or land owners themselves to indicate the current use value based on the commercial performance of the land. OVG suggested that getting the current value of the property should be work that was shared between all state entities, e.g. SARS should be providing the land valuer with the commercial performance of that property. It would be preferable to trying to get the information from the person whose property one was trying to take.
Mr Motsoeneng acknowledged that theoretically one could get to zero compensation, especially in cases where the extent of the state subsidy equalled market value.
Mr Mwiya said that he would answer the questions.
The Chairperson summed up by saying that the OVG had limited itself to proposing an Amendment to section 25(3), based on the Property Value Act. The OVG wanted the Constitution to be explicit about the inclusion of the words “current use value”. The OVG also wanted other arms of state to be able to provide information about land and the production of the land. The OVG needed help to arrive at a valuation of land. The OVG had difficulties in acquiring information, and wanted other arms of state to assist.
Mr Maila asked how the OVG could get assistance from other spheres of government. How would they serve to help to quantify the value of a property? He added that the presentation was spot on about where the Constitution could be amended so that it would also make the work of the VG easier.
Mr Mnguni said that he knew the OVG from his work in his other Committee and he wished them all the best. Certain functions of the Department of Rural Development and Land Reform programmes had stalled at the level of OVG. What was the market reaction to the implementation of the just and equitable rule? He knew that many people wanted to take the willing seller, willing buyer route. But that was not in the Constitution. What was the reaction of the market and industry of the OVG applying the rules?
Mr Mnguni asked if the OVG had come up with a formula to implement “just and equitable”? What were the formula indicators to balance the five points in the Constitution? Was the OVG prepared to take cases to court? Were the Members about to hear about a case that was going to court? He knew about the case of Mala-Mala.
Mr Smith said his understanding is that the OVG wanted it to be made explicit in the regulations of the Expropriation Act. Was it also suggesting that it had to be made explicit in the Constitution in 25(3)? How would they craft the Amendment?
Mr Smith had asked Adv Trengove whether any cases of expropriation had gone to the courts where the state had lost and he had said that there were many. The OVG had started its presentation by emphasising that it was a market economy, but the OVG valuers could not come up with a realistic valuation, so the state had lost court cases time and time again. It was not related to Constitutional change, but he felt that it was time that the OVG found a better way of coming up with valuations.
Ms Semenya said that in terms of the resolution of the House, the Committee had been instructed to amend the Constitution to say explicitly expropriation without compensation, but the OVG was talking about the value which meant that his proposed Amendment was about value, even if it was zero. The previous speaker had enlightened her about government taking land. She understood that the OVG was looking at the situation from his angle, but she felt that the presentation had only focused on the OVG as an institution and had not looked at the issue facing Parliament.
Mr Smith recalled that the OVG had spoken about SARS being able to help it to value the land. What guarantee was there that the declarations of the value of the land, as captured by SARS, was under-valued or over-valued? How could one rely on the information given to SARS? Should there not be some checks and balances?
Mr Maila asked which property valuations Mr Motsoeneng was looking at: privately owned or property that had been restituted and was getting grants from government?
Mr Mwiya replied that he should give the Committee the background as to how his office determined value. It looked at five factors:
-Current use that was where he looked at the current use value of the land and looked at financial statements.
-Compensations, for example, letting someone who had fought in a war, buy land at 50% of its market value.
-Direct state investment and subsidies, e.g. giving stock fences or building warehouses, reduced interest rates on the mortgage.
-Grants given for training prior to 1994.
In response to the question about how industry and the market felt about what the OVG was doing when valuating property for restitution, Mr Mwiya said that the reaction had been that they should go back to market value. But his team had explained that they could not go against the Constitution and gradually property owners were beginning to accept that.
The OVG had come up with a formula. He explained what had informed the formula. The valuer took the current use value and the market value and then deducted all the subsidies listed above from the market value.
The framework for a just and equitable settlement outlined by the Constitution allowed the courts to be flexible when arriving at a value, but the regulations prescribed by the Valuer-General provided a fixed formula, which was: value = current use value + market value divided by two, minus historical acquisitions benefits and state subsidies. Current use value was not calculated in the same manner as productive value and was defined as the net present value of cash inflows or other benefits that the property generated for the owner under lawful use. The valuer needed the production income of the farm, but farmers had been reluctant to give that information.
