Section 25 review of Constitution: public hearings day 4

Constitutional Review Committee

07 September 2018

Chairperson: Mr L Nzimande (ANC)

Audio
Section 25 review of Constitution: oral presentations by stakeholders on submissions 5
Section 25 review of Constitution: oral presentations by stakeholders on submissions 1
Section 25 review of Constitution: oral presentations by stakeholders on submissions 2
Section 25 review of Constitution: oral presentations by stakeholders on submissions 4
Section 25 review of Constitution: oral presentations by stakeholders on submissions 3

Documents
Banking Association South Africa submission
Business Unit South Africa submission
Nedbank Group Ltd submission
The JLD Institute submission
Limpopo CPI Forum: Review of Section 25 of the Constitution
Sakeliga submission

Meeting Summary

VIDEO: Constitutional Review Committee: Oral Presentations 7 September 2018

The Constitutional Review Committee allowed stakeholders to make oral submissions about the possible review of Section 25 of the Constitution of the Republic of South Africa, dealing with the government’s proposals for the expropriation of land without compensation.

Organisations which participated on the day were the Banking Association of South Africa, which represented all the banks registered to operate in South Africa, Business Unity South Africa, which was an apex business organisation, representing a cross-sectoral mix of businesses, Nedbank, one of the country’s big four banks, the John Langalibalele Dube Institute from the University of KwaZulu Natal, the Legal Resources Centre, Sakeliga, the Vumelana Advisory Fund and the Limpopo CPI Forum.

BASA stated that the purpose of sustainable land reform was to support good land ownership patterns in South Africa, restore the dignity of those who had suffered dispossession, and to provide food security, inclusive economic growth and financial stability and benefit the poor, and to create sustainable urban and rural human settlements. South African banks were committed to finding practical solutions to the challenges of unemployment, poverty and inequality and to transformation in agriculture. This could be done without amending Section 25 of the Constitution. An amendment of the constitution had the potential to undermine all property rights, and the amendment of section 25 posed a risk to every home owner, business owner and investor. Banks had invested over R1.6 trillion of South African’s savings, salaries and investments in property loans. Properties were security for loans, if needed to recover depositors’ money. Should property values decrease markedly due to legislation or loss of investor confidence, banks and the economy would not be able to absorb the shock. The two most relevant aspects of their strategic objectives were a transformed, inclusive economy that created sustainable employment and regulatory certainty, and fit-for-purpose regulation. Section 25 was sufficient to achieve sustainable land reform to enable transformation and growth, while still maintaining confidence in South Africa’s commitment to property rights, as well as fostering a growth-friendly policy environment.

Nedbank said that South Africans had a constitutional duty to recognise and redress the injustices and inequalities of the past, build a society that was based on the rule of law, and aim to improve the quality of life for all citizens. As a commercial bank, their key role was in funding the economy and any material negative impact on property prices would adversely impact confidence in the banking system and could trigger a classical banking crisis, starting unfortunately with a smaller bank and possibly migrating to bigger banks, with significant negative knock-on effects to the economy. Every bonded property that was expropriated without compensation was likely to result in a direct impairment to that loan on the balance sheet of the lending bank, even if such loans did remain technically legally due and payable. Banking crises the world over start on the asset side of the balance sheet. This included the possibly of shrinking balance sheets, constraining credit to other sectors of the economy, and in extreme circumstances requiring government intervention at a cost to taxpayers to protect deposits. Maintaining confidence in the banking system was absolutely imperative for depositors to feel that their money was safe.

The J L Dube Institute recognised the historical context of South Africa’s highly skewed land ownership patterns. It felt that expropriation of property should definitely be implemented for public purpose and in the public interest. This was adequately provided for in Section 25 (2), (4) and (5) of the Constitution.

Some Members of the Committee made note of what they referred to as “scare tactics” among some of the institutions, especially businesses.

Sakeliga made a presentation which centred on the rule of law and constitutionalism as important tenets for modern states to promote active citizenship.

Vumelana said that their entire interest was in the success of land reform in South Africa. Given their experience, challenges faced by communities were compounded if nothing was done to ensure certain things were in place, starting from putting together commercial arrangements, and getting the right commercial partners to improving their governance. It often led to challenges such as infighting amongst communities. They were committed to land reform, but there was not a clear enough land reform vision nationally. The people on the ground wanted real rights. Transferring the land and access to capital made their rights real. If the diagnosis for the problem was that all the ills at present were as a result of the constitution, the patient would not be cured.

The Legal Resources Centre said that the current constitutional framework allowed for the expropriation of land with zero compensation in certain instances. The Constitution had been promulgated in 1996 and the state had to date never expropriated land with zero compensation. There was a pressure cooker on the boil and an amendment to section 25 would not address the more pressing problem, which was the systematic failure of land reform to address spatial injustice and historical dispossession. They described instances where it was possible for the state to expropriate land with zero compensation. These instances focused on land occupied and used by labour tenants and farm occupiers, and the land claimed under restitution that was not used by the land owners.

The Limpopo CPI Forum said that despite the achievement of constitutional democracy in 1994, the land question was at the heart of blacks’ struggle to overcome the legacies of many years of white minority rule. Indigenous people were still being dispossessed and were losing the land their forefathers called home. They disagreed with what the Committee had described as scare tactics by business being valid. Despite the Boko Haram insurgency, investors had contributed to ensuring that Nigeria was Africa’s largest country in terms of gross domestic product (GDP). They believed that the rightful owner of the land was the state, and they should be tasked with distributing the land equally.

Meeting report

Banking Association of South Africa

Mr Cas Coovadia, Managing Director: Banking Association of South Africa (BASA said that the BASA had handed in a written submission and would highlight the main points in his oral presentation. Having listened to Afriforum make their presentation the previous day, it was ludicrous to say that land reform was not an issue in South Africa. The fact that we had a particular history in South Africa of land deprivation and that there were thousands of people who had made submissions was evidence that it was an issue. It was an issue which needed to be dealt with. BASA also did not support the ‘Doomsday’ scenario around this issue. BASA believed in sustainable land reform in South Africa.

BASA was an industry association which represented the 35 South African and international banks registered to operate in the country. The purpose of sustainable land reform was to support good land ownership patterns in South Africa, which restored the dignity of those who had suffered dispossession, provided food security, inclusive economic growth and financial stability, and benefited the poor and created sustainable urban and rural human settlements. South African banks were committed to finding practical solutions to the challenges of unemployment, poverty and inequality and to transformation in agriculture. This could be done without amending Section 25 of the Constitution.

According to Section 25 of the Constitution -- “A mandate for transformation” -- Moseneke and Sachs assert that under Section 25 (3), “just and equitable compensation” could range from zero to above market value, depending on individual circumstances. This was supported by the Motlanthe HighLevel Panel (HLP) report. Section 25 (5, 6, and 7) imposes an obligation on the State to create a right of access to land on an equitable basis. Section 25(8) provides for the state to take legislative measures for land and water reform to redress past racial discrimination. This should be read with Section 36(1) (limitation of rights clause) that requires the limitation to be reasonable and justifiable in a democratic society, based on human dignity, equality and freedom.

Threat

An amendment to Section 25 had the potential to undermine all property rights. As such, it posed a risk to every home owner, business owner and investor. Banks had invested over R1,6 trillion of South Africans’ savings, salaries and investments in property loans. Properties were security for loans, if needed to recover depositors’ money. Should property values decrease markedly due to legislation or loss of investor confidence, banks and the economy could not absorb the shock. Banks must be able to recover the loans that they had already extended against properties and agricultural operations (R148 billion). Insecure property rights retard investment and economic development. There was a need to deal with unemployment, inequality and poverty.

(Refer to Section 3 and Annexures A and B of BASA’s written submission)

Land invasions occur primarily in urban and peri-urban areas because of a shortage of housing. Land claims were not confined to rural areas. The economic value of rural land requires security of tenure, infrastructure and technical and financial support. Without these, land reform could not support inclusive economic growth.

BASA said that their strategic objectives were to create an enabling environment for inclusive growth and employment in South Africa.

Proposals

Banks were committed to public-private partnerships. Its recommendations were:

• A key stakeholder summit to commit to meaningful transformation in agriculture and land reform.
• A review of urban and rural development policy and legislation.
• A comprehensive land audit.
• The creation of an integrated electronic national database.
• The release of suitable state-owned land for urban human settlements and land redistribution in rural areas.
• Clear and crisp legislative and institutional frameworks to be expedited.
• The creation of an Ombudsman for Land Reform, to provide communities with access to redress.
• Security of tenure for those in communal areas could create generational wealth, access to the formal economy and the extension of credit.

(Refer to Section 7 of BASA’s written submission)

Mr Coovadia said there was no single solution to this challenge, but these proposals could contribute to sustainable land reform and inclusive economic growth.

Discussion

Ms R Mothapo (ANC) thanked the BASA for their presentation and their opening remarks, especially given what had transpired the day before with Afriforum. She sought clarity about BASA’s concerns about amending Section 25 of the constitution. She wanted to know what the best option would be in addressing the inequality in South Africa which prevailed in terms of the land question. Secondly, with regard to the concern for secure land tenure on communal land, there had been other interest groups, who had addressed the matter, but from a different perspective. Others were content with the current type of tenure, because the banks would not be able to attach their properties. She wanted to know what BASA’s take on this was.

Mr S Maila (ANC) said that the day before, the House of Traditional Leaders had indicated that the issue of title deeds -- which, according to Mr Coovadia, was a matter of security -- was not considered favourably because once people were given title deeds, they were likely to lose their land. The BASA presentation had also said that property was security for loans -- if one was not in a position to settle the loan, the property would be taken over by the bank. This was what irked traditional leaders. These were directly opposed views which he asked Mr Coovadia to consider.

Mr N Swart (ACDP) asked about the different legal opinions regarding Section 25, and whether or not it was advisable to get the Constitutional Court to give parameters of Section 25, given the numerous different parameters made by others, but the Constitutional Court had not given. Secondly, in order to assist the Committee and the public, he asked what would happen to one’s loan agreement as a bond holder in the case of expropriation without compensation. How would this impact on South African property owners. Thirdly, pertaining to the point about title deeds, which was supported by some and not by others, he sought comments about private ownership being used as collateral. Small businesses wanted capital, but did not have collateral. If they had collateral, the inverse would be true.

Mr K Mpumlwana (ANC) wanted to find out about what Mr Coovadia had said, that banks had to be able to cover loans which had already been extended to property owners. If land were separated from property/buildings -- if property did not include land -- how would banks be affected? Would this lead to a decrease in the property’s price? He said there were countries where land was separated from property. In England, the land belonged to the Queen. The Queen then gave right of authority to use the land. The Netherlands, Canada and Mozambique, all had banks. How were they affected by that?

The second question was about title deeds. Today, a title deed meant that the Government owned everything below the ground. However, banks gave loans for operations such as mining, yet the government gave the mining rights. How would the bank’s loans or property be affected if, instead of saying what was below the ground but also what was above the ground, belonged to the Government? Given what other colleagues had spoken about, this would be in order to try and reverse a problem which started in 1994. To others, it was a 300-odd year problem involving farms which the government could not service. The government did not have money. There was a problem of people living in squatter camps. Property which was needed by Government was bonded by banks. How could banks come to the fore to try and solve this problem?

BASA’s response

Mr Coovadia said addressing land inequality and informal settlements was a question which needed to be addressed as a nation. His view was that the matter was being viewed in isolated incidents or cases. The land reform and land settlements question was being addressed without taking into account the type of economy and global framework the nation of South Africa found itself in today. The ideological concerns could be separated from practical concerns. There could be a debate about whether or not the country would be part of the global land community or not. The reality was that South Africa was a part of the global community. If all stakeholders rallied together and looked at a combination between expropriation with and without compensation, the private and public sector could get together to facilitate this.

Over a year ago, the banking sector had provided ideas to former Minister Gugile Nkwinti about how the sector could help the Department of Rural Development and Land Reform (DRDLR) to achieve its objectives. BASA believed that the above could be achieved. From the banking sector’s point of view, it had to be in the bank and society’s interests to ensure that more people had access to land and access to security of tenure. This enabled individuals to engage banks through transactions such as borrowing, which led to increased business for banks. It needed to be good for the sector, economy and country. There was no doubt that this needed to be done, but if it was done in a way which pointed to there being a lack of security of tenure on communal land, because banks would attach to the land, this was not a solid argument. A more plausible argument was that there needed to be security of tenure, an asset, which would enable an individual to borrow using such an asset, which would allow small businesses to access loans etc.

Banks did not want to attach property. It was not good for the customer or the bank economically. Any attachment was a write down at the end of the process. People needed to be more responsible in how they managed their finances. If this was the case, nothing would need to be attached. Security of land tenure was one of the reasons why BASA thought there needed to be a National Land Summit. He understood why the House of Traditional Leaders was not particularly sold on the idea of secure land tenure. However, from a traditional banking point of view, if an individual had security of tenure, it made it easier for a bank to interact with an individual and vice versa. What this meant for traditional leaders was not BASA’s problem, but government’s problem.

