Expropriation Bill: Public Hearings

Public Works and Infrastructure

17 June 2008
Chairperson: Ms T Tobias (ANC)
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Meeting Summary

AGRI SA supported the Constitution and fully supported government’s land reform program. There was broad acceptance in principle that expropriation was a necessary tool in the hands of the state and that it may also be used for land reform purposes. However, it was felt that it should be used only as a measure of last resort and subject to fairness, transparency and the rule of law.

Moreover, AGRI SA highlighted that certain sections of the Bill were not in line with the Constitution. This was a view shared by a number of other stakeholders, and a view, which had been validated by senior counsel opinion. As a result, AGRI SA believed that it was critical that these sections be amended to bring them in line with the Constitution.

Forestry South Africa accepted that there was a need to create a legislative framework for expropriation which was consistent with the Constitution. However, FSA contended that the Bill was objectionable mainly because of the Bill’s failure to provide for expropriation which was procedurally fair and its denial of proper access to the courts for the resolution of disputes, particularly those relating to compensation. In support of this claim, FSA listed their objections to specific provisions in clauses 10, 11, 15, 17 and 24.


Meeting report

Opening Remarks by the Chairperson
To begin with, Ms Tobias thanked all the officials who accompanied the Committee to the public hearings convened in each province, as part of the principle of Batho Pele. She described the hearings as successful as there had been a great response in all areas. She stressed that the Committee appreciated the inputs made during those hearings and would consider all submissions when it deliberated on the Bill. Part of the critical issues identified during the proceedings included the apprehension that the Bill would pose an investor risk to the country and threaten food security. Concerns were also raised about whether compensation at below market price, as contemplated in the Bill, would infringe individual rights to property as enshrined in the Constitution. Some also speculated whether the country needed the Bill at this juncture.

As a general response, Ms Tobias explained that the key objective of the Bill was to align the Expropriation Act, No 63 of 1975, with the Constitution. She cited countries such as Canada, Australia and Brazil that used expropriation as a beneficiation tool for those who did not have access to natural resources. She recognised that the principle (of expropriation) was not easy to accept for members of the public because of the subjective nature of the relationship individuals had with their assets. However, she felt that at some point a distinction needed to be made between public and individual interest. Lastly, she declared that government had a responsibility to facilitate and regulate land that served the interest of all South Africans.

Mr S Opperman (DA) voiced his objection regarding the process of the public hearings. He indicated that in many instances there was no clarity about the dates and venues of the hearings. As a result, he reasoned that the Committee had not fulfilled its constitutional obligation because many people were prevented from participating in the process.

Ms C Ramotsmai (ANC) responded that Mr Opperman’s comments were vague and that he should state specifically in which provinces people were not made aware of the hearings.

Mr Opperman clarified that the Committee was supposed to have taken Parliament to the people. However, he maintained that this was not achieved because people were not informed about the venues. He alluded to the differences in the hearings programmes issued by Parliament and by the Committee, to strengthen his point.

The Chairperson accepted the right of any Member to raise an objection. Nevertheless, she felt the need to clarify certain points. Firstly, the Committee had done something extraordinary, by arranging meetings in all provinces because such hearings normally took place in Parliament. She indicated that there had been protests regarding the cost implication of such an exercise. Nonetheless, she had insisted that the Batho Pele principle be applied, and that those people who could not afford to come to Parliament be given an opportunity to present their views on the Bill. In addition, all the areas that the Committee had visited had been identified by Members of the Committee themselves and that most of the venues had been filled to capacity. Moreover, she rebuked the Member for withdrawing from the delegation and failing to provide an apology for this. Lastly, she described the Member’s statement as baseless and nothing more than public grandstanding.

AGRI SA submission
Mr Laurie Bosman, President: AGRISA, thanked the Chairperson for the opportunity to address the Committee on an issue that was of interest to their members. He recalled that the organisation had previously sub
mitted its written comments on the Bill. In the written submission, AGRI SA outlined the following concerns:

The fact that the term “public interest” was not properly defined;

The definition of a “juristic person” on whose behalf the state may expropriate, was too wide and could include any company, close corporation, trust or non-profit organisation. 

