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26 March 2008

Cape Town: Today the National Minister of Public Works, Ms Thoko Didiza, presented the proposed new Expropriation Bill to the Public Works Portfolio Committee, marking the beginning of a formal process by Parliament to adopt the new Bill for the purposes of discussions, consultative engagements and consolidation before it is passed into law.

The new Bill will replace the Expropriation Act of 1975 which still applies. The 1975 Act is inconsistent with the current Constitution of South Africa in several key areas such as recognition of rights of tenants and farm workers; the basis for payment of compensation and the rationale for expropriation. The Bill seeks to align the Expropriation Act with the Constitution and to provide a common framework to guide the processes and procedures for expropriation of property by organs of state, by providing for, among others, the following:

(1) The extension of the purposes for which property may be expropriated to include expropriations in the public interest. Expropriation in the public interest, for instance, provides government with a tool to achieve its commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources

(2) All affected parties to be notified of a contemplated expropriation, to afford such parties an opportunity to raise objections and make representations to the expropriating authority, before a decision to expropriate is taken. The expropriating authority must give consideration to all submissions and must attempt to reach an agreement with persons whose rights and interests may be adversely affected, before deciding to expropriate

(3) The expansion of the scope of protected rights to provide for compensation for both registered and unregistered rights. In terms of the 1975 Expropriation Act, only the holders of registered rights and certain unregistered rights are eligible for compensation upon expropriation. Section 25 of the Constitution, however, does not distinguish between registered rights and unregistered rights such as tenants and farm dwellers.

(4) The payment of just and equitable compensation to persons affected by expropriations, with such compensation reflecting an equitable balance between the public interest and the interests of those affected. Whilst the market value of expropriated property is a predominant factor in the 1975 Expropriation Act, the Constitution requires consideration of all relevant factors, including:
* the current use of the property
* the history of the acquisition and use of the property
* the market value of the property
* the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property and
* the purpose of the expropriation.

(5) Expropriating authorities and affected parties to exchange technical reports and other relevant information, in endeavouring to reach agreement on compensation. In the absence of agreement, the expropriating authority shall make a determination on compensation. In the event that the expropriated owner or holder of a right does not accept such determination, he or she may approach the court for a judicial review of the process followed by the expropriating authority in making such determination. Should either party not accept the ruling of the court, it would have the right to appeal.

(6) The establishment of the Expropriation Advisory Board to advise all expropriating authorities on all aspects of expropriation, including the determination of compensation. The Board will also render advice to organs of state on the fair value of immovable property when the state acquires property other than through expropriation, or disposes thereof. The Bill proposes that the minister be empowered to establish as many such Boards, as may be necessary in different geographical areas, to ensure effective and efficient services to all expropriating authorities and organs of state.

Whereas the 1975 Act narrowly focused on the market value as the sole determinant for the negotiations preceding expropriation, the proposed new Bill, in line with the Constitution, takes a holistic view and considers other relevant factors such as the current use of the property, the history of the acquisition, the extent of the direct state involvement and subsidy in the acquisition and beneficial capital improvement of the property, among others. The above is contrary to the paranoia raised by certain sectors of organised farming that government seeks to downplay market value in the expropriation negotiations.

Of importance, is the fact that the Bill would also promote the tenets of good governance and administration by consolidating current disparate pieces of legislation and processes of expropriation (about 140 of them) across all spheres of government including parastatals, ensuring that the power to expropriate would be applied uniformly, constantly and free from haphazard decisions which might infringe constitutional rights and freedoms.

The Bill has been passed by Cabinet hence today’s briefing of the Portfolio Committee by the Minister. In preparation, the Department of Public Works had convened two separate workshops in February 2008 to canvass comments and other views on the draft policy document issued in November 2007. Both the organs of the state and the private sector including the farmers’ organisations were on separate occasions given an opportunity to engage with the document.

Following today’s briefing of the Portfolio Committee by the Minister of Public Works, Parliament is expected to spearhead parliamentary and public discussions on the proposed Bill and to that end, Parliament has adopted a scheduled timeframe for national consultations which will be taken to all the provinces.

Issued by: Department of Public Works
26 March 2008