BASA was not averse to the different legal opinions on Section 25 of the Constitution. The presentation had been their interpretation as per their legal team. If there was more clarity needed on this matter, BASA was open to this. South Africa must be careful about tinkering with the Constitution. He was of the view that South Africa had an enabling Constitution which had held it in good stead over the last decade. If it was ascribed well, South Africa would be able to deal with the challenge of land inequality and informal settlements.

There was still clarity which was needed regarding land being expropriated if one had a loan. Legally, a person still had an obligation to meet the terms of a loan if, for example, they owned a farm despite expropriation without compensation. There was still uncertainty regarding this, and the matter needed to be clarified.

Regarding separating land from development and mining rights, he said that Mr Mike Brown, the CEO of Nedbank, would explain how Nedbank conducted their business. There was no blanket answer. Depending on the circumstances on what the loan was for, and what the circumstances of the borrower were, there were different types of collateral for different types of land. BASA accepted that there were certain historical events which had occurred. South Africa faced a situation in which there could be a wholesale retraction of the status quo, which could cause other problems to arise. There was a need to provide direction regarding how this issue was dealt with.

Mr Pierre Venter, General Manager at BASA, referred to the land tenure situation in the UK and the Netherlands. It was important to recognise that outside of formal land ownership, one had long-term leases. The most important thing about a long-term lease was that it needed to give life to the occupant or holder of the lease. It needed to give unrestricted, real rights and should be tradeable in the open market, as was the case in Europe. If one moved away from ownership, one could substitute it with a long-term lease.

Pertaining to communal land development, one needed to engage this matter because it was of some importance, as 31% of South Africans resided in these areas. Mr Coovadia had been talking about the generational wealth which ownership with a title had created, which amounted to R4.5 trillion of wealth. One needed to try to create the same thing for communal areas, otherwise families would not be enabled to build wealth, which would generate into generational wealth. BASA recognised that the banking sector would eventually have to venture into communal land. They were currently talking with the Department of Agriculture. Whilst there was a model created for formal ownership, which had been put to the Department 3½ years ago, BASA realised the need to look at other areas as well, such as land restitution and how the private sector could get involved in communal areas. The help of government would be needed to underpin some of the risk to ensure it was at an acceptable level for a commercial, private sector partnership. Discussions were ongoing to achieve this.

There also needed to be a distinction drawn between short-term loans, production loans and medium to long-term loans. Production loans were much easier to give in the private sector, because one relied on the acumen of the farmer concerned. One was also able to get insurance cover to hedge against adverse weather conditions. As a commercial lender, it was easier to give production loans, which were mostly given to cooperatives through wholesale finance. When it came to term loans, unless one could get the security that underpinned I -- access to title, the land plus improvements --this would be unlikely. One was dealing with a productive unit here, and at least 50% of the value of any farm was actually the infrastructure which allowed the production to take place. They were inter-linked. Land on its own, if it was unproductive, was of little value. When it came to term loans, one placed a reliance on security in order to recoup funds. BASA’s view was that Government needed to partner with banks in order to create acceptable levels of risk.

Ownership and title was not the only form of tenure. The Law Society had undertaken a lot of work in countries such as Ghana, and there were numerous types of tenure which one could look at, which actually conferred the real right on families which lived in communal areas. He believed that this should be their task. Because he was involved with South Africa’s Law Society, he believed that they would love to help and make suggestions to the Committee about how one could create an alternative form of ownership tenure which was relied upon in South Africa.

Regarding loans and expropriation without compensation, the security which was put up before that loan did not absolve the owner of that debt. A bank would have recourse to the owner, even though the security had been taken away. From the bank’s perspective, the last thing they wanted to do was to fold an individual. The bank had two options -- either to demand their money back or strike a deal with the customer on a repayment term based over an extended period of time. He thought this was where the bank would go, because they would not want to unnecessarily put a family into insolvency.

The Chairperson asked if Ms Mothapo’s question about inequality had been sufficiently addressed.

In response, Mr Coovadia said that when dealing with issues of inequality, they needed to be dealt with in a manner which, once something had been put on the table, gave people access to resources, gave people land, etc, and which enabled them to interact with an economy, and which enabled them on an ongoing basis to use whatever hadbeen dealt with from a point of inequality, to continue to grow and develop assets. To simply say that land was expropriated and giving it to people who had been deprived of land without taking into account whether there was security of tenure, or whether the person could develop the land, was sub-optimal. As mentioned by Mr Venter, land without the above had little value. There may be historical and other emotive issues when tackling this. However, he felt that in South Africa, there needed to be an optimal use of resources in order to grow the economy. Inequality needed to be dealt with in a more sustainable way. BASA believed that if there was a convergence of South Africans in addressing these issues, it could be done.

In relation to small, medium and micro enterprises (SMMEs), he agreed that if people had a right of tenure, they could access productive loans by growing small businesses. Through the CEO forum, a R1.5 billion fund had been established for SMMEs. Inequality needed to be dealt with more holistically.

Discussion

Mr Mpumlwana interjected that he was disappointed with how BASA had not outlined how they would specifically come into the picture. AgriSA, or another organisation, had come with something, saying that white farmers had 75%, while the government and other South Africans owned about 25%. To try and change this, they had offered something. BASA’s stance was that they were holding money and that there was little that they could do. He said that they should consider the above.

Dr C Mulder (FF+) said BASA were legally sound in their argument when they said that the previous home owner owed on a bond after a property had been expropriated without compensation. The bondholder was technically liable, but it showed the absurdity of the point as far as he was concerned. One would not get money from such a home owner. Pertaining to their presentation, specifically where they spoke about threats, they had referred to the banks having to recover loans which they had already extended for agricultural operations, worth R148 billion. Section 25 did not deal only with agricultural property, but dealt with all property. He guessed the figure of R148 billion dealt with agricultural debt. What was the exposure of the bank regarding other debt in terms of home loans? This would also be affected if this section was changed.

Mr N Godi (APC) appreciated the fact that BASA had acknowledged the colonial past and the indignity suffered by the indigenous majority when they had been dispossessed of their land. For him, one of the most recurring themes had been the almost historical approach to this item. It was always important to put this in perspective. Those who had not suffered dispossession had no sense of emotional solidarity with those dispossessed in their presentations. It became an intellectual argument or debate, devoid of the living human beings which were affected. His point was that the presentation had said that an amendment of Section 25 had the potential to undermine all property rights. Did BASA not think that was a bit loose? That might amount to scare-mongering. There was some talk of those who owned property rushing to the bank to get loans in order to frustrate the expropriation of land without compensation. He wanted the mention of R148 billion worth of loans to be checked.

He said Mr Venter had allayed some of his concerns about c ommunal land when he spoke about security of tenure. There were a number of options, opposed to the usual punting of giving people title deeds. When they were fighting for freedom, they used to say that communal land was a dumping ground for their people. It was land which was less fertile. All of a sudden, they were told to give these people title deeds so that they could make some money off the same land they were saying could not be of useful economic use.

The communal land system was an African system which some people believed in, and lived. In dealing with it, there needed to be recognition of it as a system of the people. If it were to be changed, there could not be some pronouncement made by individuals who were not even affected and had never lived on communal land. The issue of inter-generational wealth being unlocked because communal land did not have security of tenure was a part of that pattern in terms of how it would be acquired. He had grown up in rural areas and was the owner of his late father’s homestead, in the context of the current arrangement. The security matter was more ideological as opposed to being a practical matter.

Mr M Paulsen (EFF) commented that in the BASA presentation, there had been mention of a discouragement in changing the constitution, yet it had been changed several times, and always to the benefit of South Africans. It was disingenuous to say that it should not be changed this time as well. Very little had changed in terms of how banks underwrote risk and wanted title so that they could evict tenants. They had done this liberally for several years. He wanted to know what banks had done to transform how they operated in terms of how they underwrote risk, as opposed to wanting a title deed in order for people to secure whatever assistance they needed from banks, and how they viewed clients. Very few of their clients were black. What was the bank doing about transformation, other than how they employed people? How did they support potential customers?

The Chairperson admonished Mr Paulsen to focus on the subject matter, as he had raised a general question.

Mr N Koornhof (ANC) interjected on a point of order, saying that 55 minutes had elapsed and time was not on their side. He urged the Chairperson to be strict with the ten-minute period and the 20-minute cut off period, as had been done at the the public hearings.

Inkosi E Buthelezi (IFP) encouraged Members to ask clarity-seeking questions and not to make general statements, in order to save time. The Chairperson supported him.

A Member apologised for arriving late, and said when she came in, BASA was reflecting on the question of title deeds. In light of redressing the wrongs of the past, which was mentioned in the Constitution, where would title deeds be placed, given that there were no title deeds issued to two-thirds of South Africans? The 1913 Land Act had taken away what few rights had been available, on the basis of race. How would BASA deal with the issue of title deeds in that situation?

Ms N Mente (EFF) said she had only one question on the issue of property rights, and the amendment of section 25 having the potential to undermine all property rights, and the statement that R1.6 trillion was invested in property loans. When When BASA said it was going to undermine property rights, what did they mean? Everyone who had a bond did not own that property. That land and structure belonged to them only when a loan of 20 years and more was paid up, so what property rights were they talking about? Amending section 25 meant that the person would at least have the right to a piece of land as the state.

Ms D Carter (COPE) referred to the R1.6 trillion of South Africans’ saving, and asked if that meant that whoever had invested their money would now be dependent on the state? A lot of it would be teachers’ pensions, etc, which would be lost. Would there be more people dependent on the state? Pertaining to the R148 billion, she wanted to know if that also included production loans.

BASA’s response

Mr Coovadia said BASA had been asked to give details of interactions they had had with government over the last three or fours years, as Agri South Africa had given examples. He had not done that because of the time constraints, but what they had done over the last four or five years was to put various proposals to the DRDLR on how the banking sector, agri business sector and the government could work together to actually bring resources to effect land reform and land restitution. They could make those available to the Committee in writing if it so deemed, otherwise it would just take up too much time, but they committed to do that in writing.

The R1.6 trillion was the total commitment of the banks to property, including home loans and commercial properties.

In relation to the question on whether or not people would be dependent on the state, if one had a loan with the bank, had security on the loan, and that security was taken away through expropriation without compensation, then one was liable for that loan. One was not dependent on the state to pay that loan. If a lot of people then reneged on their loan because they did not have the asset any more, this created issues, legal and otherwise.

Replying to Mr Godi, he said that he appreciated the experiences of many South Africans regarding this matter. His own wife had also been kicked off their property and they were still trying to get restitution. As such, one did identify with it. It was necessary to have a discussion on whether one wanted to address those criminal activities in a way that took the country forward.

Regarding communal land, it was not for him to pronounce about African jurisprudence. The crux of the issue was the ability of banks to lend money and to be able to get it back. How Government and the House of Traditional Leaders wanted to deal with the issue of security of tenure could be explored. There were different ways of dealing with the matter. This was also in line with the question about the banking sector and the issue of title deeds. The banking sector was regulated according to global banking regulations. If the regulations allowed for flexibility, the banks were more than willing to talk about it. To insinuate that banks were interested in title deeds simply to be able to evict people was incorrect. The banks did not want security on the loans they gave with the intention evicting people. However, if a person did not repay a loan, it was necessary to use the law in order to recoup the bank’s funds. Banks were doing things differently all the time, but what it did needed to be done with the law and prevailing regulations.

Title deeds had historically not been issued to some people, and there were numerous areas such as townships where title deeds could be issued. There was no reason not to go ahead with this. This was another frustration to the amendment of Section 25. There were various things the Government could do today, without amending Section 25. Lesotho had been talking about giving title deeds to people living in townships for years. However, this had not materialised, mostly due to reasons of inefficiency.

Mr Venter said that it was important to recognise that property was all about long-term investor confidence. If families did not have confidence that one of their biggest purchases had an underlying security value and would be an asset which appreciated in value and create generational wealth, they would not invest in property. BASA had used the words ‘potential to undermine’, which meant that there was a probability that the event could occur. They were dealing with perception. Further on, Mr Coovadia had spoken about the need for clear legislation to be expedited which would give investors confidence that they would not be the next family to incur expropriation without compensation. If that confidence was not created with the public, it did have the potential to undermine property rights.

The importance of property rights was about real rights. It was about protecting families from an unlawful act, such as taking away the biggest purchase an individual had made without any compensation. This was related to the point about title deeds in communal areas. A title deed did not necessarily mean that a bank would take away a person’s property, but it was about providing security to those families. A number of articles and conversations he had read had detailed the experiences of people who had suffered great injustice and indignity at the hands of traditional leaders, especially women, who felt that they did not have assurance that they would be able to remain in their homes should a husband pass away.

