If anyone should be complaining about the Expropriation Act, it’s government, argues Bulelwa Mabasa, Director and Head of the Land Reform practice at Werksmans Attorneys.
But before explaining why, she wants to dispel some common myths about the act which was recently signed by President Cyril Ramaphosa, and which grants the government powers to expropriate property in the public interest, in some cases with the possibility of nil compensation.
Myth 1: Expropriation is a new concept in South Africa
“Expropriation is not a novel concept in South Africa. It is a fundamental part of property law worldwide, and here it is deeply rooted in Roman-Dutch law, which forms the basis of South African legal principles. Various jurisdictions have their own versions: in the United States, it is called Eminent Domain, and in the United Kingdom it is termed compulsory acquisition. Countries such as Germany, the Netherlands, Brazil and others recognise expropriation as a legal mechanism and in certain instances makes provision for expropriation with less than market value compensation.
“The misconception that the Expropriation Act introduces an unprecedented system is incorrect. The state has always had the power to acquire private property for public use, provided fair compensation is given.”
Myth 2: Expropriation without compensation is a radical and dangerous Idea
“A common misconception is that expropriation without compensation is a dangerous innovation. In reality, South Africa’s Constitution has always linked expropriation to compensation. However, the methodology of compensation varies globally. Most countries base compensation on market value, while others go beyond that, paying additional amounts to account for the inconvenience caused to the landowner.
“The South African Constitution, promulgated in 1996, does not limit compensation to market value alone. Instead, it outlines a nuanced approach, considering factors such as the property’s history of acquisition, its current use, and any improvements made. This means that in some cases, compensation may be nil, especially when a property is abandoned, has unpaid taxes exceeding its value, or was originally acquired without cost, as in the case of Crown grants, for example.
“While the government has been slow to use its expropriation powers, the new Act does not introduce expropriation without compensation as an entirely new concept. Rather, it explicitly acknowledges the possibility within a specific legal framework.”
Myth 3: The state has unlimited power to expropriate land
“Another unfounded fear is that the Expropriation Act grants the state unchecked authority to seize land at will. In reality, the process is highly structured and places significant burdens of proof on the government.”
And herein lies the rub for government, which has a political imperative to achieve land reform, and for whom constraints may prove irksome.
The checks and balances include:
Before any expropriation can take place, the state must:
- Issue a notice of intent to expropriate
- Obtain reports from multiple government departments, including land reform, environment, and water
- Undergo a compulsory mediation and arbitration process
- Face judicial oversight, where courts have the final say on whether the expropriation is justified and if the compensation is fair
“Given these stringent requirements, the notion that expropriation amounts to state confiscation is misguided,” says Mabasa.
Myth 4: Expropriation is the main barrier to land reform
“Some argue that the expropriation process itself stymies land reform. While the procedures are complex, they are designed to ensure fairness and due process. The South African Constitution mandates that all state actions must be procedurally fair, lawful, and reasonable.
“Historically, the government has underutilised its expropriation powers. Even in cases where land lay fallow, was illegally occupied, or where inner-city buildings became hazardous, authorities were slow to act. The new Act now allows the state to acquire land for land reform objectives, such as granting access to land for historically disadvantaged communities. However, the stringent procedural requirements mean that the government, rather than landowners, may find itself most burdened by the new framework.”
Myth 5: The Expropriation Act poses a threat to all property rights
“Concerns have arisen about whether expropriation extends beyond land to other forms of property, such as mortgage bonds, shares, or lease agreements. The Act primarily deals with land expropriation. However, it does include provisions for notifying and compensating holders of related property rights, such as mortgage bond owners and leaseholders. The state cannot arbitrarily seize financial assets under this legislation.”
Expropriation and conservation: addressing the concerns
While much of the heat around the Expropriation Act has come from farmers’ organisations and political parties for whom personal property is sacrosanct, there are also specific concerns around conservation land. Some fear that land deemed to have no obvious “use” will be arbitrarily expropriated for purposes like mining or development. However, says, Mabasa, “expropriation must be justified based on public interest, and the government would need to prove why the land is necessary for its intended purpose”.
“Conservation areas, where there is economic activity, employment, and biodiversity significance, would not be easy targets for expropriation. In fact, South Africa’s legal framework ensures that conservation, land reform, and economic development must be balanced rather than being in conflict.”
Call for national land use plan
There is a way to cut through some of these issues, argues Mabasa. “One of the fundamental issues in land reform is the lack of a coordinated national land-use plan. South Africa needs designated areas for specific uses, such as:
- Mining zones
- Conservation and biodiversity protection
- Renewable energy projects
- Restitution and land reform initiatives
“Without such a framework, conflicts—such as those seen in Xolobeni where community, conservation and tourism interests were pitted against mining interests—will persist. A clear national plan could pre-empt disputes and create legal certainty, reducing prolonged litigation and policy uncertainty.”
“In other words, we should be able to say, province A has an area that’s demarcated, let’s say, for mining. In Province B, there is land that is important for conservation and biodiversity. Land X is earmarked for renewable energy projects. When you have a national land plan for different land uses, you have the clarity where you won’t end up with restitution land claims versus conservation.”
She emphasises that land reform is complex and multifaceted, and is not encompassed by one piece of legislation. “In the context of conservation and land claims, what is important is to understand that we are moving away a focus on the the Expropriation Act, and are now talking about land claims. Land claims are governed by a separate piece of legislation, which is the Restitution of Land Rights Act, where claimants must prove that they were dispossessed of land. Currently, we’ve got about 5,600 land claims that remain unresolved since 1998.”
Re-iterating her support for a land-use framework, Mabasa cites from her own experience how progress would be ensured through such a framework.
“I’m involved in a case where there is a dispute between a mining house and people who, practice their rights of religion and culture in a specific area. That matter can only be resolved in the courts. But we’ve already gone through a 10-year process. It is not sustainable for different parts of government to be at loggerheads with each other, and at the expense of those that might not even have access to justice. Why spend another five years in court litigating over a matter that could have been resolved if we had a clear plan, upfront.”
She notes that there are integrated development frameworks in parts of the country, “but there are different players who are responsible. Municipalities do what they do, but it’s not integrated well enough. It’s certainly not integrated per province, but it’s also not integrated at national level.”
‘This is exciting for investors”
In spite of the roaring debate, stoked by the US president and local activists, Mabasa is very optimistic.
She maintains that land reform, which is not the primary the object of the Expropriation Act, is a nation-building imperative and holds the promise of uniting the country, as perhaps some of the reaction to American intervention has shown. She is emphatic that “This is exciting for investors, for landowners, to invest in the country trusting and knowing that we’ve got a judicial system that’s been robust, and that is trusted, ultimately, if there should be any form of injustice.”
“The exaggerated fears surrounding the Expropriation Act overlook the fact that the law is designed to balance the interests of all stakeholders while ensuring land reform objectives are met in a fair and structured manner,” she concludes.
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