The determination of compensation (possibly at lower than market value) by the Expropriating Authority;

The limitation placed on the right of the affected landowner to have a dispute determined by a court. Mere review by the court was viewed as unacceptable.

The devolution of the power to expropriate down to municipal level.

Mr Bosman emphasised that the organisation and its members supported the Constitution and fully supported government’s land reform programme. There was broad acceptance in principle that expropriation was a necessary tool in the hands of the state and that it may also be used for land reform purposes. However, it was felt that it should be used only as a measure of last resort and subject to fairness, transparency and the rule of law.

The stated intention of government was to replace the current Expropriation Act, with the Bill, which was more in line with the Constitution and would help to speed up land reform. The concern, from AGRISAs perspective was whether the Bill would impact on the propensity to invest in the sector. (i.e. would security of tenure be jeopardized), and whether market related prices for agricultural land would be significantly tampered with. While AGRISA was inclined to believe that the Bill would have a negligible impact on tenure security, there seemed to be no guarantees that this would indeed be the case.

Furthermore, he pointed out that neither commercial nor emerging farmers would have any incentive to invest in the agricultural sector if there was no tenure security. Given the current global food price crisis, it was feared that the Bill would threaten food production and security further.

Moreover, he mentioned that government’s land reform programme had failed in significant respects, not only in terms of the (small) numbers of ‘beneficiaries’, but also in terms of the situation in which they found themselves: in debt and without government support. The recent report by the Harvard economists emphasised the importance of agriculture to a growth strategy for the economy as a whole because of the potential of the sector to engender job-creating growth. While it was sometimes difficult to imagine that employment in the agricultural sector could be turned around (after losses of more than a third of employment opportunities over the past 20 years), one only had to look at the growth performance of the country’s main agricultural sector rivals globally (e.g. Chile and Argentina in fruit; Australia and New Zealand in wine; Argentina and Brazil in field crops; the Asian countries in poultry and dairy products) to fully understand the negative effects of the uncertain investment environment in this country.

AGRISA appreciated the complexity of striking a balance between political imperatives regarding land reform and the notion of nationalisation, which accompanied any manipulation of land prices or assets in general. One way of dealing with this dichotomy was to add detail content and definition to the related issues contained in the Constitution i.e. public interest and the relevant aspects dealing with price formulation. Until such time as these matters were resolved, AGRISA SA would focus on the legal matters contained in the Bill in order to secure recourse to the legal system and to ensure administrative justice.

Moreover, he reiterated the view that certain Sections of the Bill were not in line with the Constitution. This was a view shared by a number of other stakeholders, and a view, which had been validated by senior counsel opinion. As a result, AGRISA believed that it was critical that these Sections be amended to bring them in line with the Constitution.

In conclusion, AGRISA pledged its commitment to the country and its future. The entity expressed its support for the Constitution and a willingness to assist government with its land reform programme. AGRISA maintained that the Bill in its present form conveyed the wrong message to organised farmers and to future investors in property in the country.

Mr B Radebe (ANC) appreciated AGRI SA’s stated support for the Constitution and the country’s land reform programme. In light of this, he queried how the entity could claim that the definition of public interest (in the Bill) was too wide when it had been extracted directly from the Constitution itself.

Ms Annelize Crosby, Parliamentary Liaison Officer, AGRI SA, accepted that Section 25 of the Constitution provided for expropriation in the public interest and that the Bill should reflect this as well. However, she believed that the definition of public interest in the Bill was too broad and should be narrowed.

Mr Radebe noted AGRI SA’s preference that the point of departure for dealing with compensation should be market value. However, he preferred that the history of the acquisition of the property be the salient consideration when determining compensation because in many cases farms were forcibly taken from people without compensation.

Equally, Ms Ramotsamai disagreed with the suggestion that market value should necessarily be the starting point for determining compensation, and maintained that it should be considered as one of several other factors.

Mr Tembeka Nguckaitobi, Consultant: Drafting Team, asked whether the entity accepted that in determining compensation the history of acquisition of the property, as opposed to the market value, could be the starting point because the Constitution did not give any undue weight to either factor.

