Expropriation Bill: Day 2 of Public Hearings

Public Works and Infrastructure

18 June 2008
Chairperson: Mr TV Tobias (ANC)
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Meeting Summary

Absa Bank felt that tighter definitions were needed in particular for the concept of ‘public interest’ and ‘moveable property’. Clarification was needed on the right of juristic persons and rights of bond holders. There was not enough recourse in challenging the amount of compensation awarded and in some cases there were elements of unconstitutionality. Financial institutions needed security and might have to increase their prices with a resulting economic impact if they had to cater for losing money due to insufficient compensation being paid to cover financial costs.

The Congress of South African Trade Unions felt that government had failed in its mandate to address poverty and inequality. The Bill presented an opportunity to redress past wrongs. One of these was the skewed distribution of property in the country. Market value should not be seen as the most important factor in determining the amount of compensation. More precise definitions were needed. The possibility of temporary expropriation was not included. All stakeholders should be involved in the Advisory Boards. Action should be taken against landowners who did not provide information about unregistered rights holders on their property, but the failings of the postal system should also be considered in serving these notices. An awareness campaign was needed. The Geldenhuys formula needed to be reviewed, and market value should not be the key factor. The history of acquisition should be the key factor. The benefits of previous government subsidies should also be considered. Landowners should not be allowed to vandalise fixed equipment to the detriment of future occupants.

Members questioned the presenters on ideological issues. Nationalising industry would have major impacts on the economy. The concept of market value was defended as being objective, but it was also pointed out that the Constitution required more factors to be considered in the setting of compensation. There was considerable debate over how these factors should be prioritised. The history of property acquisition was important. It would be difficult to quantify how previous subsidisation of farming had added value to the properties.

The Committee was urged to consider the environmental issues associated with mining. The Bill would make it easier to expropriate land for mining purposes. The term ‘of public interest’ was subjective and could be used to serve political priorities at a particular time. Another submission highlighted the problem of expropriated land not being used for the stated purpose. This often resulted in property developers acquiring the land cheaply.

Members argued that environmental conditions were in the legislation, but were told that there was no provision for environmental management after the expropriation. There was agreement that checks and balances were needed both on environmental issues and in ensuring the correct use of expropriated land.

Members were reminded of the goals of the Freedom Charter. The Bill would be a tool to achieving some of those goals. There were some blockages at present. Emerging farmers should be given assistance after land was granted to them in order to make them commercially viable. This would also be a way to address the food crisis.

Meeting report

The Chairperson recalled some of the points from the previous day’s hearings. There had been claims that expropriation was linked to mineral rights. Anglo American had said that the Expropriation Bill was linked to the Mineral and Petroleum Resources Development Amendment Bill (MPRDAB). There were claims that the Expropriation Bill was unconstitutional. There was a newspaper article reporting that some groups were planning to petition the President. She felt that people were giving up too early.

Presentation by Absa Bank
Ms Raksha Singh Semnarayan (Legal Counsel for Absa) said that a submission had been made before 16 June 2008. Another letter had been written by the Group Chief Executive. Copies of this were being made for the Members. Absa supported government initiatives, but these should happen on an economically sound basis. Expropriation could be done if it was in the public interest. This term was defined very broadly. Where it happened it should be done in a fair manner. The long title of the Bill said that expropriation could be done in the public interest or public purpose. She submitted that the word “or” should be changed to “and” so that both considerations must be taken into account.

She said that the definition of property included moveable property. Absa felt that the intention of the Bill was to expropriate land. Moveable property was not in this spirit. The bank agreed that all should have access to natural resources. Clause 4 of the Bill gave the Minister the authority to expropriate on behalf of a juristic person. This should be clearly defined. Clarification was needed on the rights of such a juristic person, especially after the expropriation had occurred. This should be addressed.

Ms Semnarayan said that Clause 10 referred to an advisory board and this should be considered. Clause 10(2)(b) did not expressly covered the need for an advisory board. Money owed to financial institutions should be considered when determining compensation.

She said that the provision for notice of expropriation was a 21-day period. The clause should include a stipulation that no expropriation would take place until this period had lapsed. The clause was a departure from the previous Act. It could be detrimental to the land owner in its current form. The Bill must make it clear that the 21-day period must run its course first.

Ms Semnarayan said that the provisions of Clause 11 could affect the financial institution. Notice should be given to the institution. Title deeds should be endorsed so that any buyer of a property earmarked for expropriation would be aware of the situation.

She said that the amount of money owed to a financial institution should be considered in the determination of a compensation amount. Market value was the most reliable and objective way to determine compensation. The Constitution ensured that there was fairness in the process, and Absa submitted that there should be a just and equitable balance of the interests of the public and the owner.

Ms Semnarayan said that in Clause 17(1) the owner was not obliged to give details of a bond on the property.  Clause 21(1) determined that the amount owing to a financial institution should be settled first before the balance of the compensation was paid to the land owner. This did not address the issue of the compensation amount being less than the outstanding mortgage. Clause 21(2) only made provision for the landowner to have recourse to the courts to determine the terms of payment and not the amount. Clause 22 only provided for a judicial review. This did not provide sufficient avenues for redress and was thus unconstitutional. It was crucial that the amount of debt be considered. Financial institutions should have the right to challenge decisions.

