There is little in the public domain that demystifies the concept of “expropriation” as a legal construct. Simply put, expropriation is a tool used by governments in varying jurisdictions across the globe, to take private property for public use, with compensation.

In South Africa, the 1975 Act was used to acquire property solely for a public purpose, which includes examples such as the construction of public infrastructure such as public clinics, public schools, laying power lines and more recently the construction of the Gautrain.

What is the role of compensation in expropriations?

Intrinsic in the legal definition of expropriation, is a requirement for compensation to be paid. In other words, expropriation is inextricably linked with compensation. The amount and methodology of calculating compensation differs in varying jurisdictions. Some quarters argue therefore that the concept of “expropriation without compensation” is a legal absurdity. The 1975 Act provided for market value compensation commonly referred to as “willing buyer will seller compensation”.

What does the new Expropriation Act say about compensation?

In contrast, the Expropriation Act now makes provision for “just and equitable” compensation. The concept of “just and equitable” compensation was introduced already in our law 29 years ago when the Constitution was promulgated. Just and equitable compensation is made provision for in section 25(3) of the Constitution, and lists factors to be taken account in calculating just and equitable compensation. Between 1975 to date, South Africa has been expropriating using a financial model that was at odds with the Constitution.

The Expropriation Act therefore now aligns itself with the Constitution. Factors that must be taken into account in the calculation of just and equitable compensation are the current use of the property, the history of its acquisition, improvements made in the property, if there was any State investment made on the property and the purpose of the expropriation. The outcome of the application of the just and equitable method of calculation, is based on the facts of each case. Whilst it may be possible to arrive at nil compensation, it would only be in extremely rare circumstances that would enable nil compensation. It is also arguable that expropriation without compensation as a concept, may be susceptible to a constitutional challenge.

The second most important factor that is contained in the Expropriation Act, is the inclusion of a State power that enables the State to acquire property not only for a public purpose, but also in the public interest. This mirrors the Constitutional property clause, which defines the public interest as including the nation’s commitment to land reform. This means that expropriations to make land available to enable citizens to gain access to land for land reform purposes now have a statutory basis in addition to the Constitutional basis, which has been in effect since 1996. The inclusion of land reform objectives in the Expropriation Act aligns with section 25 of the Constitution.

In essence, this means that since 1996, the Constitution has mandated a model of equitable balance whereby the public interest (including the nation’s commitment to land reform) and the interest of the landowner must be balanced. In other words, if, on a consideration of all relevant factors, it would be just and equitable to pay less than market value for an expropriation, the Constitution not only justifies, but mandates, doing so.

What does the Expropriation Act say about expropriation without compensation (“EWC”)?

It is arguable that the Expropriation Act may be interpreted to go further than the Constitution by expressly stating that expropriation may be nil in certain circumstances. As such, the Expropriation Act expressly introduces the concept of EWC in our law. A few caveats should be noted in this regard . EWC applies only to land, as opposed to other forms of property, i.e. real rights such as mining rights, limited real rights, intellectual property, and movable property. The Expropriation Act does not contain a special definition for ‘land’. This is in contrast to the Constitution that provides that property is not limited to land.

EWC applies only where land is expropriated in the public interest as opposed to for a public purpose. This suggests that EWC will be applicable mainly (or perhaps only) to expropriations for land reform purposes, and expropriations in the context of access to natural resources such as minerals and water. Again, in these contexts, the only form of property that can conceivably be expropriated without compensation is land, and not the real rights or limited real rights attached thereto, such as mining rights or water use licences.

In section 12(3), the Expropriation Act lists four circumstances in which it may be just and equitable for EWC may be paid. These include where the land is held for speculative purposes and is not being used by the owner; where the land is held by an organ of state that is not using for its core functions and the organ of state is not likely to require the land for its future activities, and the organ of state acquired the land for no consideration; where an owner has abandoned the land by failing to exercise control over it despite being reasonably capable of doing so; and where the market value of the land is equivalent to or less than the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.

These particular circumstances may justify EWC, but must be considered in light of all relevant circumstances, which would no doubt include the factors in section 25(3), which are mentioned above.

Is EWC the answer to South Africa’s land reform problems?

The move away from the ‘willing buyer, willing seller’ model to the ‘just and equitable’ model of compensation will impact expropriations for land reform and will make compensation more affordable for the state. However, it is a misconception to think that EWC is the answer to all land reform problems. EWC as it is set out in the Expropriation Act would only be applicable in very limited circumstances, and would only apply to land which is not in productive use. EWC will have no significant impact on land reform in urban and developed areas. South Africa’s land reform issues go significantly deeper than the Constitutional method of determining compensation, and will not be solved solely by the promulgation of the Expropriation Act.

Who has the power to expropriate?

The Expropriation Act vests the power to expropriate in the Minister of Public Works, currently Minister Dean MacPherson. Minister MacPherson has already indicated that “no expropriation without compensation of private property will happen under his watch”.