Mr Mwiya assured the Committee that his office could defend the formula. However the OVG determined equitable and just value; his office did not determine compensation. Compensation was determined between the two parties i.e. land owner and the state, or it could be determined by the court.
The OVG proposed there should be strict criteria such as if the land was being held for food security purposes. The way that it had been captured in the Constitution was fine, but the regulations had to be amended.
Regarding the issue of SARS, the VG said that when the valuers were trying to determine the current value, they wanted to know how much money had been made, or whether a loss had been made. Farmers did not want to give that information, which was why they wanted to get it from SARS.
Mr Motsoeneng said that the OVG had limited its input to the Committee to section 25(3) because that related to the OVG. He had started with the fact that it was a market economy. When the valuer determined a value, sometimes the farmer might say that he had a bond which was greater than the amount that the just and equitable value determined for the farm. The OVG needed to clarify what would happen with the bonds if the amount on the bond was greater than the value that OVG was offering. Did the OVG only look at properties that had not been bonded or what did they do about people who would then owe money on property that they no longer owned?
Mr Mwiya explained that if the property was to be expropriated without compensation, the OVG would give it a value of R1, i.e. nominal value. His concern came about when the state gave R1 and there was a bond of R10 million on the property. Did the state have to take on that bond? If it did, it would mean in real terms, that the land had cost the state R10 million, so it was costing the state more than just purchasing land. The liability might be greater than a market value.
Mr Mnguni said that it was the first time that he had heard the formula, which he had attempted to get hold of to no avail. The formula of current use value plus market value minus all subsidies, divided by two did not talk to forced removals. That was just one example. How did the OVG include the history of acquisition in the formula? There had to be a factor even it was times 0.6 or 0.7. What if a road had to be built, or a dam or a school in a rural area, then what would the people be getting? They would get peanuts. The Committee wanted to revise the land regime in terms of the Constitution. He might be advanced in his examples, but he, as a person who dealt with land matters every day, knew why he was raising the question. He was not satisfied with the OVG’s urge to go to court because the people were insulting politicians aa a result of the slow pace of transformation. Until the VG was prepared to take the lead, the process would remain a willing buyer/willing seller model.
The Chairperson said the Member had asked how the OVG factored in the history of acquisition in the case of forced removals. How did one take that into account?
Mr Mwiya said that his office took its cue from the Constitution and in terms of that, one could not penalise people twice. If a black person had been displaced in 1913, the OVG was not talking about the market value then. A white person who had benefitted through the process had to be penalised at current value. People who had been dispossessed could not be penalised by a formula that penalised the dispossessed person.
The Chairperson explained that the question was about forced removals. For example, people had been moved from District 6 on the basis of proclamation and therefore they did not get compensation at the time. How did one quantify that history, other than by subsidies? How did one compensate for that forced removal, especially when it had become a generational issue? For example, Mr XX was a descendent of Mr X who had been allocated land and then given other subsidies. How was compensation for Mr XX determined? People who had benefitted from proclamations were different from those who had benefitted from acquisitions in other ways. Maybe the answer was it was difficult to compensate for that. How did one factor in the reality of the words “history of acquisition” as in the Constitution? How did the VG take into account the history of acquisition if there had been no monetary exchange? Had that not been one of the constraints in working out a model?
Mr Motsoeneng admitted that that scenario was not catered for in the model, except where it tied into the subsidies and discounts that he had spoken about. The example of the soldier who had been given a discount on the price of the farm related in some way. However, he assumed that the formula would evolve over time.
Mr Motsoeneng stated that he did not have a suggestion for the specific wording for an Amendment to the Constitution as requested by Mr Smith, but requested that he be permitted to send a suggestion to the Committee Secretary.
Ms Semenya said that if the property clause, or land clause, in the Constitution were to be amended, certain portions of the Land Act would have to be amended so that it did not become an obstacle to land reform.
Mr Mwiya thanked the Committee for the opportunity to make the presentation.
The Chairperson thanked the OVG for presenting to the Committee and sharing the current challenges in the implementation of the current Land Act and how 25(3) had caused a debate in the work of the valuers. The Committee appreciated that they had tried to work out a model of just and equitable compensation.
