South Africa's Land-Seizure Debate: What's the State of Play?

(Bloomberg) -- South Africa’s ruling African National Congress is forging ahead with plans to amend the constitution to make it easier to seize land without paying for it, overriding complaints from some opposition parties that it isn’t following proper procedure.

Parliament’s Joint Constitutional Review Committee is set to adopt a report Thursday that recommends that the wording of section 25 of the constitution be changed to explicitly allow for expropriation without compensation. The report will then be referred to the National Assembly for approval -- a fait accompli since the ANC enjoys an outright majority and the change is backed by the populist Economic Freedom Fighters, the third-largest party.

The panel was originally given a Sept. 28 deadline to draft its report, but it secured an extension to consider more than 400,000 written submissions and thousands more made in public hearings held nationwide. The Democratic Alliance and several other opposition parties argued that the written submissions were largely ignored, and the defective consultation process means any amendments could be challenged in court.

The South African Institute of Race Relations, a Johannesburg-based research institution, on Wednesday said it has briefed its lawyers about the procedural flaws with a view to seeking a judicial review of the parliamentary process. If the legislature does approve the report and it isn’t derailed by lawsuits, another lawmakers’ panel will draw up revised constitutional provisions that deal with property rights -- a process that may take several months.

Here’s what some of the key players are saying:

South African Citizens

The committee received 449,522 valid written submissions and 65 percent of respondents favored leaving the constitution unchanged, an analysis conducted by recruitment company Silumko Consulting shows. However, the submissions made at the public hearings were overwhelmingly in favor of changing the status quo.

Opinion polls commissioned by the Institute of Race Relations from 2015 to 2017 showed most black citizens had little interest in land reform. “This is not surprising, as the country is already 65 percent urbanized and most people want jobs and houses in the towns and cities,” it said in its submission to parliament. The Human Sciences Research Council came to a different conclusion -- 67 percent of adults it surveyed in each of the past 15 years said they favored land reform, and there appeared to be an increased sense of urgency that the matter be addressed.

The Ruling Party

The ANC says its plan to expropriate land in certain circumstances won’t diminish or wipe out property rights and it doesn’t want to hurt confidence or damage the economy. Land reform “will be done properly and through the rule of law,” and individuals’ rights will be protected, according to Ronald Lamola, a member of the party’s National Executive Committee who is coordinating its land reform policy.

Commercial Farmers

AgriSA, the biggest organization representing the country’s farmers with about 28,000 members, says it supports land reform but argues that the deprivation of property without pay “constitutes a very serious breach of an individual’s rights.” In August, the lobby group said it would go to the country’s highest court to protect property rights.

The African Farmers’ Association of South Africa

The organization, which represents about 3,000 black producers, wants the constitution changed to minimize diverse interpretations of its property provisions and ensure there is just and equitable land reform -- which it says has not happened under the current dispensation.

The Banking Association of South Africa

With 1.6 trillion rand ($110 billion) in mortgages, 150 billion rand of which has been extended to farmers, the banking industry has a massive stake in the outcome of the land reform debate.

While lenders support the ANC’s desire to correct skewed ownership patterns, the constitution already makes provision for expropriation, according to the industry association. It warns that constitutional changes and the possible erosion of property rights could diminish real estate values, weaken investor confidence and thwart economic development. In a worst-case scenario, banks and the economy wouldn’t be able to absorb the shock, with depositors bearing the brunt of a systemic crisis, the association said.

Banks are in talks to start a joint fund that could be used to accelerate transfer of land to black citizens.

To contact the reporter on this story: Ana Monteiro in Johannesburg at amonteiro4@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Mike Cohen, Karl Maier

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