South Africa’s New Land Expropriation Law
President Cyril Ramaphosa assented to the new Expropriation Bill on Thursday, 23 January 2025, after 20 years of ongoing debates, legal challenges, and discussions around land reform in South Africa.
The Expropriation Act 13 of 2024 (the new Expropriation Act) has sparked much controversy, primarily because the Act permits the government to expropriate land without compensation under certain conditions.
Those in favour of the new Expropriation Act argue that the Act is necessary to address historical land inequalities and to promote social justice and further maintains that the Act aligns with constitutional provisions and is essential for transformative land reform. Those against the new Expropriation Act, including political parties such as the Democratic Alliance (DA) and the Inkatha Freedom Party (IFP), contend that the Act is unconstitutional and infringes upon the right to private property.
A closer look at the changes introduced by the new Expropriation Act and the aspects of the Act that are controversial may provide a better understanding of its potential implications.
The Constitution
Private property rights are protected under section 25 of the Constitution. While section 25 protects private property rights, it also provides for property expropriation in terms of the law of general application for a public purpose or interest, with just and equitable compensation. It is important to note that Section 25 does not explicitly prohibit expropriation without compensation, only that compensation must be “just and equitable.”
Furthermore, the limitations clause, under section 36 of the Constitution, allows for the limitation of rights in the Bill of Rights, but only if such limitations are reasonable and justifiable in an open and democratic society. The limitation clause requires that the limitation be proportional, considering factors such as the nature of the right, the importance of the purpose for the limitation, the extent of the limitation, and whether there are less restrictive means to achieve the same purpose.
Property rights are contained in the Bill of Rights and therefore fall within the scope of the limitation clause, meaning that the right to property is not absolute and may be limited where it is reasonable and justifiable in pursuit of a legitimate public purpose or interest.
The Old Expropriation Act
The Expropriation Act 63 of 1975 (the old Expropriation Act) was seen as outdated and restrictive, focusing on state-driven development projects over land reform. The old Act permitted expropriation only for public purposes, with compensation primarily based on market value, often making land reform costly. Additionally, it granted broad powers to the Minister of Public Works with minimal oversight, provided limited opportunities for public participation, and offered little legal recourse for property owners. Since the old Act predated the Constitution, it did not align with constitutional principles of justice and fairness, creating challenges for land reform. These shortcomings ultimately led to the development of the new Expropriation Act.
The New Expropriation Act
The new Expropriation Act repelled the old Expropriation Act and expanded the scope of expropriation to include land reform and redistribution. The new Act provides that compensation must be just and equitable, considering factors such as the land’s current use, the lands acquisition and usage history, the market value, state investment and the purpose of expropriation.
A major point of controversy surrounding the new Act is the specific introduction of expropriation without compensation, or nil compensation, in specific cases including where unused land is held solely for value appreciation, where land is abandoned, where unused land is state-owned land, or where land is acquired through state subsidies. However, the new Act also requires public participation and engagement with affected parties before expropriation occurs, while also granting property owners the right to challenge expropriation decisions in court, thereby attempting to ensure fair procedures and legal safeguards.
Although the new Expropriation Act has attracted significant criticism, it is important to note that it also promotes greater transparency, public consultation, and legal oversight.
Controversy
The new Expropriation Act has led to considerable discussion and concern across various sectors, including businesses, property owners, political parties, and investors.
Expropriation without compensation is a major concern, not only because nil compensation is explicitly allowed in some cases, but also because it could set a precedent for broader expropriation without compensation. Some fear that the new Act may weaken property rights, discouraging investment and economic growth, or that the new Act could be applied too broadly, impacting properties and owners beyond the new Acts intended scope. Additionally, concerns have been raised about the new Act’s potential to deter investment, particularly in agriculture and real estate, as well as its impact on market stability and property values. Furthermore, some fear that the government may be overreaching its power and could misuse the law for political gain.
The Future of the New Expropriation Act
While the new Expropriation Act aims to address historical land inequalities within the framework of the Constitution, the new Act remains highly contentious, particularly regarding its provisions for expropriation without compensation. The discussion surrounding the new Act highlights the ongoing tension between land redistribution and the protection of property rights.
The concerns have led opposition parties, such as the DA and IFP, along with various business groups, to argue that the Act is unconstitutional, with plans to challenge it in court.
The new Expropriation Act’s future now rests with the courts, which will need to adjudicate whether the Act succeeds in striking an appropriate balance between land reform objectives and the protection of constitutional property rights.