The Chairperson reminded Members that Valli Moosa had said that it was the first time that the country was amending the Bill of Rights and that it was a weighty matter to make a change to the Bill of Rights. That was why Parliament should take most people on board, even if it was just so that people understood why it had to be amended. Parliament could have just decided to make the Amendment and it would have been passed in the House, but Parliament had decided, consistent with its laws and practices, to engage in wide public engagement to hear the views of South Africans about what Parliament should and should not do in respect of expropriation without compensation. Some people had said that there was no need for an amendment, but many others asked that Parliament make explicit what was implicit in the Constitution.
The Constitutional Review Committee, considering the need for an Amendment, had tabled its report and then the current Ad Hoc Committee had decided to hear the experts and those who were practitioners in the field of land and land reform. As the Committee responsible for amending the Constitution, Members had decided to familiarise themselves with the constitution-making process. Reflecting on the Constitutional Review Committee, Members had decided to hear the experts, particularly those practitioners who had been trying to establish the correct value of fair and equitable, and also to make suggestions on how to amend, which clauses and what would be the wording the Committee might need to consider.
The Committee had also heard from people who had been involved in drafting the Constitution to understand what they were thinking and what they were trying to do when section 25 was drafted in that particular way.
The Chairperson invited Advocate Tembeka Ngcukaitobi to make his presentation.
Presentation by Advocate Tembeka Ngcukaitobi
Advocate Tembeka Ngcukaitobi’s personal view was borne out of his involvement in land matters as an advocate, acting judge on the Land Court and author, was that there was no need to change the Constitution. What had to be done was that the Constitution had to be implemented. However, he had given up on the debate because the decision had been taken that section 25 should be amended. He mentioned it upfront because the over-concentration on expropriation without compensation diverted people from what needed to be done to ensure land reform as a whole.
The three principles of land reform, which were tenure security, restitution and redistribution, remained intact but the crucial problem was that they had not been turned into a practical reality. One of the things that the country had failed to do, despite a clear constitutional reality, was to pass legislation pursuant to sections 25(6) tenure security and 25(5) access to land, which was redistribution. Section 25(7) was the third leg, which was restitution of land.
Restitution as such had not achieved land reform. Initially he had argued that restitution was a failure because of compensation, the structural failure of the Land Claims Courts, and the composition of the Land Rights Act. But it had to be accepted that restitution could not possibly help the country to reach land reform.
There were three reasons for the failure of restitution. The first was the cut-off date of 1913 which meant that full restoration was impossible. Anyone would know that 19 June 1913 was just a consolidation of the dispossession. By end of 19thcentury, dispossession had happened, and the last wars had taken place. By 1900, the land of the Africans was controlled by whites. Restitution could not correct the historical problem. The effective control of Africans over land by 1913 was about 7%. SA should accept that restitution had inbuilt structural limitations that could not be resolved by fixing anything, so there is a need to look at the other instruments of land reform: one was redistribution of land. There was a need to understand the history of redistribution. One document to be read was an ANC document of 1992: Ready to Govern. It had just three pages on land and the focus was on redistribution based on need. Those who had a need for land would receive it and the distribution would be facilitated by the state. That concept had transformed into just and equitable access to the land. The second document was the ANC document of 1994: The Reconstruction and Development Programme, which gave the facts about Ready to Govern. It acknowledged that restitution was fraught with difficulties and that pre-1913 there had been inter-tribal difficulties that would have taken SA back into tribalism. Land reform had to be future-looking because, even in the context of future-looking, some people had claims as a result of the Group Areas Act. Those people who could still remember the dispossession were primary beneficiaries of restitution. For those who could not remember dispossession, there was redistribution.
After 1994, massive state resources had been put into restitution and restitution had taken over land reform. But restitution focused on resolving problems of the past and was not forward-looking. In 1913, there had been 7 million people in the country: 5 million blacks and 2 million whites, Asiatic, etc. A century later, the African population was 20 times more, but the 120 million sq. hectares of land had not increased in size. So more creative thinking about land reform was needed. The Committee was about compensation, but the debate had to be opened up and people needed to think beyond land without compensation. Could the Committee not think beyond the compensation factor and look at the original ANC proposal of redistribution in section 25(5)? Could anything be added to make the process quicker and more effective? No legislation had been processed and land reform had benefitted the elite, where it had happened, and the poor people had not benefitted from the process.