Another point was that the security which underpinned a loan reduced the risk for a lender. This meant that banks could reduce the interest which they charged. If home loans suddenly became unsecured loans, banks would be forced to charge higher interest rates, because they needed to be compensated for the increased risk and upon default, the losses incurred by the bank would be significant as opposed to when the bank had an attractive asset such as the property underpinning the loan.

Mr Paulsen wanted to know if Mr Venter was a farmer.

Mr Venter replied that he was, and that he had a small holding near Hartebeespoort Dam.

Business Unity South Africa (BUSA)

Ms Tanya Cohen, CEO, BUSA, said BUSA was an apex business organisation which represented a cross-section of South African business sectors, businesses large and small across the sectors of the economy, including emerging and established businesses. Their members included BASA, which had just presented, as well as AgriSA and the Agricultural Business Chamber (Agbiz), which had presented earlier on in the week.

Busa’s strategic objectives were to create an enabling environment for inclusive growth and employment in South Africa. This also included:

• A transformed, inclusive cconomy that creates sustainable employment.
• Thriving small and medium enterprises.
• Predictable, certain and enabling regulatory environment
• Affordable, reliable and sustainable energy and Infrastructure to meet current and future needs.
• Productive and stable labour market.
• A progressive tax system that supports inclusive growth objectives.
• Trade regime and international cooperation that enables South African business.
• Education and skills development for current and future work.
• Affordable comprehensive social security framework for future generations, including national health insurance (NHI).
• Ethical and accountable business for cooperation and influence in SA, the Southern African Development Community (SADC), Africa and globally

The two most relevant objectives to this Committee were a transformed, inclusive economy that creates sustainable employment, and regulatory certainty, with fit-for-purpose regulation.

She was reflecting on some of what might already have been pronounced as a cross-cutting business perspective on the issue of the review of section 25 of the constitution. As a starting premise, business fully recognised and endorsed the need for land reform. They recognised that the legacy of land and property ownership continued to be an obstacle for transformation for economic growth and for social development. They certainly recognised that the pace of land reform had been unacceptably slow and beset by many problems -- endemic structural and administrative problems. They did not believe that this was a problem of section 25 of the constitution. They believed that the provisions brought a just and equitable compensation to enable expropriation without compensation, should that be necessary according to the criteria set out in Section 25. They also fully endorsed the findings of the Motlanthe HLP and Operation Phakisa, which said that the existing constitutional framework was not an obstacle to sustainable land reform, but rather its implementation challenges and failures that had been the constraints.

For business confidence, BUSA believed that the constitution was a foundation stone for society and also for the economy. It provided a stable bedrock and a platform of rights and upheld the rule of law. It provided long-term assurance to all stakeholders that rights would be protected while providing the space for advancing transformation. Land rights were inextricably linked to property rights, and section 25 was far broader than land rights on their own. Although there were specific references to land from a local and international business investor perspective, the Constitution provided the ultimate form of security that investors would not be arbitrarily deprived of property in relation to residential and commercial property and unutilised agricultural land.

The possibility of expropriation without compensation would result in land uncertainty, which would affect investment negatively. Recent developments bore this out. BUSA had had countless engagements with investors, with rating agencies and with international potential investors, who had indicated the importance of having certainty around property and land rights, but what they had started to see more recently was an endorsement also of the necessity to ensure that they brought about land reform in a transparent manner, which would bring certainty and clarity that would enable economic growth and food security. She was sure that the Committee had heard these figures before, but South Africa was the only net exporter of food on the continent. A third of all manufacturing was dedicated to agricultural processing. The sector had massive potential to grow and to create jobs to provide food security and to be the arrowhead in terms of sustainable transformation.

BUSA believed that a lot of the challenges could be solved through more focused, coherent implementation with the cooperation of all the stakeholders. There were systemic problems with implementation. They believed that the legislative framework was an inadequate tool to effect land reform. There was also the lack of coordination and scalable action within both the public and the private sector, and maladministration and corruption, and a lack of training and capacity had compounded the problem.

BUSA also supported the idea that a national land reform plan needed to be developed and a coherent comprehensive plan be developed in partnership between government, civil society and business. The elements of the plan would include a coherent legal framework for institutional capacity, a finance solution for infrastructure which included irrigation, water, transport and a digital platform-building capacity, including commodity specific properties, making sure that South Africa was set for the Fourth Industrial Revolution, and then also setting aside land and urban areas for small business trading.

In conclusion, Section 25 was sufficient to achieve sustainable land reform to enable transformation and growth, while still maintaining confidence in South Africa’s commitment to property rights, as well as fostering a growth-friendly policy environment. Constitutional amendments were not necessary to achieve meaningful land reform, and the consideration thereof was creating policy uncertainty. Public-private partnerships with the agricultural, agribusiness and banking sectors and a shared vision for land reform would be the only sustainable solution for real economic empowerment. If, however, this Review Committee recommends that Constitutional Changes were necessary to demonstrate the country’s commitment to land reform, BUSA would appeal that this be effected in a manner that brought clarity, certainty and entrenches property rights as a basis for economic growth and social development.

Discussion

Ms Mente asked BUSA to elaborate on its comment that the possibility of expropriation without compensation would result in uncertainty, which would affect investment negatively. What had it based that on? What was the basis of that argument? On the page before last, you talk about. How did it believe that capacity building, training and financial solutions were going to assist in land distribution being done much more effectively and faster, given that the current system of distributing land and all the systems it had been talking about had been in place for the past 24 years? They had all not worked, so how could they assist in the current dispensation, having failed before for 24 years?

Ms Carter asked what, in BUSA’s view, would be the impact on business and on the economy if section 25 was changed.

Mr Paulsen said BUSA had spoken about uncertainty from an investment perspective, but it had not looked at other models or other countries where land expropriation had taken place. Had it looked at countries like Botswana and South Korea, and seen how successful they were? His real question was if BUSA claimed that the constitution did allow for land expropriation without compensation and did not need to be changed, why did it feel it had failed thus far?

Ms Mothapo asked if BUSA did not think that the issue of the inadequacy of a legislative framework was because of the present constitutional imperative, which related to the just and equitable principle to which it had referred. Secondly, regarding its proposals on transparency and economic growth, she thought the President had tried to address that in his State of the Nation Address. However, it appeared BUSA still had doubts in respect of economic growth. There was mention of compromising economic growth and food security in your presentation. What was BUSA’s view on this?

Mr N Swart (ACDP) asked what BUSA’s opinion was on the fact that it would appear that the full parameters of section 25, as presently worded, had not been fully first implemented as decided on by the Constitutional Court. Secondly, South Africa was in a technical recession, and BUSA had indicated in its submission that it had had countess engagements with investors who were looking for policy certainty -- particularly on the land rights -- and it was encouraging to hear that investors were getting a great appreciation of the land reform issue. However, to what degree would BUSA attribute the policy uncertainty around land rights to the present technical recession that the country was in, given that agricultural production had dropped some 29%, and that one of the caveats in the ANC resolution had been related to the fact that the economy should not be affected?

BUSA’s response

Ms Cohen referred to the link between uncertainty and investment, and said that when BUSA and the Minister of Finance had engaged on an international investment roadshow, this was where she got the most feedback. When they engaged with groups of international investors and with the rating agencies, one of the top two concerns had been what was happening with expropriation without compensation, and what was the issue about property rights? They were not asking specifically about land rights. They were saying, would our investments be secure? When they spoke about property rights -- and that might be investment in infrastructure or investment in research and development -- essentially all of that was captured in the whole issue of property rights. She thought that from an international investors’ perspective, there certainly were serious concerns about whether they would have security when they invested in the country. How would they know that their investment was going to be secure, and they were not going to be arbitrarily deprived of it? That was the feedback that were getting. Those were international investors, but they were also getting a deep sense that local investors were similarly unsure. In particular, what they had found was that the agricultural sector was not performing at its potential because businesses were looking at the ability to invest and to be productive, but they were not quite sure how it was going to be affected by the issue of how land would be dealt with. The sooner that there was policy certainty in that space, the better, because it provided the foundation.

She responded to the question of ‘If it hasn't worked over the last 24 years, why do we think it's going to work now?” BUSA knew that the way in which land reform had been managed over the last 24 years had been sub-optimal. There had been massive implementation challenges. There had been a lack of coordination. There was a regulatory framework that was not fit for purpose. There had been duplication in terms of an overreach of different departments that were involved in the issue, and where the mandates were not entirely clear. There had not been a comprehensive plan that had provided guidance on land reform in the manner that it required. It was an intensely complicated issue, but a very important one, and BUSA felt that it needed to be suitably prioritised and dealt with accordingly -- but that it was not a failure of the constitution. The failure had been in how it had been implemented.

Regarding examples in other countries, BUSA believed that this was not necessarily going to apply in South Africa, and she hoped that she understood the question. There was a unique situation in our country, and we have a history that we needed to address. We needed to do so in a way that took us forward as a country, that was sustainable, that was socially acceptable but also was economically viable. South Africans needed to handcraft that solution and make sure that they got the right solution. BUSA believed the constitutional framework enabled this, that but it had not been actually used in the way that it should be.

BUSA did not believe that the just and equitable provision had been fully implemented in terms of the regulations and the legislative framework. It had not been tested. Potentially, a declaratory order would be a way to get clarity without actually having to go through cases to test the provision of justice and equitability. If one really looked at what the just and equitable provision was trying to achieve, BUSA felt that it was more than adequate in order to achieve South Africa’s land reform objectives. Not only was it more than adequate, bit it resonates with what the constitution should be doing, which was to ensure that there was a just and equitable framework. From an equality perspective, not enough had been done as a country, and those objectives needed to be advanced.

Regarding the inadequate legislative framework, the Motlanthe high level panel had done a lot of good and detailed work on the legislative framework that covered land redistribution and security of tenure as a whole, So when one got focused on land expropriation without compensation, it was only a small part of the panel’s broad law review. BUSA thought that that work had lost quite a bit in the debates on the land issue, and it should not get lost. The recommendations of that panel should be put at the forefront. The just and equitable provision was adequate, and it did allow for expropriation without compensation in certain circumstances. The failure of land redistribution was as a result of a lack of will and a lack of implementation.

It was difficult to allocate causality with regard to what had contributed to the technical recession. What was known was that generally, policy uncertainty and a lack of clarity, and legislation that was not fit for purpose, was having a detrimental impact on business’s willingness to invest. BUSA had been engaged in quite a number of processes, both through the job summit at the National Economic Development and Labour Council (Nedlac) where economic sectors were being considered and where blockages were being identified, as well as in the lead up to the investment summit at the end of October, looking at what those constraints and limitations were.

One of those streams of work was around agriculture and agribusiness, and there were possible challenges both in terms of the regulations but also in terms of the processing and the implementation. If one looks, for example, at water licensing and the fact that it takes an average of five years to get a water licence and an agricultural business, whether it was emerging or established, it was severely disadvantaged because they could not operate lawfully until they had a water licence. There were challenges throughout the system that BUSA thinks were making it exceptionally difficult. The drought had a contribution to make in terms of the agricultural sector in particular.

A general pointer was that policy uncertainty was doing the economy no good, and of course, if the economy was not growing, one could not create jobs.

Nedbank

Mr Mike Brown, DEO, Nedbank, said he was sure that throughout these past few days of hearings, the Committee had heard much from many stakeholders on the why and why-nots, and the risk of changes to the constitution. Nedbank was not there just to alarm the Committee about these potential risks or lament about what had not worked. They hoped that their presentation was realistic on the economic impact assessments, but they would also focus on what in their opinion could be done to make sustainable and economically beneficial land reform implementable in a way that was pragmatic, effective, constitutional, transparent, rules-based and offered certainty and predictability based on the merits of each case in respect of each piece of land in question. As a leading player in the banking industry, Nedbank felt that it was imperative that the Committee hear directly from them.

Their recommendations on land reform, including the question of whether a constitutional amendment was required, which included expropriation without compensation, had in its genesis their role as a bank in the broader transformation of society. Nedbank was one of South Africa's largest commercial banks. It was an engaged corporate citizen. It was both their moral and business imperative to fulfil their transformative role in South Africa and in so doing to help improve the lives of all citizens, primarily by transforming the savings and deposits of citizens, companies, institutions and government into investment and productive consumption, and in so doing to facilitate inclusive economic growth, employment, wealth creation and transformation. In this context, property -- and land specifically as a capital asset and as a basis of security -- was a key enabler in this role of a bank, thereby safeguarding the country’s savings and deposits and ensuring the safety and soundness of our financial system.

