Serious concerns about South Africa’s new expropriation law

South Africa’s new Expropriation Act may conflict with the country’s Constitution, which does not allow for the arbitrary deprivation of land and stipulates that the expropriated party must be compensated.

Law experts from Cliffe Dekker Hofmeyr, Belinda Scriba, Claudia Grobler, and Bridget Witts-Hewinson explained that the new Expropriation Act marks a transformative development for South Africa, whether welcomed or not.

Their comments come after 24 January 2025, when President Cyril Ramaphosa signed the controversial Expropriation Bill into law. 

The commencement date for this Act is yet to be announced, meaning it is not yet in force, and there has been no indication of when the President plans to make this announcement.

The experts explained that the new Act is intended to replace the Expropriation Act from 1975.

In addition, the new legislation adopted the language of Section 25 of the Constitution, which speaks to the right to property and the conditions under which property may be expropriated. 

“The Constitution highlights that property–whether movable or immovable–can not be expropriated arbitrarily,” the experts explained. 

“The Act confirms this position, confirming that there has to be a legitimate public purpose or public interest underpinning the intended expropriation, and sets out the factors which must be considered to determine suitable compensation for the expropriation.”

Specifically, the new Act stipulates the powers of the “expropriating authority”, an organ of state or person legislation empowers to expropriate property. 

Under the new legislation, for example, the Minister of Public Works and Infrastructure would be an “expropriating authority.”

The centre of the new Act’s controversy lies in the express power it gives to the expropriating authority to offer nil compensation for the expropriation of land for public interest purposes.

The authority can only expropriate for nil compensation after considering all relevant circumstances, including the ones specifically listed in section 12(3) in the Act. 

Constitutional questions

Since this Act was signed into law, it has been heavily criticised for this “nil compensation” provision. Many question the legislation, specifically this provision’s constitutionality.

The experts explained that South Africa’s Constitution “speaks to not only the impermissibility of arbitrary deprivation of land but also the fact that the expropriated party must be compensated for the expropriation”.

In simpler terms, Section 25 of the Constitution does not allow someone to take land without reason, and it states that the person whose land is taken should be compensated for it.

A few years ago, there was an attempt to amend this section of the Constitution to unambiguously align with the possibility of offering no compensation.

However, the National Assembly rejected the proposed amendment and it never came into force.

The experts said it is uncertain whether the new Expropriation Act’s wording of “nil compensation” compared to phrasing like “no compensation” would be sufficient to succeed against a constitutional challenge.

They said this can only ultimately be determined by a court if and when the matter comes before it.

“The Act provides a structured and comprehensive process for expropriation in the public interest and/or for public purpose,” they said. 

“By aligning the legislation with our constitutional mandate and values, the Act has emphasised the commitment to balance public needs with the rights of property owners.” 

They highlighted that the introduction of mediation as the first step in resolving compensation disputes shifts the emphasis towards amicable negotiations.

This offers a less adversarial approach to expropriation, which the experts believe is necessary in light of the delicate balance between expropriation for public purpose and/or public interest and property ownership. 

“The Act and its implementation are not without their challenges, however,” they said. 

“Ultimately, the implementation of this Act will require careful navigation by all stakeholders, with courts playing a critical role in response to emerging issues and disputes.”