Mr Bosman explained that the Restitution Act, which was in line with the Constitution, had a specific formula for determining compensation. In that process, the current market value was the starting point because it could be easily determined. After that, other factors such as the history of the acquisition and use of property were calculated into the price. In conclusion, Mr Bosman suggested that the Bill follow a similar process.

Ms Annelize Crosby, Parliamentary Liaison Officer, AGRI SA, clarified that the entity did not question what Section 25 of the Constitution stipulated. The Constitution provided the broad parameters and the Bill gave the details. However, AGRI SA contended that the definition of “public interest” in the Bill should be narrowed. In the same vein, AGRI SA agreed that the history of the acquisition and use of the property should be taken into consideration when compensation is calculated. However, she advanced that market value should be the starting point because this was the only objective factor that could be verified and tested whereas all the other factors were subjective.

Not satisfied by the response, the Chairperson asked what the motivation was for prioritising market value above the history of the acquisition of the property because she considered the latter more important.

Mr Opperman reminded the Committee that there were different layers of history in the country, which needed to be verified.

Ms Crosby maintained that it was difficult to attach a financial value to the history of the acquisition of the property. On the other hand, market value could be easily established and should therefore be the starting point. Subsequently, all the other factors should be factored into the analysis.

Ms Ramotsamai addressed several issues. To start with, she recalled that during the public hearings in Limpopo, the local AGRI SA had provided statistics and data concerning how the Bill would affect the country’s food security. She wondered how those figures were arrived at and what formed the basis of those calculations. Secondly, she reminded AGRI SA that the Bill went beyond just the agriculture sector and hence fell into public works as part of property. Thirdly, she examined whether AGRI SA wanted property relations in the country to remain unchanged.

In response to the first question, Mr J van der Merwe, Executive Director, AGRI SA, responded that, based on certain assumptions, it was possible to make predictions about the country’s food security. However, he agreed that it was far fetched to produce reliable statistics at this stage.

Mr Bosman recognised that the Bill went beyond the agricultural sector but stated that AGRI SA represented the agricultural sector and therefore addressed the Bill from that perspective. He added that other submissions would highlight the issues that affected other sectors.

In respect of the final question, Ms Crosby voiced AGRI SA’s support for land reform and indicated that the entity was involved in the process in various practical ways. She emphasised that there should be expropriation for purposes of land reform but only as a measure of last resort. She concluded that it should not be used on a large scale, and in a manner that was fair to current land owners.

The Chairperson agreed with the last comment and stated that it would be self-defeating for any government to do expropriation on a large scale.

Ms Ramotsamai continued to interrogate AGRI SA. Firstly, she observed the presenter’s reference to the recent report by the Harvard Group that stressed the importance of the agricultural sector for sustained growth in the economy She added that while the country continued to grow (by between 4 and 5% annually), it remained jobless growth.

Mr Bosman stated that the recent World Bank Report came to the same conclusion as the Harvard Group, with both emphasising the importance of the agricultural sector as a catalyst for economic development. Countries were encouraged to take care of, invest and have confidence in the sector. In addition, he argued that economies were failing due to certain interferences. In South Africa, food production had been a cornerstone of the economy for decades. The country had been a net exporter of food and an earner of foreign exchange for many years. That has since come to an end. Lastly, he cautioned that if government failed to invest and have confidence in the sector, the current global food crisis would worsen.

The Chairperson advanced that any economic growth without development was useless. Personally, she maintained that the actual intention of the Bill was to overcome the legacy of colonisation and apartheid that had left certain sectors of society landless and others with more assets. This was a global challenge and international experience showed that the redistribution of land was paramount in tackling this problem. She rejected the impression that if the Bill was passed (in its current form), all farms, particularly those that were productive, would be expropriated. For that reason, she mused whether the Committee should address perceptions or factual issues given the objectives of the Bill.

Ms Ramotsamai stated that nothing had been said about farms that were either converted into game farms or rezoned for property development. Lastly, she could not comprehend why people believed that the introduction of the Bill would lead to mass expropriation.

