Amending Section 25 of the Constitution to include expropriation without compensation - the latest developments, and reflections of a more general nature on the implementation of Government policies

Amending Section 25 of the Constitution to include expropriation without compensation - the latest developments, and reflections of a more general nature on the implementation of Government policies

Anton van Dalsen | Jun 09, 2021
This brief looks at the latest developments in the process to amend Section 25 of the Constitution, specifically regarding expropriation without compensation. Against the background of land reform requirements, it then goes on to reflect on the implications of insufficient institutional capacity within Government to implement large complex projects.

Introduction

The process to amend Section 25 of the Constitution to permit, in an explicit manner, expropriation without compensation in connection with land reform, has been underway for more than three years. The Bill that had been gazetted in December 2019, provides that a court may, where land and any improvements thereon are expropriated for the purposes of land reform, determine that the amount of compensation is nil. The Bill also requires that national legislation must set out specific circumstances where a court may determine that the amount of compensation is nil.

The Ad Hoc Committee to Initiate and Introduce Legislation Amending Section 25 of the Constitution had, however, not been able to complete its work by the deadline of 31 May 2021. As a result, the deadline has been extended to 30 August 2021 in order for it to complete its work on the wording of the proposed amendment to the Constitution.

Differences between the political parties

In the Ad Hoc Committee’s meeting of 28 May 2021, the DA, ACDP and FF Plus all reaffirmed their parties’ support for land reform and redress as already enshrined in section 25, but restated their unequivocal opposition to any amendments to the section.

Regarding the respective EFF and ANC positions, it has now become clear that there is a serious difference of opinion on the nature of the state’s role in the land reform process and although the suspicion has always been that it would provide a future obstacle, it is perhaps surprising that it has only now come out into the open.

In essence, the major difference between the EFF and ANC centres around the EFF concept of the state exercising custody of all land, making it available as and when needed. The precise concept of custodianship does not on its own have a clear legal content and its implications have also not been made very clear by the EFF. Obviously, the main question that arises is whether it amounts to full-blown nationalisation or something similar.

In a press conference of 3 June 2021, President Ramaphosa stated that the blanket type of approach of the state owning all land may impede the entrepreneurial aspirations of the people and that the ANC approach is to give people fixed title, as they want ownership of land which will enable them to approach banks for loans, apply for water licences etc. It is therefore difficult to see how the ANC and EFF will be able to agree on this point, but this is all being played out as part of a somewhat complicated game of chicken, essentially between three groups: the Ramaphosa wing of the ANC, the Radical Economic Transformation wing of the ANC and the EFF. The EFF threat is not to support the constitutional amendment. Without the EFF and ANC both agreeing on the text, there will be no change to the Constitution, as a two-thirds majority will not be attained. This would mean that the ANC would not be in a position to implement the 2017 NASREC resolution on land reform, and would certainly heighten tensions between the different wings of the ANC. 

There are indications that President Ramaphosa has had to concede within the ANC that the pace of land reform has been too slow and that this concession may have been required to ensure sufficient support for the suspension of the ANC’s Secretary-General.[1] One can be sure that the EFF is aware of these internal ANC tensions and will try to capitalise on them, by advocating a much more extreme position than had been agreed initially between themselves and the ANC.

The other issue that has arisen is an ANC and EFF proposal to exclude a court signing-off on nil compensation being paid in any specific expropriation. However, this would not exclude the role of the courts in any review, as aggrieved parties will always retain their right to legal recourse. The reason it has been proposed is ostensibly to speed up the land reform process.

It should be noted that the Parliamentary legal advisers commented in the meeting of 28 May 2021 that if material changes are proposed to the published Bill, a new process of public consultation would have to be commenced. In such an event, the whole legislative process will have to continue to make provision for this and it is difficult to predict when it will reach its conclusion.

The main problem remains: is the state able to manage a land reform process?

The HSF has consistently stated that in the heated public debate over expropriation without compensation, no attention has been placed on actual land reform issues. It has all been about changing the Constitution to permit expropriation without compensation, on the assumption that that will solve all problems.

However, land reform’s problematic issues go far beyond expropriation without compensation. Prior to an overall legislative, administrative and financial framework for land reform being established, clarity first has to be obtained on a number of different issues which may have a direct or indirect effect on any expropriation process. The most crucial question is whether a transparent and effective decision-making process is going to be run, given the “increasing evidence of corruption by officials, the diversion of land reform budgets to elites, lack of political will and lack of training and capacity”?[2] 

It is extra-ordinary that in this whole land reform debate, no-one raises the question about the need for an adequately resourced and staffed land reform agency to run the implementation process of a land reform policy. 

