What section 25 means for land reform

 

 

LAND

A constitution, former Chief Justice Ismail Mahomed once wrote, reflects the soul of a nation. In the case of South Africa, he added, the Constitution records our collective vision, aspirations and reminds us never to repeat the past. If we accept this, we should accept the Constitution’s dynamism to meet the evolving society. Ordinarily the focal area for constitutional changes are the courts as they “develop” the law to reflect new societal mores. The text of the Constitution is usually the departure point, but never the end point. The latter is necessarily indeterminable — interpreting a law is never truly the dogmatic application of precedent, but an exercise in imagination.

Of all the 17 constitutional amendments of the past 25 years, none has been as controversial as the amendment to the inaptly named “property clause” in section 25. For obvious reasons too. The violent confiscation of land from Africans by Europeans was the key feature of colonial conquest. The struggle for freedom was driven by the desire to change the inherent unfairness in the property relations created by white settlers. When the Constitution was negotiated in 1993, the expectation from oppressed Africans was that it would primarily be about altering the unfair property holdings, particularly land.

But the true political dynamic of the “transition” resulted in an unhappy truce. Property relations were not upended at once. The design was that property relations would change over time, guided by a supreme Constitution interpreted and applied by an independent judiciary. So, if you were white and a property owner on April 26 1994, you remained the owner on April 27 1994, despite the “revolution” of 1994. That remains the case largely to date. Hence, the criticism that rather than reversing colonialism, the Constitution has cemented it.

The Constitution is the wrong target. Post-liberation politics have failed the Constitution. Legal constraints to governmental power are necessary. What has slowed down transformation of property relations are the design flaws, inefficiencies of the land administration system, endemic corruption and misapplication of the Constitution, particularly the slavish adherence to

market-driven compensation models. For its part, the Constitution is necessarily open-ended and transformative.

Prevailing political consensus, right now, is that section 25 should be amended to allow for expropriation of land without compensation — although the justification appears to have shifted. We were initially told that an amendment is necessary because section 25 is a constraint to transformation of property relations. Now it is said that an amendment is necessary to “make explicit what is implicit” in the Constitution. The weakness in this explanation is self-evident. If the Constitution allows, implicitly, for the compulsory expropriation of land without compensation, then why amend it instead of enforcing it. Nevertheless, if we accept democratic outcomes, our representatives will sometimes make decisions that are unintelligible when subjected to logic, but in the language of politics make perfect sense.

The amendment is contained in one line, yet carries so much significance. The line is a proviso tucked somewhat uncomfortably in section 25(2)(b): “Provided that in accordance with subsection (4a) a court may, where land and any improvements thereon is expropriated for the purposes of land reform, determine that the amount of compensation is nil.” (Many proponents of the amendments will be disappointed that the venerated phrase “expropriation without compensation” did not make it into the final draft proposed text.)

What does the proviso mean?

The ultimate justification for the amendment was to “make explicit the implicit”, but does it? On the most sensible reading, the proposed section means that a court may determine that in a particular case, land or improvements on land may be expropriated with no compensation. But when will this be the case? How does an owner of land know that their land is liable to be taken with no compensation? These questions are not answered in the proviso, but in another proposed amendment, in subsection 4a, which enables national legislation to be passed to set out these instances.

There are further ambiguities. Assuming that land falls within the category identified in national legislation for expropriation with no compensation, how will a court determine if it should be taken with no compensation? The answer to this, perhaps lies in the old formulation of “justice and equity”. So if land falls in a category identified by national legislation for compulsory taking with no compensation, a court must apply the formula of justice and equity to finally determine if it should in a specific instance be taken with no compensation.

What are the implications of this proposed amendment? We should draw a distinction between two separate acts. The act of expropriation and the decision to compensate the owner of expropriated property. The state retains the right to expropriate, but not the power to decide on compensation. The power to decide whether compensation for expropriated land should be paid or not lies with the courts, not the government. This has always been the case. The existing section 25(2)(b) provides that any compensation to be paid to a property owner must either be agreed to “or decided or approved by a court”. If we should assume that there will be rarely instances where property owners agree to part with valuable property for no consideration, the amendment changes nothing insofar as the powers of the courts are concerned.