Ms Semnarayan said that the ability to secure property was crucial to the financial institutions. This might lead to the institutions having to increase their costs in order to cover the possibility of debt exceeding compensation. This would impact on property owners and small business. The impact would be serious both on the institutions and the nation. It would seriously affect economic confidence if property could be expropriated for any reason without fair compensation being paid.

Congress of South African Trade Unions (COSATU) submission
Ms Prakashnee Govender (Parliamentary Office Co-Coordinator) said that the Bill would repeal the Expropriation Act of 1975. This had been part of the onslaught by the minority group. Property rights were an emotional issue, and COSATU had criticised government for being reluctant to move forward on implementing constitutional imperatives such as the combating of poverty and inequality. The masses were disenfranchised regarding property.

She said that some parties were reacting that there were unconstitutional aspects to the Bill. These parties had vested interests, but now had the opportunity to redeem themselves for past actions. This was not just on racial grounds. Socio-economic reform was needed in the country. Important aspects were the access to water and food security issues. It was imperative to tackle constitutional questions.

Ms Govender said that the concept of market value was a nebulous one. The willing buyer / willing seller concept was an alien concept. High inflation was making estate agents and banks run scared. There were predictions that the price of houses could drop by up to 40%. She asked if this would apply to all property values. In terms of supply and demand, there was a question as to whether the prospect of expropriation would create an additional demand and distort the normal property market. This was one of the contradictions of an unequal system.

She said that falling house prices indicated an oversupply of property. This had to be compared to the backlog in service delivery. There was too much in one area and nothing in another. The situation was an indictment on the parties criticising the Bill. COSATU remained critical of the willing buyer / willing seller approach. The Constitution did allow compulsory expropriation even if there was no agreement between the parties. The courts could decide.

Ms Govender said that in terms of Section 25(3) of the Constitution, five factors had to be considered in determining compensation. Market value was only one of these. The idea of market value created distortions and was a subjective determination. Other factors included the history of acquisition. Many people had benefited from racist property laws in the past. They had acquired property at minimal prices.

She repeated that the Bill was a repeal of the Act of 1975. If anything, market value should be seen as a ceiling price. There was no real change to the old law. Government’s commitment was weak, and COSATU had detected a shift in political will. They wanted additional measures.

Mr Mfanafuthi Tsela (Research Coordinator, COSATU) said that the question of land reform was not limited to land issues. The Expropriation Bill should realise some of the objectives of the Freedom Charter. It was still COSATU’s position that strategic industries should be nationalised, particularly the former state-owned enterprises. Government should rescue collapsing businesses.

Mr Tsela said that a specific area which COSATU welcomed in the Bill was the consideration to be given to unregistered rights holders such as farm workers.
Mr Tsela then made some specific comments on the Bill. COSATU placed equal value on the values of ‘public interest’ and ‘public purpose’. Clause 1 should include definitions of the terms “expropriated holder” and “unregistered rights”. The terms “public purpose” and “public interest” should also be clarified further. Clauses 2 and 3 set out the powers of expropriation. The original Act made provision for temporary expropriation for purposes such as disaster relief, but this was not repeated in the Bill.

He referred to Clause 7 regarding advisory boards. It was important that all stakeholders were included, including labour, community groups, women and the youth. Clauses 10 and 12 called upon owners to provide names and addresses of unregistered rights holders. COSATU felt that some landowners could maliciously withhold this information. They supported the punitive measures in the Bill and felt there should be more emphasis on the role of expropriation authorities to investigate these matters. There should also be an awareness campaign in the rural areas so that they would know their rights. Chapter 5 of the Bill provided for compensation. The Geldenhuys formula was used to determine the amount but relied heavily on market value. Other factors were contained in Section 25(3)(c) of the Constitution. Post 1994 policies had centred mainly on the concept of market value. Clause 10 acknowledged that in many cases land was acquired with the help of state investment and subsidies. Also, commercial farming had been heavily subsidised in the past. COSATU felt that this factor had to be key in the determination of compensation.

Mr Tsela said that there was a tendency by some disgruntled white land owners to vandalise equipment on land which was to be expropriated after they had been compensated. This was done to perpetuate the myth that blacks could not farm. This practice should be an offence. The provision in Clause 10(7) made it an offence to fail to provide information as required. COSATA felt that the request could go missing in the post. This possibility should be considered.

He said that the Bill was an opportunity to move away from the limitations of the willing buyer, willing seller concept. The Restitution of Land Rights Amendment Act of 2003 provided for the expropriation of land for land reform purposes, but it had taken government more than three years to declare its intent to implement the law. Political will was needed for this even in the face of hostility from those with vested interests. Restitution should not be the only reason for expropriation but should be used for broader aspects of land reform.

Ms Govender said that institutions like universities had more resources than communal farming organisations. The Bill determined that the cost of expropriation could be subsidised. This included the cost of the property to the new owner, transfer and other legal costs. Where a juristic person was the new owner it would have to bear these costs. All juristic persons should have the same treatment.

The Chairperson said that the Committee would take cognisance of this suggestion.

