Abstracts

43 Agricultural Business Chamber—Theo Boshoff, Wandile Sihlobo, and Sifiso Ntombela— published a white paper that noted the economic implications of EWC on South Africa’s agro- industrial complex. They articulated that the threat of EWC would disincentivize white farmers from investing in their businesses as well as deter prospective investment into commercial farming and related industries. A dearth of investment would make commercial farmers and agribusinesses hard pressed to produce at the level necessary to maintain current crop prices in South Africa. In other words, EWC would commence a stagnation of investment into the agro-industrial complex, which, by necessitating higher prices, would increase food insecurity amongst the lower class. Agriculture, including related upstream industries and downstream industries, con- stitutes approximately 7% of South Africa’s real GDP (Boshoff et al., p. 4). Not only would food security be threatened but also about 7% of the economy would struggle to attract the investment required to maintain its current size. Lastly, a dearth of investment in the agro- industrial complex could further perpetuate South Africa’s already exorbitantly high unemployment rate (29.1% as of January 2020) due to the labor-intensive nature of the sector. Recommendations The cons of EWC blatantly outweigh the potential benefits. If the draft Constitution Eighteenth Amendment Bill should pass (even if backed by strict limitations in a corresponding expropriation bill), South Africa will have opened the floodgates for increased capital flight, increased legal liability, and increased food insecurity. Parliament would be well advised not to pass the Amendment Bill or any other EWC legislation in the foreseeable future. Although there is merit behind social and spiritual arguments in favor of EWC, it is deeply antithetical to South Africa’s economic interests. A nation with stagnant economic growth that is completely reliant on FDI and foreign markets is in no position to denigrate the idea of land as a commodity. For all the social and spiritual advantages of EWC, the most pressing issues in South Africa (unemployment, food security, and poverty) will only become worse and more endemic. However, it is true that the draft Constitution Eighteenth Amendment Bill allows for a limited version of EWC since it merely “sets out specific circumstances where a court may determine that the amount of compensation is nil.” The resulting national legislation, in an ANC- controlled parliament, would enumerate very limited “specific circumstances” where EWC applies in a revised expropriation bill. Even if a new expropriation bill somehow passes, and EWC is limited to “specific circumstances” like state-owned enterprises; abandoned land; and land obtained through criminal activity, donation, or informal settlement areas, the draft Constitution Eighteenth Amendment Bill sets a precedent for EWC-related national legislation and/or EWC-related amendments in the future, which could be far more radical. If an amendment is passed, political actors should do all they can to prevent the draft Constitution Eighteenth Amendment from creating a slippery slope on the way to radical land reform. For example, Parliament must at least have unambiguous definitions for terms such as “absentee landlord,” “purely speculative,” and “hopelessly indebted” in the revised expropriation bill, if not in Section 25 of the Constitution itself. If defined in the Constitution, the burden to expand the scope of EWC in future expropriation bills would be exceedingly difficult. Furthermore, the Sixth Parliament would be well advised within any amendment to Section 25 to make sure that foreign-owned land is provided for. As discussed previously, an EWC amendment that does not provide for FDI-backed property opens up the South African government to legal liability within the international investment court system and greatly damages its international reputation as the premier location of foreign investment in Africa. A clause within Section 25 should explicitly protect property that was previously protected under the Protection of Investment Act, 2015. In doing so, South Africa will minimize its legal liability because the explicit constitutional protection of FDI-backed property certainly meets the international minimum standard for expropriation. At minimum, the clause should explicitly protect