The second facet of the amendment is the category of the property to which it applies. The amendment is limited to “land” and “improvements on land”. Plainly, it excludes other forms of property, such as stocks, pensions, cash and credit. In limiting the class of properties to land, the amendment follows the proposals of the ANC at its December 2017 Nasrec elective conference and the resolution of Parliament, adopted in February 2018 prior to the national consultative hearings on the necessity for the amendment. (It is notable that the Zimbabwe constitution favours an even narrower category of “agricultural land” for no compensation.) Many will view this in a positive light. Yet by excising from the scope of the amendment other forms of property the implications may turn out to be negative.

The argument in favour of retaining the present formulation has always been founded on the flexibility of the notion of “just and equitable”. Particularly, it has been argued that a compensation regime based on justice and equity factors in history, present use and purpose of the acquisition. This model may allow for above market-based compensation, for instance to land holders of Xolobeni, expropriated to make way for mining, while it would contemplate for below market value compensation to commercial land holders expropriated to make way for low cost housing. By fixing the target of “nil compensation” to land, the consequences might set the default of market-based compensation for all other categories of property.

This is a retrogressive step in a constitutional dispensation whose aim is to resolve unfair patterns of property holding. When one takes into account that land taken in 1913 has since transmogrified into stocks and other items of value, focusing on land and improvements on it might only scratch the surface of property relations, leaving the property regime unchanged.

There is a further definitional question: What precisely is land, or improvements on land? It is not hard to conceive of disputes about whether the business of farming is an “improvement on land” or whether a structure, such as a house, is an improvement on land. Perhaps, these will be contained in national legislation, or to be decided by courts, by reference to the common law.

Another feature of the amendment is the role of national legislation. Not all land will be liable to compulsory acquisition with no compensation. Only those categories identified in national legislation. The framework of section 25 is premised on the idea of “striking a balance” between the interests of the land owners and those without land. National legislation, however, may tip the balance, where justifiable. But it would be arbitrary to identify a particular piece of ground for expropriation for no compensation. Only the identification of general categories will pass constitutional muster. Factors such as history of acquisition, current use and state investment, already contained in section 25, might be helpful pointers towards the identification of the classes of land.

Although not all land is liable for compulsory taking with no compensation, the proviso is even narrower. Only those categories of land taken for “the purposes of land reform” can be taken for no compensation. “Land reform” is not a term of art. But it is taken generally to refer to three pillars: land redistribution, restitution of land and land tenure security. Recently, some commentators have added “land development” as the fourth pillar. Importantly, however, the amendment does not use the constitutional phrase of “public interest”. Instead, it reduces the scope of public interest by restricting the application of the “nil compensation” clause to land taken for land reform. If land is needed for other public interest reasons, just and equitable compensation would need to be paid.

Finally, the amendment returns into the spotlight the rule of law. The centrality of courts as arbiters of disputes in society is entrenched in the Constitution. Not only is the law supreme, judicial pronouncements are final and binding on other organs of state. The amendment affirms this. Only a court may decide whether compensation is to be paid. A flexible standard that is just and equitable should still be applicable in cases of disputes over compensation. Unless legislation further elucidates the content of justice and equity, courts will operate from a blank slate. Many will view this as slowing down land reform, because disputes about compensation are notoriously slow to resolve in courts. Yet the rule of law is a crucial safeguard against the rule of the strong.

Another important element of the rule of law is absence of wide executive discretion. The amendment curtails this by leaving the contours of the law to the legislature, which should define three important aspects: Which land, for what payment and for what purpose? Because ours is a representative government, not only should citizens participate in the constitutional amendment process, they should also focus their attention on the subsidiary legislation as much will turn on its content.

Bearing in mind the emotional, intellectual and financial investment that has gone into the project of “expropriation without compensation”, was the exercise worth it? In one sense, yes. It brought home the reality that land reform must be anchored in the rule of law. And many now appear to accept this as true. But in another sense, no. The true challenge of land reform still lies in the combination of weak and dysfunctional institutional structures, corrupt officials, greedy land owners, absence of a people-centred ethics in the political class and failures of the legislature to translate the Constitution into tangible laws. It is by refocusing the debate to these known challenges that land reform can be meaningful. And no constitutional amendment can resolve this challenge.

Advocate Tembeka Ngcukaitobi is the author of The Land Is Ours: South Africa’s First Black Lawyers and the Birth of the Constitution

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Tembeka Ngcukaitobi
Adv Tembeka Ngcukaitobi is a South African lawyer, public speaker, author and political activist. He is a member of the South African Law Reform Commission.
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