Mr A Botha (DA) said that the COSATU presentation had contained many fascinating opinions. They were correct to say that unregistered rights holders needed to be compensated. He asked how they would like to determine the value of compensation without using market value as a basis. Indeed, if no account was taken of market value, he asked how the value of unregistered rights could be determined. He disputed the statement that commercial agriculture had been heavily subsidised by the state. He had been a farmer for 40 years, but had not found these huge subsidies, unlike the practices overseas. There had been some subsidisation, but more specifics were needed to determine how such subsidies had enhanced the value of property. He asked what was meant by COSATU’s reference to vandalised equipment. Fixed equipment was not part of the property, and was also not moveable. Clause 13(3)(a) made provision for the existing landowner to take care of the land.

Mr B Radebe (ANC) appreciated the input from COSATU. They were sympathetic to the masses. Their suggestions would go a long way to addressing land rights. In about 1985, apartheid had been declared a crime against humanity but international banks had continued to fund the regime. Thanks to the support of the banks, the apartheid government had mowed people down and killed them in the streets. The majority had thought that the banks were being economically irresponsible. Some had disinvested from the country. This government was economically responsible. A sign of this was that business had never been better. To say that expropriation could lead to unemployment was only the bank’s perspective. The country’s Constitution had been certified as correct, but now Absa wanted to see it amended. The term “for a public purpose or in the public interest” was a direct extract from the Constitution. The public interest included land reform. The history of a property was a critical factor in determining compensation. There had been a case in Pongola where a farmer had ejected people from his property. It was the bank’s constitutional responsibility to look at the history of a property.

Mr S Opperman (DA) said that his property was not just his, but was an inheritance for his descendants. Market value was a vague concept, especially when applied to a property such as a church. Absa was placing sufficient weight to market value. He wondered what it should be. In determining the history of acquisition, he wondered if the real history of the country would be considered.

Mr T Ngcubaitobi (an attorney in private practice representing the Department of Public Works (NDPW) and on the committee which had drafted the Bill) said that one of the objectives had been to align the current Act to the Constitution. Natural resources were still in the hands of the minority.

Ms N Ngcengwane (ANC) appreciated the submission made by COSATU. They had highlighted some imbalances. Absa was suffering from a fear of the unknown. There was a lack of trust, and she did not know how this should be addressed. There were many issues in the Bill. There would be serious effects for the whole country. The formula to determine compensation was taken from the Constitution.

Mr T Dlali (ANC) observed that there were no guarantees that the advice emanating from an Advisory Board would actually be heeded. An expropriating authority could take their advice or leave it. There was a diversion from current procedure. It was not clear if advice would be sought in each instance of a planned expropriation. They were elected representatives and would do what was needed. The second paragraph of Section 25 made provision for a judicial review. The Constitution surpassed any legislation. COSATU had submitted that all relevant stakeholders should be included in the process. This should include traditional leaders, and there had to be a reference to the Traditional Leadership Framework Act and the Communal Land Rights Act. In the rural areas there was no organised labour. Existing structures would be needed. She asked what the status was of people who had already been forced to leave the land due to illegal evictions.

Mr Nel (DA) said that some more unbundling was needed concerning unregistered rights holders. He asked if this included bond holders. COSATU had raised the point about a better definition for “expropriated holders”, and he agreed with them. However, he asked why they stopped their call for nationalisation at Sasol and Mittal Steel. The effect of nationalisation on the economy would be huge.

Mr Groenewald (FF+) asked about the fast-tracking process. People thought that the Bill would be a magic wand. He asked why COSATU thought that fast tracking was needed. The present problem was with the administrative process, not the expropriation process. On the question of nationalising strategic industries, he asked if COSATU recognised the Constitution. He asked if the right to private property ownership was recognised, and if so, how they saw it. They had called for government to rescue collapsing businesses where the owners were resorting to retrenchments and pay cuts. Taxpayers’ money would be used to fund such a revival. In the sections of the Freedom Charter referring to nationalisation, he asked if they would target all banks and the monopoly industries. While some companies did have a major share of the mineral wealth, he asked if they would also nationalise the smaller mining companies.

Mr L Maduma (ANC) said that Absa had questioned the powers of the Minister in their written submission. He asked if they understood that the Minister was the only person empowered to authorise expropriations. He asked if Absa thought that someone else must be given such powers. The Act of 1975 had given the Minister the power. He asked if Absa was saying that a black Minister must be disempowered. Whether the Minister’s name was Didiza or Groenewald, that person was still the Minister. It was clear to him that the Bill complied with the Constitution. He asked what perspective the bank was using when it spoke of economic uncertainty resulting from expropriation. In fact, the Bill was trying to achieve certainty. The disadvantaged of the country still had no access to natural resources. It was a wide responsibility of government to correct this, such as access to water. Life was still a battle for thousands of black South Africans. Fishing rights remained in the hands of a few white people. The Bill must be broad enough to cover this aspect as well.

Dr S Huang (ANC) said that the issue of outstanding loan amounts was clearly addressed in Section 25(3). If the amount owed to the financial institution exceeded the market value then the compensation amount should increase to cover the outstanding loan.

The Chairperson said that the crux of the Absa submission was the expropriation of land and cases of perceived unconstitutionality. There was a question on the limitations on juristic persons. Section 10 dealt with the mortgage bond situation and the concerns of lenders. Landowners had a right to challenge these decisions. COSATU had quoted the Geldenhuys formula, but this was nowhere in the Bill. The advisory boards could look into these issues.