Mr van der Merwe replied that it was incorrect to say that people were moving away from agricultural farming without looking at issues of sustainability, profitability and economic sense.

Mr Ngcukaitobi sought to ascertain whether AGRISA wanted the Bill to be withdrawn while the 1975 Act, which was apartheid enacted legislation, remained in operation.

Ms Crosby clarified that AGRISA did not want to preserve a pre-constitutional Act. Instead AGRI SA suggested that the 1975 Act be amended to bring it line with the Constitution because there were problems with so many aspects of the Bill.

Mr van der Merwe commented that there had been a decline in investment in the agricultural sector in the late 80s and early 90s. A multitude of factors, such as the changing environment, contributed to this. Furthermore, he claimed that the legislative framework whether intentionally or unintentionally also created uncertainty. In light of this, he appealed to the legislator to be mindful of perceptions and unintended consequences that would influence investment decisions.

Forestry SA (FSA) submission
Advocate Christiaan van der Merwe, Consultant for Forestry South Africa, said that FSA accepted that there was a need to create a legislative framework for expropriation which was consistent with the Constitution. However, FSA contended that the Bill was objectionable mainly because of its failure to provide for expropriation which was procedurally fair and its denial of proper access to the courts for the resolution of disputes, particularly those relating to compensation. In support of this claim, FSA listed their objections to specific provisions in Clauses 10, 11, 15, 17 and 24. In respect of Clause 10 FSA argued that no allowance was made for an owner or the holder of registered or unregistered rights to influence the outcome of an investigation. It was deduced that the right to privacy and the associated right to human dignity was infringed by the powers conferred on investigators in this Bill. On Clause 11, concerns were raised that once a notice of intention to expropriate had been published, no express provision was made for a right of objection. The right to object was in any event restricted by the provision that it must be lodged within 21 days after publication or service. The right to be heard was further limited in that provision was only made for the lodging of written objections. Furthermore, FSA challenged the basis on which compensation was to be determined in terms of Clause 15 of the Bill. FSA noted that the Bill was incongruent with Section 25(2)(b) of the Constitution, which stipulated that the amount of compensation and the time and manner of payment thereof must either be agreed to by those affected or “decided or approved by a court”.

Mr Mandla
Mabuza, Chief of Staff: DPW, noted that in their submission, FSA had stated that the Bill had not made provision that payment of compensation could be more than market value. He explained that the Bill quoted Section 25(3) of the Constitution verbatim and therefore could not understand the view advanced by the entity.

Adv van der Merwe replied that Clause 15(3)(b) of the Bill stipulated that compensation may be below market value and made no mention that it may be above market value as well. He explained that there was a legal principle in interpreting legislation that by naming one, the other was excluded. This implied that by including that compensation could be below market value, there was an inference that it could not be above market value. As a result, FSA proposed that the Clause be amended or deleted in its entirety.

Mr Ngcukaitobi addressed several issues. To start with, he clarified that the decision to institute an investigation was an administrative action. He explained that the definition of administrative action under PAJA consisted of taking a decision which had an adverse and material impact. He reasoned that a decision to contemplate an investigation lacked both crucial elements. Secondly, he countered that because the Bill contemplated notification in advance and objection to that notification, FSA’s complaint about the violation of the right to privacy and human dignity was baseless. Thirdly, he mentioned that Section 25 of the Constitution dealt with two distinctive legal process; namely deprivation of property and expropriation (which was a limited form of deprivation of property), that had different legal consequences.

In addition, Mr Ngcukaitobi questioned whether the entity accepted that in determining compensation the history of acquisition of the property, as opposed to the market value, could be the starting point because the Constitution did not give any undue weight to either factor.

Mr van der Merwe found it interesting that the Committee continued to debate the issue (of compensation) when matter had already been determined by the Constitutional Court. As a result, he argued that the Bill should be in line with that determination.

Mr van der Merwe expressed concern about the attempt in the Bill to exclude the authority of the courts to pronounce on the value determined by the Expropriating Authority (EA). This was not in line with Section 25 (2)(b) of the Constitution and therefore unconstitutional.

