EWC marches on

Two months back, I wrote in this column that Expropriation without Compensation was back. The context was that the African National Congress had emerged from a policy conference at which it recommitted itself to the policy. EWC, as President Ramaphosa emphatically declared, was something that ‘we must utilise’.

It may not have been an unreasonable assumption that even though the matter had been returned to the official agenda, it would take its interminable time to come to some sort of a conclusion. After all, the question of a constitutional amendment took close to four years to come to a vote in Parliament, where it failed to muster the numbers required for its passage.

The President had said at the party’s policy conference that the goals sought through the constitutional amendment could be achieved in other ways. Here he was quite correct, and in this he echoed what the Institute of Race Relations – and I personally – have said repeatedly. Properly targeted, ordinary legislation could achieve very much the same objectives.

Last week, however, property rights took two potentially very serious blows, with nothing like the attention they deserved, when the National Assembly passed two Bills that significantly expand the latitude of the state to take property, whether at ‘nil’ compensation, or at a generous discount to the detriment of its owner.

The first of these is the Expropriation Bill. While new Expropriation legislation was needed to replace the 1970s-era legislation currently on the books, this Bill provides for a set of procedures loaded in favour of the state. These include allowing property to be taken before payment has been made, and even where it is being contested – something likely to create a powerful incentive for a property owner to take what is on offer.   

The Expropriation Bill moreover makes explicit provision for taking land at ‘nil’ compensation, on the basis of an open-ended list of circumstances. These include land that is ‘unused’ and acquired with the intent of selling for a profit, and land over which the owner ‘fails to exercise control’.

The latter point might be assumed to mean properties that have been abandoned, where the owner has absconded and has effectively relinquished control over his or her holdings and can no longer be traced, or is simply uninterested in any further involvement with the property. This is a real problem, and is a contributor to urban decay. There may well be a case for compensation-free expropriation under certain such conditions.

But the wording used – exercising control – suggests a more expansive understanding of things. One possibility is a property which has been invaded and occupied. This is the nightmare scenario for just about any property owner, especially since acting against it is hardly regarded as a priority by law enforcement, and constitutional rights to housing can make resolving it a difficult matter.  

It’s not beyond the bounds of possibility that EWC could be invoked with the justification that the owner of an invaded property had failed to exercise the necessary control over it.

The second piece of legislation is the Land Court Bill. This would establish a parallel court system to deal with land issues, including disputes over expropriation and compensation.

Billed as a means to ‘promote land reform as a means of redressing the results of past discrimination and facilitate land justice’, it allows in some instances for the admission of evidence that would not generally be acceptable in a court.  Perhaps more concerning is that judges may sit alongside assessors whose criteria for appointment is unspecified – although they would have the considerable power to overrule the judge on matters of fact (although not on questions of law).

The notable risk here is that they would be appointed because of their involvement in land activism, with the implied mandate to deliver more rapid and expansive land reform. Their interventions might be important for determining, for example, whether an owner has failed to exercise control over his or her land, and whether ‘nil’ compensation is in order.

Together, these push the threats to property rights in South Africa. To say that they are symbolic or mere posturing as some might do is to mistake their significance, for they set in place the systems and processes that would be needed for a major EWC push. (Incidentally, as I wrote two months ago, there have also been suggestions from within the ANC that a renewed move on the Constitution might be under consideration.)

The implications are not encouraging. There is little that would dissuade investment, be it foreign or domestic, more fulsomely than the degradation of property protections – a particular consideration in a state so marred by corruption and incompetence.

Investment in South Africa sits at around 13% of GDP – less than half the 30% that the National Development Plan envisaged. Placing more obstacles and disincentives in the way of investment would undermine the prospects for job creation, for the availability of credit and ultimately for dealing with the challenges of poverty and exclusion.

It seems a very high price for the country to pay….