Ms Semnarayan said it was unfair to assume that companies and juristic persons did not support the Constitution. The tone of Absa’s submission was that the bank required clarity. This was not a crime. The Bill was unclear in places. Absa had responded to an invitation to comment on the Bill. The tone of some of the Members’ questions was that the bank had no right to do this. The content of the submission was not intended as a criticism of any elected Members. The criticism of the bank was unfair.

The Chairperson said that Ms Semnarayan should confine herself to answering the questions of the Members.

Mr Botha raised a point of order. The Member had said that Absa objected to the Bill because the current Minister of Public Works was black.

The Chairperson told Members not to threaten the presenters. She had a duty to keep order, and this kind of remark should not be repeated. The Committee had to complete its work on this piece of legislation, and could not afford to waste time. She would call Members to order if needed.

Ms Semnarayan did not want the Committee to amend the Constitution but just needed clarity on some points. She had often made presentations to the Portfolio Committee on Communications. She knew that uncertainty in legislation was good news for the lawyers. It was important to eliminate ambiguity. Market value had been used in the new municipal rates regime. This determined the rates payable. Using market value in this Bill would not therefore be unprecedented, and would be objective. It was hard to make the connection between natural resources and land. If there was a tractor on the land, would it be seen as a natural resource?

The Chairperson said that the expropriation of property included land. This was perhaps an oversight in the wording.

Ms Semnarayan said that the rights of registered landowners were confirmed through documentation. The rights of unregistered land occupiers had to be determined through some legal contest. She asked if this was the intention. Section 25 of the Constitution had been debated in the same way by Agri-SA. Courts should have the power to determine the amount of compensation.

Ms Govender said she was humbled by the opposition’s fascination in their opinions, even if their comments were sarcastic.

The Chairperson called on all Members and guests to behave in an honourable manner. She appreciated now what the Speaker of Parliament had to contend with. She called on them to avoid sarcasm and to confine their comments to responses to issues raised in the hearings.

Ms Govender said that in defining compensation for expropriation holders, the status of the holder should be considered. These could be labour tenants who had the use of land for grazing or crops. Offering such people monetary compensation might only be a token response.

Mr Ngcubaitobi said that Section 25(3) of the Constitution made it difficult to apply the factors in a just and equitable manner. He asked what the precise proposal was. The Geldenhuys formula might be applicable. The current legislation took the various factors into consideration. Market value was not the starting point. Any concrete proposal would have to utilise the five factors mentioned in the Constitution.

Ms Govender said that market value was an economic term. It was subject to distortion through the mechanism of supply and demand.

The Chairperson asked the COSATU delegation to apply their minds to this question, namely if market value should be considered over and above the other factors.

Mr Botha said that some rephrasing was needed. He agreed that landowners should be entitled to compensation. He asked if the value of compensation could be determined, not only in monetary terms, if the market was ignored. Everybody depended on the market.

Mr Ngcubaitobi said that market value was one of the factors. COSATU had argued that it should not be the starting point.

Ms Govender said that COSATU could only raise their views. Some factors were being ignored. She would have to speculate to answer the question of the best way to determine compensation. Labour tenants and communal groups had limited rights. Some issues were symbolic and of token value only. A multi-sectored approach was needed. There could be no clear answer.

She said that advisory boards had to deal with practical matters in the different sectors. She did not believe that their proposal was calling for fast-tracking. A variety of mechanisms was needed, and detailed research had been done. There were budgetary and financial considerations. The legislation was signalling a shift towards more meaningful land reform. COSATU had been part of the drafting of the Constitution, but this did not mean that the organisation did not have some criticisms of the Constitution. Some space was needed to move on the programme of land reform. The masses could not remain disenfranchised.

Mr Groenewald said there was a specific question on public – private ownership.

The Chairperson said that the hearings must not be conducted in a court environment.

Ms Govender was not afraid to discuss ideological issues, but understood the time constraints of the hearings.

The Chairperson said that a way had to be found to benefit all. A balance was needed between individual rights and the public interest. All of this was in the Constitution.

Mr Groenewald said that this would be an interesting debate, as it would go to the core of the Bill.

The Chairperson decided that ideological issues did need to be aired. She proposed that the next twenty minutes should be set aside for this before the lunch break.

Mr Groenewald said that the Chairperson would not tell them what he could or could not say. He just wanted to hear the views of COSATU, not the explanation of why they were held. A debate was needed, and he relished the thought of a twenty minute ideological debate. He wanted his own clarity on how COSATU saw the legislation. He urged the Chairperson to make the ruling she had proposed.

The Chairperson said that Mr Groenewald was being very difficult. It was the first time he had been in this Committee, and he did not seem to appreciate the procedure. The first step was to ask questions of clarity, and the Members could engage with presenters on a broader framework later. He wanted a different approach. There were ideological questions. These were not in the legislation but in the views of Members and presenters. All were entitled to their own views and did not need to explain themselves. She had now changed her mind, as they were diverting from the purpose of the meeting. She could not force the COSATU presenters to provide a yes or no answer to Mr Groenewald’s question.

Mr Botha said that presenters should be allowed to answer the outstanding questions.

Mr M Likotsi (APC) wanted to ask some simple questions.

The Chairperson denied him this opportunity, as these would be new questions. He would be given a chance later once the outstanding questions had been answered.