Whilst the Expropriation Act vests in the Ministry of Public Works, other pieces of legislation, such as the Mineral and Petroleum Resources Development Act No. 28 of 2002 (“MRPDA“) and the Restitution of Land Rights Act No. 22 of 1994 (“Restitution Act“), vest the power of expropriation in the Minister of Mineral Resources and the Minister of Land Reform and Rural Development respectively. The Expropriation Act also contemplate that an expropriating authority may be other organ of state.

Is the Expropriation Act constitutional?

The constitutionality of the Expropriation Act is contested. Section 25(2) of the Constitution provides that property may only be expropriated for a public purpose or in the public interest, and must be subject to compensation, which must be agreed between those affected or must be decided or approved by a court.

On 7 December 2021, the Constitution Eighteenth Amendment Bill, which aimed to amend this provision of the Constitution to reflect that compensation could be nil, failed to pass in the National Assembly. Some commentators and academics are of the view that EWC is implicit in the Constitution, and that the Constitution therefore implicitly recognises that it would in some circumstances be just and equitable for compensation to be nil. Others argue that compensation is an integral component of expropriations and that to expropriate property without any compensation is more analogous to a confiscation and akin to s deprivation.

This question is by no means clear, and it is likely that the Expropriation Act is likely to be challenged upon its commencement. Indeed, both the Democratic Alliance, ActionSA, Afriforum, and the Cape Independence Group have indicated their intentions to challenge the Act.

Is the Expropriation Act operational?

Section 31 of the Act provides that it will come into operation not on the date of presidential assent, but rather on a date determined by the President by proclamation in the Government Gazette. As at the date of this article, the Act was published in a Government Gazette on 24 January 2025, but its date of commencement has not yet been proclaimed.

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With the introduction of the Restitution of Land Rights Act 22 of 1994, which allowed both individuals and communities alike to claim rights to land that had been dispossessed of as a result of past racially discriminative laws or practices, there arose the question of how the land claimed by the land claimants, particularly communities, would be held and managed for the benefit of the beneficiaries if restitution was granted. Partly in answer to this question, the concept of Communal Property Associations (“CPAs“) was birthed.

CPAs are legal entities formed for the purposes of enabling communities to acquire, hold and manage property on a basis agreed to by members of a community in terms of a written constitution and to provide for matters connected therewith. Until 8 October 2024, CPAs were governed by the Communal Property Associations Act 28 of 1996 (“principal Act“)which provided for the constitution, administration and governance of CPAs.

In reflecting on the effectiveness of the principal Act, it was reported in the 2023/24 Commission on Restitution of Land Rights’ (“CRLR“) reporting period that 75% of the registered CPAs across the country were found to be non-compliant with various provisions contained in the principal Act and as a result, could not function or did so illegally.

The reasons advanced by the CRLR for the non-compliance range from a lack of proper leadership and governance in the executive committees of the CPAs, a lack of proper administration and a lack of a solid business model. These often result in illegal transactions taking place within the CPAs and no proper records being kept, ultimately leading to the beneficiaries of the CPAs not receiving their dues.

From a legislative point of view, the non-compliance was also attributed to the ambiguous and vague nature of the provisions contained in the principal Act.

In order to remedy these shortcomings, the Communal Property Associations Amendment Bill (“Bill“) was drafted. The Bill has since been signed into law and has come into effect from 8 October 2024 thereby introducing the Communal Property Associations Amendment Act, 2017 (“new Act“). The new Act seeks to provide certainty to the provisions that were left open to interpretation in the principal Act and solidifies the status of CPAs as legal entities that can be effectively used as tools to manage the properties belonging to communities. The new Act has also widened the scope of application of the principal Act and has established various bodies to ensure proper enforcement of the Act and functioning of CPAs.

NOTABLE AMENDMENTS INTRODUCED BY THE COMMUNAL PROPERTY ASSOCIATIONS BILL, 2017

Below, we highlight notable amendments to the principal Act and their implications on the operation of CPAs.

PROVISIONAL ASSOCIATIONS [section 18A of the new Act]

1. The principal Act allowed for communities to form provisional associations which would hold and administer the land belonging to the community whilst the community drafted its CPA’s constitution and arranged all necessary papers to ensure compliance with all relevant processes. An interim committee sat on the provisional association’s board pending registration of the association.
2. The Bill has eliminated the option of provisional associations and has indicated that all provisional associations which have not adopted a constitution or been registered as associations must be registered as CPAs within 12 months of the commencement of the ‘Act’ (8 October 2024), which period may be extended by a further 12 months only.

3. Should currently existing provisional associations not be registered accordingly within the stipulated time periods, they will cease to exist and any property held by them must be dealt with by the Registrar in accordance with the Minister’s direction and with due regard to public interest.

COMMUNAL PROPERTY ASSOCIATIONS OFFICE [section 2B of the new Act]

4. A completely novel addition, the Bill provides for the establishment of a Communal Property Associations Office (“CPA office“) within the Department of Rural Development and Land Reform (“Department“).