Adv Ngcukaitobi said he had once asked the former Minister of Rural Development and Land Reform, Ms Maite Nkoana-Mashabane, how much government had spent on land reform. The answer was R54 billion and the majority of that money had gone to white people. He asked if that was not scandalous that whites had been given more than R30 billion. In return, black farmers had got 7% of commercial agricultural land. The Land Reform Court had been set up for five years only because the intention had been to transfer 6% of land annually. The transfer of land should have stood at 30% after five years. Today one knew that land redistribution was proceeding at 0.7% per annum. State-driven land restitution had gone down to 0.7%. He had a suggestion for section 25(5) because he thought that the focus on the compensation provision had made political, historical and ideological sense but it was the bête noire, and land was still in white hands. 74% of commercial agriculture was in white hands. Whatever one said about land reform, that figure was staggering in a land where the majority of people were African. It could only change if there was a structural change.
The first thing that was needed was to shift the conversation to the redistribution of land, but one had to be very careful about the wording that went into the redistribution provision, largely because of urbanisation. People were not forcibly taking the farms as people had in Zimbabwe, but people were occupying buildings in the inner cities. The problem of evictions was in the inner cities. The redistribution should be about giving people land on the basis of their need.
Restitution was embedded in Constitution and there was no need to interfere with it, but it needed to be speeded up. There was no reason for it not happening. He had been told that one of the reasons was that there was no money because most of the money had gone for restitution. But there was another problem for restitution. He had been acting as a judge on the Land Claims Court in 2016. The Land Claims Courts had had five judges in 1995 but now it had not a single judge. What was unclear was how to strengthen the judicial arm, which was one of the weakest arms. With the proposals that he had come with, was an urgent need to strengthen the judicial arm of land reform.
The rule of law was important in the process of land reform so that land reform was sustainable and people with complaints could go to the judiciary with complaints and the judges could deal with them. But in light of the weakness in the judicial arm, that could not happen. Parliament had not bothered to strengthen the judicial arm of Land Reform and one had to consider whether or not some reference to the judicial arm could be included in the Amendment.
Adv Ngcukaitobi indicated that he wanted to make some suggestions about the compensation provision and how it could be dealt with. There were a number of aspects to compensation. Firstly, what was the compensation for and why were people being compensated? It was for land or buildings or property taken for a public purpose in the public interest. South Africa was not the only country with expropriation provisions. Many democracies had expropriation in the law. Even the Lancaster Agreement on Zimbabwe had provided for compensation. Even the Zimbabwean constitution stated that non-compensation was limited to commercial farms.
Secondly, there was the question of why compensation was paid and to whom? In Africa, when the colonists had left Africa in the 1960’s, they had feared that Africans would willy-nilly just grab their properties, so compensation had been included in all colonial constitutions as a way of protecting themselves. That was the historical reason for compensation but there was another contemporary and pragmatic reason for compensation which was that an individual land holder should not be unnecessarily burdened with a national problem. For example, if he had gone to the market and bought his property, he should not be burdened with a greater responsibility that he should bear for the state. There should be a balance between the interests of an individual and those of the nation. The acquisition of property for public interests and public purposes had nothing to do with one as an individual property owner. That was the utilitarian explanation for compensation. There should be no unnecessary burden on an individual for a burden had to be borne by the nation as a whole. Hence the nation compensated if one lost one’s property for a larger national goal.
Adv Ngcukaitobi stated that there was a third reason for compensation, and that was an economic reason. Sections 25(2) and 25(3) presupposes that land transfers take place between only two parties: the owner and the acquirer. Section 25 did not take into account that, in the commercial world, there were so many other vested interests. The most immediate interest was that of the bank because the banks were financing land. The owner historically acquired land by dubious means but how did one deal with the fact that the redistribution impacted on banks currently. It might be true that the state wanted to take a piece of ground for a larger national concern, but in taking that piece of ground, the state impacted not only on the owner who got the land for dubious reasons, but it impacted on the interests of the banks. ABSA and Standard Bank said that they had nothing to do with land redistribution. Since the discussions on land reform had begun, owners had been mortgaging and re-mortgaging land so that they owed money to banks, which made it difficult to expropriate land without compensation because the banks were not the holders of land in the clause in the Constitution. Expropriation without compensation needed to be addressed by legal means as it impacted on the economy of the country.
