Land as a 'National Asset' Under the Constitution: The System Change Envisaged by the 2011 Green Paper on Land Policy and What this Means for Property Law Under the Constitution

This paper takes a close look at some of the main tenets set out in the Department of Rural Development and Land Reform's Green Paper on Land Reform of 2011, specifically those that have a bearing on the creation of a new framework for land law. The purpose is to advance some suggestions as to how new statutory interventions can avoid being contested for unconstitutionality. The analysis focuses on the Green Paper's notion of land as a "national asset", questioning the meaning and implications of such a notion against the debate about nationalisation of important resources. In this context, the paper is critical of the perceived tendency to introduce reforms for the mere sake of political expediency. The guidelines for state interventions with property rights that would pass constitutional muster are deduced from (mainly) the decision of First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 4 SA 768 (CC).


Introduction
One of the many issues arising from the Department of Rural Development and Land Reform's Green Paper on Land Reform of 2011 1 is how the policies it envisages relate to the South African constitutional order. Several concerns have been raised.
One example is misgivings about the institution empowered with determining the value of land for purposes of taxation, rating and expropriation. Another is apprehension about the elimination of the judiciary from the process of determining and/or approving expropriatory compensation. 2 It is difficult, however, to analyse such issues properly at this stage. The Green Paper's purpose is to indicate possible directions of policy change, to solicit comments from developing policy that would eventually translate in changes to existing law. 3 It is too early to predict specific issues of constitutionality that could be raised by a policy change not yet developed, nor implemented. Instead, this paper is about the choices that go into the broader policy framework displayed by the Green Paper, and how this may be translated into legislation that avoids unconstitutionality. * Hanri Mostert. BA LLB LLM LLD (Stell). Professor: University of Cape Town, Faculty of Law. Visiting Professor: Groningen Centre for Law and Governance and Department of Private and Notarial Law, Rijksuniversiteit Groningen. The members of the Department of Private Law at UCT commented on a previous version of this paper. Special thanks for the input of Anne Pope, Jaco Barnard-Naude, Alistair Price, Sindiso Mnisi Weeks, Ernst Marais and the anonymous peer reviewers. Richard Cramer, Janine Howard and Cheri-Leigh Young rendered research assistance that aided the completion of this paper. Their work is acknowledged with gratitude, as is the financial support of the National Research Foundation. Remaining errors and opinions expressed here are my own and should not be attributed to these individuals or institutions. Email: Hanri.Mostert@uct.ac.za 1 DRDLR Green Paper. goodwill is not "an inexhaustible social asset", and that change must be rapid. 23 These statements confirm the Government's awareness that the envisaged policy changes to land reform will be far-reaching, and that some upheaval of existing positions will be unavoidable.
The Government admits in the Green Paper 24 that its problem is that the original target date for the completion of the land reform initiative, 2014, is around the corner and that it is nowhere near meeting the target of 30% redistribution. Though 19 DRDLR Green Paper 1. 20 The resolution of the 52 nd National Conference of the African National Congress (ANC) (December 2007) on agrarian change, land reform and rural development confirmed the ANC's acute awareness and sensitivity to the "centrality of land (the land question) as a fundamental element in the resolution of the race, gender and class contradictions in South Africa" (DRDLR Second, any political agenda has a shelf life of about four to five years. If nothing can be achieved within a particular election cycle, the electorate will be quick to condemn the governing party. 28 The problem is that no land reform venture of the scale embarked on in South Africa 29 can even remotely hope to meet the targets set within one generation, let alone a few election cycles. Although land reform is highly politicised, 30 it is, unfortunately, not an area in which real solutions fit political expediency. This is not a problem peculiar to South Africa. All over Africa, in fact, all over the world, wherever land reform is high on a country's agenda, scholars 31 29 Lund 2012 www.fm.co.za. 30 Mostert 2011 PELJ 85. 31 Adams Breaking Ground 59 as discussed in Palmer 2007 www.gsdrc.org. Also discussed in Mostert 2011 PELJ 85. the cyclical nature of land reform initiatives: The political commitment to land reform is often followed by hesitance or delays in implementation, 32 as the costs and complexities of such ventures become apparent. Delays or slow implementation persists until internal political pressure necessitates renewed commitments to the original initiative, 33 or a rethinking of the existing land reform processes. 34 This is where the problems of linking party politics to land reform become obvious: to expect politicians, land administrators, civil society and donors to take a long-term perspective on land tenure reform is almost impossible to ask. However, a long-term approach is what is really needed.
Yet, regardless of where in the world such tendencies are studied, governing political parties are under pressure 35 to gratify their electorates instantly; or at least devise plans that will appease their electorates for another few cycles, even if real change to proprietary positions or poverty levels cannot so be achieved. For South Africa, the Green Paper is the beginning of that process. It marks the shift from the originally negotiated goals to a more aggressive programme of reform. The shift is the result of a realisation that the original aspirations are not attainable.
The four-tiered structure that the Green Paper proposes indicates its vision. The key features are: 36 (1) "reasonable access to land with secure rights" to fulfil basic housing needs and to enable productive livelihoods; (2) property rights that must be "clearly defined" and sustained by effective governance; (3) "long-term tenure" for resident non-citizens who meet specific criteria; and (4) effective regulatory systems ensuring good administration. The goal of land reform, the purpose of which is promoting "optimal land use" in "all areas and sectors," 37 is to achieve social cohesion and development. 38  favour of secure land rights for all South Africans, and a secondary system of longterm tenure for resident non-South Africans who can invest in ensuring the country's food security and livelihoods, and who can improve agro-industrial development.
With these points in mind, this paper proceeds to scrutinise the core concept espoused by the Green Paper, namely land as a "national asset". In particular, the analysis deals with the consequences of this view of land, which at present is regarded as a crucial resource that (still) lies largely in private hands. The paper considers the meaning of the Green Paper's rhetoric, along with its practical implications for the way our property law is structured at present. Thereafter it is possible to consider how such a policy could be converted into a reform of land law that would align with the constitutional mechanisms for protecting private property interests.

