Initiatives > Legal successes > Either a valid Constitution, or expropriation without compensation

Dear Sakeliga members and friends

One can have either expropriation without compensation or a valid constitution, but not both. Since expropriation without compensation was proposed in Parliament for the first time in 2018, this has been Sakeliga’s point of view. For this reason we reject the draft amendment bill on the Constitution in its entirety. This is what Sakeliga submitted to Parliament last week, together with extensive comments by top legal scholars and economists.

Feel free to read here the executive summary of Sakeliga’s comments. For the complete comments, see the bottommost link.

Regards,
Piet le Roux
Chief executive, Sakeliga


Executive Statement and Recommendation

In this submission, Sakeliga objects to the Draft Constitutional Amendment Bill. The objection is based on a rejection of the premise of the Bill and therefor to the Bill in its entirety. As such no alternations to the proposed wording is suggested.

Sakeliga comments on the Bill by way of five points. These points are substantiated in annexures A through D, which include expert contributions on constitutionalism, international law, economics and the relation between economics and constitutionalism.

  1. Constitutions are always subject to constitutionalism itself: The Constitution of South Africa was enacted by Parliament as the country’s foundational legislation. Proper procedure, while important, is only one requirement for amendments to the Constitution’s text to be valid. Another essential requirement is that amendments must be in accordance with the deeper principles of constitutionalism itself, such as respect for private property as a cornerstone of civil society. Put differently, Constitutions cannot be amended arbitrarily, as if anything is possible as long as proper procedure is followed and a majority in Parliament votes for it – such a situation would imply tyranny. Constitutions that are amended such that they violate the principles of constitutionalism loses to this extent their legitimacy and regains legitimacy only after constitutionalism is restored.
  2. Expropriation without compensation is confiscation: For a taking of property to constitute expropriation, it is essential that an owner has access to the remedy of compensation. Absent the remedy of compensation takings of property are not expropriations, but rather penalties or forfeitures, and therefore in fact really confiscations.
  3. The Bill adds a new provision to the Constitution and does not simply make explicit that which is implicit: Contrary to the premise from which Parliament and the Committee operates, the Constitution does not implicitly sanction expropriation without compensation, or confiscation in the proposed way. The current effort to alter the Constitution is therefore an attempt to insert into the Constitution a new provision precisely because that which is said to be there implicitly is in fact not there.
  4. International consultation and international law: Consultation with international property owners, as required by the South African Constitution, has been insufficient. Government has a duty to consult meaningfully with local and, also importantly, international property owners. Failure to have done so casts doubt on the validity of the process followed by the Committee. Moreover, since government is duty bound by international law to provide adequate protection to international investors, confiscation as a state policy will put South Africa in violation of its international obligations.
  5. The constitutionality and legitimacy of the Constitution of South Africa: The current Bill is an attempt to insert into the Constitution a provision that is at odds with the principles of constitutionalism itself. Should confiscational powers for the state, as contemplated, be inserted into the Constitution it will render the document unconstitutional and illegitimate in so far as and so long as that amendment taints it. It will then be incumbent upon citizens and civil society in all its manifestations to refuse to abide by such an amendment and to endeavour themselves to the restoration of a sound constitutional order.

Recommendation

Sakeliga proposes that the Committee reports to Parliament that

  1. The Committee is unable to decide the matter referred to it for report, in terms of Rule 166(1)(c) of the National Assembly, since it is not possible to formulate an amendment to the Constitution, for expropriation without compensation, such that constitutional integrity is maintained;
  2. The Committee’s mandate rests on a mistaken premise, in that the amendment in fact seeks to add something new to the Constitution and not simply make explicit that which is already implicit;
  3. An amendment to the Constitution as contemplated would bring the Constitution in conflict with the concept of constitutionalism itself;
  4. The amendment would jeopardise initially the legitimacy of the Constitution in so far as it is amended as proposed, and over time detract extensively from the legitimacy of the Constitution as a whole, as generally perceived by civil society and business;
  5. An amendment to allow confiscation of assets as proposed would bring South Africa in conflict with international law and lead to great economic harm; and
  6. Given the unprecedented wave of opposition from civil society and business it would be unwise to proceed with the amendment, since civil society and business are unlikely to ever accept the amendment to the Constitution.

Piet le Roux
Chief Executive Officer
Sakeliga

 

Background on Sakeliga’s Position

  1. With more than 12 000 members, 3000 associates, and several affiliated chambers of commerce, Sakeliga is perhaps the largest business organisation in South Africa.
  2. Sakeliga supports private property rights and free markets as matters of justice and in the interest of the well-being of everyone in South Africa.
  3. Sakeliga is opposed to an amendment of the constitution to allow for expropriation without compensation, regardless of whether such amendment is achieved by way of an alteration to
  4. a) the text of the Constitution
  5. b) the interpretation of the Constitution
  6. Sakeliga generally supports transfers of land that occur as part of
  7. a) Land restitution (the return of rights in land to persons from whom such rights had been unjustly deprived since the 1913 Land Act, or proper compensation in the alternative)
  8. b) The free market (buying, selling, donating, bequeathing and other transfers between mutually agreed partners)
  9. c) Voluntary empowerment projects (in which owners of land encourage employee and community participation in the management and ownership on mutually acceptable terms)
  10. Sakeliga generally opposes transfers of land that occur as part of
  11. a) Redistribution (the confiscation, expropriation or purchase of land previously held by rightful owners in order to transfer such land to preferred recipients of the state on a discretionary basis)
  12. b) Nationalisation (when the state expropriates land and become its owner)
  13. c) Custodianship (when the state takes control of property away from an owner, but, under a convenient legal construction, does not become the official owner, but rather its custodian)
  14. Sakeliga warns that expropriation without compensation, regardless of whether it is performed under an altered constitutional text or alternative interpretation of the current text, would lead to great personal, economic and public harm.
  15. Sakeliga undertakes to support private property rights and free markets in the interest of its members, the economy in general and a vibrant civil society and constitutional order.
  16. Sakeliga will provide free legal aid to the first of its members who becomes a victim of expropriation without compensation due to an amendment of the property rights clause in the Constitution. All members of Sakeliga, both individuals and companies, will enjoy this protection.

    For the complete comment as submitted, click here for Sakeliga’s Comment on Expropriation. The full comment includes contributions by

  • Professor Koos Malan (Professor of Public Law, UP)
  • Professor Hennie Strydom (Professor of International Law, UJ)
  • Russell Lamberti (economist, ETM Macro Advisors)
  • Piet le Roux (CEO, Sakeliga)
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