All eyes on new expropriation law

ABC Chief Executive John Purchase said that controversial clauses - said by some to include seizure of company shares and immovable property - in "this critical and important piece of legislation" still needed attention.

Critics of the bill, which stretched beyond the farm sector, were concerned that it would lead to a Zimbawean-style land-grab and claimed it was unconstitutional.

The SA Institute for Race Relations (SAIRR) warned in July that the bill threatened investment.

"The bill governs not only land and other immovable property but also 'rights in property' and movable property, without exception. It thus paves the way for any organ of state, at any level of government, to expropriate livestock and farming implements, residential homes, business premises and equipment, patents, and shares whenever it considers this to be in the public interest.

"The bill empowers the state to take ownership and possession of any such property simply by giving notice to the expropriated owner. Though compensation will thereafter be payable, this is likely to be less than market value or loss suffered."

The state will make the 'final' determination of the compensation due, subject only to a limited form of court review. Since no compensation may be payable while such review is pending - and ownership and possession will generally already have passed to the state - only people with deep pockets may be able to contest the state's decisions on compensation.

"The bill is a draconian measure giving all state agencies, from municipalities upwards, the power to take from farmers, firms, and ordinary people their most valuable assets - often their only assets."

Dr. Purchase said in an interview with Fin24.com this week that it is critical that confidence in the sector was re-established in order to draw investment into the sector to ensure increased production.

"This is especially true in light of the food price crisis that South Africa is currently experiencing and the need to improve our food security situation, given also the global food crisis and fast changing agricultural trade patterns," he said.

Food crisis

Earlier the Chamber of Mines said in a submission before the agriculture portfolio committee that the bill contained no provision for a reasonable opportunity of the owner making representations to a court in the event of a dispute and the periods allowed for land owners facing expropriation to respond, were far too short.

To enable such owner in practice to obtain the necessary advice from expropriation law experts and professional valuers, a realistic time period would be needed, particularly where expropriations affect a large number of owners.

The chamber said this deprived land owners of lawful, reasonable and procedurally fair administrative action. "There is moreover no reason why expropriation needs to occur with such unseemly and unjustifiable haste."

Purchase said the main issue the farm sector still hoped to negotiate with government before a new version of the bill saw the light, was that of land owners not having recourse to courts over the amount of compensation paid for expropriated land.

- Fin24.com