Land expropriation without compensation in South Africa continues to create unease among local and foreign residents and investors alike. However it is imperative to explore deeper insights regarding land expropriation without compensation. Which is part and parcel of the government’s commitment to land reform.
The Constitution purports that expropriation of land must be done ‘subject to compensation. This is a hurdle for any land reform legislation designed to allow the state to expropriate without compensating. Albeit, it is important to read the obligation to compensate with s 25(3) of the Constitution, which deals with how the amount of compensation must be calculated, for the specific portion of land.
Section 25 (3) of the Constitution
Provides that compensation payable must be ‘just and equitable’ of which just and equitable should reflect the following;
In light of the above it requires that the owner of the Land receive compensation. However this compensation does not have to be market value but rather that the owner of land receive what is just and equitable. Thus, if regard is given to Section 25(3)(a) to (e) the owner of the land may receive any amount that may be qualified as just and equitable in the circumstances. Furthermore it seems that there will be times when the Constitution requires that only a nominal amount of compensation needs to be paid in very special circumstances.
Section 25(8) of the Constitution provides that:
‘ No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform. In order to redress the results of past racial discrimination, provided that any departure from the provisions of this section is in accordance with the provisions of section 36(1). ’
Section 25(8) impedes on 25(2)( b ) in that the lack of compensation where a nominal amount is just and equitable. The state may be able to justify such a violation because Section 25(8) expressly provides that any departure from the requirements of section 25(2)( b ) must be done in accordance with the provisions of section 36(1) of the Bill of Rights, of which Section 36(1) can limit a person’s rights. However this limitation must be reasonable and justifiable in an open and democratic society. It must promote basic human dignity, equality and freedom. And with this said the following factors must be given consideration;
( a ) the nature of the right;
( b ) the importance of the purpose of the limitation;
( c ) the nature and extent of the limitation;
( d ) the relationship between the limitation and its purpose; and
( e ) less restrictive means to achieve the purpose.’
Key take home in respect of Section 25 of the Constitution;
This raises the question of whether there is a need to amend Section 25 of the Constitution. Bearing in mind that Section 25(3)( a ) makes the ‘current use of the property’ a relevant consideration when determining the amount of compensation. A farming operation vis-a- vis a open piece of land that is not in use will be priced differently. The furtherance of land reform must be carefully considered wherein the expropriation of land is given to those without access to land.
Giving regard to the above the expropriation without compensation may work in areas where the state carefully identifies land. That was historically acquired in an unjust manner or where the state heavily subsidised the owner’s thereof. Thus the land being expropriated should ideally be land that was not invested by the owner and remains not in use.
Consequences if Section 25 is amended without careful considerations ,-
Section 25 of the Constitution protects property and not just land. Thus this could imply that state could retain or obtain property without reasonable compensation. In order to fully understand the magnitude one must look at the definition of property which is inclusive of movable an immovable property.
Given the far reaching effects of Section 25 and what is deemed property, it may have a detrimental effect on foreign investment if the policy space and regulations. Therein are not given sufficient, careful and rational consideration.
In closing, the government can implement a policy of expropriation without compensation via legislation. But such legislation will have to be very carefully thought out so as not to unconstitutionally infringe on Section 25. Nor fail a rational review test with carefully thought out legislation.
Baker McKenzie Report 2022: The rapid rate of competition law development across Africa
The Importance Of Good Legal Advice When Doing Business In Nigeria Today – Morenike George-Taylor
Continue Reading
Medical Negligence and Common Factors Contributing To Medical Negligence Cases In South African Hospitals
Click to comment
In a groundbreaking move to drive innovation and entrepreneurship across Africa, the African Union and its partners, including Google and Africa Practice, have launched the AU Startup Policy Framework and Model Law. The Policy Framework and Model Law articulate principles, recommendations, and policy innovations to tackle the challenges hindering startups in Africa. It provides specific sample clauses to guide African Union Member States in developing or updating their national startup legislative and regulatory governance arrangements.
The Policy Framework and Model Law, developed in cooperation with Google in line with its Memorandum of Understanding with the African Union Commission, is set to harmonise approaches to enabling startups and innovation, in line with the African Union’s broader harmonisation objectives.
Speaking during the launch held during the African Union 6th Mid-Year Coordination Meeting that brings together the African Union, the Regional Economic Communities, the Regional Mechanisms and the African Union Member States, H.E. Albert M. Muchanga, African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, said, “We are excited about the new prospects for our continent unlocked by the adoption of the Startup Policy Framework and Model Law which is set to leapfrog the startup ecosystem in Africa. As you know, small and medium-sized enterprises, including startups, represent most businesses in all sectors and are the primary source of job creation. Specifically, startups spur development by creating jobs in the digital economy, employing 34,000 people across the continent. Unfortunately, out of 1000 unicorns globally, only seven are in Africa. This is primarily due to complex regulations, limited funding, a scarcity of skilled labour, and fragmented markets in Africa. Therefore, the framework is expected to unlock some of these hurdles and set a strong foundation for the growth of Africa’s startup landscape, projected to expand to USD 10 billion by 2056.”
H.E. Albert M. Muchanga went on to highlight that “Africa is a young continent, by 2050, the continent will account for 25% of the global population. Governments need to make the provisions to enable capital flow for the burgeoning ideas coming out of Africa. We need to create an environment that enables these innovative minds to catapult the continent to economic prosperity, and this framework is what enables this.”
While there’s no universal formula for fostering innovation and startups, the framework outlines principles derived from successful models. It is a call to action to ensure that startups — particularly those led by women and youth can be better supported. This Policy Framework and Model Law holds the potential to address gender disproportionality in financing flows, inspiring a new wave of innovation and growth.
Marie Wilke, the Chief Innovation Officer at consulting firm Africa Practice, said, “The adoption of the Startup Policy Framework and Model Law marks the beginning of an exciting but potentially transformative phase. We must maintain momentum behind engagements with regional economic communities (RECs), regional organisations (ROs), and member states, to update and enact regional legal frameworks and national laws. Innovation is as much about finance and people as it is about drive. The future of Africa’s small and new businesses depends on our joint and decisive efforts to support them, paving the way for The Africa We Want.”