Mr Tsela said it was a known fact that farmers had been subsidised by the previous regime. Everyone knew that. On the question of vandalism, he said that equipment was considered in the amount of compensation. Any damages should be deducted from the amount. A problem with unregistered holders was that landowners would evict them in anticipation of expropriation. Not every company should be nationalised, but only those of strategic importance. This should be done to address national development issues. Expropriation was a tool to achieve this.

Mr Botha said that he accepted Mr Tsela’s statement that ‘previous subsidisation was a known fact’ was actually only an opinion. In deliberating on the price of compensation, it was hard to quantify the value added by subsidisation. He asked COSATU to provide the facts to bolster their argument.

Afternoon session
Mr Likotsi said there so many issues. He asked how land reform could be fast tracked. The methodology of land distribution had to be considered, and he asked if Absa had any suggestions. He asked if government had the capacity to pay compensation given the economic situation. On the 30% issue, government was still struggling to achieve a balance between the “haves” and the “have nots”. Absa was married to the idea of market value, and he asked what other method could be used. COSATU had been sceptical of the willing buyer, willing seller approach. This was constraining GEAR. He asked if this was the policy. He asked if the Bill would affect the Land Restitution Act. Farmers had been heavily subsidised in the past. He asked if subsidies were the only way that farmers could succeed.

Ms Semnarayan said that if land reform were to be fast tracked then the law would be the first step. It had to be in line with the Constitution. A parallel process could be a private/public partnership. When land was expropriated, there had to be a programme to use it in the public interest. The Minister of Housing had concluded agreements with the banks regarding low cost housing. It was up to government to answer the question of the capacity to compensate. She assumed that plans were in place. There could be a partnership between government and financial institutions.

The Chairperson asked for her personal opinion. People were saying that government did not have the capacity.

Ms Semnarayan replied that government could if it wanted. In fact, government could do anything. As to how long it would take to fast track land reform, this would also depend on government’s resolve.

Mr Likotsi remarked that it had taken 346 years to sort out the land dispossession issue. It could take another 346 years to resolve the problem.

Ms Semnarayan said this was possible. It would be a long process, but it could happen in her lifetime. Market value was not just an economic term, but an objective way to assess the value of property. It had been used in other legislation, such as the determination of property rates. The question was how market value was to be determined.

Mr Tsela said that in the macro economy there had not been much funding for land reform. Subsidies had to be taken into account in determining prices. He could not say how to calculate these at present as values had been inflated over time. Emerging farmers also needed support.

Mr M Maura (Deputy Director-General: NDPW) referred to the letter from the Absa Group Executive. He was sure that the presenter embraced the sentiments expressed in the letter. Section 25(2)(a) of the Constitution stated that expropriation could be done in the public interest or for a public purpose. The letter said that the expansion of the grounds for expropriation was of concern. He assumed that Absa accepted the supremacy of the Constitution. He asked what the basis for Absa’s concern was. It was a bold statement that market value was the main criterion for compensation. The Constitution held that the history of the property was an important factor. He asked how Absa could say that this factor should cause minor adjustments to the compensation amount.

The Chairperson was looking for the specific sentence in the letter. The definition of public interest was wide, but no alternate suggestion had been put forward. If a person had been evicted in terms of the Group Areas Act; that would be an example of a forced eviction. She asked if this should carry less weight in determining compensation. It was illegal to sell RDP houses. One could move away from market value but not substantially. However, if market value was predominant then the history of acquisition would be ignored.

Mr Nel said that market value was fair and equitable. He asked if the owner of an RDP home could be prejudiced in the public interest twenty years later.

Mr Ngcubaitobi said that using market value as the only factor in determining compensation would be unconstitutional.

Mr Radebe said that the Committee could not override the Constitution. The appropriate Committee would have to look into that.

The Chairperson said she wanted to clarify the issue. The Constitution recognised all factors equally.

Ms Semnarayan said that an expropriation of an RDP house in the public interest would be at the prerogative of the expropriating authority. Absa respected the Constitution and did not expect to see changes. She understood the rationale. In terms of compensation amounts she submitted that market value was the outstanding factor and was objective.

Mr Ngcubaitobi said that in terms of Section 21 there was an agreement between three people. These were the owner, government and the financing bank. Absa must read the Bill properly.

The Chairperson said this matter would not be debated.

The Chairperson said that the argument could not hold water. The history of acquisition should supersede all other factors. Government would not look at profit-making. She asked what the basis of the argument was. People had died in the process of acquiring freedom.

Ms Semnarayan said that other factors should be considered. Market value was one of these. Some issues were reasons for compensation being awarded, but did not go to determining the amount.

Mr Ngcubaitobi said that either the situation before 1913 should be considered, or there should be separate classes of rights owners. Victims of eviction could be one class.

Mr Nel said that the date of 1913 was in the Constitution, in Section 25(7).

Mr Radebe said that the clause should not be misinterpreted. It was only for restitution and land reform.

Ms Govender said that others had seen Section 25(5). Efforts had to be provided to make access to land on an equitable basis.

The Chairperson said that there was no equitable access to land. That was a fact.