5. The Bill envisages that the CPA office will be the centre of operations for all matters relating to CPAs in the country, in tandem with any regional offices that may be established as branches of the CPA office.

REGISTRAR [section 2C and 2D of the new Act]

6. A registrar of CPAs (“Registrar“) will be appointed by the Minister of the Department (“Minister“).

7. The minimum qualifications and experience required of the Registrar will be determined by the Minister together with the Registrar’s remuneration, in consultation with the Minister of Finance.

8. In furtherance of the Registrar’s main role of administering the CPA office and any regional offices, the Registrar’s functions include, inter alia, –

8.1 establishing a provincial office in each province and appointing a Deputy Registrar for each office established;

8.2 providing assistance to the communities and associations concerned;

8.3 ensuring verification of members of the association;

8.4 registering associations and keeping record of all certificates of registration issued;

8.5 ensuring compliance by associations with the new Act;

8.6 keeping record of any bank account opened in the name of an association;

8.7 keeping record of any delegation made in terms of the new Act;

8.8 providing members of the public with copies of the constitution of any association or similar entity in line with PAIA;

8.9 impressing the seal of Communal Property Associations on –

8.9.1 any certificate of registration;

8.9.2 any addendum to a certificate of registration, e.g. in the event of a CPA changing its name;

8.9.3 any letter that the Registrar provides to an association to present to a bank or institution where the association wishes to open an account and which is valid for the period indicated in the letter; and

8.9.4 any other documents as may be prescribed; and

8.10 performing any other functions assigned to him or her as directed by any court or as may be requested by the Minister or Director-General.

9. Regarding the registration of associations, the Bill replaces the Registration Officer referred to in the principal Act with the Registrar and states that the Registrar –

9.1 shall consider an application for registration of an association together with any prescribed information and the constitution adopted by the association, which constitution must reflect the views of the members of the community; and

9.2 may, if satisfied of compliance with the Act, register associations in the prescribed manner, allocate a registration number and issue a certificate of registration.

QUORUMS [various sections in the new Act]

10. In stark contrast to the principal Act, the Bill provides for a 60% minimum vote in favour of a decision to be made. As such, for a decision to be valid, 60% of the attendees of a meeting, who are eligible to vote must vote in favour of the motion. This 60% rule is applicable when –

10.1 a community adopts a constitution;

10.2 a community decides to amend the constitution or dissolve the association or to dispose of or to encumber immovable property; and

10.3 members of an association adopt a resolution to deregister the association.

CONCLUSION

11. Since the inception of the concept of CPAs and the establishment of the principal Act, CPAs have been marred by tales of corruption, incompetence, lack of service delivery to their beneficiaries and being the scene of outright illegal activities. The CPA Amendment Act aims to resolve the bulk of the challenges faced by CPAs by expressly outlining the rights of communities and the steps to be taken for proper administration.

The establishment of a specialised CPA office and the appointment of a Registrar are welcomed in order to ensure, at a minimum, that there is a centralised agency for the administration of CPAs which will hopefully lead to more accurate record keeping, proper assistance to communities and more information sessions held for the benefit of communities that are beneficiaries to CPAs. The success or failure of the CPA Amendment Act is hinged upon the offices of the Registrar and the CPA office being adequately resourced with adequate skills and resources. A wholescale public awareness drive must be undertaken in order to capacitate communities and CPAs to comply with the provisions of the CPA Amendment Act.

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The advent of the of the discovery of new critical minerals in the quest to fulfil the growing demand for a low-carbon economy, has had unique consequences for South Africa and in particular, for communities that either own or occupy land communally. Many of these minerals are located beneath informal land, where tenure is precarious.

The interactions between mining companies, environmental practitioners, lawyers, funders and communities, are no longer limited to environmental and mining issues. Expertise required are increasingly in the area of the social impact of expanding mining operations onto communal land. It has now become even more critical for mining houses to employ teams that are well versed in not only dealing with mainstream mining and regulatory issues, but in addition, those that have the depth and experience to deal with Traditional Councils, Chiefs and affected communities, in a manner that ensures equity and unity long after the mining activities have ceased. The level of expertise required stretches beyond the realm of land reform and requires professional teams that have an appreciation of cultural rights , values, language as well as the ability to crystallise complex legal and mining concepts to be distilled effectively to the most vulnerable and least educated or skilled member of a community.

Now more than ever, mining communities should be centre stage in mining projects as it is their rights, land, dignity and ancestry that are most affected by mining activities.

The time has now passed where Traditional Councils and communities are spoken for, such that there is an increasing need to monitor and evaluate their level of meaningful and effective participation with Traditional Authorities that filters down to every member of the community.

One such an example is the grave relocation process, which is undertaken in the course of mining expansions and the resettlement of mining communities. In addition to procuring a suitably qualified grave relocation specialists, the observation and respect of the community’s spiritual needs and practices, as well as the relationship that families have with their ancestors requires much more than a desktop exercise.

The Mineral and Petroleum Resources Development Act No. 28 of 2002 no longer affords the holder of mining right priority over the rights of people on their land.