This question arises against the background of a 2019 Constitutional Court judgment about the Department of Rural Development and Land Reform’s patent inability to process labour tenants’ land claims under the Land Reform (Labour Tenants) Act, leading the Court to approve the appointment of an outside entity to fulfil the Department’s legislative obligations. 

The Court stated the following in its judgment:[3]

In this, the Department has jeopardised not only the rights of land claimants, but the constitutional security and future of all. South Africans have been waiting for more than 25 years for equitable land reform. More accurately, they have been waiting for centuries before. The Department’s failure to practically manage and expedite land reform measures in accordance with constitutional and statutory promises has profoundly exacerbated the intensity and bitterness of our national debate about land reform. It is not the Constitution, nor the courts, nor the laws of the country that are at fault in this. It is the institutional incapacity of the Department to do what the statute and the Constitution require of it that lies at the heart of this colossal crisis.

A last question on Government’s ability to manage any land reform process, is simply: will sufficient funding be made available, in stark contrast to the purely nominal funding dedicated to land reform up to now? According to National Treasury’s 2021 Budget Review, land reform, restitution and farmer support takes up only 0.35% of total Government expenditure (including debt service) for 2021/22. 

It is striking that these issues are given no prominence in the emotionally charged public debate. The focus has been almost exclusively on the principle of expropriation without compensation and the supposed need for the Constitution to be amended to cater for it.

Conclusion and reflections of a more general nature

The fact that no attention has been paid to the underlying problems of the land reform process inevitably brings one to the following question: why does Government continue to come up with grandiose schemes in various areas, which are of such magnitude and complexity, that the existing state apparatus (or a-still-to-be-established one) cannot possibly be expected to cope? The state simply has no institutional capacity to deal with challenges of these dimensions.

The most obvious example outside of the land reform debate that comes to mind is that of the proposed National Health Insurance (NHI). Whilst we are firmly in favour of the principle of universal health care, how can Government think it can put in place a single payment system for all health expenditure in the country, on the back of a badly functioning public health system and a badly regulated private health sector? Surely the public and private health care sectors should first need to be properly managed and regulated to avoid an even bigger mess? The problem is similar to that in the land reform sphere: grand political statements are made about the fundamental right to universal health care, without any attention being paid to the already existing reality. The reality is that the serious problems confronting public and private health care in South Africa first need to be solved, precisely to enable universal health care to be implemented.

In general, Government needs to be more realistic and modest in its policies, and less grandiose in punting complicated solutions to everyday issues. The lacking element is that some sort of analysis first needs to be done as to what is actually achievable in the short to medium term and what administrative framework is required for a successful implementation of any policy. Government has to learn to accept that it is bound by its own financial and staffing limitations and that it cannot continue to act as if everything will miraculously fall in place at some later stage. If it continues to be unwilling or unable to accept these limitations, the price which the country will have to pay for its failures will be very high.

In addition, the principle of accountability, which is sorely lacking in most Government entities, must be applied rigorously and the practice of cadre deployment has to end. Government must also attempt to get its head around partnering (in a real manner) with outside entities, which have particular technical or professional expertise which is not available in state institutions. Until the mindset in this regard changes, little improvement can be expected.

If you think we are being unfair, try the following comments from the most recent Auditor-General’s report:

Auditees have a poor track record in dealing with irregular expenditure and ensuring accountability. The year-end balance of irregular expenditure that had accumulated over many years and had not been dealt with (through recovery, condonement or write-off) stood at R262,03 billion.[4]

Two-thirds of departments and 44% of public entities did not comply with supply chain management legislation, resulting in unfair or uncompetitive procurement processes.[5]

The financial state of provincial health and education departments needs urgent intervention to prevent the collapse of these key service delivery departments. In comparison with the other departments, these sectors (which constitute 30,2% of the total expenditure budget) are in a particularly bad state.[6]

The Auditor-General’s comments make the enormity of the challenge crystal clear.

Anton van Dalsen
Legal Counsellor
anton@hsf.org.za


[1] See in this regard, Ferial Haffajee’s column of 10 May 2021: https://www.dailymaverick.co.za/article/2021-05-10-inside-the-nec-how-ramaphosa-dealt-ace-a-double-blow-and-scored-a-victory-for-anc-reform/

[2]The Report of the High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, 2017, Chapter 3, Dr AninkaClaassens, p. 300.

[3]Mwelase and Others v Director-General for the Department of Rural Development and Land Reform and Another (CCT 232/18) [2019] ZACC 30; 2019 (11) BCLR 1358 (CC); 2019 (6) SA 597 (CC) (20 August 2019).

[4] Consolidated General Report on National and Provincial Audit Outcomes, PFMA 2019-20, Auditor-General, page 11.

[5] Page14.

[6] Page 62.