Land expropriation without compensation: Implications of a seismic shift – BizNews

By Terence Corrigan

If there was ever any doubt that a reckless mishandling of land policy represented a real threat to South Africa’s future, the ANC’s recent national conference has put that to rest. Its resolution on land expropriation without compensation constitutes a profound danger not only to the agricultural sector, or to the economy as a whole, but to the rights and prospects of South Africa’s citizens.

Committing to expropriation without compensation is merely the latest (dare we say most ‘radical’?) step in a long-running progression of policy and legislation. The effective nationalisation of riparian and mineral rights, proposals around mining and land policy, draft expropriation legislation – among other things – have all been intended to strengthen the hand of the state to ‘resolve’ South Africa’s socio-economic problems. Nowhere has this been more visible and visceral than in relation to land reform.

This must be understood for the substantively ideological impulse that it is. The constitutional protection of private property was something that was accepted with reluctance by many both within and outside the ANC during the transition. ‘Property rights’ have regularly been condemned as a hindrance to socio-economic upliftment of South Africa’s poor. Or they have been dismissed as a ‘sunset clause’, always destined to be repealed. Rather – so this argument goes – an activist state needs the space to upend and remake South Africa’s ‘property relations’.

Herein lies the rub – or rather, one grating rub among many.  There is as yet no certainty on the form that a compensation-free expropriation regime would take, or how freely it would be applied (an implausible caveat was that expropriation without compensation would be undertaken so as not to disrupt the economy). It was, however, made clear that this would involve amending the Constitution.

It is well-nigh impossible to conceive of a situation in which property rights would enjoy any meaningful constitutional protection if the state is to be empowered to seize the holdings of its citizens without offering anything in return – certainly not if this is to be done on a scale that would leverage a noticeably more rapid pace of land acquisition, as its proponents seek to achieve. True enough, expropriation without compensation might be structured to require compliance with administrative process, and some recourse to the courts might be offered. But, ultimately, the degree of power the state would define for itself by such a move, and the potential for intrusion into the lives and livelihoods of its citizens would imply that property rights would effectively cease to exist.

Rather, property would take on the character of a conditional privilege to be granted and repealed by state order. 

This should give pause to those who might applaud the thought of impending state-sanctioned land seizures. What this stands to produce is not redress in favour of South Africa’s poor, but the accumulation of assets and power by the state.

This is deeply ironic. In the 1990s, the ANC put forward a very worthy intention: ‘a new system of just and secure property rights must be created, one which is regarded as legitimate by the whole population’. The emerging reality is far removed from this. One need only look at the course that land reform has followed in recent years.

Land reform was a necessary policy goal in 1994, and remains so today. There is much to criticise in its implementation, but as much to criticise in the way it has come to be understood by government. No longer is the goal to transfer ownership of land to the ‘beneficiaries’ of redistributive programmes. The focus is increasingly on land coming under state control, and then leased (at a fee) to users. This is clearly articulated in the 2013 State Land Lease and Disposal Policy. Rather than nurturing property owners, the policy seeks to create tenants, farming according to the dictates of officials. This is especially so for those engaged in small-scale or subsistence farming: they are excluded from acquiring ownership. Those able to run commercial operations may qualify for an option to purchase, after having farmed for 50 years.

Professor Ruth Hall of the Institute for Poverty, Land and Agrarian Studies at the University of the Western Cape responded to this with a biting analysis. Among her criticisms were that it rested on a raft of false assumptions about agriculture, poverty and the income that might be derived, and that it assumed management capacity that did not exist and held the potential for abuse by patronage seekers. But her most scathing comment referred to what might be described as the foundational assumptions of the policy: ‘This is a policy that says that black people are not to be trusted with land.’

This is by no means theoretical. Subsequent work – by Prof Hall and Prof Thembela Kepe – in the Eastern Cape paints a dismal picture of what land reform is producing in reality. Perhaps most noticeable is the lack of secure tenure – most ‘beneficiaries’ of land reform had no leases, let alone title. This made it next to impossible to access other forms of support, or to contemplate improvements. Large vested interests, meanwhile, have been able to profit off the situation, involving themselves as ‘strategic partners’, something that the authors describe as elite capture – a concept by now comprehensible to most South Africans, and an ever-present danger where a government arrogates to itself too much authority.

This approach has brought neither justice nor security. Hall and Kepe pose the provocative question: ‘Without redistribution of power and wealth to those who are the ostensible beneficiaries, is it even land reform?’

The answer is clearly no, if by land reform we mean that land and the opportunities that it might create are to be made available to those who have been deprived of them. At some point, this must involve a recognition of the independence of its beneficiaries and of ownership and property rights.

Regrettably, expropriation without compensation takes us in the opposite direction. It offers little but to degrade a necessary protection that South Africans need, both to safeguard their economic interests and their rights as citizens. Should this go ahead, the implications for both our economy and our politics will be ruinous.

*Terence Corrigan is a Policy Fellow at the Institute of Race Relations, a think that promotes political and economic freedom, 

Read the article on BizNews here.