Understanding the implications of South Africa's Expropriation Bill

By: Shamla Pather

ON JANUARY 23, 2025, President Cyril Ramaphosa signed the Expropriation Bill and this was then gazetted into law. This marked a significant milestone in South Africa, with the age-old battle fought in respect of land reform, compensation and the right to live freely on one’s property.

This bill has caused a controversy within the government, legal and property sectors.

The legislation is aimed at providing a legal framework for the state to expropriate land that it may earmark as being for the benefit of the public, ostensibly, as a means to address historical injustices stemming from apartheid, segregation, the Group Areas Act and other such unlawful dispossession of property rights.

Property owners are understandably concerned about the risk of arbitrary land seizure. The new legislation ensures that expropriation will take place in circumstances where there exists a clear public purpose or interest. Property owners can challenge decisions to expropriate their land, and they can seek assistance in the form of mediation and this, in turn, is consistent with the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”), and restores an individual’s constitutional right for fair administrative action.

As with all matters, the costs associated with litigation creates a hurdle if there are disputes, especially over the interpretation of “nil compensation”.

The new Act aims to align expropriation procedures with Section 25 of the Constitution, which deals with “just and equitable” compensation. There are specific circumstances, such as abandoned or speculatively held land, where “nil compensation” may be appropriate. While every attempt will be made to deal with the matters and disputes by alternative dispute mechanisms, when matters cannot be resolved and have to proceed to court for final determination, costs are a factor that could prejudice a litigant taking on the government who will have a war chest to oppose litigation.

One cannot however overlook the fact that the legislation is aimed at ensuring adherence to fair administrative procedures enshrined by both the Constitution and the rules governing PAJA.

For prospective investors and buyers, a robust expropriation regime destroys sales and in turn creates unpredictability, volatility and this causes untold stresses both in the property sectors and to landowners. Investors, who are interested on projects with social/environmental impact may benefit if underutilised land is made available.

However, this is conditional upon our legal justice system upholding the sections in the Act. As is always the case with politicians, their stake and threats of legal action so as to further their political agendas may place any prospective deals on hold.

Communities will benefit exponentially with effective expropriation processes in place as this will serve to offer restitution, aid the community, and support community-based agricultural/entrepreneurial projects, social housing schemes. Again, the Act creates a platform of proper processes that are consistent with the Constitution and PAJA and the law. The ordinary individuals like you and I must be vigilant to ensure that the “nil’ compensation is not abused.

The expropriation bill outlines several key features:

- Public purpose requirement: property can only be expropriated for a public purpose or in the public interest

– Negotiation mandate: government must negotiate with property owners before expropriating property. I would suggest that the landowner be given access to proper advice and counselling.

– Nil compensation clause: the bill allows for circumstances where nil compensation may be deemed just and equitable, in certain circumstances.

– Mediation provisions: disputes over expropriation can be referred to mediation or appropriate courts.

– Transparency measures: the bill aims to provide a transparent framework for expropriation processes.

This Act is a product of a five-year project, which was born to repeal the pre-democratic-era Expropriation Act of 1975 (grossly draconian). In his presidential press release, Ramaphosa stated that new law “repeals the Expropriation Act… to provide a common framework in line with the Constitution to guide the processes and procedures for expropriation of property by organs of state.”

Fifty years later we have this new legislation that has ignited debate across all political spectrums. My attitude about these debates is what is the real agenda associated with these political parties. The DA and Solidarity Party has promised court challenges, while the EFF has branded the reform a “legislative cop-out”. The ANC obviously praised the legislation, and the President has been quoted as stating that “this is the first step towards transformation and land reform”.

The key difference between the repealed pre-democratic Expropriation Act of 1975 and the new Bill is that the court now has the power to award nil compensation in certain cases.

If the Act is implemented transparently, intelligently and with proper consultative processes, it could facilitate land reform and accelerate transformation. The Act has the potential to awaken the potential in idle assets. Large tracts of derelict or unused land could be re-purposed for social housing and agricultural projects, thus bringing jobs and rejuvenation to local economies.

A workable framework could attract socially conscious investors and encourage public-private partnerships. It could strengthen the spirit of Ubuntu, within which a community’s wellbeing and an individual’s prosperity are intertwined. A fair expropriation mechanism could reflect Ubuntu by balancing historical redress with individual property rights.

Shamla Pather is director at Shamla Pather Attorneys Inc. She has been in practice for over 26 years and a member of several local and international organisations.

** The views expressed do not necessarily reflect the views of DFA or Independent Media.

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