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Report and recommendations by the Panel of Experts on the Development of Policy regarding Land Ownership by Foreigners in South Africa
Prof. Shadrack Gutto (Chairperson), Dr Joe Matthews (Deputy Chairperson), Prof. Fred Hendricks, Mr. Bonile Jack, Prof. Dirk Kotzй, Mr. Mandla Mabuza, Ms Nothemba Rossette Mlozi, Ms Mandisa Monokali, Mr Cecil Morden, Ms Christine Qunta
Panel of Experts on the Development of Policy regarding Land Ownership by Foreigners in South Africa
August 2007
SARPN acknowledges the Parliamentary Monitoring Group (PMG) as a source of this document: www.pmg.org.za
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Introduction
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For reasons contained in the Report, land is a finite and an indispensable asset which defines a people’s identity and provides human dignity. It is an integral component of national sovereignty and a basis for national cohesion. To the extent that the Executive Authority is enjoined by the Constitution to develop and implement national policy1, the Panel concluded that Cabinet ought to consider a wide range of factors raised in the Report, and not focus exclusively on the size or percentage of land owned by foreigners. In other words, the precautionary principle in responding to threats ought to be preferred2.
The Panel’s opinion is that determining the exact size of land owned by foreigners and the purpose for which the land is used, are indeed important and will be relevant for national sovereignty, governance, security and economic policy considerations. They have to be pursued as a matter of urgency. This Report provides indicative statistics and information regarding land ownership by foreign individuals. As far as ownership by foreign corporations and trusts is concerned, statistics are incomplete and extremely difficult to collect and interpret. The Panel has initiated a process to analyse the existing records held by the Deeds Registries, the Masters’ of the High Court’s Offices, Companies and Intellectual Property Office (CIPRO)3 and commercial banks. It is one of the tasks which the Department of Land Affairs will have to continue with after the Panel has concluded its work.
For the purpose of assisting in developing South African policy on landownership by non-South African citizens it is important to provide international comparisons. This is vital to determine whether there are any appropriate lessons to be learnt from attempts to regulate foreign land ownership in other countries. To this end, the Panel investigated comparative foreign trends at some length. The Panel analysed policies and laws from several countries and then selected and visited a few, on the basis of their levels of economic development and the manner in which they have managed regulation of land holding by foreigners while continuing to attract foreign direct investment. The countries visited were Canada, Chile, Brazil, Indonesia, Singapore, England and Scotland.
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In carrying out its mandate, the Panel adopted an approach that starts with a critical and holistic understanding of the meaning of land and the land question in South Africa. In brief this entailed a departure from the narrow meaning of land as merely an economic resource and a commodity in the market, to the understanding of land as the national heritage of all the peoples of South Africa. It was bequeathed by nature and past generations (ancestors) to those who are living to-day to hold and nurture for the benefit of the present and future generations. In the broader African context, land is not just “a thing”, as understood in transplanted conventional Roman Dutch Law that places land in the legal regime of the “Law of Things”. As a Nigerian Chief submitted to the West African Land Commission in 1912:
“I conceive that land belongs to a vast family of which many are dead, few are living and countless yet unborn”4. In Africa, including South Africa, land has historical, political, economic, social, cultural and spiritual value and meaning. There are indeed many other societies, such as the Chinese, who regard land as holy.
It is to be pointed out that except for land previously falling within the infamous 13% reserved for the majority “natives” by the colonial regimes in South Africa since 1913, land in South Africa has been the subject of sustained commoditisation for a long time. In determining the significance and policy-relevance of the size, value and impact of land owned by foreign nationals, one has to take account of these multiple, but interrelated, meanings and context.
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The Panel concluded that foreign natural persons own around 3% (and a significantly higher percentage in coastal and game farming areas) of land in the categories of erwen (land used for residential housing), agricultural holdings, farm land and sectional titles. The size and value of foreign ownership will certainly be higher once the process of analysing information regarding corporations, trusts and section 21 companies is completed. It is important to point out, however, that the exact size and value of land owned by foreign nationals can only be established definitively once all existing and future registered owners (natural and corporate) have made declarations and disclosures in the form and manner recommended below.
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From the public hearings conducted in the nine provinces and written submissions to the Panel, it was established that the ordinary citizens, both black and white, feel very strongly that acquisition of prime land by foreigners is denying them affordable access to land and rendering them strangers in their own country. (See Section One, Part 1 below). Given that foreign ownership tends to be concentrated in certain areas (according to a provisional analysis of available Deeds Registries information and information gathered from the public hearings and written submissions), it may have serious implications for the dynamics of development in the country.
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The Panel established that the lack of a national policy on the regulation of foreign ownership of land in South Africa is certainly not the norm in the world, including countries with comparable economic systems and levels of development and even in countries with more advanced economies.
Footnotes:
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Section 85 (2)(b) of the Constitution.
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ptG N Mandel and J T Gathi, “Cost-Benefit Analysis versus the Precautionary Principle: Beyond Cass Sunstein’s Laws of Fear” University of Illinois
Law Review, Vol. 2006, Number 5 (2006) 1037-1079.
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The Panel is aware that CIPRO has been criticized in the media for the backlog in its processing of information and updating of its records (see the
Editorial “Sorting out Cipro”, Business Day, November 10, 2006).
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T.O. Elias, The Nature of African Customary Law (1970) at page 162. See also Edwin A Gyasi and Juha I. Uitto, Environment, Diodiversity and Agricultural Change in West Africa: Perspectives from Ghana (United Nations University Press (1997), at page 1.
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