Mr Ngcukaitobi asked on what basis such an allegation was made.

Mr van der Merwe explained that there was an attempt in Clauses 15 and 24 of the Bill to limit the courts to only review the process of the determination. In terms of the Bill, if the courts did not approve the amount, the matter must be referred back to the EA. Conversely, Section 25(2) of the Constitution expressly allowed the courts to determine the amount and not the EA as envisaged in the Bill.

The Chairperson queried whether the Department had a different interpretation on this matter.

Mr Ngcukaitobi found it problematic that people interpreted the Constitution in a particular way and insisted that everybody must argue on the basis of their interpretation regardless of the flaws in that interpretation. He mentioned that expropriation consisted of two distinct legal processes, namely the act of expropriation and the act of determining compensation. He then compared Section 25 (2)(b) of the Constitution with Clause 24 (1), (2) and (3) of the Bill. Section 25(2)(b) stipulated that compensation could either be agreed to by those affected or decided or approved by the court. Section 24(1) provided for determination of compensation by the EA in the absence of an agreement. The subsequent subClause stated that such a decision was an administrative one under the Promotion of Administrative Justice Act (PAJA). Section 24 (3) stipulated that any party may request a court to determine amongst other things, the final determination of the compensation.

Mr Ngcukaitobi stated that it was incorrect to say that a court on review was limited to matters of process. A court of review under PAJA could conduct a merit based as well as a process based review system. He added that there were legal precedents that supported this viewpoint.

Mr M Nel (DA) questioned whether expropriation was an administrative act.

Mr van der Merwe answered in the affirmative.

Ms Crosby disagreed with this assessment. She argued that Section 25 read together with Sections 34 and 169 of the Constitution expressly provided that it was the function of the courts to determine compensation in the case of a dispute and not the EA.

The Chairperson sensed that people did not want the Minister to have the power to decide compensation when the law allowed for it.
Mr A Botha (DA) maintained that the spirit of the Bill was unconstitutional because it only allowed the courts to only approve and not determine compensation.

The Chairperson disagreed with this analysis and highlighted that the Bill provided for a just, fair and equitable balance between public interest and individual rights. In addition, she sought to clarify whether the role of the EA to decide compensation was an administrative act.

Ms Crosby reiterated that this was not merely an administrative function because it involved individuals’ constitutional right.

The Chairperson stated that the Committee would continue to try its best to make people understand the legislation. She thanked the organisations for making the effort to share their views on this matter, and confirmed that their views will be considered.

Afternoon session:

Amahlathi Emerging Entrepreneurs Forum (Amahlahthi) submission
Mr Moses Qomoyi, Executive Member: Amahlathi, indicated that the organisation represented more than 20 000 emerging growers, who were mainly black. Amahlathi supported the land reform process which the Bill sought to advance. However, he claimed that the Bill would have unintended negative consequences for black empowerment in the forestry sector. He contended that 80 percent value of the value of a timber farm was in the timber, an immovable asset. As a result, separate market valuations were done for land and timber in terms of land restitution.

Mr Bailey Bekker Executive Member: Amahlathi, indicated that there had always been a legal separation between the land and the timber on the property. The separation also existed in terms of tax where capital gains tax was paid on the land and income tax on the timber stock. In that sense, timber was quite different from the rest of agriculture where the value of the crops was attached to the land.

In addition, Mr Bekker provided an analysis of the ownership patterns, which illustrated that private growers owned only 21% of the industry. Independent timber growers were either selling their assets to big corporates or felling timber, fearing that if the expropriation legislation was passed in its present form, they would be paid below market prices for their timber assets. As a result, he called for timber to be valued at market levels in cases where there was expropriation to discourage growers from selling to corporates.

No questions were raised.

Transvaal Agricultural Union-South Africa (TAU) submission
At the outset, Dr Neil du Preez indicated that he had been instructed by Ross and Jacobs Incorporated to represent TAU. TAU recognised the fact that under certain circumstances, the state had the right and/or duty to expropriate property for public purpose or in the public interest and therefore did not object to the Bill. However, TAU contended that some of the Sections in the Bill were in conflict with the Constitution.

