Breakfast with Judge Gildenhys: AGRI SA Corporate Chamber
26 MARCH 2018: MACROBERT INC.

The judge attempted to answer three questions:

Question 1: Is expropriation without compensation possible in terms of the Constitution?
Answer 1: Yes, but only in specific circumstances.

Question 2: Can the Constitution be amended and, if so, how?
Answer 2: Yes, by a 2/3 majority in the National Assembly and six (6) of nine (9)provinces in the Council of Provinces. A 75% majority is not required.

Question 3: What does the Constitution currently stipulate regarding expropriation? Subsections 25(2) and (3) deal with expropriation.
Answer 3: The wording of sub-section 25(2), namely that compensation must reflectan equitable balance between the public interest and the interests of those who are affected, is derived verbatim from the German constitution.

Expropriation is a public liability and must be borne by the community as a whole and notonly by the person whose property is taken. It would be unfair to encumber one owner more than another. Equitability in respect of a public liability is a principle adopted by French, German and American law. If we in South Africa were to deviate from this, we will be acting contrary to the position in many other countries.

Most countries’ constitutions require compensation, whether full compensation (Denmark, Norway, Russia, Kenya, the Seychelles and Lesotho), fair compensation where a balancing test applies (USA, Poland, Japan, Egypt, Namibia, the Congo and Mozambique), equitable compensation (France, Rwanda, Madagascar and Tanzania) or adequate compensation (Botswana, Malta, Uganda and Zambia). If South Africa were to scrap the equitability principle, we will be out of pace with most African countries.

Weighing up interests could sometimes result in no compensation being paid. An example of this is Greece where land held by a convent was expropriated without compensation and given to the people who worked it. In Scotland, land owned by the nobility and worked by crofters was expropriated without compensation and given to the crofters.

Expropriation without compensation is possible in South Africa. For example, where a businessman bribes a chieftain in a trust area to give him land and then evicts the inhabitants, a land claim could be lodged later in which case the businessman will not be compensated. The same would apply where someone becomes wealthier as a result of expropriation, for example where a farmer owns a farm of, say, 1 000 ha used for dryland cropping. If the state were to expropriate 400 ha of the farm in order to build a dam on the land, with the farmer receiving water rights to such a dam, it could triple the value of the remaining 600 ha.

Judge Gildenhuys referred to the report of the High-Level Panel on Key Legislation’s findings. These findings should assist Agri SA in its submission to the Constitutional Review Committee. The Panel found, amongst others, that expropriation had to date rarely been used for land reform purposes. They also found that the state’s budget forland reform was totally inadequate and had never in any tax year been used in full. The requirement to pay compensation is not the biggest obstacle to land reform. Beneficiaries of land reform become mere tenants on state land. Beneficiaries should be able to choose how restitution should take place. Communal farming does not work. Beneficiaries should decide for themselves how they wish to hold the land. At the current rate, it will take another 35 years to finalise all outstanding land claims. If the process is reopened it will- at this rate – take another 709 years to finalise.

Farmers’ land was not stolen. It was obtained in terms of then valid legislation. Most other countries only allow expropriation without compensation in very limited circumstances. With the exception of Zimbabwe, Judge Gildenhuys could find no precedent for large-scale expropriation of productive farms owned by individual farmers without compensation being payable.

There are enormous implications for agriculture should farms be expropriated without compensation.

What is the solution?

• The entire land reform process should be managed by an independent body.
• The private sector will have to contribute. A fund for land reform could be a goodidea and could even be in the form of a once-off wealth tax. A land reform levy onthe transfer of property is also a possibility. All such contributions should be paid into an independent fund and managed.
• The right of first refusal is also a possible solution. Interest subsidies and a credit guarantees have merit.
• Black farmers should be properly trained

This is a political rather than legal problem, which should be addressed within the frame work of the Constitution. In India there was a lengthy battle between the parliamen tand courts, with the property clause eventually being scrapped in total. In closing, Judge Gildenhuys recommended that all role players make use of the opportunity to provide input to the Constitutional Review Committee.

Source: Forestry South Africa