As South Africans, Nedbank believed it had a constitutional duty to recognise and redress the injustices and inequalities of our past, build a society that was based on the rule of law and aimed to improve the quality of life for all its citizens. These injustices and inequalities were apparent in all parts of the economy and in land ownership, which reflected a history of conflict, colonialism, segregation and apartheid. As a result, it was that land distribution and ownership was skewed along racial lines. Therefore, as a leading commercial bank and a partner in society, Nedbank recognised the national imperative of changing these skewed and unequal patterns of ownership affecting land reform in a way that was constitutionally-based, orderly, pragmatic and sustainable, and which contributed to and unlocked higher and more inclusive economic growth which safeguards food security and does not create systemic risk to the financial sector and, as a consequence, damage the economy. Whatever the recommendations and conclusions that this Committee may arrive at, including prospective legislation interventions and amendments, Nedbank would want to work with the state to make sure that effective, sustainable and an economically beneficial model and programme of land reform was implementable.

Nedbank believed that the constitution already strikes a careful and well-considered balance between the need to protect ownership and the need to ensure land reform and address inequalities caused by our history. In Nedbank’s opinion, the Constitution had to date not been an impediment to the lack of progress on land reform. In its opinion, there was no deficit in the legal powers provided to the state by the Constitution and in existing legislation to expropriate land for land reform purposes. However, these powers had not been adequately promoted or enforced.

Section 25 of the constitution placed actions and oversight on the ability of the state to expropriate private property. It recognised the importance of the right to own property and to be protected against the arbitrary deprivation thereof as a fundamental right. It was one of the pillars of our legal and economic system. As a result, it underpins much of the safety and soundness of our financial systems. The right to own property was not absolute, however, and the state was entitled to expropriate property provided it was in terms of a Law of General Application -- for a public purpose or in the public interest, and subject to a just and equitable compensation with the important protection of judicial oversight. The constitution should therefore not be used as a scapegoat for the real reason for lack of sufficient progress on land reform.

As the chief executive of one of the big banks, he certainly understood his obligations not only to the eight million clients who entrust the bank to protect their hard-earned savings, but also to the safety and soundness of the country’s entire financial system and economy. The stability of the banking sector was an extremely valuable national asset which contributed to the assessment of the country's investment ranking. It lowered borrowing costs and insured funding availability for government, companies and individuals alike. This was particularly important in South Africa, which had a fiscal and current account deficit that meant it spends more than it earns and imports more than it exports. As a result, it was reliant on external borrowings to balance its books.

As a commercial bank, Nedbank’s key role was in funding the economy, and any materially negative impact on property prices would adversely impact confidence in the banking system, and could trigger a classical banking crisis starting, unfortunately, with a smaller bank and possibly migrating to bigger banks with significant negative knock-on effects for the economy. Every bonded property that was expropriated without compensation was likely to result in a direct impairment to that loan on the balance sheet of the lending bank, even if such loans did remain technically legally due and payable. In addition, municipalities would be impacted in terms of rates and taxes. For indicative purposes, an assumed expropriation of 10% of Nedbank's R153 billion residential mortgage book would result in a direct impairment charge of a minimum of R15 billion. Given that Nedbank had only 14% market share, losses to peers would be greater than this. Their exposure to agriculture was R17 billion.

Banking crises the world over start on the asset side of the balance sheet. This included the possibly of shrinking balance sheets, constraining credit to other sectors of the economy in extreme circumstances, requiring government intervention. As had been seen around the world, this comes at a cost to taxpayers to protect their deposits. Maintaining confidence in the banking system was absolutely imperative for depositors to feel that their money was safe. This directly affected the level of the currency of sovereign debt ratings and the value of investments held by pension funds’ asset managers, and consequently every ordinary South African.

Global data showed that the recovery from such crises was painful and costly, and could be characterised by recession, higher unemployment and spiralling public debt. He had just returned early from an international investor roadshow to make this presentation, and could assure Members I that the uncertainty in the investor community in respect of the outcome of this constitutional review process was already negatively impacting investor perceptions and investment in our country. The topic of expropriation without compensation, and the lack of clarity as to exactly what this could mean, had been raised in every single investor meeting, hence the importance for clarity and certainty to be provided as quickly as possible.

In conclusion, Nedbank was certainly committed to working together with fellow South Africans to support an orderly process of ongoing land reform, and it proposed a plan of concrete and considered steps along the following lines which required both the state and the private sector to work together. To be clear, in the bank’s opinion, this did not require constitutional amendments. Firstly, there needed to be a comprehensive and well-resourced model for land reform which had to be predicated on actions to use existing instruments and powers of land reform more effectively so that there was no further delay to land reform in our country. Secondly, this requires legislative, regulatory and administrative frameworks with Parliamentary and judicial oversight, and thirdly, the state working with the private sector to explore opportunities to provide improved and more holistic support for beneficiaries.

Discussion

Mr Koornhof said there was a pro and con debate with regard to whether there should be title deeds or not. Some people would say if one’s property was bonded, the bank would take it. He asked if it was possible to have a caveat in the title deed to say that in the first 10 years, the bank could not sell this property, or if it sold it, the state or municipality would have a right of first refusal. The bank would have to sell it back to the state. Would that lower the value of the bank’s security if there were caveats like that?

Ms Carter asked if the bank would say that the positive impacts outweighed the negative impacts. What would the effect of expropriation without compensation be on Nedbank’s eight million clients -- their salaries and their savings which they were entrusting the bank with?

Inkosi Buthelezi said he heard Nedbank and also BASA speaking a lot about the risks involved if South Africa took the route of amending the Constitution. Did they not think that there was already a risk to the country, where the majority of the people, particularly the blacks, were not working? As a result, they relied on the state for social grants and their health was dependent on the state’s public hospitals. As a business, the banks believe in taking risks, so why was this aspect a concern if the state believed that this process would not interfere and would not actually pose any risk?

Ms Mente said Nedbank had put it quite correctly when it had said that there was a skewed distribution of land ownership in South Africa and that left it with 90% of the wealth in the hands of the minority, which were predominantly white people. The rest of the people that actually did all the things which BUSA was talking about, were black people who worked the land. So if land could eventually be expropriated without compensation, was Nedbank willing to come on board and work with government to assist in the process of ensuring that land was no longer a commodity, but everything else that one could do on top of the land, like building the structures, agriculture and building factories and everything else, was a reality? She referred to the road shows Mr Brown had been doing abroad, and said the investors all failed to look at other countries where the same system had been applied, such as Singapore and China, and the systems that had not failed. The scare-mongering that investments were going to take flight and never return had not been proven true in those countries. The system had been implemented and was working, so why did people always ask initially if their investment was safe? Why was there such a great emphasis about uncertainty, because this system had worked?

Mr Paulsen said Nedbank had referred to legislative and regulatory certainty, and also about including an enabling policy, yet the policies had benefited business. What sort of investment had this brought to the country, even though there had been an enabling policy? If the government did expropriate land without compensation and was to pass this amendment, and if it were to amend this policy or section 25, would Nedbank commit to working with government to avoid thed classical banking crisis that it had spokjen of?

Mr Godi said he would start by acknowledging the opening line that recognised the historical context, because without the story of context, one was not talking about the same issue. However, was he misreading the presentation to say that beyond the acknowledgement of the historical dispossession of land, the body of it was a lot of negatives about what the government should not do? Even the points about land reform sought to put the burden on those who wanted to see transformation and very little of what Nedbank was suggesting needed to be done to address this very historical imbalance that had been spoken about. Nedbank says that if section 25 was amended, it would send a ‘very strange and damaging signal’ to your people. He was thinking about how his people would feel about that, or were they talking about the same people? What did that mean in the context of the opening line? There was a historical context, but then the bank goes on almost as if it wanted to keep the status quo.

Ms Mothapho said she was carrying on from where Ms Mente and Mr Godi had left off, and asked if Nedbank aware that majority of the people were excluded from participating in the economy? Again, when one looks at this presentation, it was very scary. It could scare everyone, including the market. When one looked at page 5, there were those six bullets and the comparison of this process with the effects of post-World War 2. She did not think that was a very good comparison, and would like to know why they had gone to the extent of making such a comparison. She was inclined to agreed with Nedbanks recommendations, but the manner in which they had started the whole input was very scary. She hoped that everyone, including business and every interested South African, became part of this process in order to address the injustices of the past.

Mr Swart said he considered it a wakeup call for Members as legislators to understand the financial implications of a land reform programme policy that had not been thought through carefully. It was scary. These were the things that the Committee needed to consider if there was going to be a financial banking crisis. The 2009 financial crisis had impacted South Africa as well. Given Nedbank’s approach to section 25, which was in line with the approach of the Human Rights Commission -- which was the custodian of the bill of rights – had it like Agri South Africa engaged with government, and was it continuing to engage with government so that government clearly understands the implications of a ‘poorly implemented land reform programme,’ given again the caveat that was put that any amendment to the constitution would be done with their consideration, and must not impact the economy?

Nedbank’s response

Mr Brown said that outside of the engagements that the Banking Association had, Nedbank had not engaged directly with the government on these issues, and they were using exactly this process to do that.

Regarding the conversation around title deeds being something banks want to take to be able to sell assets, he wanted to make a couple of things 100% clear. Firstly, in their residential mortgage business at Nedbank, a sale in execution was an absolute last resort. It was the worst outcome for the bank and it was the worst outcome for customers. Over the last few years, as customer have gone through a very difficult financial situation, Nedbank had helped more than 30 000 customers who had got into arrears on their home loans. They had helped them to manage that situation and remain in their houses. The bank tried to work with their customers if they got themselves into a financial position where those arrears were unpayable. In the first instance, they worked with them to sell the houses themselves, and not the bank selling the house in a sale in execution. In fact, Nedbank wanted customers to sell the houses themselves. Nedbank picked up 50% of the loan shortfall and again, over the last few years, that had cost them R500 million in helping their customers to exit their financial obligations.

Finally, and very importantly, the bank did not profit on home loan repossessions. When we read repossession as a last resort in a sale and execution, we set a reserve price on that property, and credit the customer with the reserve price. If the bank buys the property and subsequently sells it at a profit, that profit is credited to the customer's account so it is not in the bank’s financial interest in any way to sell properties in a sale in execution.

Mr Mfundo Nkuhlu, Chief Operating Officer and Executive Director, added that with regards to potential risk and whether or not Nedbank did not recognise that there were existing risks, Nedbank did recognise that a lack of financial inclusion of people who were not in the mainstream economy did undermine sustainable growth and the development prospects for all citizens. However, as a consequence, they were drawing attention to the fact that expropriation without compensation as was contemplated in the review should not have the effect of raising systemic risk to the soundness and stability of the financial system. If that were to be done, it would create a higher order risk for all and sundry. It was evident, as had been the case across the world, that when systemic risk emerged to cause a banking crisis, the restoration and recovery of the financial system would take precedence and priority. It would have the unintended effect of actually refocusing attention away from land reform to deal with a new system increase that would have emerged. This was what they were raising caution against.

Responding to Ms Mothapo’s question, Mr Brown said that the intention of the presentation was not in any way to be scary. The intention, if one saw what was said upfront, was that the bank recognised the importance of land reform. It provide at the back end of the presentation practical ways that they thought land reform should be executed, and had said that they did want to be part of working with government in that process. He just believed that it was incumbent upon him, as the Chief Executive of one of the big four banks in this country, and therefore responsible for the safety and soundness of the financial system, to point out the consequences of poorly implemented land reform or wide scale expropriation without compensation, on the safety and security of depositors’ money.

Mr Brown invited Mr Dennis Dykes, Nedbank’s Chief Economist, to talk about other countries and why they talked about this uncertainty, and why this had succeeded in other countries.

Mr Dykes felt that it was important to warn the Committee of the risks of the amendment of Section 25 of the Constitution. There were many of these events which had been seen in history and they had had very significant effects and were entirely avoidable.

He found China to be a slightly odd example, because China had gone from total state ownership of property, and had liberalised from around 1978, with incredible consequences. As the private sector had gained some ownership of property, it had contributed up to 70% of total gross domestic product (GDP). This was almost the inverse of what had been suggested.

Singapore had very particular circumstances, but to the best of his knowledge, the expropriation was not without compensation. The expropriation that took place in South Korea was after the Second World War, with the invasion of Japanese land owners. These were very particular circumstances. Farmers who were small-scale were greatly supported by the state, and this was consequently a great example of land expropriation. This was quite different to South Africa’s circumstances.

The examples which had been made were with a view to illustrating what could go wrong, and how long it took to address the consequences of a banking crisis. This was the average of banking crises in this period. It was not extreme. It would not be a worst case or a best case. Something like an 86% increase in government debt, something the authors attributed more to the consequences of a recession post an event that caused a collapse in property values, rather than bailing out banks or depositors. It gave an idea of how tremendously damaging this could be, particularly to government. Government would have fewer resources to spend. Nedbank felt that there were better ways of doing it. Nedbank was willing to participate in this process.