He noted that it was clear from the Section 25(2)(b) of the Constitution that the words “decided or approved” were both governed by the words “by a court”. Hence, the court alone was entitled to determine the compensation and not the Expropriation Authority. Section 18(4) of the Bill stipulated that the last offer by the EA “must be regarded as final”. Apart from submitting a claim, there was no procedure whereby the expropriatee was offered a hearing before the final determination of compensation by the EA. TAU agreed with the view that a review by the court only pertained to an investigation into the procedure and not into the merits. The Bill afforded the EA, in terms of Section 24(1) read with Section 18 (4), the power to determine the amount of compensation where it was not agreed. This was clearly a judicial function traditionally fulfilled by the courts and involved the judicial determination of the merits of a dispute. This implied that the EA did not have the power to exercise this judicial function. Lastly, he highlighted several unwarranted infringements by the Bill, to the court system.

Mr Radebe probed two issues. Firstly, he expressed disappointment that TAU had delegated their legal advisor to address the Committee. Secondly, he voiced concern that the organisation retained the word Transvaal in their name when the place no longer existed.

Mr du Preez objected to both remarks made by the Member. He stated that TAU had been invited to make a presentation to the Committee and that it was entitled to legal representation just like any other organisation. Also, he mentioned that there was nothing improper about the organisation’s name because the name Transvaal was still used to describe the High Court in Gauteng. Lastly, he stated that the Committee was not here to debate the organisation’s name.

The Chairperson informed Mr du Preez that there was proposed legislation to change how the Transvaal High Court was referred to.

Ms Ramotsamai sought to dispel the impression that the Bill undermined the issue of compensation. She stressed that market value would be one of many factors that would be taken into account when determining compensation.

Mr Nel thanked the legal expert for an informative presentation and queried whether Section 24 infringed the Constitution.

Mr du Preez answered in the affirmative.

Mr L Maduma (ANC) commented that people were fearful of the unknown. Nevertheless, he maintained that this should not detract the government from proceeding with the Bill. Secondly, he alleged that when determining compensation, the courts would only look at market value whereas government would give preference to other factors such as the history of acquisition and subsidies.

Mr du Preez rejected the latter comment and clarified that in terms of Section 25(3) of the Constitution, the court had to take into consideration all the factors when determining the amount of compensation.

The Chairperson stated that expropriation should not be seen as a process to hamper black economic empowerment. This issue should not be viewed along racial or beneficiary lines but as a mechanism to address development. She thanked the presenters and stated that their views would be considered.

Association for Community and Rural Advancement (ANCRA) submission
Ms Monica Manong, Director: ANCRA, described ANCRA as a land service and rural development organization based in the Northern Cape. She mentioned that the struggle for land in South Africa was fundamentally a struggle over land rights, access to land, and the right of individuals to a sustainable livelihood on the land. It was a struggle that was born during the era of colonial and apartheid land dispossession, which confined Africans to 13% of the land and reserved the remaining 87% of the land for white farmers and the state. Fourteen years into the new dispensation, only 5% of the land had been redistributed. She rejected organised agriculture’s claims that they were feeding the country. Instead, she accused them of turning their agricultural farms into game farms, eco-tourism hubs, golf courses and bio-fuel production centres. ANCRA expressed their support of the Bill but nevertheless suggested further improvements to it. Firstly, it was proposed that mineral rights should accompany the expropriation of surface rights. Secondly, she
suggested that there needed to be a time limit of not more than twelve months for the entire expropriation process inclusive of court appeals. Thirdly, she argued that the Regional Advisory Boards should be inclusive of landless representatives. Lastly, she advised that when the Bill was passed, that it be implemented without delay and not used as a last resort.


Mr Mabuza indicated that he was encouraged by the input made by ANCRA and viewed the entity’s presentation as refreshing.

Ms Ramotsamai acknowledged the frustration experienced by the organisation and landless people in general.

Equally, Mr Radebe also appreciated the submission presented by ANCRA.

Mr Maduma supported the proposal introduced by ANCRA that time limits should be inserted into the Bill so that the process did not frustrate redistribution.