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Land as a national asset The nationalisation debate is at its most heated in the arena of mining and minerals, but there is not much scope here to elaborate. 51 I mention it here only to draw attention to the potential quagmire of problems for the rejuvenation of the land reform agenda.
There is a striking parallel here between the wording of the Green Paper and some provisions of the MPRDA. In its pivotal section 3, the MPRDA determines that mineral and petroleum resources are the "common heritage of all the people of South Africa and that the State is the custodian thereof for the benefit of the nation". 52 The interpretation of this clause has kept scholars 53 busy for the past decade and even though much has been written about it, no court of law has so far taken the opportunities that presented themselves 54 to set out, once and for all, There may be a purpose in "fudging" core notions such as the one of state custodianship of mineral resources in the MPRDA, or the notion of "land as a national asset" in the Green Paper. Evading a clear meaning of such concepts may be the only way, for instance, of achieving a negotiated transformation. But the lesson that may be relevant here is that in the absence of greater clarity about what is meant by referring to land as a "national asset", the law to emanate from the Green Paper will have the same Achilles heel as that of the MPRDA: the fundamental concept is cause for confusion rather than a useful compass. This might give rise to an unnecessarily costly litigation processes in the interest of clarity.
This may have implications for the constitutionality of proposed reforms to land reform law, in the same way in which the MPRDA has come under fire 57 for its supposed expropriatory provisions which do not attract compensation. Elsewhere, 58 I indicated my opinion that the MPRDA does not intend to expropriate existing positions, nor amounts to an inadvertent expropriation. However, the weaknesses of the MPRDA 59 cause the opposite view to continue attracting proponents. 60 What the example of the MPRDA demonstrates, is the challenge to conceptualise the laws that will flow from the Green Paper in such a way that fundamental concepts are not vulnerable to contestation. To allow yet another important legal reform to be hijacked for the sake of political gamesmanship or whatever other reasons there may be, would be succumbing to such vulnerability.
Although the Minister of Rural Development and Land Reform has stated that the government's intention is not to nationalise land, 61 there are indicators in the Green Paper itself that may lead some to believe that the opposite is true. Take  organs that the Green Paper mentions: the Land Management Commission will have regulatory functions to ensure that land-holders will appropriately manage land, 62 and powers to investigate "any issue" relating to land 63 and to verify title deeds for the sake of validation. 64 The Land Valuer-General will have the power to determine compensation for expropriation on the basis of constitutional principles, 65 thus avoiding the current involvement of the judiciary in either determining expropriatory compensation or confirming an agreement about compensation between the parties. 66 The Land Rights Management Board will have the power to enforce compliance with norms and standards, policies and laws. 67 The regulation envisaged by these clauses is extremely broad. It could have significant repercussions for the ability of private land holders to use the land in commercially viable ways. This begs the question of how the Green Paper's vision will affect property law more broadly.