Meaningful and adequate engagement with affected communities, with the assistance of experts that have the know-how remains a key component in ensuring that mining communities and mining right holders build and maintain a relationship of trust that gives effect to sustainable development beyond the life of the mine.

The economic benefits brought by mining into local communities are undeniable, but beyond that, mining communities’ interests and desires are made up of both the tangible and intangible connectedness to their land, which is associated to their sense of belonging and dignity.

The mining revolution towards the exploration for new critical minerals on communal land, provides new opportunities for inclusive growth, where mining can move from an extractive industry, to one that can champion sustainable social impact.

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On 27 February 2024, the Constitutional Court heard oral arguments in the matter of Charnell Commando and Others v City of Cape Town and Another (Abahlali baseMjondolo as Amicus Curiae) (Constitutional Court Case No.: 49/2023) (“Commando“). The Commando matter concerns the impending eviction of some 15 Coloured persons (the “Bromwell Families“) who, together with their dependants, reside at Erf 10626, Bromwell Street, Woodstock (“the Property“) and more specifically, the question of where the Bromwell Families should be relocated to following their eviction. At the time of the drafting of this submission, the Constitutional Court had not yet handed down its judgment in this matter.  

The Applicants contend that the Commando matter must be considered in light of the ongoing gentrification of areas such as Salt River and Woodstock, which are one of the few inner-city neighbourhoods in which Coloured households managed to survive forced evictions such as those in District Six, which saw 60 000 people ejected from the inner city. Consequently, the Bromwell Families argue that it would be unreasonable for them to be relocated to the outskirts of the City.  

The Commando matter has been ongoing for more than 8 years. On 6 September 2021, while the COVID-19 pandemic was still underway, the Western Cape High Court granted an order (“the WCHC Judgement“) declaring the City of Cape Town’s (“City“) implementation of its emergency housing policy unconstitutional and directing the City to provide the Bromwell Families with temporary emergency accommodation (“TEA“) in Woodstock, Salt River or the Inner-City Precinct, and to report back to the Court on the relocation of the Bromwell Families and the specific property to which they would be relocated.  

The City subsequently appealed to the Supreme Court of Appeal (“SCA“), which overturned the WCHC Judgment and upheld the City’s appeal. The SCA set aside the WCHC’s finding of unconstitutionality regarding the City’s emergency housing policy and the WCHC’s directive ordering the City to provide the Bromwell Families with TEA in Woodstock, Salt River or the Inner‑City Precinct, but ordered the City to provide TEA in a location “as near as possible” to the Property.   Following the SCA Judgment, the Bromwell Families appealed to the Constitutional Court. This matter has generated enormous public interest and raises questions about the reasonableness of the City’s policy of not providing any TEA in the inner city and the importance of the location of TEA provided by a municipality in relation to the considerations of justice and equity mandated by the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE“), which is South Africa’s principal law applicable to evictions.  

The South African Constitution mandates the State to take reasonable measures to progressively realise the right of all South Africans to access to housing. The Constitutional Court has, through a series of landmark cases, interpreted and given substance to the meaning and justiciability of this right. The Commando matter will no doubt be followed very closely by all stakeholders with an interest in land reform, housing, spatial planning and evictions in South Africa. This matter has the potential to become a critical part of the future South African jurisprudence on evictions, spatial transformation, and the importance of the location of a specific TEA in relation to its reasonableness.  

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Marking its 30^th anniversary of the Investing in Mining Indaba in Cape Town, which incidentally coincides with South Africa’s 30 years as a democracy, common themes were raised in both South Africa’s President Cyril Ramaphosa’s keynote address, along with that of Minister of Minerals Gwede Mantashe’s speech.

The challenges surrounding backlogs in our rail, port and road networks, along with the energy crisis, remain at the core of major challenges facing mining companies, together with low commodity prices and geopolitical issues are well known. Mining companies are often left to bear the brunt of high transportation costs in an already volatile environment. What also continues to linger, is the historical legacy of careless mining, that has led to a plethora of former mineworkers undertaking illegal mining activities, which has resulted in sophisticated regional criminal syndicates that operate in abandoned mines.

Mining law practices across the country are dominated by matters involving litigation over overlapping grants of mineral rights to various parties over the same piece of land by the Department of Minerals. Lack of transparency in the application and grant of mineral licences, arises mainly from the fact that South Africa does not have a reliable cadastral system that is transparent, effective and efficient. Grants of mineral rights is undertaken by the DMRE. Both the President and the Minister indicated that a preferred bidder to implement a transparent, efficient and effective cadastral system has been appointed, following a rigorous process that involved investigating what would constitute best practice from neighbouring countries.

With major mining companies having taken advantage of decarbonisation and securing their own renewable energy projects, a renewed opportunity has been created to place surrounding mining communities in the centre of benefitting directly and meaningfully. The African continent is at a precipice: with rare earth metals and PGMs lying below its surface, belies a possibility for the continent to drive new industries and beneficiation, on its own terms.  The latter begs the question. A critical factor that serves to assist communities in mining, is the question of whether or not our mining regulatory framework as it stands, serves to meet the objectives of an inclusive, mining industry.