Anglo American submission
Ms Lindiwe Zikhale-Ngobese, Head of Regulatory Affairs, Anglo American, noted that the Bill intended to bring about equitable access to all South Africa’s natural resources. While it supported the objects of the Bill, Anglo American argued that the Bill did not take into account the significant legislative reforms that had already occurred in regard to mineral and petroleum resources and water resources. In the current legislative framework, mineral and petroleum rights already fell within the custodianship of the state, through the Minister of Minerals and Energy, but could be expropriated by other organs of state in terms of the current Bill. Concern was also raised that unregistered old and new rights would be deemed to be expropriated when the land was expropriated. This should not take place unless expressly referred to in the notice of expropriation and with the consent of the relevant Ministers. Anglo American submitted that the members of the Advisory Board should be suitably qualified and that the appointment of its members should be done by an independent body. Like previous presentations, Anglo American outlined similar concerns regarding the determination of compensation in Clause 24 and related Clauses. It was suggested that actual financial loss and inconvenience should be added to relevant factors considered in Clause 15(3)(a).

Mr Mabuza noted the company’s submission and insisted that the Department had consulted the Department of Minerals and Energy (DME) and several other departments in the drafting of the Bill.

Prof Michael Dale, mining attorney appearing for Anglo American, explained that Section 5 of the Minerals and Petroleum Resources Development Act (MPRDA) provided that prospecting rights and mining rights, which were granted by the Minister of Minerals and Energy who was the custodian of the mineral resources, were limited real rights both in the minerals and in the land. Therefore if the land was expropriated, it was material for the custodian of mineral resources to be informed of the expropriation because it materially affected their statutory role.

The Chairperson stated that Cabinet operated from a principle of cooperative governance and by implication the relevant departments already knew that they were affected by the Bill. She added that the Committee would engage on this issue further.

Mr Mabuza rejected calls for the Regional Advisory Boards (RABs) to be removed, and cited that the majority (70%) of expropriation occurred at a local level.

Ms Zikhale-Ngobese emphasised that the recommendation was not intended to minimise the work of the Department and undermine the intentions behind the Bill. From a capacity point of view, she surmised that there was insufficient personnel to implement the Bill.

Ms Ramotsamai took exception to Anglo’s suggestion that members of the Advisory Board should be suitably qualified. She wondered if this proposal implied that government never employed qualified people.

Ms Zikhale-Ngobese clarified that she was not questioning the credentials and qualifications of advisory boards. At the same time, she argued that there was insufficient capacity both in the private and public sector to implement the legislation.

The Chairperson accused the presenter of “generalising” and stated that there was no evidence to prove such a claim.

Mr Maduma sought to determine the type of skills that a board member would be required to have.

Mr Dale indicated that the qualifications of the Board members could be construed from the tasks that the Board was required to perform in terms of Clause 10(2)(b) of the Bill.

Mr Ngcukaitobi pointed out that the Minister would take into account issues of competence when she appointed the Board.

Ms Ramotsamai interrogated the company’s concerns surrounding unregistered rights.

Mr Ngcukaitobi sought to understand what informed the claim by Anglo that holders of unregistered rights had no opportunity to make representation when Clause 11(4) of the Bill actually catered for holders of unregistered right and owners of property to enter into negotiations before expropriation took place.

Mr Dale stated that Anglo supported the recognition of unregistered rights in the Bill, which went far beyond that in the old Expropriation Act. The holders of unregistered rights were recognised for purposes of payment of compensation. However, Anglo believed that this did not go far enough and submitted that the holders of unregistered rights be recognised even in regards to the expropriation itself. In addition he advanced that unregistered rights were deserving of separate recognition and should not be deemed as part of the land when there was a decision to expropriate. The merit of the unregistered right should be weighed up against the purpose of the land itself.