Mr Brown, responding to the road show question, said that just to give an indication of the concerns of investors, in a one hour meeting they would usually spend probably 20 minutes on the country, 10 minutes on the industry, and 30 minutes on Nedbank. In the most recent road shows, they were now spending an average of 40 minutes on the country, five minutes on the industry and 15 minutes on Nedbank as an investment opportunity. With one particular asset manager of a very large fund in the US, the entire meeting was spent on land reform. They did not even get to talk about any other investment opportunities. He asked Mr Nkuhlu to speak about what Nedbank was doing to deal with the issue of the exclusion of the majority.

Mr Nkuhlu said that Nedbank recognised the importance of the financial inclusion of the majority, to bring them into the mainstream. This was a serious underpinning which their transformation journey had looked at. This was reflected in current accomplishments, where 80% of the staff were black, and 70% of the client base was black. However, they recognised that there was still much to do as a country, and Nedbank specifically had to deepen and entrench progress on the transformation of the economy as a whole. It was with this in mind that Nedbank had committed to be part of this process and participate in collaboration with the state in implementing a sound land reform program. Nedbank was committed to this, both because of their extension of credit in the market and their exposure to property as an asset class, but also because this was an underpinning of sustainable economic development. Therefore, having recognised the magnitude of the challenge, Nedbank was not shirking in their responsibility to be a partner in finding solutions.

Mr Brown said that Nedbank’s exposure to the South African economy, with residential mortgages, commercial mortgages and agriculture, their total asset and liability base within South Africa was in excess of R1 trillion. In the first instance, their job was to work alongside government to minimise any risk which may arise as a consequence of South Africa’s land reform process, and to ensure that they achieved an outcome that truly promoted the growth of the economy and did not compromise food security.

The challenge was that they had heard what the land reform process was not. They had heard that it was not going to be a land grab, and they had heard that it was not an assault on property rights. They had heard that it would not impact on the economy and food security. What the investment community had not heard was what it was. Was there going to be an amendment? What exactly was the wording that was proposed? Certainly, Nedbank wanted to be part of the process of ensuring that whatever the outcome was, it truly did increase economic growth and food security, and whatever the outcome, they had an obligation as a responsible corporate citizen to work alongside other corporations and government in South Africa to create a better life for all South Africans.

John Langalibalele Dube Institute

The Committee was told that the JL Dube Institute was part of the University of Kwazulu-Natal (KZN) in Durban at the Howard College campus, and had been formed with the aim of carrying forward the ideals, values and aspirations of the legendary statesman, Dr John Langalibalele Dube (1871-1946).

Upon his return from studying in the USA in 1900, Dr Dube had co-founded the Natal Native Congress. His activism had centred mainly on opposition to racially-based legislation and practices that had led to the dispossession of African natives by European settlers during that period. The activism had also led to the formation of the South African Native National Congress in 1912. Dr Dube had been the first leader to respond to the enactment of the Natives Land Act no. 27 of 1913. He had made representations to the monarch of England regarding the plight of the African people as a result of the dispossession of their land by European settlers.

Since its formation in 2014, the JLD Institute had been appointed on the panel of researchers of the Commission for Restitution of Land Rights to assist with the researching of the 80 000 land claims that had been lodged by the cut-off date of 31 December 1998. To date, the Institute had researched over 300 land claims in KZN, the Eastern Cape, Western Cape, North-West and Mpumalanga provinces. It had interviewed over 3 000 claimants, which consisted of individuals, families and whole communities. Over 90% of the testimonies collected from claimants confirmed that their fertile land had been taken (expropriated) by Europeans without any form of compensation.

The Institute therefore regarded itself as ideally placed and morally bound to advance well informed opinions on the “Expropriation without Compensation” debate from a purely research perspective.

Background

The issue of land rights, specifically the right to restitution and redistribution, was an important issue of justice and human rights, which had to be urgently addressed. However, after several decades of attempting land reform, there had been little to show in the form of progress. Complex issues had arisen and there was enough evidence to propel a conviction that a review of legislation was necessary, with the intention to beef up the applicable legislation in the interests of expediting the pace of land reform.

Government and civil society organisations had wrestled with complex of issues relating to land reform and land restitution in particular, and it was clear that the problems were deep and may result in a general feeling that the system was failing the nation in its promise of redress. The Government should shift its focus from the current overemphasis on private property rights at the expense of the state’s social responsibilities for radical social and economic transformation.

The Freedom Charter, the Constitution and the National Development Plan (NDP) embodied a vision of a South Africa in which development was progressive and inclusive. Poverty, unemployment and inequality currently affecting the dispossessed and poorest of the poor had been deliberately engineered by the colonial and apartheid governments through expropriation of their land and livestock without compensation. This had been achieved through the application of various pieces of draconian racial laws. Likewise, a case was being made for land reform -- restitution, redistribution and land tenure reform -- to take place through the Constitution and the law. Land reform should unapologetically include expropriation without compensation (EWC), but through a legislative framework that was transparent and fair.

Expropriation in the South African Context

The concept of expropriation and hence the Expropriation Bill (EB) should be understood to mean the provision of the means for government to acquire property needed for public purpose, or in the interest of the public, as well as to provide fair and transparent guidelines on how to do so. “Property” in this instance was not limited only to land, but included land reform and restitution programmes, and infrastructure development projects such as dams, roads, and human settlements. “Public Interest” included the nation’s commitment to land reform, and to reforms that would bring about equitable access to all of South Africa’s natural resources.

Any action that was taken to correct the wrongs of the past must be informed by a proper understanding of the scheme of section 25 of the Constitution. At face value, it may appear to protect property rights, but it makes an exception when land was required for public purposes or in the public interest (Section 25(2) (a)), in which event property may be expropriated. Given our history, the public interest encompasses expropriation of land pursuant to a reasonable land redistribution policy. It provides for land redistribution by imposing an obligation on the state to “take reasonable legislative and other measures, within its available resources, to foster conditions which enable citizens to gain access to land on an equitable basis”.(Section 25(5)). It also guarantees restoration of land to individuals or communities who were dispossessed of their land as a result of racially discriminatory laws. Restoration of land would seem to require that land taken away must be restored as per section 25 (7).

The issue of compensation in restoring land taken away without compensation does not arise. However, compensation may be payable for improvements to the land, but this would depend on the circumstances under which the occupier of the land came to be in possession of the land. These were questions that the government needed to debate.

It was a matter of course that expropriation with compensation had always been heavily skewed in favour of white landowners who had previously acquired their land through generous grants by the colonial and apartheid governments or through soft loans from the Land Bank. Therefore, the present government would do well to consider determining compensation benchmarks that take into account the manner of acquisition of the properties that were earmarked for expropriation.

There were many other instances of expropriation -- with or without compensation -- that had occurred during the apartheid era, where the creation of self-governing homelands necessitated the expropriation of land and relocation of both black and white people in the interests of establishing the so-called betterment schemes. Expropriation was, therefore, neither a new nor foreign concept in South Africa’s history. Its application in a transparent and equitable manner in line with the Expropriation Bill would be the key in fast tracking peaceful social and economic transformation of society for the benefit of all.

Expropriation Case Studies

The following case studies lend credence to this fact:

• Mr. Barras Baker (RLCC reference – KRN6/2/2/E/36/0/0/24) had his farm Sweethome 254 expropriated by the South African Development Trust in 1991, and was paid the sum of R420 000 and R30 000 in compensation
• Mr A.H. Harper (RLCC reference – KRN6/2/2/E/16/0/0/156) had his farm Sub 2 of Lot HH Umgodi and Sub 4 of Lot DW No. 8777 expropriated by the South African Development Trust in 1981, and was paid R335 498.
• The communities under Chief Dube and Chief Mkhwanazi in Reserve number 10 near Richards Bay were removed in order to establish the township of Esikhawini in 1975, which was to be a labour reservoir for the port of Richards Bay. Each of the families was paid compensation of R36 000 and a township house to rent.
• The Abathuyi community’s land was expropriated by Tongaat Hullett in the eThekwini Metro. They used to live in the area currently occupied by the Dube Trade Port and the King Shaka International Airport, approximately 35km north of Durban. The only compensation paid was 11 matchbox houses for Chief Paul Chili and his family.

Recommended Approach to Expropriation

The State should identify all unused state land that was not earmarked for particular developments. There were large tracts of land that could immediately be re- distributed for this purpose. Private land could be expropriated in terms of the forthcoming Expropriation Act for redistribution in the public interest, without having to go through the limitations of the Restitution of Land Rights Act. The State should also consider the expropriation of land that was owned by absentee landowners who were holding it purely for speculation purposes. It should also consider expropriating land that was acquired by landowners with financial assistance from the State or under apartheid laws, so that clear precedents were created to limit the compensation paid out when taking into account all relevant factors.

All of the above could be achieved through the application of section 25(5) of the Constitution and the soon to be finalised Expropriation Act.

The government should embrace its moral obligation to promote equal access to land and property rights to all our citizens. The benefits to the country in terms of employment creation, poverty reduction as well as skills and capacity building would be immeasurable.

It would require some sacrifice from the privileged, which the Institute hoped would be regarded in a spirit of reconciliation, patriotism and nation building. It would also require commitment from the previously marginalised to intensify their efforts to reduce the triple scourge of unemployment, inequality and poverty. It would also require time, effort and government investment in order to empower the previously disadvantaged and to achieve the goals of the National Development Plan.

Conclusion

In light of the above, the JL Dube Institute was of the opinion that expropriation of property should definitely be implemented for public purpose and in the public interest. This was adequately provided for in Sections 25 (2), (4) and (5) of the Constitution.

Section 25(3) provides for the enactment of legislation which would standardise a “sliding scale” from 0% to 100% market value compensation, based on various factors to be considered in determining just and equitable compensation, reflecting an equitable balance between the public interest and the interest of those affected.

Therefore, expropriation without compensation did not require a review of the Constitution. It simply required the lawmakers to adopt greater urgency in strengthening the Expropriation Bill to allow for expropriation without compensation. The truest test for government now was to confront the original sin of land theft by whites. 

Discussion

Ms Mothapo said, as a point of departure, that the JLD Institute did not support land expropriation without compensation, as per the last page. It appeared to be contradictory, because they had made mention of not agreeing with section 25, sub-section 7 in relation to the cut off date, but at the same time they were saying they did not support this the resolution because they had mentioned the critical role of which the late Dr Dube had played in the liberation of African people. Did the Institute think of the presentation today in terms of it perpetuating his legacy? What was their opinion with regard to communal land in relation to the process?

Mr S Swart (ACDP) said he did not see any contradiction in their position. They had made it very clear that the present wording of Section 25 on page 14 was sufficient for land reform to be implemented in order to redress the ills of the past. The cut-off date was a separate issue, as he understood it, as opposed to expropriation. What they had indicated was that if there was uncertainty, a legal opinion should be obtained on the present wording of the section by government.

The second issue related to their very good recommended intervention, which was to make use of the statute. Firstly, there should be a comprehensive land audit to identify unused state land. The Institute had mentioned local, provincial and national government land, before looking at private land. Would they also include land that was owned by state-owned enterprises? Transnet, for example, owned vast tracts of land that had been purchased for R1. Transnet now wanted market-related compensation for that land. It would appear to him that there was enough land in our nation for land reform purposes. The Committee needed to be very wary of an amendment to the constitution, as the Human Rights Commission had already indicated.

Ms Mente said that Dr Dube had been the first president of the ANC, and he had known perfectly well the pain of being dispossessed. The last line of the Institute’s presentation said that it simply required the lawmakers of the land to adopt greater urgency in executing their mandate. What was this greater urgency they were talking about? Of the two case studies, two stood out -- the first person got R460 000compensation, while the other got nothing. This was exactly what had been the problem. The problem was that government had to compensate people according to what they demand. The coffers of this country were not adequate to cover such compensation. They had also spoken about land which was lying fallow. What must happen to it? Her collegue had made an example of Transnet, which wanted a market-related price. Had they obtained it at a market-related price? They had not – they had taken it for free. This was also true for those who had taken land before. South Africa did not have the money to pay for Transet’s asking price for the land. There were still skewed land redistibution patterns in South Africa. This was the problem. Most people were sitting on small pieces of land. Members wanted them to have proper land, to develop, and to own factories.

What was their view of the scare tactics from the business and the financial sector pertaining to the land issue? All these scare tactics sought to detail the process of land expropriation without compensation, which was not going to hurt anyone. Instead, everyone was going to develop, and would be much more fruitful and productive as South Africans.

Dr Mulder said the essence of the contribution had been in the last paragraph, where it clearly stated that expropriation with or without compensation did not require review of the constitution. His question dealt with the examples given in terms of expropriation in the past, the amounts paid and what exactly happened there. The point he wanted to make – and he knew the whole question of communal land was a very sensitive issue -- but was he right or wrong if he said that in the first two examples that had been mentioned, people had been compensated adequately. In both of the cases, those people did have title deeds in terms of their properties, and a market value could be put on those properties. The other examples that were mentioned were communal land, and he was trying to ascertain whether that was not exactly the problem -- because the argument had been put forward that if everyone had title deeds, this kind of issue could be fairly addressed. He did not have the answer, but would like to hear the Institute’s perspective on that.

