Threat of Land Grabs in SA Not Over Yet

It was recently reported that the Portfolio Committee on Public Works debating the proposed Land Bill had suspended its deliberations on the 14th of August 2008. Now a top law firm has warned clients that the land grab law could well be back on the table by next year.

Webber Wentzel, an SA law firm has issued a warning to clients regarding the controversial land expropriation bill and alerted them to the fact that the draft law has not been withdrawn, despite a statement by the Ministry of Public Works to the contrary.

There has been extensive media coverage on the issue, with Realestateweb recently reporting that the law had been shelved, but not withdrawn. Earlier this week, one of the country’s top law firms revealed to the media that it was spelling out all the details of the contentious law to its clients, which bears extreme similarities to the land grabs that have led to the well-publicised economic demise of neighbouring Zimbabwe.

Peter Leon, partner and head of Webber Wentzel’s natural resources and regulatory practice group, has said that the statement saying that the bill had been withdrawn was issued, but “the Minister of Public Works has not withdrawn the Bill, as required by the National Assembly’s Rules. And all indications are that the Bill could well be reintroduced after next year’s general election”.

He warned that the withdrawal looks to be only temporary, as the precise legal status of the Bill remains unclear. “On the 17th of September 2008, the Director General of the Department of Public Works indicated to the media that it was possible that the Bill could be reviewed in 2009. It has also been reported that the future of the Bill is being discussed by the chairperson of the committee and the Minister of Public Works,” the law firm said in its statement.

It went on to say that, “The Bill empowers the Minister of Public Works to expropriate any property for a public purpose or in the public interest despite public hearings on the Bill that raised concerns that it would severely discourage foreign investment and infringe the Constitution’s property clause”.

According to the Bill, “public interest” includes “the nation’s commitment to land reform and to reforms to bring about equitable access to South Africa’s natural resources”, while “property is broadly stated to include ‘a right in property’ as well as ‘moveable property’”. Leon interprets this as meaning that shares in a company, as well as various other rights in property, such as intellectual property rights, could be capable of expropriation under the Bill.

Leon also said that prospecting and mining rights granted under the Mineral and Petroleum Resources Development Act 2002 would also constitute property for the purposes of the Bill. “As the Bill has not been formally withdrawn, doubt remains as to whether it will be completely redrafted or merely reconsidered at a later stage. At the time of its ‘withdrawal’, the portfolio committee chairperson stated that the general consensus within the committee was a desire to see the Bill reintroduced when either feasible or appropriate,” he said.

The law firm outlined the steps in the legal process as follows:
- The draft Expropriation Bill 2008 was tabled by the Minister of Public Works in the National Assembly on 16 April 2008 and was subsequently referred to the Portfolio Committee on Public Works;
- The Portfolio Committee invited written submissions on the Bill in late April 2008, which were to be submitted by 16 May 2008. Extensive public hearings were conducted by the Committee in Parliament, as well as each of the nine provinces in late June 2008;
- The consultation process on the Bill gave rise to a number of objections;
- Despite the intensive public hearing process, the reason given to justify the Bill’s sudden “withdrawal” was a lack of proper consultation;
- On 14 August 2008, the Committee announced that it had suspended its deliberations on the Bill.

The information in this article is courtesy of Realestateweb (“Land grab law: set to make a come back – warning”, 18 September 2008).

Find South African property for sale.