Mr Ngcukaitobi was convinced that Anglo did not consider the provision before making comments on it. He explained that the process of expropriation commenced in Clause 10, which required the Board to investigate the existence of unregistered rights. Simultaneously with that investigation, there was an enquiry whether there was a public interest or public purpose warranting the expropriation of that registered or unregistered right. Thereafter, Clause 11(b) provided that a copy of the notice of intention to expropriate be served on the holder of the unregistered rights. Moreover, Clause 12 prescribed that the notice must be served on all relevant parties. He emphasised that Clause 13 regulated the vesting of expropriated property but the steps themselves commenced from Clause 10. He insisted that it was not true to state that unregistered rights were only included at the time of determination of compensation. Instead, they were included from the time the actual process of expropriation started.

Mr Dale countered that all unregistered rights in an expropriated property were simultaneously expropriated in terms of Clause 13(1)(b). He claimed that there was not even an exception in the Clause whereby the EA, having found out about some of the unregistered rights, could insert a provision that such an unregistered right should not be expropriated. Lastly, he declared that the service of the notice had the effect of vesting the unregistered right and that problems would arise if the EA was not aware of an unregistered right.

Mr Ngcukaitobi stated that Clause 10 contemplated a full investigation into the existence of the unregistered rights. Also, he maintained that all the processes, listed from Clause 10 to 14, addressed all their concerns outlined by Anglo.

The Chairperson flagged this issue, and asserted that all legislatives gaps should be closed.
Ms Ramotsamai enquired why Anglo wanted actual financial loss and solatium to be included as an additional factor in Clause 15(3) of the Bill.

Mr Ngcukaitobi probed whether Anglo accepted that the Constitution in no way conferred the right on any expropriated person to receive actual financial loss or solatium.

Mr Dale explained that the injunction to the court in Section 25(3) of the Constitution provided that all relevant circumstances be taken into account when compensation is determined. Therefore, he submitted that actual financial loss and solatium were relevant circumstances.

Mr Radebe found it hard to believe that such a big company as Anglo would make such a submission to the Committee. He alleged that there was no transformation in the mining sector and could not fathom the company wanting to retain apartheid legislation.

Mr Maduma expressed disappointment with Anglo’s presentation, and commented that it was surprising to hear a major role player in the economy of the country raise certain issues. He enquired whether the company implied that the process should be centralised when they suggested that the RABs should be expunged. Additionally, he countered that the land parcels could not be divorced from mineral rights because the Bill intended to address the question of access to natural resources.

Mr Dale replied that Anglo was not simply reverting to old legislation but trying to render the Bill constitutionally compliant.

Mr Ngcukaitobi highlighted that Clauses 12(1) and (2) made provision for notification to the DME when expropriation took place.

Prof Dale explained that Clause 12 dealt with an expropriation that had already occurred. Hence, he urged that the DME be consulted prior to expropriation to determine whether the expropriation should in fact occur.

The Chairperson maintained that it would not be necessary to consult DME because a need would have already been identified that expropriation was necessary.
Ms N Ngcengwane (ANC) enquired why compensation should be determined by the courts and not the EA.

Mr Ngcukaitobi explained that compensation was dealt with in terms of Section 25(2)(b) of the Constitution. Furthermore, he clarified that the first way of determining compensation was by means of an agreement. In the absence of an agreement, it must be decided or approved by the courts He stated that Anglo suggested that when the Constitution used the word ‘or’, it contemplated using ‘and’ which was not apparent from the text of the Constitution.

The Chairperson sensed that people were operating under the assumption that there would be a dispute because the offer would be below market value.

Ms Zuraya Adhikarie, Parliamentary Legal Advisor, interpreted Section 25(2)(b) to read that in the absence of an agreement, there were two alternatives. The court could either decide or approve the amount of compensation. She mentioned that concerns were raised that the wording of the Bill only allowed the court to approve and not decide. If the court did not approve, the matter was referred back to the EA to determine a new amount. As a result, the court’s decision-making power was limited.

The Chairperson commented that the lawyers were confusing the Committee. The Committee would digest all the information and debate the issue further.

The Chairperson stated that the government found itself in a difficult predicament of having to address two competing needs. She thanked all the presenters for assisting the Committee, and advised that they follow the Committee’s discussions on the Bill. She reiterated that all views would be considered and that if people still had serious concerns, they could approach the Constitutional Court.

The meeting was adjourned.


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