Implications for the structure of property law
South African property law's centre of gravity has always been its understanding of the concept of "ownership" as full or unencumbered control over property within the limits laid down by law. 68 This has been a problematic viewpoint. Some of the most crucial pieces of property law scholarship 69 of the past century demonstrated convincingly that no reliance can be placed on the claim that ownership has ever been absolute. 70 What is striking about clause 3 of the Green Paper, which sets out how private landholding is to function pursuant to the proposed changes, is the lack of support for 62 See DRDLR Green Paper s 6.2(c), 6(5 any conceptualisation which puts control over land primarily in the hands of private individuals. The manner in which clause 3 refers to "rights in property", "access to land with secure rights" and "secure long-term tenure" seems to avoid reliance on the concept of ownership as our law knows it. Traditionally, in our Roman-Dutch law, ownership was conceptualized in absolutist and encompassing terms. Van der Merwe's description of ownership as the "most comprehensive right embracing not only the power to use (ius utendi), to enjoy the fruits (ius fruendi) and to consume the thing (ius abutendi), but also the power to possess (ius possidendi), to dispose of (ius disponendi), to reclaim the thing from anyone who wrongfully withholds it or to resist any unlawful invasion of the thing (ius negandi)" 71 is most telling. The frequently used phrase plena in re potestas confirms, for instance, the owner's ability to act at will with the property within the limits of the law. It also expresses the widely held conception of ownership as the "most extensive" legal relationship that can exist between a person and property. 72 Descriptions such as these do not discount the fact that ownership is not limitless, but are more frequently relied upon to endorse the idea of ownership as full and uninhibited power over property -a notion which might have been more appropriate as a response to medieval feudalism than to the demands of the modern socioeconomic context. 73 In fact, scholarship of this and the previous century has confirmed that conceptually, ownership was never absolute, neither in Roman law nor beyond it. 74 Nevertheless (and paradoxically), the idea of ownership as conveying absolute power over property, especially in as far as it relates to the ability to exclude others from using and enjoying the resource, was a widely 71 Van der Merwe "Things" paras 296, 298. Van der Merwe Sakereg 12-13; Scholtens "Law of Property" 578-579. 76 Van der Walt notes that eviction was ostensibly neutral. However, "when applied in the context of apartheid land policy it soon became obvious that eviction is a political instrument that not only serves a general socio-political purpose in that it entrenches the existing hierarchy of owners and non-owners, but that it could also further less wholesome and far more contentious This is implied from the fact that s 3.1 as well as s 6.4(a)-(d) refer to all types of land (state, public and private), but s 6.4 expressly excludes communal land tenure, stating that it will be dealt with in a separate policy document. 80 This is evidenced by the wording used in the Problem Statement and Vision for Land Reform, mentioned above. DRDLR Green Paper s 2.1 and 2.2 require the state to continue to invest in land relations, while s 3.1 introduces a four-tier system of administration. S 3.4 requires the administration of land through planning and regulatory systems. The creation of the Land Management Commission (LMC) under s 6.5 also evidences state intervention. The LMC has the power, inter alia, to subpoena and question any party, enquire about any land or initiative, grant amnesty and seize or confiscate land obtained through illegal means. In addition, the Land Valuer-General is granted wide powers to determine the price of land earmarked for land reform, arguably ousting the jurisdiction of the courts. The Land Rights Management Board mentioned in s 6.7 also shows a system of state intervention. 81 For example, the LMC has the power to subpoena private and public parties to answer any questions relating to land, enquire about any question relating to land, as well as verify and/or validate/invalidate any title deed in accordance with DRDLR Green Paper s 6.5.2(a)-(c). 82 The state will be involved in the selection of beneficiaries, the valuation of property, as well as the transfer of property through the creation of the Land Management Commission, Land Valuer-General and Land Rights Management Board.
The Green Paper definitely wants to move away from a legal structure in which full control of land lies with its owner. Or, put more mildly, the move is towards a legal structure in terms of which private "title" to land will be subject to much more severe limitation. In doing so, the Green Paper deviates from the pivotal concept of ownership as known in Roman-Dutch law, both in terms of the severity of its envisaged regulatory intervention by the state 83 and in the importance it affords to concepts such as "rights in property," "tenure" and "access", all of which cannot be equated with the ownership concept 84 (at least not in the form it still takes in South African common law as explained above).
There are strong indications here that the Green Paper envisages not merely minor changes to laws that have a bearing on land reform, but indeed fundamental changes to the way in which land law is constructed and practiced. This is the point at which one must ask how constitutionality can be assured.

