Land reform: The ANC’s expropriation without compensation dilemma

by | Jul 6, 2021 | General | 0 comments

Opinionista • Paul Hoffman • 30 June 2021

Despite rhetoric to the contrary, the ANC is actually lukewarm on the issue of expropriation without compensation (EWC). With the so-called Radical Economic Transformation (RET) forces in the party in disarray, with action against Ace Magashule and Jacob Zuma, it is even more on the back foot.

Section 25 of the Bill of Rights – Chapter 2 of our supreme law, the Constitution of the Republic of South Africa – sets out the parameters within which the right to property is respected and protected by the state.

At its 2017 elective conference held at Nasrec, the fractious and faction-ridden delegates voted in favour of a resolution that requires Parliament to revisit section 25 with a view to introducing a system that allows for confiscation of land or, as it is more delicately, albeit inaccurately, called, “expropriation without compensation”. 

The resolution was explained to the media at the time by ANC spokesperson, Enoch Godongwana, and was reported as:

“The final conclusion that we agreed, the national executive committee will initiate some amendments in the Constitution’s section 25 to achieve expropriation without compensation.

“For that to happen it must be sustainable,” said Godongwana. This means it must not impact on agricultural production, food security and other sectors of the economy.

He said that even those who want land expropriation without compensation agreed that it should be achieved sustainably. “It should not impact the finance sector and other sectors negatively,” said Godongwana.

The National Executive Committee (NEC) of the ANC met in July 2018, after which meeting the president announced that:

“The lekgotla reaffirmed its position that a comprehensive land reform programme that enables equitable access to land will unlock economic growth, by bringing more land in South Africa to full use, and enable the productive participation of millions more South Africans in the economy.

“Accordingly, the ANC will, through the parliamentary process, finalise a proposed amendment to the Constitution that outlines more clearly the conditions under which expropriation of land without compensation can be effected.   

“The intention of this proposed amendment is to promote redress, advance economic development, increase agricultural production and food security.

“It will also transform the unjust spatial realities in urban areas.”

The sharp end of the much-delayed parliamentary process is now approaching rapidly. The current state of play on the Nasrec resolution, and the NEC’s interpretation of it, is discussed by Marianne Merten in an analysis in Daily Maverick on 27 June 2021 (“The politics and numbers of land expropriation without compensation – the slow and winding road to… nowhere in particular”)

A point of clarification, and an issue not mentioned by her, are deserving of attention as she takes what she calls the “slow and winding road to nowhere”.

Merten points out that the ANC does not on its own have sufficient seats in Parliament to pass the necessary constitutional amendment which requires what she calls “a minimum two-thirds threshold”.

Merten continues by suggesting that: “If this rises to the 75% many constitutional observers argue is needed because the Bill of Rights is to be amended, more votes are needed.”

Actually, generally speaking, it is possible to amend the Bill of Rights with a two-thirds majority, one which currently seems to be unattainable because the ANC and EFF cannot agree on the confiscatory measures under discussion in the parliamentary committee, in particular as regards the parameters of the concept “custodianship”, a term that is notably absent from both the Nasrec and the NEC announcements on the topic.

If truth be told, the EFF favours the nationalisation of land, while the ANC does not. Section 25 addresses all property rights, not only rights to land.

The efforts currently being made by the ANC to woo the small, or “rats and mice” parties in Parliament, speaks to the dilemma in which the ANC finds itself.

The attaining of a two-thirds majority may prove to be impossible if the EFF and ANC remain at loggerheads. The situation is compounded by utterances from leading communist Jeremy Cronin and former president Thabo Mbeki which suggest that the whole idea is not in line with the overall position of the ANC.

For the two-thirds majority to be applicable, it will be necessary to find a way to amend section 25 in a manner that does not offend the internationally recognised rule of law principle that property rights be respected in all jurisdictions that offer fealty to the rule of law. 

In section 1 of the SA Constitution, the rule of law is regarded as supreme, along with the Constitution itself.

An amendment to the Bill of Rights that does not implicate any tinkering with the rule of law is notionally possible if a two-thirds majority in the National Assembly votes in favour of it, and enjoys the support of six of the provinces represented in the National Council of Provinces.

If the EFF and ANC remain at odds, the prospects of doing so seem slim.