Mr Botha said that Mr Ngcubaitobi was a lawyer in private practice and an advisor to the NDPW. The bank had a role to play in the economy and property acquisition. Government had a sound policy to make all the people bankable. Collateral was needed which should cover between 60 to 70% of property value. Banks had a practice of redlining certain areas where property was not secure. There should be security of property. Now the Bill was to be enacted, and market value was not important. This meant that expropriation could happen at 50% of market value, whereas the bank had lent at 70% of the value. He asked if the bank would then lose the balance of the money. Government should consider the effect on bankability and the consequences of not using market value as a starting point. The only value of those factors listed in the Constitution which was remotely quantifiable was the market value.

The Chairperson said that it was not government policy to red line areas. The policies of banking and redlining were not to be dealt with in this debate.

Mr Ngcubaitobi confirmed this. The Bill looked at market value and the history of the property.

The Chairperson said it was in the Bill. There was a class issue. People did not believe what was written down.

Ms Govender said that compensation was not limited to a particular year. It would be determined on a case-by-case basis. The victims of illegal evictions should be compensated by redistribution legislation.

Submission by Andrew Pyper
Mr Andrew Pyper said that he was a farmer. He said that the new system of government was superior to the previous system and was more transparent. The provisions of the Bill could affect the environment as well as the health and welfare of the nation. Clause 15 of the Bill was based on Section 25 of the Constitution.

Mr Pyper said that the power lay in the application of the legislation in order to achieve the desired outcomes. The public interest was a subjective concept which was used to achieve political objectives. At the time, apartheid was seen as being in the public interest albeit only for the whites. This was not the same here. The intention of the Bill was blatant. There were a number of imperatives, but the Bill was completely silent on the protection of the environment.

He said that everyone had the right to a healthy environment. This applied to both present and future generations, and substantive measures had to be taken. Natural resources had to be used wisely. Not everyone felt bound to accept this, but the majority of South Africans were Christians. There was a biblical injunction to rule the Earth, but this had to be done with wisdom and on a sustainable basis. There were many environmental concerns. There were many examples of the destruction of the environment such as wrong farming policy.

He said that the belief that only white farmers could be efficient was a fallacy. He was from Kuruman where the former colonial powers had allowed detrimental practices. There was ample evidence of successful stock farming by indigenous people before the advent of British rule. Native reserves and locations had been moves to ensure a supply of cheap labour “in the public interest”.

Mr Pyper urged government to look before it leapt. It must not repeat the same mistakes of 1913 and 1936. At present there were some projects which seemed bound to repeat earlier failures. He urged government to be careful not to negate aspects of the Constitution.

He said that Clause 10 of the Bill dealt with the suitability of properties. It should be amended to include the need for an environmental management plan and ongoing programmes.  

Mr Pyper said that inclusive property rights would encourage African people to farm, and this could be the start of viable commercial enterprises. He had been a supporter of the United Party, which as an opposition party had encouraged the granting of freehold rights to blacks before 1994.

He said that there were health risks due to the widening scope of mineral exploration. The Bill increased the scope for expropriation on behalf of juristic persons. Mining often affected the health of the community. At present it was relatively easy for mining companies to expropriate property for public purposes. If the Bill was implemented the process would become even easier. One of the complications of mining activities was disease, as evidenced by recent cases as a result of manganese mining. Measures had to be installed to reduce the risks.

Mr Pyper said that the Bill did present a wonderful opportunity for land reform. The consequences should not impact on the environment and so the Bill did need to be amended. He warned the Committee that the people in the rest of Africa could make mistakes in their countries and move south to start again. However, the next stop from here was Antarctica.

The Chairperson said that the Minister had stressed the conflict between productivity and social justice. Although some Members were still attending a cluster briefing in the National Assembly she decided to continue with the next presentation.

Submission by Ms Gisela Weinmann
Ms Gisela Weinmann, a property manager, said that the Bill had good intentions but had inherent flaws. There was a danger that more harm than good would be done. She had prepared a lengthy presentation but would speak off the cuff. Her concern was what might happen after expropriation. The government and the Minister were not protected from the consequences of their actions. When land became public property it fell within the public domain. There was a question over how it would be managed. The Bill should have precautionary measures.

She said that the preamble could be amended in one of several ways. There could be a reference to providing for connected matters. Another option was to have a separate Bill which would restrict the powers of local authorities. This would limit arbitrary expropriation. Another possibility would be to include a fall-back clause, which would protect the Minister against claims resulting from the exercise of delegated powers. The final option she suggested was to provide for notarial services.

Ms Weinmann said that expropriated land should be used for the poor but this was cheap land which was often sold to property developers or swapped for other pieces of land. If the land was not used for the public interest then it should go back to government. This would prevent property developers from acquiring the land for their own purposes.

A fall-back clause would ensure that the land was not used for personal gains by politicians, who would be the decision-makers in the expropriation process. She suggested that there should be a three year time constraint. Policy and procedures should be determined by the land reform commission. Where there was a notarial deed of perpetual servitude, it should be noted which municipality was involved and the reason. The provincial premier would have to give permission for any diversion.

Mr Opperman said that Mr Pyper had proposed changes to the Bill but was not specific.

The Chairperson pointed out that Section 24 of the Constitution dealt with environmental issues.

Mr Maduma said he must commend Ms Weinmann. Land was often not used as intended, but it was not possible to have a separate Bill. All the related issues had to be accommodated in this Bill. This was a crucial issue. Municipalities did resell land. Government had to release land for development. Municipalities did not have the financial capacity to develop property themselves as their tax base was insufficient.