Section 104 of the MPRDA provides for communities who wish to prospect or mine on land that is registered or to be registered in the name of the community. This section exempts communities from submitting a social and labour plan and from compliance from the Mining Charter. However, section 104 does not come without its shortfalls. At the first instance, section 104 envisages its beneficiaries to be land owners that have been registered under a formal cadastral system. This is notwithstanding the fact that 60% of South Africans hold land rights that are not registered under the formal deeds registry system. This position is in direct conflict with what section 1 of the MPRDA defines as a “community”, which expressly provides that it is historically disadvantaged persons with interest or rights in land, who are either formal or informal. This definition aligns with persons who ought to be consulted prior to a mining right being granted to third parties. This conflict has the unintended consequences of being exclusionary to the very communities which are intended from benefitting from section 104. Additionally, onerous provisions that require communities to have sufficient mining technical know-how along with financial and business capabilities, result in section 104 provisions continuing to be elusive concepts.  As a mitigating factor, government must consider a cap on the percentage that external funders are able to acquire from funding community- led mining operations.

A real opportunity lies in government directly and assisting communities on communal land, with the setting up of workable, legally sound Community Trusts that will alleviate the challenge of creating secure land tenure and land ownership rights for communities. The latter requires a focused approach and possible reforms within the MPRDA in favour of a more robust and workable opportunity for communities to have a real stake in the mining revolution that is progressive and inclusive.

In light of this, in order to ensure that section 104 lives to its true potential in the spirit of inclusive growth within the mining sector, and if communities are not to be left behind, government is well advised to consider setting up a bespoke fund that seeks to invigorate and to promote the objectives of section 104 which will enable communities, particularly on communal land to satisfy requirements necessary to conduct technical studies and financial capability without seeking the assistance of external funders. In turn, these communities will pay “royalties” back to the fund which will enable government to continue realising the true goal of section 104.

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With over 6000 thousand delegates having descended at the CTICC in Cape Town for the annual Investing in Africa Mining Indaba 2023, which delegates include 3African Heads of State, 1 Prime Minister and 39 Ministers, this year’s gathering is arguably the most highly anticipated, for a myriad of reasons, chief amongst those being the energy crisis facing the globe due to the Russia/ Ukraine conflict, exacerbated locally, by South Africa’s incessant rolling power cuts and loadshedding.

It is reported that in excess of 200 days in a 365 cycle, were characterised by loadshedding in 2022.  The energy crisis in South Africa is axiomatically, its Achilles heel in its continuous quest to attract investment.  As expected, decarbonisation and the shift towards just energy transition, are set to dominate the essence of the discussions and panels in and outside of the conference.

The 2023 Mining Indaba occurs in a timely moment not only for South Africa, but for the African continent as a whole. Policy certainty, and focused impetus is anticipated into the how’s and when’s, nuts and bolts, set to enable and to achieve the notion of just energy transition. The availability, consistency and cost of energy generation remain key considerations in the imploding green revolution globally.

What is South Africa’s position?

South Africa’s just energy transition investment plan for the initial period of 2023 to 2027 gives effect to the just energy partnership forged at the United Nations Framework Convention on Climate Change (COP26). South Africa’s response included the formation of the Presidential Climate Task Team in February 2022, in the midst of commitments made by the International Partners Group’s to mobilise an initial US$8.5 billion to assist South Africa gradually towards low emission and to accelerate the just transition and the decarbonisation of the electricity system, and to unlock opportunities in the green economy.

In 2022, the Electricity Regulation Bill was published for comment, with the aim of establishing an independent transmission company. This Bill supports the restricting of Eskom and the establishment of an independent transmission system operator, ultimately allowing multiple generators to sell electricity.

In October 2020, the Regulations on New Generation Capacity were amended in order to allow municipalities to procure electricity independently.

In 2021, the amendment to Schedule 2 of the Electricity Regulation Act raised the threshold for electricity generation projects that do not require a licence from 1 MW to 100 MW, and ultimately the 100MW limit was removed in mid 2022.

In October 2021 and April 2002, the preferred bidders for Bid Window 5 and 6 of the Renewable Energy Independent Power Producers Programme were announced in solar, wind and solar PV projects.

Even though the aforementioned measures are steps in the right direction, the energy crisis requires a more robust and focused approach geared towards removing all legislative barriers and licensing thresholds in electricity generation, and the increment of wind and solar power for additional generation capacity.

Why Africa should be a dominant voice and a key player?

Africa has the largest mineral reserves in the world, which include South Africa, Madagascar, Malawi, Kenya, Namibia, Kenya, Mozambique, Tanzania. Zambia and Burundi, with significant quantities of neodymium, praseodymium and dysprosium.  With the Steenkampskraal mine in the Western Cape having the highest grade of rare earth minerals, South Africa holds the promise to become a leading supplier in the international market.