Mr Godi said that he was astounded at the intellectual timidity of his people. They had done a good job in giving the historical context. Their conclusion had said land reform was a matter of justice, but he would have thought they would say it was a matter of decolonisation. When one gives the context of how land was lost, and when one restores it, it had to be given the correct political context and meaning. If one did not do that, one fell into all sorts of other challenges.

He found that at the end, the Institute was not able to be precise and say that they wanted expropriation without compensation. They had been in between. He was surprised that they could come from a university, but could not be conclusive. They were not like Stellenbosh, which had presented for the Afrikaners. They had been very definitive. The Institute had been responding to a Parliamentary process, not to an ANC process, but had written as if they were talking to the ANC, not to Parliament.

J L Dube Institute’s response

The Institute said it concurred with the Member who had said the cut-off date was actually a separate issue. It was a matter that they had raised in their first submission to Parliament in 2016, where it had wanted a review of sub-section 7 of section 25, because they were a research institute. They had done a lot of work and actually interviewed over 3 000 claimants, and almost 90% of them had been dispossessed could trace their dispossession right to the 18th century, so they did not qualify in terms of sub-section 7 of the section 25, meaning that they were excluded. That was why the Institute was now advocating for the review of the date itself, because there was a lot of anger and disappointment, especially among the rural people who were dispossessed prior to the 1913 Natives Land Act.

Their legal opinion, in response to Mr Godi, was it was actually very clear, although they had not stated it. They were saying everything was there in the constitution, and it was all clear. It provided for expropriation in the public interest and for public good, and therefore all they required was that the relevant laws must be boosted in order to allow for expropriation without compensation. Perhaps that was where their recommendation had been weak, but they were of the view that expropriation should happen, but it should happen on a sliding scale.

Regarding Transnet land and other state-owned enterprises, they did not deviate from the fact that government should look at how the land had actually been appropriated to them. Based on that, they then should be able to determine what compensation should be paid. The Institute was not of the view that they should now charge a 100% market-related price. One should also take into consideration that in South Africa, land in government hands was presently just about 10%, and if the government were to start expropriating its own land, it would show seriousness and it would then instil a sense of goodwill amongst the rest of the citizens. According to the last audit, 72% of the land was sitting in white landowners hands, so if all government showed goodwill and that they were expropriating their own land for the public good, then perhaps the whole nation would follow.

The Institute had observed the scare tactics that had been going around, but they were a research institution. What they could do was to put forward their findings to the Committee, because they were dealing with over 3 000 people, and there was a lot of anxiety out there. It did not matter how much the scare tactics were going around, there was a need to go through this process in a transparent and fair manner that could be endorsed by legislation that was clear and transparent.

The Institute agreed with Dr Mulder that title deeds had made all the difference in the cases mentioned, but dispossession was dispossession. Whereas some people had not suffered from it, there was a vast majority that had, and that had to be put right. It was not right that 72% of the land was sitting in white hands, whereas the majority of the people did not have land. The Institute had been out there and had interviewed them, and believed this had to be corrected. This was all the information the Institute could give the Committee, who would have to sort out the details as the policymakers

Sakeliga

Mr Piet le Roux, CEO, Sakeliga, said Sakeliga was an independent business community with more than 12 000 members. The organisation had been founded in 2011, and existed to create a constitutional order, free markets, prosperity and a favourable business climate in the interests of its members, as well as in the common interest wherever its members did business.

Sakeliga had the conviction that the nature of commerce was seeking out mutual interests and acting in a way where both parties gained something. It would end up with the sum of the corporation being greater than the parts. According to a post-war German economist, “the market does not exist in a vacuum.” The market economy was a form of economic order that was correlated to a concept of life and a social, moral pattern. It could thrive only as part of and surrounded by a civil, constitutionally and community-oriented social order. Sakeliga’s aim was therefore to advance the constitutional order in the interests of its members and in the common interest wherever its members did business.

It was fundamentally with this view of the future of the community, and the civil constitutional social order in South Africa, that Sakeliga had accepted the invitation by the Committee. It was making this presentation in good faith, although the matter had been to some extent prejudged by the Presidential announcement. It was still up to this Committee to make a recommendation and for which history would hold them accountable. Sakeliga’s comments would focus on the question on which this Committee seeks its input -- whether the constitution should be amended to facilitate expropriation without compensation and if so, how? It had submitted a written submission on various acts as text to this question, including constitutionalism, international law, economics and matters of fact in statistics. Today it would be stressing its views on the constitutional and economic aspects.

Sakeliga wished to make three points. The first was, in order to answer the question that the Committee had asked, that it should first seek to understand the question. What was a constitution? Should the constitution be amended to facilitate expropriation without compensation? Was a constitution any legislative text that passed through formal requirements such as consultation, deliberation, referendum or carried by a stipulated majority in a legislative body such as Parliament? Was public opinion, or even a Parliamentary majority, sufficient for a constitutional amendment? The answer was no. There were fundamental requirements for constitutionalism itself. Texts, even those calling themselves constitutions, that were to be in breach of constitutions in themselves would fail to be legitimate constitutions in so far as they were in breach. This applied to the text of any constitution, as well as its interpretation by any constitutional court or other body of judges.

The second question was what was expropriation without compensation? Legally speaking, expropriation was always linked to some form of remedy payment for the property according to what it was worth at a certain point in time. What was being entertained was confiscation.

The third point was that this Committee was in a difficult position. It had to make a recommendation that would carry unfortunate and unwanted consequences either way. If this Committee were to recommend that the constitution could in fact be so amended, then they would have to take cognisance of the amazing consensus among local and international commentators and business people, that the similarities between South Africa and Zimbabwe were becoming steadily more than the differences. Thankfully, there were still many dissimilarities, but should this Committee recommended a change to the constitutional text to allow for confiscation, it would facilitate the consolidation of that local and international consensus not only among commentators and business people but among concerned citizens in general, and that was that South Africa was heading on the same route as Zimbabwe. It was not there yet, but was committed to repeating the same mistakes. In this case, it would be incumbent upon all constitutional-minded people to put all their efforts behind restoring constitutionalism.

Prof Koos Malan, Professor of Public Law, University of Pretoria, said that even though the public had been confronted in the past couple of months with what seemed to be, and which often was, a very heated debate, he thought that by and large there was still a considerable amount of goodwill in all communities that would allow this thorny issue to be solved. It was extremely important that that was what the constitution also said, and there was no basis to disagree that there should be a further pursuit of reforming patterns of ownership, because that was what it boiled down to -- patterns of ownership. Private ownership should in fact be expanded so as to include people formerly excluded from it, and he did not think there should be any discord or disagreement about that.

The important thing from his perspective speaking as a constitutional jurist was that a constitution was not only a constitution if it carries the name ‘constitution’. Constitutions had to live up to fundamental tenets of constitutionalism. To the extent that they did not do so, they ceased to be constitutions -- they simply became instruments, blunt instruments, documents for the seemingly legitimate invasion of the basic interests of people against whom it was aimed. What one should therefore do was to identify the relevant fundamental constitutional tenets which at present were at stake. What was at stake here the possible confiscation of property, and the question was whether that could live up to the tenets of constitutionalism.

The argument was that something like private property rights -- guaranteed private property rights -- lie at the very centre of the idea of constitutionalism for two inter-linked reasons. The first reason was that South Africa and most modern states look upon their permanent inhabitants as citizens. From a market point of view, one might look on people as consumers, and if one was a kingdom, then one would look at people as subjects, and there would be consensus on that. South Africa subscribes to the idea of citizenship, and people must be able to be citizens. A citizen was a person that had the necessary freedom of mind to express his or her views and participate in the political discourse. A basic prerequisite for that was that a person must have the propriety material basis for having such freedom, and that was rooted in the idea of property. Otherwise, one was a dependent person who had to look other people -- and specifically also government in the eye -- in which case one simply could not be independent. One was a subject and a dependent consumer and not a citizen. The idea of citizenship was therefore guided by the fundamental principle of private property rights.

Prof Malan said he immediately acknowledged that there were people whose basic citizenship had most definitely been detracted from as the result of a lack of independence and lack of having access to the property, and this should be addressed through making it possible for such people to get access to private property, not the opposite. Private property was also a prerequisite for institutions of civil society. Institutions of civil society in turn could be independent if they had members which had freedom, also based on the fact that they were private property owners, to participate in organisations of civil society, which could fulfil their crucially important function of serving as a check and a balance against one another, and also as a check upon government.

Discussion

Mr Koornhof said almost everyone at the hearing so far had conceded that the current section 25 allowed for expropriation without compensation under certain circumstances. Did Prof Malan agree with that? Secondly, in the written submission, expropriation of property without compensation was described as an act of confiscation. Did that mean there could never be an example, in any state, where one could expropriate without compensation? For example, a military base near Cape Town called Youngsfield had been donated to the state, but only for its use for defence purposes. However, South Africa was not at war. Could the state not expropriate that land without compensation? Was that not a perfect example in which it could take place -- for municipal land, defence force property or for state-owned entity (SOE) land? There may be other examples where one had to expropriate without compensation, even where one attached other property rights. Had it been strictly accurate to say it could never happen?

Mr Godi said that he admired the two gentlemen -- the Afrikaaner intelligentsia -- for their clear articulation of their convictions without any sense of hesitation or bothering themselves about things which did not concern them. He did not agree with what they were saying, but that was not the point. He wanted to know if he was getting the gist of what they were communicating well. In part 6 of their presentation, item number 4, it stated that they were opposed to redistribution, even if it was the purchase of land, to be transferred to the state on a discretionary basis. Did this mean that from Sakeliga’s point of view, the case for state-driven land reform did not exist? Should everything be left to the market to decide what happened? Was that the essence of its presentation?

Ms Mente said she wanted to clarify that the announcement by the President had been an ANC matter. The EFF had pronounced its own position as well. The Committee was not in a difficult position, as the gentlemen had stated, and the Committee would look at the facts. With regard to constitutionalism, she said that the amendments were constitutional. Amendment of the constitution to expropriate land without compensation was constitutional. The principle of constitutionalism was not being broken. From her perspective, Sakeliga was saying that the poor masses should remain sardined in the areas where they live. There should never be any provision for them to be human beings. They ought to be treated inhumanely as they were right now. The constitution must not be touched because the legitimacy of the constitution would be questioned.  

In part 4 of their presentation, Sakeliga had spoken about the dying of investment. This was not proven. There had been no expropriation without compensation yet. There had been a willing buyer-willing seller policy in South Africa. The investment inflows and outflows of South Africa were what they were on the day. It was not informed by expropriation. What was the dying of investment based on? There were people suffering with no land, and Sakeliga was saying the status quo must remain and that they did not care about them. She wanted to raise a point of correction: amendment of the constitution was constitutional and legitimate. The constitution would remain a legitimate document guiding South Africa.

Mr Paulsen said that Sakeliga seemed very averse to changing the constitution, yet it had already been amended 16 times. Their members were beneficiaries of land in South Africa, and said that their members ought to reflect on the role they had played in creating the status quo. This was what land did. When people were dispossessed, they did not have the same economic power as those who owned the land. He asked how the amendment of the constitution would change the behaviour of Sakeliga’s members. He said this because they also opposed the Mining Charter, and they had members in the mining industry. One should look at what mines had done in terms of damaging the environment, forcefully removing people and also being involved in illicit financial flows. How would that change the behaviour of Sakeliga’s members, if the Constitution were not to be changed?

Lastly, he wanted to caution on the irresponsible use of the word ‘confiscation’. It was very different to the amendment. It did not amount to confiscation. The government would be very irresponsible to just go and confiscate land. This was another scare tactic that Sakeliga was using.

The Chairperson reminded Mr Paulsen to not use strong or foul language. He needed to make his points intellectually.

Mr Swart thanked the presenters for their comprehensive document and the manner of their presentation, which was welcome. He also wanted to commend Sakeliga for maintaining a willingness to engage in dialogue and to find a solution to this issue, which was causing both hope and anxiety to certain sectors of society. South Africans needed to find a way forward and a resolution to this issue. On the issue of the constitution, and the possible amendment of it, he said there was a very independent, strong judiciary and strong Constitutional Court. Did Sakeliga not agree that if there was an amendment, it would be tested in the Constitutional Court? The Constitutional Court could make pronouncement about whether the foundations of the constitution were being infringed. Were there no built-in checks and balances in the constitution already as a way forward was being considered for this issue? Secondly, he wanted Sakeliga to elaborate on the process of restitution pertaining to the Land Act. It seemed that they were not without sympathy to the situation of many of the people of South Africa.