The Constitution already contained a clause that dealt with just and equitable compensation. It seemed that that notion included zero compensation but that had to be decided by the court or by Parliament passing appropriate legislation. Although it was true that expropriation without compensation could be achieved by judicial interpretation, and it could also be achieved by legislative interpretation, a consensus had been reached in society that it had to be achieved by a change to the Constitution.
Adv Ngcukaitobi believed that even though a decision had been taken to change the Constitution, expropriation had to be accompanied by some form of compensation that would still have to be worked out using the formula of just and equitable. The idea that the Constitution could insist on zero compensation was far-fetched. Why did he say that? He represented the community of Xolobeni in the Eastern Cape. In terms of the Mineral and Petroleum Resources Development Act, a mining company that got mineral rights, could break down structures and take land and they could do it with no compensation. The community’s only recourse was to the Constitution in that, if it was expropriation, the Constitution offered a just and equitable compensation.
Adv Ngcukaitobi said he also represented a community in Hlabisa in KwaZulu-Natal. There were about seven mining areas in Hlabisa and one of the big disputes was whether a company with a mining permit could simply take land without compensation. Parliament was concerned with how one could take land without compensation from the whites because they had taken land unfairly. That was understandable but he did not see how Parliament could design a clause that would make no compensation the default position. It had to find a way to allow just and equitable compensation when there was a need for such compensation. One could not allow the taking land without compensation as there were times when it would be unacceptable, as in the Xolobeni and Hlabisa situations.
Adv Ngcukaitobi had some proposals to make in respect of Amendments.
Section 25(1) was an important clause that had been inserted after a big debate during which Arthur Chaskalson had written an opinion. The white groups at CODESA had insisted on a clause that everyone had the right to own property. That had been opposed by the ANC so there was no private property clause. The clause included in the Constitution had been written in negative terms and said that no one may be deprived of property unless there was a Law of General Application, but such a law could not sanction arbitrary expropriation. So, one could not claim a constitutional right to property. Some politicians proclaimed their constitutional right to property, which was a fallacy.
Section 25(2) stated that property might be expropriated only in terms of a law of general application— (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected, or decided or approved by a court.
His proposal was to strengthen the judicial arm or to allow for another independent and impartial tribunal or forum established by an Act of Parliament. The Committee had to decide what to do to be open and fair, but also flexible. His suggestion was that a Land Tribunal, headed by a judge with four or five other members, be set up for five years to deal with the issues of land reform without delay.
Section 25(2) dealt with the question of compensation itself. Section 25(4)(a) stated that: For the purposes of this section— (a) the public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources, and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court. He would come back to that.
There were several questions about compensation. One question was: Who decides that there should be no compensation? He had heard some people arguing that the state should decide who gets no compensation, but he was very sceptical about allowing the Executive to decide on no compensation. It might be fairer to be more in keeping with the rest of the Constitution which was that anything to do with a law of application had to be dealt with by the courts. Perhaps forget about whether there was a right to compensation or not but consider whether the politicians had the right to make those decisions or would that violate section 34 of the Constitution? His proposal was to make the courts the decision maker where there was to be no compensation. He asked the Committee to remember that 25(2)(b) was always subject to compensation but that had to be subject to agreement and if there was no agreement, the courts could decide the compensation. The Valuer-General decided value of land, but did not have the power to decide the amount of compensation. Determination of the value of land was a narrow endeavour but compensation was a public interest endeavour. Who decided where no compensation would be paid? He believed that judges should decide when there would be no compensation.
Section 25(3): The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances. He suggested a qualified subsection 3 in which it was the judges who considered the amount of compensation. People thought that the formulation was about compensation only, but it was also about time and manner of payment. That was crucial and was often overlooked. Often land did not transfer until compensation had been paid but the model of compensation was that one got off the land and then fought for compensation later. That was why the Constitution said that the time and manner of compensation had to be decided upon.
In SA, it took ten years fighting compensation, before the land became available. For those ten years, nothing was done on the farm because one did not know if it was going to be expropriated or not. He proposed that compensation should be delinked from expropriation. That clause should be changed to say that once one’s land had been expropriated, one had to leave the land. The person could go to court to fight the amount of compensation. It was not just and equitable to expropriate today and only take possession ten years later.
