Filling the gaps in land reform

The report of the panel of experts on the development of policy on foreign ownership of land in South Africa is the product of a multidisciplinary team of highly qualified and experienced individuals. Although I am expressing myself in this piece in a personal capacity, the report itself is a product of the collective and ought to be treated as such.

Cabinet adopted the report on July 24 2007 with a directive that the panel should further elucidate a few issues before presenting it to government and its subsequent publication for public comment. It was finally presented to government on September 3.
The report has now taken on a life of its own. Following public comment, responsibility for implementation rests with the department of land affairs.

The panel was set up with specific terms of reference to recommend strategic policy options. It did not have an open mandate to consider and develop a new land reform policy, as some public reactions have tended to suggest.

The three legs of national policy on land reform—restitution, tenure reform and redistribution—remain in place and are to a great extent reflected in the Constitution. Of the three legs, it is not restitution or tenure security that will radically reverse the racial and patriarchal skewed regime of land distribution. Redistribution is at the heart and this requires informed and strategic state intervention.

Government’s desire to ascertain how the absence of policy to regulate foreign ownership affects these constitutional imperatives and the associated legislative framework prompted the establishment of the panel.

Land and the resources embedded on, over and under it are at the core of developing a non-sexist and non-racist society. Non-sexism and non-racism are founding constitutional values on which the national property regime and property relations have a defining influence. The panel also kept in mind constitutional imperatives regarding the environment and ecology and access to land for housing and shelter. Human and national security were also relevant.

The finding that South Africa does not have accurate and reliable information on the ownership of land by foreign persons and corporate entities—or on the racial and gender profiles of land ownership in general—led to the recommendation of compulsory disclosure of nationality, race and gender by all those who own land today, as well as those involved in future land and property transactions. This is not a difficult recommendation to implement, as compliance with the Financial Intelligence Centre Act has demonstrated. The offshoot will be the permanent availability of information for development purposes and measuring progress or otherwise achieving the vision of the Constitution.

Promoters and defenders of foreign investment that benefits their business interests have tended to portray most of the panel’s recommendations as having the potential to dampen the enthusiasm of foreigners for investing in South Africa. They seem to be operating from two premises. One, that foreigners desire absolute ownership in the colonial mode as opposed to other forms of security of tenure that reside in legitimate property regimes backed by constitutional guarantees and a climate where the rule of law thrives. Two, that the rich, both foreigners and nationals, are allergic to living in proximity to those who the system has made poor.

The extensive comparative studies of practices in other countries that form part of the panel’s report do not support these views. Many countries that attract more foreign investments than South Africa limit and regulate ownership of land and landed property by non-citizens; in most highly industrialised countries, billionaires live next door to students and the working class—the difference is not spatial but rather the built area size and the actual movable contents. Morbid subliminal fear and contempt of the lower classes needs to be confronted in the new South Africa we profess to be building.

The panel recommends outright prohibition or restricted foreign ownership in certain areas, such as those around international airports, military installations, international borders, strategic coastal areas, national and indigenous heritage sites and environmentally sensitive areas. Such regulation seems reasonable in any developing democratic society. The state is also called on to take the lead in imposing a moratorium on the sale of public land to foreigners until such a time when comprehensive policies on regulation of foreign ownership are in place. This may take about two years.

A surprising finding of the inquiry is that the government—including public entities such as state-owned enterprises—does not have an accurate picture of the land it owns. A recommendation to address this anomaly is that the data must be determined with immediate effect. A second problem here is that land belonging to municipalities is dealt with as the private land of corporations. How this is possible under the Municipal Finance Management Act remains a mystery. Private developers have cashed in on this and do direct urban development in many municipalities—sometimes leading to unintended urban chaos. This is clearly unconstitutional and the panel recommends that land belonging to all the spheres of government and other organs of state are deemed state or public land.

The panel found that “fronting” by nationals for foreigners, especially for corporate entities that own land or interests in land, is rife. Our recommendation is that government consider criminal sanctions, including assets forfeiture, for those implicated.

Other issues that emerged relate to change of existing land use with some foreign influence and participation. Principal among these are the development of game reserves, gated golf estates, polo fields and agricultural undertakings that are exclusively for foreign export. The finding of the panel is that it is not only foreigners but also the local elite who engage in these roles and activities. This is reflective of the evolution of class and class formation dynamics in South Africa. To the extent that these developments may have a negative effect on the affordability of land for reform and housing, some regulation by way of ministerial approval is recommended.

The bottom line is that colonialism and apartheid rendered the majority of black people non-citizens by depriving them of meaningful connections with the land—they lost their sovereignty, dignity and identity. The land question in South Africa must address itself to this historical reality if genuine reconciliation and national cohesion are to be realised.

Professor Shadrack Gutto chaired the panel of experts on the development of policy on foreign ownership of land in South Africa. The other members of the panel were Joe Matthews, Dirk Kotze, Mandla Mabuza, Danisa Baloyi (until 2006), Fred Hendricks, Leah Gcabashe (until 2006), Cecil Morden, Bonile Jack, Christine Qunta, Nothemba Rossette Mlozi (from August 2006) and Mandisa Monokali (from August 2006)

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