These days, we are bombarded daily with updates on changing legislation. The news, radio, Facebook, Twitter and other social media platforms have news on tap about changing laws that are promulgated. And, as Karl Marx reminds us: “The theory of Communism may be summed up in one sentence: Abolish all private property.”
On 3 June 2014, Afri-Business, together with keynote speaker Yuri Maltser from Russia, held a Property Rights Conference to discuss no less than fourteen sets of proposed legislation and policies – and this is not the entire list, as eight of the fourteen have been approved (or promulgated) since. Also, the most recent legislation that caused a ruckus – the Expropriation Bill of 2015 together with the Property Valuation Bill of 2013 – paints a disastrous picture for the future of South African property laws. On the surface, the objective of the Expropriation Bill seems to simply “provide for the expropriation of property for a public purpose, or in the public interest, subject to just and equitable compensation.” The timing of this Bill, however, is rather suspicious.
This suspicion is not without good reason. The Banking Association of South Africa (Basa) has forewarned that the Bill could dilute property rights, discourage local and foreign investors and, as a result, seriously damage the economy. Even more concerning, is the fact that the definition of “property” in this Act also includes farmland. This means that landed property rights related to property, shares and intellectual property are included and any of these may be expropriated in terms of this Act.
Another cumbersome issue is that the principle of “willing buyer” and “willing seller” will be circumvented and compensation in terms of the Expropriation Bill will be considered by five factors: market value; current use; history of acquisition; scope of state investments; and the purpose of the expropriation. The result is that, in terms of the Act, owners will not receive market-related prices for their property. Essentially, this negatively impacts the economy and the future of private property rights.
The Property Valuation Bill of 2013 that has been in operation since 1 August 2015, is also detrimental to the concept of “willing buyer” and “willing seller”. The most concerning aspect of this Bill is that it provides for a new ‘valuer-general’ with complete carte blanche and exclusive control over the valuation of property during expropriation, land reform or other forms of acquisition (such as leasing) by the state.
The danger for the future of the Private Property Right, as well as the land-reform threats by Government, is apparent from this legislation: Property can be expropriated and then, at a value or consideration, be determined at the sole discretion of a ‘valuer-general’ also appointed by the government. The government claims that the Expropriation Bill is needed to speed up land reform and that the Valuation Bill will empower the government to proceed with this process of any dispute over any compensation. In short, the state will be able to take both ownership and possession of property before it pays any compensation.