Section 24(4): For the purposes of this section— (a) the public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources; and (b) property is not limited to land.
That meant that the water could also be taken. He was sure that most people who had spoken to Parliament had said that the land was of no use without water. The ANC and Parliament’s proposal for expropriation without compensation spoke only about land. He had limited his proposal to compensation without compensation to land only, even though 24(b) allowed for expropriation of anything under the sun. That was crucial because there had been lots of emotional responses about house and stocks being taken, although that was not true.
Section 25(5): The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis.
He believed that there had not been a constitutional failure, but a political failure in passing legislation. He emphasised the word “must”. That Parliament had not been taken to court for failing to adhere to the Constitution was something that he could not understand. It was a constitutional obligation in which Parliament had failed. He also asked who the beneficiaries were meant to be. The purpose was not for it to become an elitist scheme for the rich. The purpose was to empower the landless with due regard to the economic and social circumstances of the beneficiaries. He wanted to prevent it from becoming an elite scheme and so he suggested adding to 25(5) [with due regard to their economic and social circumstances of the intended beneficiaries].
There was nothing to be done, constitutionally speaking, about section 25(6): A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to tenure which is legally secure or to comparable redress.
That had been addressed in the Security of Land Tenure Act, although there were problems in that regard.
Section 25(7): A person or community dispossessed of property after 19 June 1913 as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to restitution of that property or to equitable redress.
25(7) was a deeply problematic clause but by shifting the focus from 25(7) to 25(5), it would be possible to deal with the historical nature of the problem. Even though he was intellectually critical of the 19 June 1913 date, it was not a good idea to remove 1913 which would open old wounds and take the country back to tribal territory. It was best not to make any amendments to 25(7).
Section 25(8): No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination, provided that any departure from the provisions of this section is in accordance with the provisions of section 36(1).
Adv Ngcukaitobi suggested an inclusion: No provision of this section [including the payment of compensation] may impede the state …. In that way 25(8) actually made things explicit but could also ensure that compensation could not be an impediment to land reform, although it was a highly dubious claim as there was no evidence that compensation was slowing down land reform.
The issue was that expropriation and compensation were different. Since the 19th century, and everywhere in the world, including in the Constitution, compensation and expropriation was delinked. If one’s land was expropriated, one had to get off the land that same day.
Adv Ngcukaitobi stated that those were his proposals and his motivation, but it was work in progress.
The Chairperson said that some of the things that he had raised resonated with what earlier presenters had said. He had made explicit suggestions as to where and what could be amended. Earlier on, Adv Wim Trengove had raise the issue of the AgriSA case and his view in the light of that judgement was that it did not define taking land from one person to another as expropriation. Adv Ngcukaitobi had said that if one took land reform in a forward-looking manner, one should look very carefully at when minimum compensation could be paid and when it could not be. In particular, one needed to look at the impact on communities when mineral resource companies wished to take land.
She agreed that in practice the country had linked compensation and expropriation and that it should be delinked as indicated in the Constitution. In practice, the two had been combined. Adv Ngcukaitobi had said that the EFF motion, amended by ANC, was the reason for the Amendment but the ANC had spoken very specifically about land. The limitation had to be very clear because property went beyond land and it was possible to create uncertainty in society about what the state was trying to do.
Mr Smith welcomed Advocate Ngcukaitobi’s flexibility. He knew that his was one of the voices that had been adamant that the Constitution was clear on expropriation without compensation, but he had come to Parliament with the kind of proposals that had been asked for. He had debunked the risk that all property could be expropriated. He made it clear that the Constitution could be made explicit in 25(2)(b) and then said what had to be done.
Mr Smith asked what he had meant about a tribunal? He had spoken about a forum that should be established by an Act of Parliament. How independent was that? Should it not be established under the Constitution as a Chapter Nine institution?
Ms Semenya welcomed the presentation. She agreed that the judiciary should be a last resort, but it was not a transformed judiciary. There might be judges who were not transformed or progressive. What would the recourse be in such a case? Secondly, she bought the idea of delinking expropriation and compensation but in SA it was a journey of reconstruction and building a nation. Was that proposal not going to affect nation-building?
Mr Mnguni said that he was a whip and he had been privy to the first EFF resolution which had been heavily, heavily amended by the ANC. He appreciated what Adv Ngcukaitobi was doing in the land space. He knew about the corruption issues and had asked for fresh blood in the Department of Rural Development and Land Reform.