The modus operandi for bills amending the Constitution is set out in section 74 of the Constitution. In it, the provisions of section 1 of the Constitution (including the supremacy of the rule of law) enjoy special entrenchment in that six provinces in the National Council of Provinces, and 75% of the members of the National Assembly, must support the amendment in question. 

If the amendment to section 25 currently under discussion, once it reaches a final form, has the effect of diluting the rule of law by restricting respect for property rights currently guaranteed to all (the right to have the value of an expropriation adjudicated in a court of law being one of them), then the obviously unattainable 75% majority will be needed.

Should the ANC, and whoever votes with it, attain a majority in excess of two-thirds but not the magic 75%, then it will be possible for at least a third of the members of the National Assembly to apply to the Constitutional Court within 30 days of the president signing and assenting to the act, for an order declaring the act or part of it unconstitutional. This position is all set out in detail in section 80 of the Constitution.

It would appear that the right of any public interest litigant to challenge the constitutionality of the tinkering with section 25 of the Bill of Rights is not affected by the provisions of section 80. This legal conclusion is because section 2 of the Constitution has a blanket provision to the effect that laws or conduct that are inconsistent with the Constitution are invalid. An amendment that waters down the supremacy of the rule of law by, for example, limiting access to the courts by those expropriated, could be challenged on this basis.

The Nasrec resolution by the NEC of the ANC, its highest decision-making body, also contains caveats that are difficult to comply with in that they require that food security and economic development not be prejudiced by the introduction of EWC. These conditions will prove extremely difficult, if not impossible, to meet. 

Dire warnings of the effect on banks that hold mortgages over farms, on the Land Bank, on the willingness of existing farmers to continue to farm with the sword of Damocles that EWC contains hanging over their heads, and the inability of the state to sufficiently capacitate and finance new farmers (already in evidence in failed agricultural schemes) all suggest that the weasel words in the NEC resolution, worth quoting, are the “get out of jail free card” the ANC reserved for itself at Nasrec. 

This is how the NEC put it:

“[The] conference resolved that the ANC should, as a matter of policy, pursue expropriation of land without compensation. This should be pursued without destabilising the agricultural sector, without endangering food security in our country and without undermining economic growth and job creation.”

Merten does not mention the African Growth and Opportunity Act (Agoa), which is the US law passed by Congress in 2000. It allows eligible African countries to export many products to the US duty-free. It has been particularly beneficial to South African automobile, wine and fruit exporters. These sectors are all big employers and job creators in SA.

Given the Joe Biden administration’s professed commitment to the rule of law and the widely respected World Justice Project definition of the rule of law (see here­), it seems likely that the benefits of Agoa will be lost to SA if the confiscation-oriented or EWC constitutional amendment ever sees the light of day.

The cartwheels performed by then minister of trade and industry, Rob Davies, in relation to the frozen chicken imports fiasco, suggest that SA is keenly aware of the benefits of Agoa membership and will suffer the type of “undermining of economic growth and job creation” that is expressly catered for in the resolution of the NEC quoted above. Termination of the Agoa membership of SA by disgruntled Americans could be economically disastrous.

The SA Institute of Race Relations is leading the charge against the amendment of section 25 of the Constitution. It has put considerable time, energy and effort into opposing the notions of EWC and of custodianship of land on whatever basis, be it in the form of the nationalisation favoured by the EFF or the less drastic and more limited reform the ANC seems to favour.

The Universal Declaration of Human Rights, to which SA is a party, favours respect for property rights in its Article 17, which reads:

  1. “Everyone has the right to own property alone as well as in association with others.
  2. No one shall be arbitrarily deprived of his property.”

The Democratic Alliance has taken up its concerns with Cabinet and with the UN itself. It has pointed out that the EWC bill is detrimental to the rule of law, the agricultural sector, foreign direct investment and the long-term sustainability of the economy.

No response has been received by the DA from Cabinet. It may well be mulling the effect EWC will have on the valuable trade benefits of Agoa, which SA currently enjoys. And on how to square the process currently under way in Parliament with the express terms of the NEC resolution quoted above.

Cabinet may conclude that it is mission impossible and it may pull the plug on the whole idea. 

The current balance of forces within the ANC would seem to suggest that pulling the plug is now politically possible as the RET faction is on the back foot with Jacob Zuma facing incarceration and Ace Magashule suspended. They are both champions of RET. DM

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