Sakeliga’s response

Mr Le Roux thanked the Committee for the comments and questions, which were generally thoughtful and well put. Did Sakeliga see any room for public land reform? There was definitely room for public-driven land reform, but there were various reasons that people were currently supporting land reform. For some people, it was a matter of justice, and when it was a matter of justice, the correct remedy was restitution. That was why Sakeliga supported the restitution process. Everybody should do so, because it was about a previous taking of land that had been unjust, with or without compensation, and without proper compensation, it was a confiscation.

The restitution process, in their minds was all settled and should continue. It was not finished, but there was no need to discuss it, as the injustice should be rectified. For some people, it was all a matter of equality, and that was a very ideological way of going about things. To say that everything should be equally divided was a totally different question. The one was a question of justice, and the other was a question of social engineering. This was not to say that there were not more or less desirable patterns of land ownership, but to set equality as a goal was something completely different.

There were various other ways in which land reform should and could be pursued. One was restitution. The other was the kind of goodwill witnessed between various farmers’ projects which were showcased at Bela-Bela a few weeks ago. There were free-market land reforms. Significant reform was possible in urban, rural and agricultural land, through free-market ways. None of them necessitated confiscation. The question before this Committee was not whether land reform should be pursued, but whether there should be confiscation. To that, the answer should be ‘no’. The term decidedly should be confiscation. Sakeliga had elaborated in their presentation on why that was so, and two very competent legal scholars had explained the reason.

It was important to note that their submission was in no way about condemning people to townships. It was about protecting the order within which property rights and a market economy could exist so that there could be active citizenship, so that people could have the freedom and the means to move around, so that people had the freedom and means to seek out their dreams and realise them.

The current policy was not of a willing buyer and willing seller, but one of a willing buyer and a willing or not seller. That was not what the question was about. The question was about whether or not, when there was expropriation, should there be compensation or not. When they were for a public purpose, there were set examples of expropriation internationally and locally, that even when the seller was not willing, the compensation was market-related.

Professor Malan said the constitution did allow for expropriation without compensation, in limited cases, although that was a matter which had to be considered from case to case. However, to the extent that this was so, if it could be allowed in relation to a property owner who had legitimately come to be the owner of that land, there was actually a problem with the constitution as it stood at the moment.

In particular circumstances, there should be what in law was referred to not as a confiscation, but as an attachment. For example, in the case of a criminal who had used certain assets for the purpose of committing a crime, the Criminal Procedure Act did provide for the attachment of such property. A number of other examples had been mentioned in which he and the Committee were in agreement that they were on legal grounds.

Could an amendment to a constitution be unconstitutional? It could not be unconstitutional in terms of the provisions of the existing constitution. It could certainly be incompatible with the basic tenets of constitutionalism. South Africa should measure itself against those basic principles, because it had a constitution, with Section 39, which was outward looking, and should look at international best practice. To the extent that this was the case, South Africa should also regard itself as being bound by the fundamental principles of constitutionalism.

He agreed that if an amendment of the constitution was effected to allow for confiscation, this would have to comply with Section 1 of the constitution, requiring a three-quarters majority. However, in the constitutions of Germany, India and other countries, the basic principles of constitutionalism were enshrined in them, and therefore a court could rule that an amendment of the constitution, even if it carried the support of 90% of the legislature, should not be allowed since it was incompatible with the principles of constitutionalism.

Lastly, with due respect, he said that he was not a callous person. He had empathy for people. He dealt with white and black students daily. He made no distinction among them. Nothing in their submission and no conduct in his part could ever be interpreted as projecting or implying some kind of callous, hateful or harsh attitude toward anyone, including black people. He had empathy towards people living in woeful circumstances. He felt that within a proper constitutional framework, meeting the proper principles of constitutionalism, people should go out of our way to intervene in their predicament.

Vumelana Advisory Fund

Mr Peter Setou, CEO, Vumelana Advisory Fund, in collaboration with the Executive Director, Mr Brian Whittaker made the presentation.

Vumelana was a non-profit, public benefit organisation established in 2011 to support South Africa’s land reform programme. Its entire interest was in the success of land reform in South Africa. Its perspective on the necessity of, and mechanisms for, expropriating land without compensation was based on our practical experience of building partnerships for land reform.

It submitted that the Government should proceed with caution when considering an amendment to the Constitution to accelerate land reform because:

• To focus on the Constitution as the key impediment to successful land reform was to misdiagnose the problem.

• A misdiagnosis of the problem would divert attention from the matters that required urgent attention.

• A failure to deal with matters requiring urgent attention would compound the difficulties of land reform, slow progress and fuel rising dissatisfaction.

The impediments to successful land reform were a lack of consensus on the need for reform, uncertainty about what land reform should achieve and how results should be measured, and insufficient attention to the manner in which land was used. There were inefficient restitution processes, opaque redistribution procedures and a lack of attention to tenure reform. Reform was also hindered by policies that inhibited access to finance for land reform beneficiaries

Vumelana proposed ten key actions to accelerate land reform:

1. Encourage all to acknowledge the impact of dispossession and to commit to reform.

1. Affirm property rights, the rule of law and just and equitable compensation.
2. Clarify what land reform should achieve and measure progress systematically.
3. Balance concern for acquisition with effective use.
4. Streamline the restitution process.
5. Make the Redistribution Programme more transparent.
6. Resolve the conflicts associated with tenure reform.
7. Improve post-settlement conditions.
8. Develop innovative mechanisms for financing land reform.

1. Increase the capacity of the State.

The CEO said that expropriating land without compensation would not address the key institutional impediments to land reform, nor would it advance the actions required to accelerate land reform. He said the challenge now was to clarify the conditions under which expropriation without compensation may apply and start the hard bargaining and compromises needed to accelerate land reform. Expropriation without compensation (EWC) should apply where it was accepted by the courts as just and equitable.

All should be engaged to accelerate land reform and build a more cohesive society. This included concluding the EWC process by making clear the defined circumstances in which it could apply. These circumstances could be “defined circumstances,” such as unused land, land acquired by illegal means (corruption or fraud) or by a state grant, land developed with a large state subsidy, or if there were absentee land lords.

Compensation assessments should be based on a “just and equitable” principle (accepting zero where justified, and should be determined by the courts (not bureaucrats or politicians). The process should be regulated by expropriation legislation (setting out procedures, powers of the state, rights of land owners and beneficiaries), and subject to judicial review.

The above would be followed by starting hard bargaining and the compromise needed for successful land reform as below:

Landowners should negotiate with government, communities and prospective new owners for the finalisation of land claims, the redistribution of land not under claim and the establishment of partnerships to develop the land.

Financial institutions should negotiate the terms on which to finance land reform properties and the provision of working capital for new landowners.

Traditional authorities, government and communities need to increase the resources available for land reform, release state land for urban and rural development, streamline procedures for processing restitution claims, and make the process of redistribution more transparent.

Municipalities should negotiate the transfer of Title Deeds to homeowners and release new land for housing.

Farmers, aid agencies and non-governmental organisations (NGOs) must improve post-settlement support to land reform beneficiaries and smallholder farmers.

Discussion

Mr Godi said that he could not hear Vumelana talking from the point of view of those seeking land to transform their lives. Their comments seemed reactionary. Looking at the members of the board, he was dumfounded. There was no acknowledgement of the millions of excluded people.

Ms Mente said that their 10 key actions all addressed measures which had been done before. She also said that they had brought conflated administrative issues and failed to give any new direction to the amendment of section 25 of the constitution. All that they had proposed -- the10 key actions -- had all failed.

Mr Swart commended Vumelana for their input, saying they had dealt with very substantive matters. They had highlighted certain deficiencies of the past and had committed themselves. They had spoken of accelerating land reform and made positive suggestions. They had said the government should use the constitutional measures which were available to it, streamline legislation where required, and had supported the recommendations of the high level panel. It was not just a question of rehashing what had already existed. He was convinced that they were speaking from experience. He wanted to find out more about the post-support measures, their experience and the budgetary constraints with regard to emerging farmers.

Vumelana’s response

Mr Brian Whittaker, Executive Director: Vumelana, said that they were committed to land reform, but there was not a clear enough land reform vision nationally. The people on the ground wanted real rights. Transferring the land and access to capital would make their rights real. It was important to make the right diagnosis. If the diagnosis for the problem was that all the ills at present were as a result of the constitution, the patient would not be cured. Their experience was that there were these issues which were causing all these difficulties. Their fear was that when the process was completed, even completed with an amendment of the Constitution, these difficulties would remain. That was what they had tried to address.

Where did Vumelana stand on land expropriation without compensation? They said this was a matter which needed to be divided into three parts. They believed that expropriation was likely to be required to complete the land reform process. The State would have to use those powers in certain circumstances. On compensation, should land be expropriated without compensation, they were of the view that in cases where that was determined to be just and equitable, and the courts upheld that to be the case, then it should occur. It would be based on justice and equity. On the matter of the constitution, it was their lay opinion that it was not necessary to change the constitution. They would leave that to the constitutional experts.

Mr Peter Setou, Director: Vumelana, said post settlement support was an area which the country seriously needed to work on. When one gave people land without giving them formidable support which enabled them to put their land to real productive use, it caused problems. It disempowered them. Based on the projects that Vumelana had done, if there was no work in ensuring certain things were in place, starting from putting together commercial arrangements and getting the right commercial partners, to improving their governance, it led to challenges such as infighting amongst communities. Organisational and management support was another area they were well-versed in. Developing policies, setting up community trusts if required, negotiation of shareholder arrangements, lease agreements, having their financials audited and ensuring that they had annual general meetings, were all critical aspects in projects where they dealt with communities. Where the communities were enabled to perform the above, there was more cohesion and private investors were more interested in assisting these communities.

Legal Resources Centre

Mr Sheldon Magardie, Director: Legal Resources Centre (LRC), was accompanied by Mr Thabiso Mbense, Attorney at the Centre.

Mr Magardie said the LRC used the courts and the law to attain justice for people who had been historically marginalised and dispossessed, particularly people who had been disposed as a result of apartheid-era dispossession pertaining to land. Their clients on land reform work, were both individuals and communities across the country. Mr Mbense was an expert on tenure security issues and would be talking about matters pertaining to farm dwellers and labour tenants. His own work was in the field of large-scale eviction cases and defending people in those circumstances. In their presentation, they wanted to point out two cases in which expropriation without compensation was entirely justifiable.

Key points were that the current Constitutional framework allowed the expropriation of land with zero compensation in certain instances. The Constitution had been promulgated in 1996, and the state had never expropriated land with zero compensation to date. There was a pressure cooker on the boil, and an amendment to section 25 would not address the more pressing problem -- the systematic failure of land reform to address spatial injustice and historical dispossession. The LRC would then state the instances where it was possible for the state to expropriate land with zero compensation.

The instances they would focus on included the land occupied and used by labour tenants and farm occupiers, and the land claimed under restitution that was not used by the land owners. One of the cases they wanted to highlight was that of labour tenants, detailing the human cost of delays in land reform.

Mr Zabalaza Mshengu (1914 – 2018) was a centenarian who had recently passed away. He was failed miserably by the land reform programme. He had lodged a claim in the year 2000, but it was not dealt with after 18 years. Mr Mshengu was failed by beaurocratic indifference. It was important to note that the Supreme Court of Appeal judgment in the Mwelase case, in which the conduct of the Director General of the Department of Land Affairs was deemed unconstitutional, could not be separated from the debate which was taking place on the day and the degree of priority of allocated, which the Committee would decide were the circumstances under which the Constitution should be amended to allow for expropriation without compensation.

The Constitution dealt on a number of levels with land expropriated in the public interest. The public interest was not investor interest in itself. The public interest was the interest of the people of South Africa in restitution for wrongs which had been committed in the past. It expressly said it includes the nation’s commitment to law reform. Those words were important, because it did not just say ‘law reform’, but the ‘commitment’ to law reform. This was a commitment which was found at the outset of the constitution itself.

The purpose of s 25 was:

• The inclusion of subsections (4) – (9) was designed to ensure that the apartheid era spatial distribution of land occupation and ownership was not frozen upon coming into force of the Constitution.
• Section 25(6) and (7) constitute a crucial component of that transformative constitutional guarantee.

Legislation born as a result of section 25 (6) and 25(9) of the Constitution were important, and the Committee should bear these in mind in its deliberations. This legislation was the Land Reform (Labour Tenants) Act No. 3 of 1996; the Extension of Security of Tenure Act No. 62 of 1997; and the Interim Protection of Land Rights Act No. 31 of 1996. With regard to the Labour Tenants Act, the cut-off date for claims was 31 March 2001.

Section 25(2) of the Constitution sets out three criteria that must be met for an expropriation. These were that it must be (1) carried out in terms of a law of general application; (2) that it must be in the public interest or for a public purpose; and (3) that just and equitable compensation must be provided.