Cobalt, copper, lithium, nickel and rare earth elements are critical for the production of electric vehicles and batteries and to harness solar and wind energy, in the quest to minimise reliance on fossil fuels.

The continent of Africa is strategically placed and positioned to lead the green revolution. This era presents new opportunities for African governments to exercise agency, to breath new and to elevate Africa’s voice and contribution to the green revolution.

Leave no communities behind

In the context of South Africa, it is in the former TBVC states that the highest potential for green energy lies. Provinces such as Limpopo, the Eastern Cape, and Mpumalanga are dominated by communal land, often with no secure and registrable land rights, and sometimes land which is administered by traditional leaders. The insecurity of land tenure in communal areas, and the backlog in the administration of existing land claims which are yet to be settled, pose complex challenges in the renewable energy space.

What this means is that investors face hurdles in securing either long leases or purchasing land that is required for solar and wind energy. Legislative reforms have become even more urgent, which include the introduction and finalisation of a Redistribution Bill, that will provide legislative clarity and certainty for investors and communities.  The fortuitous nature of land required for renewable projects, currently in use by communities, must forge a renewed community-centric and a just economy with communities as equal stakeholders.

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On 1 September 2022, the Eastern Cape Judge President Selby Mbenenge handed down a landmark judgement which cements the importance of public consultation in South Africa – and the potentially catastrophic consequences of improper consultation on businesses. The ruling was deservedly welcomed in local and international media as an important victory for rural communities, informal rights holders, and public interest groups alike, but it also underscores the need for legal certainty when it comes to public consultation.

Shell Exploration and Production South Africa B.V. and two associated entities (together, “Shell”) intended to begin a seismic survey off the Wild Coast in accordance with an exploration right that was granted in 2014.

Shell’s proposed venture raised the ire of thousands of South Africans, who had concerns about the survey’s impact on the Wild Coast’s rich and diverse marine life. Previously in December 2021, the court granted an interim interdict against Shell’s activities. As a result of the new ruling, the Minister of Mineral Resources and Energy’s decision to grant Shell was reviewed and set aside.

Judge Mbenenge’s ruling is an important precedent in three respects – the importance of consultation, the need for a risk-averse approach to environmental issues, and the justiciability (i.e. legal enforce-ability) of spiritual beliefs and traditions.

Cases such as Bengwenyama, Maledu and Xolobeni have emphasised that consultation must be more than a tick-box exercise – it must be meaningful, culturally appropriate, consensus‑oriented, and inclusive. Corporations cannot consult with monarchs or tribal authorities to the exclusion of affected communities themselves. Notices must be in the languages spoken by the affected communities and must be delivered through means which will effectively reach the communities and enable them to participate meaningfully in the consultation. Judge Mbenenge was scathing in his criticism of Shell’s top-down approach, and described it as “a thing of the past which finds no space in a constitutional democracy”.

This ruling has also reinforced the need for a conservative and risk-averse approach to environmental issues, and emphasised the importance of sustainable development and considerations of climate change, following on important precedents such as Fuel Retailers and Earthlife.

Read more on climate change – Stronger Penalties Needed In Climate Change Bill

Finally, the Shell saga also vindicated the justiciability of the constitutional rights to culture, religion and language, and as such protected the diverse customary practices and spiritual beliefs of South Africa’s communities. In December, Judge Bloem said that

“[what] this case is about is to show that had Shell consulted with the applicant communities, it would have been informed of those practices and beliefs and would have then considered, with the applicant communities, the measures to be taken to mitigate against the possible infringement of those practices and beliefs.”

These remarks ring with sombre mindfulness of South Africa’s past of epistemic violence. Judge Mbenenge reverently described them as “timeless in their force and application.” Courts have historically been hesitant to afford these kinds of rights strong legal protection. This ruling represents a clear precedent that such beliefs and practices are worthy of legal protection, and that a decision-maker must give due consideration to them before making a decision that may infringe on them. Where infringement is unavoidable, mitigative steps must be taken to ameliorate the degree of infringement.

These principles have now become crystallised in our law – and certainly, this is an important and valuable jurisprudence. It is aligned with our constitutional values of openness, transparency and accountability, and gives effect to the constitutional right to lawful, reasonable and procedurally fair administrative action. The judgment should be welcomed for its potential to ensure that development happens sustainably and responsibly, and with respect for the human dignity of the communities that it affects.

However (and without detracting from the observations above) when one considers the judgment from a different angle, the following questions arise ‑ when, exactly, has a corporation consulted sufficient stakeholders? Who, precisely, must it consult, and who can it reasonably exclude from consultation? Is there a cut-off period before it can be accepted that a mining right has been validly granted? What other corporations and mining rights are at risk of judicial review?

Shell did in fact embark on a public consultation process. It conducted analyses of interested and affected stakeholders, met with representatives from various groups, commissioned three separate newspaper advertisements, held publicly accessible workshops, and was ultimately met with the approval of the Minister. And, according to Shell, it did all that was required of it in terms of the already existing regulations governing public consultation.

