The Free Market Foundation’s (FMF) exclusion from the expropriation without compensation (EWC) parliamentary hearings is an affront to South Africa’s participatory democracy and the land rights struggle. No other person or organisation comes close to the FMF’s track record and expertise on the subject. For 40 years, the FMF was the pre-eminent voice for the rights of dispossessed and landless black South Africans. The FMF was, with President Ramaphosa, a key role-player in the adoption of the property rights provision (section 25 of the Constitution), which makes it particularly ironic that he might be instrumental to removing a clause he helped craft.
The FMF runs the celebrated Khaya Lam Project, the most significant project fighting for the right of millions of black South Africans to own their land unconditionally. The FMF has been at the forefront of the land discourse for longer than most parliamentarians have been politically aware, yet it has been excluded from the hearings. Parliament has denied itself and the country evidence from, arguably, the country’s best-informed source on the subject.
The only reasonable conclusion to be drawn from the FMF’s exclusion is that it was a bad faith way by whoever made the decision to pull the wool over the eyes of those charged with making profound decisions that will impact many generations of South Africans long after the short shelf-life of all current parties and role-players has ended.
During the FMF’s involvement with the inclusion of the section 25 during transition from Apartheid, the provision was carefully crafted by the Constitutional Assembly to both protect private property and to ensure that South Africans, black South Africans in particular, would never again be subjected to property deprivation without compensation. It is hard to believe that they might son find themselves precisely back where they were under apartheid. The FMF is particularly concerned about the proposed destruction of property rights for the poor. Unlike the rich, they will be defenceless when they suffer the same fate as their ancestors as petty bureaucrats expropriate their property without compensation.
The FMF contends that the Constitution, and particularly section 25, provides ample room for government to bring about substantive land reform, and that government has been negligent in not making use of the Constitution’s potential for expanding and strengthening the property rights of the vulnerable and marginalised. In this regard, the FMF regards it as important that the Constitution not be amended to make up for government’s shortcomings. Constitutionalism and the Rule of Law dictate that constitutional instruments not be changed in response to short-term passions and transient political expediency. Instead, constitutional change must be gradual, considered, and informed by fully informed public discourse.
The FMF is concerned that formidable power of the market to redistribute property spontaneously was neither mentioned nor appreciated. The number of black property buyer no exceeds the other races, and the property-buying black middle class exceeds the entire white population. The discourse was dominated by disinformation and wild allegations.
One of most egregious flaws in the discourse has been the seemingly deliberate creation by protagonists of EWC of fake news impression that “property” comprises primarily white commercial farms. The fact that property includes all property, including for instance, public service pension savings under the PIC was seldom mentioned. The proposal is not about land, nor is it about land wrongly acquired by present owners
FMF director Temba Nolutshungu, who personally participated in the adoption of section 25, said “That the FMF was not invited to Parliament on the question of expropriation without compensation is a travesty of participatory democracy.”
Expropriation without compensation will have profound detrimental consequences for the freedom of ordinary South Africans and the economy more broadly, if it is adopted for reckless, short-term expedient reasons. Parliament has only a limited number of ways to achieve stated EWC objectives responsibly in the real world. The FMF would have presented feasible, pro-prosperity and pro-rights alternatives which have no not been properly considered.
The moral path for government to follow is to make the titling process as smooth, easy, and affordable as possible; property, to be secure for this generation and into the future, must be in the hands of the people, not the state. The Khaya Lam (My Home) Land Reform Project, one of the FMF’s flagship initiatives, is dedicated to transformation through ownership. Between five and seven million urban plots – mostly residential – throughout South Africa are owned by local government, and not the people who live on them. Converting these plots from council-owned to privately-owned with full freehold title deeds will bring a sense of pride and dignity to the occupants, who, as ‘new owners’, will be able to invest in and perhaps generate an income from their property. In many cases, ownership is all that is needed for millions of South Africans to enter the market as legitimate small business owners, or landlords to others who do not yet have the means to own property.
Government has it well within its means to convert millions of plots across the country to full ownership title and to distribute, at virtually no cost, unused government land to landless black individuals. The massive amount of land which the State owns has not been given the attention it deserves in the national conversation about land reform. Regarding title deeds attached to RDP housing, these include ‘pre-emptive clauses’ that prohibit owners from selling their home for a specified time period. These clauses nullify a central feature of property ownership, which is the choice and the ability to sell or let. There is no justice in forcing poor home owners to choose between losing their most valuable asset and getting a job in another city, or remaining where they are and jobless, just because they are not permitted to sell their house and move to another area.
If EWC is to be adopted at all, it should occur only under the following circumstances:
- Subject to the requirements of section 36 of the Constitution, which says rights (such as that to compensation) may only be limited if it is reasonable and justifiable in an open and democratic society based on freedom, dignity, and equality. No plausible reason has been given for not regarding this as adequate.
- Subject to review by the ordinary courts on the grounds of reasonableness, rationality, non-racialism, proportionality, and effectiveness.
- Expropriated property will not become the property of the State or quasi-State entities, but must be transferred forthwith to deserving South Africans.
- Superfluous and under-utilised state-owned property must be prioritised for EWC and private property can be expropriated without compensation only under very strictly-defined circumstances such as (a) abandoned property and (b) debt owed to government exceeds the market value of the property without the prospect of successful repayment.
FMF legal researcher, Martin van Staden, noted that, “Public participation is not supposed to be a mechanical checklist exercise. There must be good faith public participation, meaning all the various sides of the debate must be given a fair chance of engaging in the policy-making process. The FMF, being one of only a few dedicated public policy institutes, being totally excluded from the parliamentary participation process reeks of bad faith.”
The FMF hopes Parliament will have a truly open, transparent, informed and participative process after the Constitutional Review Committee report is tabled.