Our courts had repeatedly stressed that section 25(3) of the constitution marks a break from the traditional approach to compensation under the Expropriation Act 63 of 1975 and its predecessors. It was not concerned only with the loss suffered by the person whose land was expropriated. As was explained in Du Toit v Minister of Transport 2006 (1) SA 297 (CC), that : “Viewed in the context of our social and political history, questions of expropriation and compensation were matters of acute socio-economic concern and could not have been left to be determined solely by market forces.” Instead, the compensation awarded to landowners “must reflect an equitable balance between the interests of the public and of those affected by the expropriation.”

The Constitutional Court in the Zondi case, for example, made the point that the impounding of livestock cattle in rural areas was often a prelude to eviction. It was a form of constructive eviction to drive people off the land. It was critical for the Committee to bear in mind that we were not expropriating land in itself. We were looking at the question of the rights in land, any number of rights in land -- grazing rights, burial rights. The LRC had fought cases over the period of a decade, simply to allow people to have access to the burial sites of their loved ones and to allow people to bury their loved ones on farms, before the amendment to the Act was effected.

The following cases were pertinent:

Msiza v the Director-General for the Department of Rural Development and Land Reform and Others (LCC 133/2012) [2016] ZALCC 12; 2016 (5) SA 513 (LCC) (5 JULY 2016)

Msiza’s father died in 1997 and Msiza had been appointed the representative of the estate. Dee Cee Trust purchased the farm in 1999. Importantly, the date of the land claim was 5 November 1996. Around 2001, Msiza had issued court papers asking for an order declaring his father a labour tenant. The case was heard on the 16 – 20 August 2004 and 5 October 2004. Msiza’s father was found to have been a labour tenant on 16 November 2004. Another order, for an award of land, was made on 16 November 2004. Between 2006 and 2012, there had been a fight between the Department and land owners over the issue of the purchase price. Msiza had brought an application in the land claims court (LCC) in terms of section 23 of Land Reform (Labour Tenants) Act No. 3 of 1996, asking the LCC to determine the purchase price.

What this case illustrated was that it was possible to get compensation which was below market value under the current constitutional framework. They had initially wanted R4 million, but the LCC had given them R1.5 million. However, they were not happy and had appealed. Upon appeal, the Supreme Court of Appeal had changed the amount slightly, to R1.6 million.

Also, with regards to Mwelase, 22 labour tenants had lodged an application for the acquisition of land. In 2008, the state had decided not to process those applications. In 2013, the LRC had taken that matter to court because it wanted the State to give them their plan and also to commit that they would proceed to process those applications. The LRC had been successful. The State was declared to have acted unconstitutionally by the Land Claims Court. They had appealed, and despite being successful, the matter was being taken to the Constitutional Court. This showed that the land reform failure was the lack of the implementation of the Act, of existing legislation. The Constitution did not have a problem when it came to the above.

Ms Mente said Mr Mshengu had been failed by administrative errors. This did not speak to why the Constitution should not be amended. Section 25 2(b) of the Constitution says that people ought to be compensated. That on its own was a problem for the administration – they had to find money, and they had to find market value. Those administrative errors were not assisting the Committee in determining whether to amend or not to amend.

Secondly, when it came to land reform and land expropriation, there were two different issues. There were people who came with the term ‘confiscation’. Land expropriation meant the acquisition of land to fast-track redistribution. Amending the constitution would lead to faster redistribution, eliminate the problems of finding money to pay for land, finding willing sellers and finding people who were willing to develop the land. She found their presentation unhelpful as far as determining whether or not the constitution should be amended in order to help deal with administrative errors. Even land which some people were not using, they did not want to sell. They wanted to sell it at the market price.

Thirdly, it was cumbersome to have to approach the courts every time a piece of land was needed, to determine whether it could be accessed at the market value or not. The last case which the LRC had spoken about showed that it was possible to get land at below market value. This had been determined by the courts. As an example, the people in informal settlements such as Joe Slovo outnumbered those living in suburbs, but could not access land in Constantia for various reasons, such as because it was a suburb, crime etc. This was because the state was not in control. If the state was in control in determining who could live where, the state of affairs today would not exist.

LRC’s response

In the case of Mr Mshengu, the LRC believed that the compensation paid to the owner in that case should have been zero, for a number of reasons. In labour tenant cases, one was usually dealing with a small portion of land, which the labour tenant and their family had lived on for generations. One was not dealing with a case where there had been state investment in that land. For those reasons, they failed to understand on what basis there had been no steps taken to expropriate those portions of land for zero compensation. They believed it was perfectly justifiable to do that.

They accepted that part of the problems had been that in cases where there had been disputes over compensation that had been tied up in court battles, one of the proposals in the Expropriation Bill --  for example, a constitutional amendment -- would not deal with this. It may, depending on where the Committee may go with this, allow for a case where the expropriation would take place first, without the question of compensation having to be determined by the court of law. The LRC believed that the constitution allowed for that. Just as one could not go to the SA Revenue Service (SARS) and say, “I dispute how much I have to pay, let’s go to court.” One first had to pay the taxes, and then one could go to court. The LRC says that similarly, in relation to the implementation of expropriation of land without compensation, the state had the tools to expropriate the land first, for no compensation, and to allow for disputes regarding whether or not the expropriation was just and equitable in those circumstances to be determined by the courts or by the owner if they chose to do so. There would be no obligation, in the LRC’s view, for the Department to go through a lengthy legal process to first expropriate the land and then to convince a court that it was justifiable, when the onus of showing that it was not justifiable would be on the owner of that land. They would then have to argue why they should be compensated for a portion of land which was not being used, which was used by labour tenants and generations of their ancestors.

The LRC accepted the point that the Committee was going to be faced with two difficult issues. On the one hand, they were faced with a number of submissions, which repeatedly told it about the failure of land reform. On the other hand, they had public hearings in which people were saying that they wanted the constitution changed. The LRC felt the difficulty would be to marry the two together. From their experience, whether a principle was in the constitution or a statute mattered not if it was not being implemented and meant something to the people who were affected by it. They could go to their clients and say Parliament had amended the Constitution, and allowed for the expropriation of land without compensation. The very next question they would ask was, when was it going to happen? This was what they had been at pains to point out. When was it going to happen?

Mr Mbense added that in order to cure what the Committee was concerned about, Parliament could enact the Expropriation Act, not amend Section 25 of the constitution. Further, in that Expropriation Act, in was necessary just to state the circumstances in which expropriation without compensation was possible, and also the manner in which it could be achieved.

The Chairperson asked what was difficult in having that last part in the Constitution, the circumstances, if one had the conditions with regard to compensation.

Mr Magardie replied that part of the difficulty of looking at it through a constitutional law lens, was to make a definitive statement about that without knowing what the amendment was. For example, an amendment which would deal with precisely the range of circumstances, including the ones they had spoken about, that allowed for expropriation without compensation, may well be perfectly constitutional and be supported by the LRC. It would be difficult to make a pronouncement without seeing what the particular amendment would be. On the other hand, an amendment which would, for example, oust the jurisdiction of the courts, would be objectionable from a practical perspective because they knew that it would lead to a five-year battle up to the constitutional court, ultimately slowing down the land reform process, as had happened with the Restitution Amendment Act. It was important, in a principled position taken by Parliament, to open up the process for new land claimants. The procedure, unfortunately, had failed. The Act had been declared unconstitutional and the Constitutional Court had said that unfortunately, those new claimants would have to wait in line. That was the difficulty. They supported the principle of it. It was about whether or not that amendment tied up with the accountability point. From the LRC’s view, it must.

Limpopo Communal Property Institution (CPI) Forum

Mr Lefa Mabuyela said that despite the achievement of constitutional democracy in 1994, the land question was at the heart of the people’s struggle to overcome the legacies of many years of white minority rule’. Indigenous people were still being dispossessed and were losing the land their forefathers called home.

Despite the end of apartheid many black people still do not own their homes, and land dispossession, apartheid’s greatest travesty, still lived on. The brutal regime of apartheid had created “dead capital” in historically black areas where people did not own the land they occupied. Even after the Group Areas laws and the notorious 1913 Natives Land Act had been repealed, racially discriminatory apartheid and land tenure endured.

The apartheid government had used a plethora of legal instruments through legislation, resolutions, proclamations and ordinances to legitimise land dispossession, and to systematically impoverish black people. By the advent of the new SA, almost 17 000 statutory measures were in place to control land divisions, and all of these had had catastrophic consequences for the black majority.

As an example, the Occupation Act 8 of 1886 had decreed the acquisition of land in the Waterberg district free of charge, meaning without compensation. People’s human rights were being violated, they were being excluded, marginalised and faced prosecution by the likes of Afriforum when asserting their basic rights.

Blacks’ ancestors had also lost their land through the Natives Administration Act of 1927, which had provided for the acquisition of land from black people on a massive scale.

The time had come, the time was now, to stop pontification and do the right thing. This meant restoring the dignity of our people, restoring their land rights and giving them their land back, and amending the constitution to correct section 25, which was contradictory

Depriving people of their property rights was not only depriving them of their constitutional rights, but depriving them of their dignity to live. Poverty levels amongst black people were worsening. The ultimate aim was not to expropriate land, but restore it to its rightful owners. Land was central to economic inclusion.

Mr Mabuyela said the land question was a historical injustice, a sin that must be eradicated. Security of land tenure was one of the pillars of a peaceful and progressive society. A freeway could not continue to separate Sandton and the filthy Alexander forever. Through land ownership, black people would be able to contribute to the economic growth of their own country. Expropriation of land should happen without compromising food security.

The government should pass the Land Expropriation Act, without compensation, like the apartheid regime had done through the Occupation Act of 1886. The threat of losing investor confidence should not scare us -- investors had made Nigeria the largest economy in Africa, despite the Boko Haram insurgency. The Limpopo CPI Forum believed that EWC would help fast track land redistribution, and it therefore supported the review of section 25 of the Constitution.

Discussion

Dr Mulder said the presentation had referred to expropriation of land without compensation not being a new thing, as the apartheid regime had applied it through the Occupation Act 8 of 1886. On a point of correction, the apartheid regime had come into power in 1948, so Mr Mabuyela must have been referring to a colonial or other regime. Where the presentation had referred to the land being returned to the rightful owners, what did that mean? Did that refer to the Khoi/San? If not, why not?

Ms Mente agreed that there had been not market price agreement when the land was taken. She wanted to ask whether Mr Mayubela agreed that the rightful owners of the land were the State. Where would he put the argument of the banks and business, which sought to misguide the country that investors and investment would flee if land was given to the rightful owners -- which was the state, under state custodianship --for everyone, and the land being distributed equally?

Limpopo CPI Forum’s response

Mr Mayubela said that it was sad that banks were making this threat. Investors had made Nigeria the largest African country in terms of gross domestic product (GDP), despite the Boko Haram insurgency. The notion of investors fleeing was not true. He asked why the banks were not discouraged by the woeful living conditions of people living in areas such as Alexandra Township and Gugulethu.

Dr Mulder asked, for clarity’s sake, if land should be nationalised,

Mr Mabuyela said that the rightful owner of the land was the state, and they would have the responsibility to redistribute that land and to give people title deeds.

Consideration of written submissions

Dr Mulder said that it was important for the Committee to have access to the 700 000 written submission which had been made by the public, in order to have a sense of what people were thinking.

The Chairperson said that the Committee had agreed that those would be made available to each political party, and each political party would respond individually. Secondly, the service provider that had been contracted to handle submissions would be with the Committee on Wednesday 12 September to give an update. At that meeting, there would be a report on the written submissions.

Adv Breytenbach,concurred with Dr Mulder’s view, stating that her party (DA) wanted access to the 780 000 written submissions. They would need time to go through the submissions, as it was not something which could be done in an afternoon.

The Chairperson said that the Committee had agreed, and he thought that their party was already a part of that process of going through the submissions via the secretariat, as parties.

Mr Swart said that he was concerned about the process and wanted to know about the form of access for parties. Was one to receive hard copies? They needed to be informed soon, because they needed to apply their mind to the written submissions. The last report from the service provider was that only 140 000 submissions had been considered. Would the written submissions to be reported about be from all 700 000, or only the first 140 000? Were written submitters asked to have oral hearings? What was the arrangement to access the 700 000 submissions?

The Chairperson said that there were boxes for the Committee’s hard copies. Those which were electronic would be made available to the Committee as per request. The question about the oral presentations, were the ones they had come to know of. Those which were not completed, which were in the other batches, from the management Committee point of view, was why he had not announced that this was the conclusion of the oral presentations. There might still be an adjustment to the programme to allow this, as they came across those that had requested.

Dr Mulder said that over the last four days, the hearings had been on a par with those which were held for the public, and he would take it that the written submissions would be on the same level. It could not be that because they were written submissions, they would be given a lower value in terms of how they were seen. This was why it was important that they got a feel of what the people out there were saying in those 700 000 written submissions.

The Chairperson said he was in agreement with Dr Mulder regarding this.

The meeting was adjourned.

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