Ayanda Sakhile Zulu | Policy Officer | Free Market Foundation | mail me |
Through its Rule of Law Project, the Free Market Foundation (FMF) participated as an amicus curiae (friend of the court). The constitutional challenge to the Expropriation Act ran from 3 to 7 August in the Western Cape High Court.
AfriForum, IRR Legal and the Vaderland Stigting principally brought the substantive challenge. Meanwhile, the DA made a primarily procedural case. The FMF appeared alongside other civil society organisations participating in the proceedings.
Adv Mark Oppenheimer and Adv Kessler Perumalsamy ably represented the FMF. They made compelling and well-substantiated submissions to the Court on the Act’s constitutional implications.
Unsurprisingly, the FMF’s participation has attracted the familiar accusation that it is a “white” institution defending “white interests”. Critics also claim its opposition to the Expropriation Act denies the historical deprivation of black South Africans’ private property rights.
This accusation is, of course, false.
The FMF fully acknowledges the historical injustices relating to property ownership. It also believes existing restitution processes can address legitimate claims arising from historical dispossession. To some extent, these processes have already addressed such claims.
Moreover, the FMF demonstrates its commitment to expanding property rights through its own work. Its Khaya Lam Land Reform Project specifically advances tenure reform by working with conveyancers, municipalities and private sponsors. The project helps disadvantaged South Africans living in council-owned rental stock secure title deeds for their properties. With formal title, these properties can become economic assets that allow them to build wealth.
The political origins of the Expropriation Act
The familiar accusation of historical denialism should not obscure the fact that the Expropriation Act did not emerge in a vacuum.
It culminates a political project the African National Congress (ANC) has pursued to grant the state power to expropriate without compensation. A major turning point came at its 54th National Conference in December 2017. There, the ANC adopted a resolution supporting land expropriation without compensation.
The ANC subsequently worked with the Economic Freedom Fighters (EFF) to amend section 25 of the Constitution. They sought to expressly enable the expropriation of land without compensation. However, this attempt ultimately failed in December 2021 because the two parties could not agree on state custodianship of land. Consequently, they failed to secure the required two-thirds majority.
Following this failure, President Cyril Ramaphosa publicly stated that the ANC would pursue land expropriation without compensation through ordinary legislation. This approach would circumvent the need for a constitutional amendment. Parliament subsequently passed the Expropriation Act, replacing the old Expropriation Act of 1975. In January 2025, the President signed the Act into law.
Against this backdrop, the FMF made its submissions to the Court and challenged the Act’s constitutionality on several grounds.
The FMF’s constitutional challenge
First, most states worldwide have expropriation powers to facilitate the construction of public infrastructure. However, citizens whose property the state expropriates should commonly receive appropriate compensation at a market-related price.
Section 25(2) of the Constitution acknowledges this principle and clearly stipulates that the state may only take property in the public interest. It must also provide compensation, with the amount agreed upon or decided by a court. The time and manner of payment must also be determined. As Adv Oppenheimer pointed out, the words “compensation”, “amount” and “payment” are important. Together, they indicate that some form of compensation must follow an expropriation by the state.
These requirements are plainly incongruent with section 12(3) of the Expropriation Act. This section empowers the state to expropriate property for “nil compensation” in an open-ended set of circumstances. As Adv Oppenheimer emphasised, nil may be a number, but it is not an amount. Taking property without compensation therefore constitutes confiscation, not expropriation.
Crucially, section 25(2) has its roots in the broader history of drafting section 25 of the Constitution. This provision formed an important part of the negotiated settlement. During that process, the ANC rejected the notion of expropriation without compensation.
Second, the FMF argued that legislation must bear a rational connection to a legitimate governmental purpose. It argued that section 12(3) fails this test.
Even if “nil compensation” could somehow constitute “just and equitable” compensation, the FMF questioned the government’s reasoning. The government had not explained why it was specifying a rand value (R0) that “may” apply under certain circumstances.
Sections 12(1) and 12(2) already set out the factors for determining just and equitable compensation. These provisions require decision-makers to balance competing interests. Section 12(3), however, effectively allows that balancing exercise to result in no compensation at all. Why?
Third, Adv Perumalsamy argued that the Act is inconsistent with customary international law. He pointed to section 39(1)(b) of the Constitution. This section requires courts to consider international law when interpreting the Bill of Rights.
International law – unequal treatment of property owners
The FMF submitted that South Africa’s obligations under various bilateral investment treaties (BITs) and other international agreements could require compensation. The state could therefore have to compensate foreign nationals whose property it expropriates under section 12(3). Yet a South African whose property the state expropriates under the same provision could receive no compensation.
The FMF argued that this would create an unjustifiable distinction between foreign and South African property owners. It therefore urged the Court to interpret section 25 consistently with customary international law. Section 39(1)(b) of the Constitution requires this interpretation.
The importance of civil society
While the proceedings remain ongoing and the judges are yet to rule, private property rights are finally having their day in court. This is encouraging amid a brazen attempt by the state to grant itself the power to expropriate property without compensation.
The FMF is proud to be one of the organisations standing up for private property rights within civil society. Civil society is becoming an increasingly important sphere for resisting harmful state policy through the courts. While not perfect, the courts remain an important avenue for holding power to account.
It is organisations like the FMF that should be supported so they can continue playing this important role.