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Keeping it constitutional power -its ability to impose regulations on property holders 86 -is a legitimate constitutional activity. 87 Section 25 provides that such regulation should not amount to an arbitrary deprivation 88 of property. Can the changes envisaged by the Green Paper be undertaken in such a manner as that they do not amount to an arbitrary deprivation?
To answer questions like these, it is necessary to take a stance on the underlying matter of whether it is justifiable to allow a state to exert this type of severe control over an important resource in a constitutional state such as ours where property rights enjoy constitutional protection from arbitrary infringement. The analysis below supports my view that even severe regulatory control can be justifiable, if regard is had to sections 25 (1), (2) and (3)

The FNB decision and the dictates of section 25
The FNB decision dealt with the constitutionality of a law permitting the confiscation of movable property (motor vehicles) belonging to First National Bank by the South 86 The exercise of police power is legitimate provided that the deprivation is authorised by a law of general application, it is not disproportionate in its effects and it serves a legitimate public The "sufficient reason" test is a substantive one. Procedural fairness is another consideration for which one has to search further than FNB for guidance. In National Credit Regulator v Opperman 106 the Constitutional Court suggested that a deprivation will be procedurally arbitrary if the statute effecting the intervention does not allow courts the discretion to make a just and equitable order. This is supported The FNB decision para 100. 100 The FNB case para 100(e).

102
The FNB case para 100(g). 103 The FNB case para 100(g). 104 The FNB case para 108. 105 The FNB case paras 133.  (1) as a flexible concept, influenced by the circumstances applicable in the case. The suggestion hence is that procedural arbitrariness will be determined by the absence of possibility of judicial control. 108 If Government has its way, as set out in the Green Paper, the extent of state control to be exerted over land and land-holding will be, it is fair to say, far more severe than what has been the case so far. Though this does not necessarily mean that nationalisation is what is intended, the government patently wishes to extend the state's police power -its regulatory abilities -over a resource which is clearly of national interest.
The constitutional property clause itself envisages reforms to land and natural resources that may interfere with property rights, providing in section 25 (8)

What this means for the Green Paper
It is against this backdrop that the question can be asked whether the Green Paper's envisaged regulatory interventions would "cast the net far too wide". 111 Given the Green Paper's vision of a much stricter regulatory regime on land holding in our country, it is possible that laws emanating from this policy document may result in claims of unconstitutionality. However, I would like to argue that unconstitutionality is not inevitable.
Even though the laws envisaged by the Green Paper could espouse a much more interventionist approach with land than what we have at present, it is my opinion that such an approach is possible, and that it can be constitutional when tested against section 25 in its current form, and leaving aside the possibility of a constitutional amendment. The foundations have already been laid in the FNB decision: the sufficient reason test requires that the purpose of an interventionist approach be more compelling, the more extensive the property interests affected by the impositions are. 112 Since land is such a valuable asset, 113 one would expect the motivation for an intervention to be subjected to strict scrutiny.
There seems to be another parallel here between what the Green Paper intends and what has been put in place in the context of mineral and petroleum resources. What the MPRDA does, is to put in place a regulatory system which enables the state to meet its goals of achieving broader and more equitable access to the mining industry, avoiding monopolising of sectors in the industry and to ensure optimal exploitation of mineral and petroleum resources. 114 The Green Paper expresses goals congruent to these, in wanting to ensure equitable land allocation and use, sustained food production and deracialising of the rural economy. 115 The trajectory 111 National Credit Regulator v Opperman 2013 2 SA 1 (CC) para 108.

112
The FNB case para 100(e). 113 The FNB judgment acknowledges the value of land by requiring stricter scrutiny where it is involved -FNB case para 100(f).
for land reform as established by the Green Paper is meant to improve land reform perspectives without impairing agricultural production and food security. It intends to avoid or minimise restitution and redistribution practices that do not generate sustainable livelihoods, employment and incomes. 116 These are goals that make sense in our context, and for which there certainly is justification 117 even if it means that implementing measures would constitute major deviations from current legal positions.
One must ask, however, whether such purposes really necessitate a system change.
To what extent is the system change simply a response to pressures from the disgruntled electorate? How much of the Green Paper is just an exercise in political expediency? It is particularly noticeable that the four-tier system suggested conflates place-to-live issues and food-security issues. At the very least, it is questionable whether these matters have more in common than merely that they are of interest to the electorate. "Place to live" and "food security" are separate matters of national concern. Given the scope of both these problems, why are they conjoined in a document that forces both to be treated only superficially?
The reasons for engaging in the land reform rejuvenation project of the Green Paper are without doubt compelling: a severe intervention will be necessary if the constitutionally mandated goal of land reform 118 is to be achieved within a reasonable time. But what the intervention will be must be carefully contemplated in view of the Green Paper's stated purposes for reform. Moreover, the statutory law emanating from the Green Paper must provide for the possibility of judicial oversight to ensure procedural fairness.
Also, the severity of the intervention may be tempered in many ways for those with existing property holding: One way is to provide for expropriatory compensation.