All of these observations support the conclusion that our mining laws must be reconsidered to reflect the jurisprudence that has been developed by our courts. It is desirable for both the mining industry and the communities it affects that we have certainty about what is legally required in terms of consultation.

This will yield twin benefits – corporates will budget to ensure compliance and lessen the risk of legal intervention down the line, and communities will be able to benefit from clearly defined rights, without a court having to vindicate those rights after a long and expensive litigation process.

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National Land Reform

How did we get here?

The Presidential Panel embarked on extensive consultations with the National House of Traditional Leaders in January 2019, the Women’s Land Rights Movement in February 2019 and hosted Land Administration, Rural Women and Grassroots Voices on Urban and Rural Reform engagements in February 2019.  The Panel recommended the transfer of land acquired by the state directly to communities, elevating and protecting the rights of individual and women’s rights on land.

Included in the recommendations was a proposal of a single, national data portal for all related information. The Panel recommended a move away from permissions to occupy to land rights that are legally recognised and enforceable. Central to the recommendations was also a system whereby persons living on communal land would be able to opt-in or out of land tenure systems which may or may not include indigenous law.

What does history teach us?

The Constitutional Court in 2010 (in Tongoane and others v Minister of Agriculture and Land Affairs CCT 100/09 2010 ZACC 10) handed down a judgment declaring as unconstitutional the then Communal Land Rights Act (“CLARA”), 2004. Although the court was mainly tasked with assessing the procedural matters that led the passing of CLARA, it also remarked on the substance of CLARA.

It observed that CLARA had unlawfully sought to give wide-ranging powers to traditional councils, and that in fact, had the effect of undermining the tenure of those communities and persons who were historically deprived of legally secure tenure due to a myriad of apartheid legislation. The Court held that any legislation that is to be enacted seeking to elevate and protect legally insecure tenure, must have the result of restoring land tenure to the communities themselves.

12 years after the Tongoane decision and 25 years since the promulgation of section 25(6) of the Constitution, the tenure of citizens of land living on the apartheid imposed former TBVC states remain vulnerable to unlawful land allocations, lack of consultation when land in developed on their land, and unlawful and patriarchal practices in the hands of some unscrupulous traditional leaders and members of Communal Property Associations and community Trusts.

Section 212(1) of the Constitution

What does the law say?

The institution of traditional leadership is recognised in chapter 12 of the Constitution. Section 212(1) of the Constitution envisages legislation that must be enacted in order to clarify and make provision for the role of traditional leaders at a local level on matters affecting traditional communities and in particular land administration. Section 20(1) of the Traditional Leadership Framework Act, 2003 contemplates the enactment of legislation to clarify the role of traditional leaders on land administration and culture.

On the other hand, section 9 of the Constitution guarantees the right to equality of everyone and to full and equal enjoyment of all rights and freedoms. In designing, reforming, and resolving the complexity of a dual tenure system, government must bear in mind the obligation it has on communal land right occupiers and owners to enjoy the full protection of the law in so far as land tenure is concerned.

Rights of communities

The courts have progressively elevated the significance of the rights of communities even in the context of mining and mining developments, where the consent of communities is required when mining companies develop mining operations on communal land. Jurisprudence is fast developing in such a way that it is unlikely that any tenure reform system that results in the oppression and/or undermining of communal land rights will pass constitutional muster.

It is critical that the legislative role of traditional leaders and/or traditional councils is clarified as being custodians of cultural practices that must be centred on the principles of equality, dignity, and freedom. More importantly, any form/s of landholding and tenure legal instruments must enable families and households to themselves enjoy the legal protection and autonomy on land that is occupied directly by them, moving away from custodianship which is a form of landholding that permeated past apartheid legislation.

Ahead of the Junior Mining Indaba, mining companies are often directly impacted by and often confronted by the incidence of intra-community disputes and a complexity that lies in not having clear guidelines and best practices in community engagements. Tenure reform is thus a critical component in mining activity and if resolved, will go a long way in elevating social and governance systems in mining areas.

In essence, land administration must be a function that lies at the heart of a unified nation that involves planning, monitoring, and evaluation capabilities beyond communal areas.

Ps. This is in my personal capacity as a member of the Presidential Advisory Panel on Land Reform and as Director and Head of Land Reform, Restitution and Tenure practice as Werksmans.

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South Africans have recently been presented with the Expropriation Bill B3-2020 (“the Bill“). While the Bill has drawn vociferous criticism from various voices, it is crucial to view the Bill in the broader context of the land reform project. In the author’s view, a unified system of expropriation and compensation is to be welcomed, as the compensation mechanisms in the Expropriation Act No. 63 of 1975 (“the 1975 Act“) and the Constitution have been inconsistent since the inception of the Constitution.[1] However, it is likely that the Bill, if passed, will be unconstitutional.

Because the Expropriation Bill goes beyond the ambit of the Constitutional property clause and permits nil compensation in certain circumstances, it deviates from the compensation-based nature of the Constitution. If the Bill is to provide for nil compensation, the Constitutional amendment process must be completed first. The Bill is also far too vague in many respects, most obviously with regards to the circumstances in which nil compensation may be payable.

