absa comes under fire over expropriation bill 
19 June 2008

Absa legal spokeswoman Raksha Semnarayan had supported earlier representations in public hearings that clauses confining the courts to reviewing expropriation proceedings conflicted with the property clause in the constitution. She also had reservations about the wide definition of public interest.

Cosatu’s Prakashnee Govender had thrown the federation’s support behind the new expropriation law and said there was a tendency to “retreat into challenges of constitutionality”. Cosatu supported the principle that market value be only one factor in deciding on compensation after expropriation.  In response to challenges from MPs, Semnarayan complained she was under attack for seeking clarity on an important piece of legislation and asked committee chairwoman Thandi Tobias for protection. Tobias called on MPs to confine themselves to questions of clarity.

Absa Group CE Steve Booysen said in a separate written submission that “the expansion of the grounds for expropriation from being solely for public purposes to also include the public interest is of concern to us. We understand that land reform is an important part of redressing the injustices of the past, but believe that where expropriation is used as a mechanism for effecting land reform, this should be done in a fair manner and in accordance with sound legal principles”.

The width of public interest created seemingly unlimited grounds for expropriation and “will create the opportunity for abuse of the legislation and cause uncertainty with property owners and security holders (like financial institutions) about their property and security rights and their vulnerability to expropriation”.  Booysen said: “The Expropriation Bill, as it stands, will have serious effects not only on property owners and financial institutions but on the whole of SA. Consequently, the content must be reconsidered, in consultation with all stakeholders.

“If any property can be expropriated by government at any time for almost any reason and without the owner necessarily receiving a fair and market-related price for such property, economic uncertainty and a lack of confidence in the country will be created,” Booysen said.

Wyndham Hartley, www.businessday.co.za