As the policy stands, it lacks the force of law and is thus unenforceable in light of the constitution, says Phephelaphi Dube.
Pretoria - The Rural Development and Land Reform Department recently published a new policy document that proposes drastic changes to ownership of commercial farms. It proposes equity sharing on farms, the constitutionality of which is questionable.
In justifying the need for the policy, the department cites the constitution, Freedom Charter, National Development Plan (NDP) and “Agenda 21” of the UN.
It also contends these documents address “the necessity to address historical land hunger and extreme concentration of land ownership and control in a few hands”.
Hence to correct this and to “de-racialise South Africa’s rural economy, democratise the allocation and use of land and ensure food security”, the policy proposes the share equity scheme.
This means each farm owner will retain 50 percent ownership of the farm and will cede 50 percent ownership to workers.
The workers will, according to the policy document, acquire equity shares in the farm depending on their length of service.
Workers employed for 10 years get 10 percent of the workers’ half of the business – that is, 5 percent shared among however many employees there are and so on.
Those who have worked on the farm for less than 10 years do not receive anything.
It is unclear how this policy will be incorporated into legislation.
As the policy stands, it lacks the force of law and is thus unenforceable in light of section 25(1) of the constitution that stipulates “No one may be deprived of property except in terms of law… and no law may permit arbitrary deprivation of property”.
Will new legislation be enacted to give the demands of the policy legal authority?
It is difficult to envisage the policy, should it ever be incorporated into law, passing the constitutional test due to its aim of acquiring 50 percent shares equity without reference to any compensation.
Section 25(2) of the constitution allows expropriation in terms of a law for a public purpose or if in the public interest – subject to compensation.
The policy seems to be unclear about the real motive and purpose behind the proposals. Despite references to living and working conditions on commercial farms being irreconcilably marginalised, the protection of farmworkers and their families – seemingly in context of labour rights, tenure security and apparent land rights – is touted as the primary objective.
Does the policy then seek to improve labour rights of farmworkers?
Moreover, does the policy imply the right to fair labour practices must be interpreted to mean employees have a right to their employer’s business? Is that the only way in which the right to fair labour practices for farmworkers can be interpreted?
The policy also mentions the share equity scheme should be built into the “current draft bill” – presumably the Extension of Security of Tenure Act Amendment Bill. Once again, the policy is unclear as to whether its focus is on land restitution or tenure security.
There is a difference between the beneficiaries of land restitution and those of tenure security. Land restitution would cater for individuals who once held property but were dispossessed of it after June 19, 1913. Tenure security is geared towards people living on land that belongs to land owners. The Extension of Security of Tenure Act protects the basic human rights of such people, subject to limitations.
The policy proposal also provides that families can only stay on farms if they adhere to certain “duties and responsibilities”. This takes away thetenure rights provided by the constitution in section 25(6) which states: “A person or community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, to legally secure tenure or to comparable redress.”
The policy makes the tenure conditional upon these unknown sets of duties and responsibilities, despite the constitution providing a basis for entitlement to tenure security. This appears to be unconstitutional, apart from the fact that it creates an incentive for farmers to terminate lease agreements and employment contracts after nine years so that employees do not qualify for the share equity scheme.
This is not to suggest that share equity schemes as a concept cannot succeed.
Similar successful schemes have, however, been underpinned by “preparatory work, including opening communication lines, managing expectations, financial education and promoting productivity and competitiveness”, according to experts.
Where share equity schemes have worked, they have involved substantial private investments. For example, the Solms-Delta Wine estate boasts an equity-sharing scheme that tackles poverty and dependency among its farmworkers.
Exclusively funded from private finance without government involvement, the equity share scheme in the form of a trust, provides education, health care, job skills training and life skills training for the farmworkers. Solms-Delta farmworkers, as shareholders, are also entitled to a share of whatever profit the business makes.
Other successful farm share equity schemes have received government subsidies while others are privately funded, but they work far differently from the model proposed in this policy.
Land reform is a constitutional imperative, but poorly implemented policies will arguably result in job losses and threaten food security. The policy as it stands is unclear as to what issues affecting farmworkers the policy should address. Political parties have expressed their opposition to the policy, alongside business and farmers’ agricultural unions.
Even the governing ANC has reportedly questioned the constitutionality of the policy’s proposals. Hence, it is unlikely that the proposals should come into fruition.
Ultimately, South Africa, as a constitutional democracy, provides for the security of rights against unlawful and arguably unnecessary state intervention.
All laws passed in Parliament must stand up to constitutional scrutiny. It is doubtful whether this policy would meet the requirements of the constitution’s section 25.
Summary of paper on Land Reform and Food Security hosted by the Konrad Adenauer Stiftung and the faculty of law of the North West University on June 19-20