The Chairperson said that Ms Weinmann had raised a touchy issue. A monitoring tool was needed, and the Committee would have to consider this. A perpetual usage servitude must be in the public interest. This was not always the case in practice. Government had to take a long-term view. Lessons must be taken into account. The same mistakes must not be made. She said that there was a problem with placing limits on the power of local authorities. These should be monitored rather than limited.

She had attended the briefing by Minister Didiza in the National Assembly who had answered the questions there as if she was responding to the questions being posed at this Committee meeting. Environmental conditions would be difficult, and as much consultation would be included in the process as possible. She agreed with Mr Pyper that environmental concerns were often disregarded until nature fought back. However, there were laws in South Africa to cover this. She had served at the Department of Environmental Affairs and Tourism (DEAT) previously, and had learnt to appreciate nature conservation while she was there. Environmental Impact Assessments (EIAs) were done as part of any such process. There was alos an opportunity for conservation groups and others to raise objections before the EIA process started.

Mr Opperman agreed that the environment was important. Global warming was an issue. He asked at what stage the EIA took take place. He asked if this happened after the application for expropriation was made.

The Chairperson answered that the EIA was always done beforehand. The Committee would need to discuss this. It should be done as a part of special planning. There needed to be consultation on where the EIA should fit into the process.

Mr Maduma said that the matter of public interest was an interesting matter. An implication was that government was the custodian of public land. Government had to fast track equitable distribution of land. It could not abandon its responsibility. This was perhaps linked to the question of public interest. Emerging farmers needed land. This would not be the responsibility of the private sector but of government. He thought there might be a need for checks and balances, especially where the land was not used for the stated purpose. This would be counter-productive. Emerging farmers must be helped.

The Chairperson said that public interest was in the political interest. Government was trying to appease the homeless. It was a difficult definition. It was a case of normative statements against factual statements. Property and unemployment were literal concepts. Crime was the result of unemployment. In the same way that Mr Pyper had quoted Genesis Chapter 1, South Africa was not the Garden of Eden. Rules and regulations were needed. There was no trespassing in the Garden of Eden. She was not looking for political favours, but wanted to address the real issues of poverty and landlessness. One could not use public interest as the scapegoat, and could not gamble on the future.

Mr Pyper said that the provisions of Section 24 only came into effect after expropriation. In terms of agricultural land, what was the public interest in the past was no longer so now. This led to the problem of landless people. Remedial steps should be taken at the beginning of the process. South Africa now had a wonderful Constitution. The problem was not so bad. The EIA process was there, but he was asking for more after expropriation. An environmental management plan and programmes needed to be in place. These were non-existent at the time of expropriation.

The Chairperson reminded him of the National Environmental Management Act (NEMA).

Mr Pyper said that the EIA was normal policy. Land was granted by government according to policies and practices. This should be in the spirit of Section 24.

The Chairperson said that South Africa had attended a world summit where a plan and vision had been presented. She had been at the DEAT at the time. Urban migration had been a concern, and there were fears that the cities would be overwhelmed.

Mr Pyper said that environmental conditions must be set up front. Clause 10(2)(c) lent itself to environmental issues in part. It was one thing to attend a conference but another to put resolutions into practice. This was the crux of the matter as there were counter-productive aspects. Section 24 had wonderful provisions. Traditional policies could negate constitutional principles.  Political objectives were subjective. The Bill tried to redress land issues, but these were emotive. He supported land reform fully. He did not want to see an instrument devised to achieve this which had no checks and balances. The legal department should find ways and means to bring them into the Bill. It was wonderful to have a Constitution which promoted sustainable development.

Ms Weinmann said that NEMA was in place and made adequate provisions. However, some activities would be affected by conflicts of interest. She quoted the example of a weir in a river which should be properly evaluated over a three year period. For small scale farmers there was a limit on ground clearance.

The Chairperson said there was a need to accommodate environmental issues.

Ms Weinmann said that the Record of Decision (ROD) process could last up to twenty years.

The Chairperson said that the Committee would look at the disputes on occupancy. The courts might have to decide but legal proceedings should not take longer than twelve months. The Committee would air its views on this later.

Land Access Movement of South Africa (LAMOSA) submission
Mr Wayne Jordaan thanked the Committee for the opportunity to make a presentation and for the assistance in enabling his visit. He apologised for the absence of the leader of LAMOSA. He had attended the public hearings on 6 June at Ventersdorp. He noted that people had been asked to sing the national anthem, but some had only sung Die Stem. They then stood up and said they supported land reform.

He said that LAMOSA was working with the landless. They had launched the Back to the Land campaign in the 1990s. An expanded base had been formed of like-minded organisations. This predated the dawn of democracy in 1994. Successful restitution claims were seen as a victory. However, there was not a cooperative relationship. Restitution claims were a long struggle, and some people never got to see the fruits of their struggle.

Mr Jordaan told the story of a community in North West known as Uitkyk which was near Ventersdorp. People had been removed from the land, which was then subdivided and sold off. When an initiative had been launched to restore the land to the people, some of the new landowners had agreed to sell but others had refused. LAMOSA had introduced a strategy to buy what was available and hoped that the others would sell in time. This had still not happened. He provided other examples. At Palmietfontein a farmer had leased the land. He now wanted to evict the tenants. He was not farming but was waiting for an expropriation. At Brakspruit there was a farmer who was a willing seller. The Department of Land Affairs (DLA) had not wanted to buy the land at the time. Now the farmer was only willing to sell his land on the open market where he would get a better price.

