ANC pushes expropriation legislation, including the possibility of nil compensation, along its winding (political) road

The National Assembly public works committee is ploughing – clause by clause – through the Expropriation Bill in a course that’s never far from politics.  

It’s largely a conversation between DA MP Samantha Graham-Mare – who keeps raising pesky questions about unintended consequences of the legislative proposals and definitions, and shoddy cross-referencing – and ANC MP Elphus Fani Mathebula, who repeatedly maintains “we are a caring government”, or similar phrases, and does not allow whatever scenario is sketched by the opposition. 

In Tuesday’s committee discussions, Graham-Mare raised the possibility of homelessness of an expropriated property’s owner, given the timeframes and other stipulations of the draft law. 

Mathebula’s response was: “Our government is a caring government; I don’t think it’s possible.” 

Graham-Mare raised the possibility of the owner of a bonded, but expropriated property being left high and dry as compensation may not cover the bond – an ex-owner remains responsible for the mortgage until it is paid off – and/or the compensation being claimed by banks that want to recoup the mortgage loans.  

“There’s no guarantee the compensation will cover the full balance of the mortgage. Although the expropriation itself dissolves the rights in the land, it does not dissolve the contract between the landowner and the bank,” added Graham-Mare.  

Mathebula’s response: “One is well aware, as we embark on this expropriation process, that some of the properties are mortgaged and as such there are plans in place to deal with that… I cannot see therefore a property owner being prejudiced by the expropriation process is going to unfold.”  

Exchanges like these are the strongest signal yet that the Expropriation Bill, when it reaches the House, would be passed with the required ordinary majority on the back of ANC numbers. The governing ANC has 230 seats in the House, the DA 84 and the EFF 44. 

And exchanges like these also indicate the draft law would remain largely as is – or with at best technical changes like tightening clause cross-referencing and perhaps tightening up definitions like “abandoned land”.  

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Despite countrywide public hearings in 2021 and concerns raised by the Banking Association of South Africa, Agri SA and the National House of Traditional Leaders, the Expropriation Bill discussed now remains the B23-2020 version tabled in October 2020 by Public Works and Infrastructure Minister Patricia de Lille. 

This has been the third attempt at expropriation legislation in democratic South Africa. 

The 2007 draft expropriation law was withdrawn when parliamentary lawyers advised that recourse to courts had to be included.  

The 2013 call for public comment on new proposals led to another expropriation draft law in 2015, which was passed by Parliament in 2016, but then returned to the national legislature in 2017 by then president Jacob Zuma over concerns about inadequate public consultations, including with traditional leaders.

In August 2018 this bill had to be formally withdrawn by the public works committee to allow the minister to table new expropriation legislation that included the 2017 ANC national conference resolution that compensationless expropriation was a possibility – if it did not undermine the economy, agricultural production and food security.  

The current Expropriation Bill is enmeshed in the politicking around the attempts to amend section 25 of the Constitution, dubbed the property clause, that failed on 7 December 2021 when it fell short of the required two-thirds majority of 267 yeahs. 

The vote, after an acerbic political debate, came down to 204 for the Constitutional 18thAmendment Bill, and 145 against after the EFF pulled its support when the ANC allowed for “state custodianship of certain land” only. 

The Expropriation Bill, which requires an ordinary majority of 50 plus one, now carries the responsibility to set out the legislative framework for compensationless expropriation, or nil compensation as the legal terminology puts it.  

Clause 12 of the bill sets out that compensation must be “just and equitable”, and reflect “an equitable balance” between the public interest and the interest of the expropriated owner, with considerations to include the acquisition and suitability of the property, alongside factors such as enhancements and improvements.  

Clause 12(3) states: “It may be just and equitable for nil compensation to be paid, among other, when land is held to ‘benefit from appreciation of its market value’, has been abandoned, when the property is a health, safety or physical risk and when land held by an organ of state is not using that land for its core function.” 

The steps towards expropriation are set out and apply uniformly, regardless of who the expropriation authority is. Crucially, the property of state-owned enterprises may not be expropriated without the concurrence of the minister responsible.  

Clause 18 allows for the expropriation of mortgaged property, involving the lender, and directs compensation to be paid to the Master of the High Court pending the resolution of any dispute. 

On Tuesday, parliamentary legal advisers were requested to provide a formal opinion after commentary that the bill did not exclude the possibility of nil compensation on mortgaged property as long as expropriation was not arbitrary and meets the bar of being just and equitable.  

Farmers plough fields outside Harrismith in the Free State. The 2017 ANC national conference resolved that compensationless expropriation was possible if it did not undermine the economy, agricultural production and food security (Photo: Felix Dlangamandla / Daily Maverick)