After the Bell: Why the Expropriation Act is the ugly ogre some make it out to be

Over the years, whenever the ANC has put forward some terrible legislative idea, which – let’s face it – has been often, I have felt constrained to write negatively about it. This is my job; be honest. The ANC and its cohorts likely have a different point of view; that is their right. But in almost every case, members of SA’s liberal community, for whom I have a deep affection, claim I am “hyperventilating”, “overstating”, “fostering panic”, “fear-mongering” and being unpatriotic and generally unpleasant. 

I understand this instinct. Tactically, liberal South Africans don’t want to be conflated with the right wing. It’s crucial for SA’s future that richer South Africans don’t take their relative wealth for granted and are not seen as obstructionists to any and all initiatives that may improve the position of SA’s poor. And, personally, I support this notion wholeheartedly. 

But often I think that in their effort to be tactically flexible, SA’s liberals miss the point completely. A good example cropped up recently with the signing of the Expropriation Bill into law. The Act, politically, constitutes an attempt by the ANC to pull the wool over the eyes of its own supporters. It does not make it more likely that vast quantities of SA’s land will be returned cost-free to its original owners prior to 1913 as the ANC wants its supporters to believe. Rather, in some ways, it makes it less likely.

But that’s the politics of it. What is also pertinent – to me at least – is how liberal South Africans are playing it. They are, after all, going to be the losers here. How should they respond? Well, this is more complicated that it seems. 

Here is just one of many examples: Last year, when the legislation was being discussed, Annelize Crosby, the head of legal intelligence at Agbiz, wrote that the legislation should be put into perspective. “It’s not the ugly ogre some make it out to be”. Well…

Crosby then presented a legal analysis of the legislation, pointing out that many countries around the world have expropriation laws, although fair compensation is very often protected in one form or another and is present in international human rights instruments. Right.

More specifically, the SA Expropriation Bill, as it was then, is surrounded by legal constraints. And particularly the clauses that do now allow expropriation without compensation have additional checks and balances. “The bill guarantees that expropriation can only be used as a last resort after all other attempts to buy the property have failed. The extent of expropriation is therefore not determined by any political party’s land reform targets but rather by the degree to which landowners and the state hold out in negotiations or choose to make a genuine attempt at reaching a fair settlement.

“Simply put, there is no way to accurately predict the impact that expropriation will have because there is no way to predict how often it will be used,” she concludes.

Okay, I understand, there are legal constraints. We are not Zimbabwe after all, heaven forbid. As far as the zero compensation issue is concerned, Crosby says: “Any attempt to award nil compensation will have to be justified and a calculation would need to be made using the values afforded to all relevant factors to show how a nil rand value was arrived at.”

But, you know, the problem is not the lack of constraints. Nor is it the principle of expropriation, as everyone points out. The problem is more of a question: Will this fix the problem? Is this a good idea or not? And the answer to that is, “No, not even close”.  

The ANC didn’t want to go full Zanu-PF on the issue because of, you know, national destruction. But having agreed to put in legal constraints, the utility of the legislation is going to be muted because it takes five years now to get the Road Accident Fund to pay you if you are a passenger in a minibus accident. Think how long it’s going to take to expropriate someone’s farm for zero compensation.

But even that is not the real problem. The root of the problem is philosophical. The legislation is premised on the notion that land owned by the state is automatically owned by the people of the state, because the government represents the people. It assumes that the people of the state would be happy with this circumstance and their desire to see the dastardly 1913 Land Act reversed will be satisfied in these circumstances. At last, the nation will be at rest! All socialists believe this, or something like it. You just take the property from the people who have it and hold it in state coffers, and the problem of inequality and colonialism is solved. Huzzah!

Trust me when I tell you that is neither what South Africans want, nor is it what they should want. What they should want (and do want, I suspect) is individual property title. That would provide the financial base to expand black ownership of land and actually start addressing the problem. There isn’t a reputable economist in the world who doesn’t agree with this notion. 

There is lots in the Act about the acquisition of land (all property, actually, even incorporeal property), but there is very little in the Act about its distribution outside of a generally stated notion of the government’s redistribution plan. And we know how well that is going. 

Thirty years after liberation, vast tracts of SA’s townships are still not owned with state sanction by the people who have lived in their houses for generations. That same applies to “tribal land”. And that is because the government is obsessed with expropriation, but doesn’t give much of a damn about people actually owning the land they live on or cultivate. 

So, please, let’s not beat around the bush: the Expropriation Act is indeed the ugly ogre some make it out to be. DM