He said that LAMOSA was very much in favour of the Bill. He hoped that Section 25 would be effected. In 2005 there had been a national land summit. The concept of market related values for compensation had been rejected. The legislation should be brought into line with a socio-economic approach. Some money was also needed for post-settlement development. Informal rights holders were protected in terms of the Land Act. There were cases where land was acquired with farm dwellers still in occupation. Sometimes their rights would be inferior. The Bill would protect such people.

Mr Jordaan said that there were different powers in legislation or regulations. Vulnerable people needed protection otherwise they would become victims again. The current expropriation legislation was inherited from the previous government. Expropriation should be the first tool in the armoury.

He referred to the food crisis. Some argued that the status quo should be maintained in order to address this crisis. LAMOSA said that part of the solution was to assist small producers. There was a problem with the current producers. The approach advocated by LAMOSA would assist in the achievement of the first millennium objectives by alleviating poverty. It would soon be the 52nd anniversary of the Freedom Charter. That document had called for the land to be given to those who worked it. The state should help the peasants. The language was dated, but the issues were still current. The poor needed assistance to develop.

Mr Likotsi asked how many of the farms given to disadvantaged people, either through the land restitution programme or through expropriation, were productive. There was a dependency on government after expropriation. Government was presumed to have a big bucket of money. Assistance could make farms viable. He admitted that he was a socialist. He asked if there were programmes in place to ensure immediate sustainability. He had seen many unused tracts of land in the rural areas which belonged to disadvantaged communities. There was already an abundance of land.

Mr Maduma said that people were informed by their experiences. Government had to work out how to deal with the challenges of under-utilisation of land.

Ms Ngcengwane said that the Bill should be strengthened. Additions had been proposed. She had visited all nine provinces and had seen the poverty. The Bill had to serve all South Africans.

Mr Ngcubaitobi said that Ms Weinmann had suggested that the land should revert back to the state if it was not utilised. This was one way to address the problem. The concept of use was relative. He asked if there was any concrete proposal on this ‘use it or lose it’ approach.

Mr Opperman spoke about “false settlements”. People would need support. One possibility was that new landowners could form partnerships with present farmers who had the expertise. Some capital should also be provided.

Mr Botha said there was a background of some grim situations, particularly in the dry platteland areas. The current food crisis could only be solved by increased production, but he asked how this could be done. One solution might be to put more farmers on the land. However, different regions had particular climates and soil types. It was government’s goal to allocate 21 million hectares to black farmers by 2014. This would be shared by 40 000 new farmers, replacing ten to fifteen thousand white farmers. This would give each new farmer an average farm size of 500 hectares. Of this land, between 5 and 15% was only suitable for grazing. Studies showed that one animal needed up to 10 hectares of grazing. Even if all the required land could be obtained at no cost, it would not solve the problems. He asked why land was not being sold to government, and if expropriation would help.

Mr Likotsi wanted an understanding on the investment issue. Investment in land was not allowed. If one invested in the bank one would accumulate profit over a time. Some people invested in property. He said that the whole of Bloemfontein was basically owned by two men. Some people owned many farms, and were only investors. He asked what the position of government was on this.

Mr Jordaan said that the Members had posed some hard questions. An important aspect of an integrated programme was the access to land. Black South Africans were poor in assets. Success was linked to a healthy asset base. There was thus a dependence on government. The private sector did not always assist. An integrated approach to development was required. He said that the community was given land. Up to two years after this happened, no government department had helped. Private parties made promises but did not actually fulfil them. Post-settlement aid was very important. The DLA had its
Settlement and Implementation Support (SIS) programme. This looked at what needs there were, particularly regarding resources and skills, and made provision to address them. There would still be debate over this. People were being given land, but not other means to support themselves.

Mr Jordaan was in favour of partnerships. The milk producers were assisting small scale dairy farmers, but even there only those with a particular level of assets qualified for this assistance. The challenge was to reach this level. A mentorship programme would need to be addressed on aspects of implementation. The problem was that so many empty promises were made.

He said that the food crisis should be dealt with at a micro level. Not all land was of the same quality. There was a tract of public land outside Stellenbosch which was leased to white farmers. Black farmers had no access. There was speculation in the property market, and the expropriation legislation would look at ways of ensuring access in the face of this. Mr Likotsi’s allegations regarding property in Bloemfontein represented a compelling case. He disagreed with a ‘use it or lose it’ approach. New landowners had to be developed after the settlement. Their land could not be taken away. An integrated approach was needed to make land reform work rather than punish those who were not immediately successful.

The Chairperson announced that this was the end of the public hearings on the Bill. It had been a marathon. Others had been on the hearings programme for that day, including the National African Farmers Union (NAFU) and Standard Bank, but had not been able to make it. They would be given a chance to present before the Bill was debated. It was very important to engage with all parties. A fair process was needed. Issues could be seen objectively and subjectively at different times. It was a question on how different views should be tolerated. She appreciated the hard work by Members and the long hours they had been forced to keep. The deliberations were still to come, and would be held in an open meeting.

The meeting was adjourned.


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