Neither should the Bill be seen as a ‘silver bullet’ which will conveniently solve all the state’s problems with land reform or be construed as an instrument of disaster which will enable the state to grab any land it wants for free and render the affluent homeless.

The state faces many other pressing obstacles to the land reform project. No consistent legislation exists which creates clearly defined goals, methods and rationales for the selection of the beneficiaries of land reform; the post-expropriation obligations of the state and support for recipients of farm-land.

The key aspects of the Expropriation Bill’s potential unconstitutionality.

Subsidiarity

• The first problem is the ongoing process to amend section 25 of the Constitution of South Africa, 1996 (“the Constitution“) which recommenced on 30 June 2020.
• The Draft Constitution Eighteenth Amendment Bill[2] proposes to insert a clause into the existing section 25 to the effect that where land is expropriated for the purposes of land reform, a court may determine that the amount of compensation is nil. However, the final wording of section 25 is unclear at this stage and may turn out to be substantially different from the present section 25.
• By introducing the Expropriation Bill before finalising the process of amending section 25, the Department has put the cart before the horse. The principle of subsidiarity dictates that all legislation must flow from the Constitution. If the amendment is ultimately successful and the amended text of section 25 differs substantially enough from the present section 25, it is conceivable that the Expropriation Bill will be inconsistent with the amended text of the Constitution. [3] If that were to happen, the Bill will need to be amended again. Given that we have, for the past 24 years, had an Act that is inconsistent with the spirit and objects of the Constitution, it seems premature to publish a new Bill while the Constitutional amendment is still pending.

Compensation-based nature of Section 25

• To make matters worse, the Expropriation Bill may also be inconsistent with the current section 25. In its current state, section 25(2)(b) of the Constitution specifically provides that property may only be expropriated “subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided and approved by a court.”
• Section 25(3) of the Constitution does not necessarily envision the payment of market-value compensation, but rather that the amount of compensation and the time and manner of payment “must be just and equitable, reflecting an equitable balance between the public interests and the interests of those affected“. It is therefore arguable that a departure from a market-value compensation approach is justifiable.
• There has been a long-standing academic debate about the meaning of “just and equitable” compensation and whether section 25 implicitly permits nil compensation. Whatever interpretation one is aligned with, there is certainly no academic consensus in this regard. If the Bill is passed, there will inevitably be a flurry of challenges regarding its constitutionality. It would be preferable therefore to first amend the Constitution to obtain clarity on this point.

Vagueness with regards to nil compensation

• Section 12(3) prescribes five circumstances in which it may be just and equitable for nil compensation to be paid, namely where:
  • land is held for speculative purposes;
  • land is held by an organ of state and it not being used for its core functions;
  • land has been abandoned;
  • the market value of land is less than the state investment or subsidy in the acquisition of the land; or
  • the land poses a health, safety or physical risk.
• Some authors have argued that the non-exhaustive nature of this section “creates the opportunity for the state to take any land, for free.”[4] While this is an extreme view, it seems clear that the is suggestive and not peremptory. However, other circumstances may also justify nil compensation.
• The phrasing of this section creates a situation where, instead of limiting the scope of nil compensation, being a deviation from the compensation-based nature of section 25 of the Constitution, section 12(3) is so vague that its precepts may in theory be stretched to apply to any other circumstances in which it is just and equitable to do so. Section 12(3) therefore creates legal uncertainty which will most likely only be settled through crystallisation of judicial interpretation. Hoops argues that the section engenders uncertainty and introduces an excessively wide judicial discretion, adding that the uncertainty might be exploited by the state until such time as a body of jurisprudence has been created by precedent.[5]
• In conclusion, the Expropriation Bill may be unconstitutional for three reasons, namely that it violates the principle of subsidiarity; it deviates from the compensation-based nature of section 25; and it is vague particularly with regards to nil compensation.
  

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[1] T Karberg (2019) ‘Weighing the scales – a critical analysis of the ‘equitable balance’ requirement for compensation under the Constitutional property clause. Unpublished LLB dissertation, University of Pretoria.

[2]The Draft Constitution Eighteenth Amendment Bill is available at https://pmg.org.za/bill/913/.

[3]POWER Talk: Looking at the newly gazetted land expropriation bill (October 12, 2020) Available at: https://omny.fm/shows/powertalk-archive/looking-at-the-newly-gazetted-land-expropriation-b

[4] Viljoen, S “Expropriation without compensation: principled decision-making instead of arbitrariness in the land reform context” 2020 TSAR 35.

[5] Hoops, B “Expropriation without compensation: A yawning gap in the justification of expropriation?” 2019 SALJ 136.

by Thomas Karberg, Candidate Attorney
reviewed by Bulelwa Mabasa, Director and Head of Land Reform Restitution & Tenure Practice

What you need to know about the Expropriation Bill and where it came from, read more.

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