Mr Mnguni commented that Adv Ngcukaitobi belonged to his clan, but he disagreed with him at a policy level. Restitution was working well. Restitution had been working with R2 billion of the R10 billion available for land reform. There was more than enough money for redistribution. He was a land activist and he had done some stock taking: 13% original land, 9% restitution and 9% compensation equalled around 31% of land in black hands. He agreed that there was some backlog, but land reform was a programme and it took time to complete the programme. A school building programme had a number of schools that had to be built and one could not simply abandon the building because time had passed. One had to complete building the schools in the programme.
The comments on redistribution were fair but restitution had been moving along and he did not believe that because there was a need for change in land reformation, that automatically implied the need for a change in restitution. He liked the comparison of land reform to a car. Would one, in dealing with the problems of restitution, want to change other aspects of land reform? He stated that on 28 July 2016 a full bench of the Constitutional Court had made a judgement stating that there was clearly a case for restitution as a result of forced removals. He was not motivating for changes to restitution, but he agreed that redistribution had to be addressed.
Mr Mnguni agreed that 1913 was a practical cut-off point but whose land would one redistribute if one had not finalised restitution first? The courts would not say that a person no longer had rights because it was not in the Constitution. Restitution was an inherent right.
Mr Maila welcomed the presentation. Amending of the Constitution was a weighty process and he appreciated all of the input by experts but Adv Ngcukaitobi had gone a step further by suggesting specific Amendments which would help the Committee to effect the required changes.
Mr Maila asked about the banks. He thought that they were going to get away with murder. Those who had the land were going to make use of banks to run away. During the Constitutional Review Committee process, there had been a call for a ceiling on the amount of land above which no one could own land. Did the advocate have a comment on this?
The Chairperson explained to Mr Mnguni that Adv Ngcukaitobi was not saying dump one in favour of the other. There were inbuilt limitations to restitution that had been recognised by the governing party in 1992 that there would not be enough land to give back via restitution. Redistribution was forward-looking. Restitution was especially for those who could say specifically when they had been moved and from where they had been moved. In the Eastern Cape there had been the betterment schemes which no one could decide whether they were cases of restitution or not. She added that Adv Ngcukaitobi had chastised Members of Parliament for not passing a law about redistribution.
Adv Ngcukaitobi replied that both restitution and redistribution were worth doing but there was a problem beyond corruption, money etc. Restitution could not give the majority of the people their land back. There was a structural limitation and that was why the ANC had said that the main vehicle should be redistribution. The fact was that South Africa had been colonialised not for ten years but for 350 years and all the people who had lost their land were dead and the tribes could not even remember where their land had been. The evidence had been completely destroyed. The Tswana people of Johannesburg was a good example of people who could not even remember where they had lived. Restitution could work where the taking of the land was fresh in the memory such as in the Group Areas Act.
In going forward, one had to look at redistribution. In redistribution, one had to ask where one got the land. Nothing in the Constitution said that one could not look at the history of acquisition or the amount paid. There was no restriction on how many people could get redistributed land. If he wanted to claim land restitution, he would have to go back to the Eastern Cape because that was where he would have an ancestral claim, but he did not want to live there. He wanted to live in Johannesburg. Many people were in that position. Parliament had to think about how to strengthen redistribution.
He had no problem with stocktaking. There was no dispute about the amount of commercial agricultural land that had been redistributed. The Land Reform Act had said that Africans would have 30% of commercial agricultural land in the first five years. However, in 2013 only 4% of commercial agricultural land was African-owned, versus 74% that was white-owned. So, it meant that 79% of population owned 4% of commercial farm land. One of the problems was the exclusion of black people in the value chain. Why did black people drive tractors, but they did not own tractors? The lack of ownership of tractors had dispossessed black people. Evictions in the past 20 years had been far greater than evictions through the entire apartheid era.
He agreed that Mr Mnguni could be right about the budget. In one year, the Department had paid the entire restitution budget for one claim, that of Mala-Mala. It made no sense at all.
