Section 25: Mbeki says country ‘cannot afford’ to allow nil compensation for land with improvements

News24

Jan Gerber

• Former president Thabo Mbeki warned against one of the ANC’s proposed amendments to Section 25 of the Constitution.
• Mbeki says allowing nil compensation to be paid for land which had been improved could disincentivise investment.
• The DA accused President Cyril Ramaphosa of misleading the country when he expressed himself against custodianship, as the ANC included it in its proposed amendment.

Former president Thabo Mbeki warned one of the ANC’s proposed amendments to Section 25 of the Constitution would lead to a “very serious disincentive to investment which our country cannot afford” and that the party should not proceed with it.

While the ad hoc committee amending Section 25 finds itself in a deadlock on the form of the amendment, the ANC on Friday laid its cards on the table and presented its proposed amendment.

In a missive of more than 5 000 words, Mbeki said the party’s national executive committee (NEC) at its meeting in May resolved to continue to discuss the ANC’s proposed amendment, even as the parliamentary process unfolded.

“The purpose of this document is to make such comments. The aim is to contribute to the national discussion on the land question, especially, in this instance, as it relates to the ANC proposals to amend Article 25 of the national Constitution,” Mbeki wrote.

One of the party’s proposals is a provision that where “land and any improvements thereon are expropriated for purposes of land reform”, the compensation could be nil.

Mbeki, who quoted this proposed amendment in paragraph 6.1.1 of his submission, raised his concern about this, saying owners of capital would obviously see this amendment “as opening the door to any government to expropriate any property without compensation”.

He added:

This would be a very serious disincentive to investment which our country cannot afford.

Mbeki continued: “Here is an example of what we are talking about. Some government in future might decide that it wants to expropriate a mine without compensation. If the constitutional amendment in 6.1.1. were to be effected, the said government would say that it intends to expropriate without compensation, for land reform purposes, the land on which the mine is based.

“In principle, this would make it possible for the government to expropriate ‘improvements thereon’ – the mine -without compensation!

“This is perhaps an extreme example and unlikely to happen in real life. However, it is exactly this kind of thinking which would inform many investors about whether they should invest in our economy.

“We should therefore not proceed with the constitutional amendment reflected in para 6.1.1!

“Correctly, the ANC recognises that it has a strategic task to lead society to defeat the challenges of poverty, unemployment and inequality. All this can only be achieved if the country develops a thriving and inclusive economy on a sustained basis. We must consider the role and place of land in this context.”

Mbeki noted the resolution the ANC adopted, called that expropriation without compensation be implemented so that it did not hurt the economy. He wrote:

It might be of interest in this regard to note that with regard to land reform, the Zimbabwe government took the position that [i] the coloniser, the British government, should compensate the white farmers for the land, and [ii] it would compensate the farmers for improvements on the land!

It appears Mbeki’s paper responds to an earlier version of the ANC’s proposal to the one presented to the committee on Friday.

The provision about nil compensation Mbeki dealt with is in this proposal, but another provision he dealt with is not in the proposal presented on Friday, and he did not touch on the subject, which proves to be the major bone of contention: state custodianship.

Custodianship entered the debate through the EFF’s proposal that the Constitution should be amended to place all land in state custodianship. The party maintains that this is not akin to nationalisation.

After meetings between the ANC and EFF, the ANC included a place for state custodianship in a mixed system of land ownership in its thinking on the amendment.

EFF leader Julius Malema then vowed in the National Assembly during the debate on the Presidency’s budget that his party would never support an amendment that did not include its proposal for full custodianship.

The following day, at a press briefing, President Cyril Ramaphosa dismissed the notion of state custodianship and said people wanted title deeds.

Nonetheless, in the ANC’s proposal on Friday, it included custodianship in the following proposed provision: “The state must take reasonable legislative and other measures, within its available resources, to foster conditions which enable state custodianship of certain land in order for citizens to gain access to land on an equitable basis.”

Votes

For a constitutional amendment to pass in the National Assembly, the ANC would need either the DA or EFF’s votes. The ANC’s proposal did not sway the EFF, and the DA – which is against an amendment in the first place – finds state custodianship highly objectionable.

In a statement released on Sunday, DA MP Annelie Lotriet accused Ramaphosa of misleading the country when he distanced himself from custodianship.

“The implications of this about-turn is that South Africa cannot, at face value, accept anything that Ramaphosa says because even if he means it, the ANC simply ignores him and does the exact opposite,” Lotriet said.

Despite the ANC and EFF clearly not singing from the hymn sheet on custodianship, she views the ANC as pandering to the EFF to obtain a two-thirds majority.

“In its blind rush to ensure the passing of the amendment at all costs, the ANC has thrown out all reason and is now openly pandering to the EFF.

“The EFF has been demanding ‘state custodianship’ in return for their support to achieve the two-thirds majority necessary to amend the Constitution to explicitly allow for expropriation of property without compensation,” Lotriet said.

“Every bit of evidence demonstrates that state custodianship does not work, yet the ANC is barrelling on, following a ruinous ideology rather than evidence.

“The DA remains resolute in our rejection of the ongoing attempt to nationalise land by stealth and reduce South Africa to an economic wasteland.”

While the parties on the ad hoc committee on Section 25 still struggle to find each other, EFF deputy president Floyd Shivambu on Friday indicated the party saw no point in having bilateral meetings with the ANC contingent in the committee and would now engage with its top six.

This meeting would take place on Wednesday, according to Shivambu.

The committee must complete its work and report to the National Assembly by the end of August.