Constitutional Law

Ad Hoc Committee to Amend Section 25 of the Constitution

The Ad Hoc Committee to Amend Section 25 of the Constitution met to hear the opinions of four experts: two experts in land valuations and two constitutional advocates who were familiar with section 25.

The first expert was a Land Valuer who had conceived a rather radical plan for resolving the matter of land reform entitled “Encouraging millions to become millionaires”. If section 25 were marginally changed, the Land Valuer stated that it could be done. The first thing was for the President, by decree, to grant perpetual tenure to all unregistered land users. The President had to turn South Africa into a world beating tax haven by replacing income tax and VAT with 100% tax on land rates and he had to declare a R2 500 per month basic income grant for everyone.

The problem of perpetual tenure was solved by simply saying that everyone who occupied 250 sqm of land would be given perpetual tenure. Everyone would immediately own land. 250 sqm was necessary because it was the smallest size of land that could provide fruit and vegetables for a family. Those whose land was taken had to be compensated over the next 16 years through land tax rebate. Only vacant or unused land with no man-made improvements could be expropriated.

Members asked which tier of government would be the recipient of land taxes: national, provincial or local government? Were occupied areas such as Sophiatown and District 6 to be left alone? What was his view of foreigners who owned land in South Africa? Some people would get 1 000 sqm, but what about those who owned more land? Members noted that secure tenure could happen if people had 250 sqm of land. How would that happen? Would it happen by decree? How would it work in the semi-arid regions of the land? What was the form of land register he envisaged for those who had 250 sqm?

An advocate, with many years of constitutional law experience, started from the assumption that the intention was to bring about drastic redistribution of land and that it was a political and constitutional imperative. There were three spaces in section 25 which allowed Parliament to legislate for redistribution. It was important to recognise that those three spaces were large and wide open. They went further than expropriation without compensation. He did not think that expropriation without compensation was necessary, but even if he were wrong, it was not enough. Much more would be needed to bring about redistribution.

A Constitutional Court judgement had already confirmed one space that had been overlooked: the taking of property constituted expropriation only if the state was taking it for itself. However, if the state took from some people and allocated to others, then it did not constitute expropriation and consequently was not subject to just and equitable compensation. Compensation simply was not required.

The advocate warned the Committee that if any amendments to make explicit expropriation without compensation were made, Parliament had to be very clear about what property it was referring to. The discussion was about land rights and the imperative for re-distribution went to land rights. But, if Parliament did not limit expropriation without compensation, that might impact on all sorts of other rights on which Parliament might not have intended to impact on.

He suggested that an Act of Parliament could create legislation that said that where land had historically been in white hands, that land could be presumed to be the results of privilege, unless proven otherwise by the owner. Then the problem of record keeping became the owner’s problem and did not lie in the state’s hands.

Members asked the advocate which of the three spaces he would select to make the Amendment. How would one redistribute land without going through the state? What modality could be used for the distribution? Would a different court think differently? What was the impact of the AgriSA judgement?

The Acting Valuer-General proposed that Parliament make current use more explicit in section 25(5). He suggested that the Constitution should refer to current use value as that would make it easier to determine market value. It was difficult too equate current use with market value. Value referred to a number and it would make his job a lot easier if everything in the formula for determining land value were in numbers. He added that if the Committee elected to look at all the factors that had to be considered in valuing land, only those factors that were practical and could be practically used, should be included. His big problem was that his officials were usually unable to determine the direct subsidies that had been received for a particular property. He also suggested that getting the current value of the property should be work that was shared between all state entities, including the South African Revenue Services. He acknowledged that theoretically one could get to zero compensation using the prescribed factors.

Members asked if the Acting Valuer-General had come up with a formula to implement the “just and equitable” criteria. What had the market reaction been to the implementation of the just and equitable rule? What were the formula indicators for the five points in the Constitution? How could other state institutions assist in determining land value? Did the Acting Valuer-General want to see his proposed changes in the Constitution or in the regulations?

A second advocate stated that his personal view, borne out of his involvement in land matters was that there was no need to change the Constitution. Despite a clear constitutional reality, the country had failed to pass legislation pursuant to sections 25(6), tenure security, and 25(5), access to land, which was redistribution. However, in light of the Committee’s obligation to make an Amendment, he presented proposals for various amendments. He provided extensive reasoning for his proposed changes to section 25 but warned that Parliament could not allow the taking land without compensation as the default position as there were times when it would be unacceptable, as in the Xolobeni and Hlabisa situations.

The advocate proposed to strengthen the judicial arm or to allow another independent and impartial tribunal or forum, headed by a judge with four or five other members, and set up for five years, to deal with the issues of land reform without delay. He proposed the delinking of expropriation without compensation so that land would be transferred as soon as it was expropriated. Going to court about compensation would happen after the expropriation had taken place. The three processes had to be handled separately: expropriation was the business of the state, compensation was the business of the judiciary or an independent tribunal, and valuation was the work of the Office of the Valuer-General. He suggested adding to section 25(5) [with due regard to the economic and social circumstances of the intended beneficiaries] so that land distribution did not enrich the elite.

Members asked what he meant by a tribunal and whether it would be sufficiently independent if it were set up by an Act of Parliament. The idea of delinking expropriation and compensation was helpful, but would that proposal not affect nation-building? The judiciary should be a last resort, but was it possible that there might be judges who were not transformed or progressive? Did the advocate support the restitution process and what were his views on that process? During the CRC process, there had been a call for a ceiling for the amount of land above which no one could own land. Did the advocate have a comment? Did the advocate think that banks should be compensated if they held mortgages on land expropriated without compensation or expropriated for less than the mortgaged amount?

For the full meeting report, click here.

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