Mr Smith had asked about strengthening the judicial arm. Adv Ngcukaitobi stated that it was important to strengthen its independence, but it was also important to strengthen its effectiveness and flexibility. In the Land Claims Court, the independence of the court was supported by the Constitution, but the court had been undermined by the system of acting judges for the past ten years. Acting judges were dependent on the Minister to appoint them on a temporary basis. That was a single Minister who did not consult anyone when appointing an acting judge. Where was the independence?
The ineffectiveness of the court was evident in the backlog. The majority of his work, when acting as a Land Claims Court judge, had simply been dealing with evictions and the review of magistrate court reviews. He had had very, very few land reform cases. The judicial arm had failed in terms of effectiveness. The Land Reform Courts were dying. That was why he was concerned about strengthening the judicial arm before the judicial process failed in the way that political and legislative processes had failed.
A forum should be independent and effective, but it also had to be quick. Forums existed in the Competition Tribunal, and there was the Commission for Conciliation, Mediation and Arbitration (CCMA). No one doubted the independence of CCMA and that forum only had a specific number of days in which to give judgement. The Chapter Nine Institutions, such as the Public Protector, were good models. The Chapter Nine institutions could be challenged, but one had to implement the decisions of such institutions, even as one took a decision to the courts. There were a variety of models. Mr Smith was right it could be a model that can be put directly in the Constitution as a Land Rights Protector. Independence could be achieved by having Members of Parliament make the appointments. But independence without effectiveness would not work. He conceded that he was flexible in his proposal about a tribunal or forum.
Adv Ngcukaitobi felt very strongly that politicians should not decide on compensation. Judges had to decide on compensation. The government was right to balance the rights. The expropriation was a political function, but the compensation part was for the judiciary to decide. That fitted in with the scheme of the Constitution. The country was moving into zero compensation and zero compensation was a very dangerous thing, especially for a politician that was not the one making the decision. One needed the element of distance.
He agreed with Ms Semenya that the judiciary had to be in tune with the Constitution but that did not mean that they had to share the ideological views of politicians and they had the right to disagree with Parliament. The thinking of judges had to be aligned to the Constitution. That was a requirement. And if they were not, it would be necessary to look inward as 90% of the current judges had been appointed post-1994.
Nation-building was undermined by people who refused to move off the land, even where it was in the public interest and the fear was that those actions would create frustration and people would invade farms. That was why delinking expropriation from compensation was so important. It might even speed up the process. People had to leave the land immediately if it was expropriated and then they could fight in court. The current land fights meant that there could not be investment in the land until the compensation question had been resolved, which could take years. SA was the only jurisdiction where one did not get the land until the compensation had been paid.
The question of the banks was one that he wanted to leave in the hands of Parliament. The Constitution did not cater for the financier. The financiers were the biggest owners of land. If the state did not compensate the owner, did that mean that the derivative owner should get paid? That would be opening up a whole new avenue that would defeat the entire purpose. It also opened up a whole new avenue for farmers to avoid redistribution. He had been told that farms were being re-mortgaged so the problem of non-compensation should be shared by the banks that had many other assets. There had to be wording in the Constitution to address the issue of the financiers of land. He personally believed that banks could take the pain of non-payment.
Adv Ngcukaitobi said that there were a couple of issues that he would have another look at.
The Chairperson appreciated his insight and the key issues that Parliament had to consider. She liked the fact that whatever system it was, it had to be effective. She also found it useful that he had separated the delinking of expropriation without compensation: expropriation was the business of the state, compensation was the business of the judiciary or an independent tribunal, and valuation was the work of the Office of the Valuer-General. The Valuer-General had said that when section 25 talked of current use, it did not have a value on it and so part of the Amendment should indicate how to determine the value of current use.
The Chairperson thanked the presenters for their input which would provide much food for thought when the Committee sat down to determine how to address its brief. The Committee would finalise the policy framework and have a meeting in the middle of the day the following Wednesday so that Members could add to it. And then the report would be finalised on 15 March 2019 and the Committee would present the report on 19 March 2019 for the House to decide if there were any other instructions for the Committee. The draft proposal would be circulated by Tuesday.
The meeting was adjourned.
- South African Constitutional Property Rights Foundation input
- Proposed amendments to Section 25: version 3
- Agri SA v Minister of Minerals and Energy
- Office Of the Valuer General input
- Work Villages input
- Media Statement - Ad Hoc Committee concludes briefing by Experts on Land Reform and the Constitution