/ 14 July 2017

Land Bill is a good, if flawed, start

Secure tenure: Occupiers could use their land as collateral for financing if the Communal Land Tenure Bill is passed.
Secure tenure: Occupiers could use their land as collateral for financing if the Communal Land Tenure Bill is passed.


Of all the programmes falling under the umbrella term “land reform”, communal land rights have arguably been the most complicated, and certainly the most neglected. For communal occupiers in the former homeland areas, legally insecure tenure has been a way of life for the better part of a century, despite the fact that Section 25 (6) of the Constitution provides for legally secure tenure or comparable redress.

After years of protracted consultations on a policy position, the department of rural development and land reform has finally published the draft Communal Land Tenure Bill for public comment. The deadline is September 6.

It is hard to believe that communal occupiers still use “permission to occupy” (PTO) certificates, which owe their origin to the 1936 Bantu Administration Act. These tenure rights are nontradeable, and ownership of the land is still vested in the state, which means that PTOs have little value as collateral and cannot be used as security to obtain a loan.

Although certain communal areas have ample natural resources suitable for agricultural production, development has been hindered by a lack of access to finance because of the precarious nature of their tenure rights.

Consultations have been dominated by two schools of thought: ownership rights and institutionalised use rights. The former argues that ownership rights are the only way to mainstream the communal areas into the formal economy as it will empower occupiers with a right that has value, is tradeable and can be used to obtain financing.

The latter argues that ownership rights will allow occupiers to be exploited by unscrupulous lenders and developers, and that the state should retain ownership to prevent the land from falling into the hands of noncommunity members. They also say occupiers should receive such rights to provide certainty, prevent gender discrimination and allow for land to pass via succession – but that it should not be freely tradable.

Although the intention behind institutionalised use rights may be noble, it is patronising because it implies that occupiers cannot make informed decisions about their property.

The draft Bill finally opted for the transfer of ownership rights. It makes provision for the minister to transfer ownership of the land a community resides on to the community. The community can choose whether they want a Communal Property Institution (CPA), a traditional council or any other body approved by the minister to administer the land.

Although the land in its entirety is transferred to the community, they can decide internally what legal form individual allocations to members will take, namely leasehold, use rights or full ownership.

From an agribusiness point of view, this is a huge step towards creating an enabling environment in those areas to develop commercial agricultural and associated enterprises. If ownership is transferred, community members can decide to use their land as collateral to obtain the financing needed to build infrastructure and buy the inputs to run a commercial farming operation.

But there are still limitations. For example, a 60% community resolution is required to encumber the land, but at least the community itself is empowered to make that decision, whereas the minister’s consent was previously required.

Also, the administration of communal land was a hotbed of contestation throughout the consultation process, with traditional authorities and CPAs often clashing. So, while it is good that the community is empowered to choose for itself, the Bill is likely to be opposed by traditional authorities. And its definition of “communal land” seems to go further than the initial policy discussions.

Provision is made for all land acquired under the redistribution process, as well as restituted land, to fall under the ambit of this Bill.

Provision is even made for the minister to acquire more land to expand the communal areas. This can negatively affect the property rights of existing land reform beneficiaries.

Finally, the minister is given full discretion to determine the existence of a right, the extent of that right, and whether to upgrade that right to full ownership. Although many communal occupiers’ rights are not formally recorded, they are recognised by law and protected by the Constitution.

So, while the Bill is headed in the right direction, it contains some fatal flaws that will need to be addressed before it is enacted into law.

Theo Boshoff is manager of legal intelligence for Agbiz, the Agricultural Business Chamber