[ad_1]
The controversial Expropriation Bill has been widely rejected since its introduction in 2015. Consequently, it has been the subject of several amendments culminating in the Expropriation Bill of 2020 (the bill).
The bill received the seal of approval from the Chief Legal Counsel from a constitutional perspective and was published in the Official Government Gazette on October 9, 2020. It will now be subject to the process of consideration, debate and public consultation in Parliament before it can be signed into law by the president.
Compensation ‘nil’ for expropriation
The most controversial feature of the bill is that it gives the state the right to expropriate the property without compensating the owner.
Initially, Parliament reasoned that to allow expropriation without compensation, section 25 of the Constitution should be amended to explicitly allow it. However, since this proposed amendment has not yet been finalized, the bill is written in accordance with the section as it currently stands.
Article 25 stipulates that compensation for expropriation must be fair and equitable taking into account all relevant circumstances.
Consequently, if the State expropriates property in exchange for “nil” compensation, it must be fair and equitable to do so in the circumstances.
The circumstances are dealt with in clause 12 (3) of the bill:
- When private land is abandoned or used simply as market investment and not for development and income generation;
- If it is state land and is not being used by a state entity in accordance with its primary mandate;
- When the market value of the land is equal to or less than the current value of the direct state investment or the subsidy in the acquisition and improvement of the land; Y
- When the nature or condition of the property represents a health, safety or physical risk to people or other property.
The introduction of clause 12 (3) in the bill is in line with Parliament’s objective of providing clarity and certainty regarding the territorial rights of South African citizens.
However, the circumstances listed, and the fact that the list is endless, fail to assuage the anxiety of investors and homeowners in South Africa.
Some relief can be found in the fact that our courts can be used to determine whether the price of compensation for the expropriation is fair and equitable if the expropriating authority and the expropriated owner cannot agree on the price of compensation. .
Property definition
Another red flag is in the fact that the bill does not provide a complete definition of what property can be expropriated.
In its current form, the definition expressly states that it is not limited to just land. Precisely what property can be expropriated is left to broad interpretation and may include intellectual property and personal property.
To contextualize this, at first glance the State would have the right to expropriate agricultural land, along with all the livestock, equipment, vehicles and intellectual property necessary for its operations.
In light of the growing tensions over land restitution in South Africa, the need for coherent expropriation legislation is increasingly vital.
However, the far-reaching implications of the bill dictate that it must be carefully scrutinized before it is enacted into law. It remains to be seen whether the bill will stand up to this scrutiny, both from Parliament and the public.
Marikah Calo is an associate at Cox Yeats, specializing in corporate and construction law.
Republished with permission from Moneyweb.
For more news your way, download The Citizen app to iOS Y Android.
[ad_2]
