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Don’t drink the Kool-Aid on the Expropriation Bill

Author: Frans Cronje

The government wants the power to take your house, business, shares…and a whole lot more.

The IRR disagrees very strongly with the views on the Expropriation Bill expressed by Mr Coenraad Bezuidenhout on Politicsweb earlier this week (see here). According to Bezuidenhout, the Expropriation Bill, which is currently making its way through Parliament,“is by no means the disaster for investor concerns”. Hence, he states, the Democratic Alliance and the chairperson of its national caucus, Anchen Dreyer, are wrong to oppose the Bill. The Bill in fact forms a key part of a raft of legislation and policy interventions which are aimed at weakening property rights and investor protections in South Africa.

 

As my colleague Dr Anthea Jeffery has explained, the Bill’s most harmful effect will be to allow the state to take property as “custodian”, rather than as owner, and so avoid paying any compensation at all for that property. The custodianship point is important but also complex. Writing for BizNews.com this week Dr Jeffery explains that the Bill, “seeks to define ‘expropriation’ in a way that would exclude the taking of custodianship (rather than ownership) by the State.

Where a taking by the Government does not count as an expropriation, then no compensation is payable under the Constitution”. What this means is that if the government takes your business or farm or home or patent as owner of that asset, then it must pay ‘just and equitable’ compensation for that property.  But if it takes such property as ‘custodian’ for the people of South Africa, it will not have to pay you anything at all.

 

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