Objection to the amendment of section 25 of the South African constitution
Dear members of Parliament, At Royal De Heus we take pride in the impact our activities have on the development of the agricultural sector as well as our contributions to the local communities in the countries in which we operate. Which is why we have always been proud to be part of the growth and professionalization of the agricultural sector in South Africa. Since 2007, the year we started our operations in South Africa, we have invested and grown our business each year. We currently employ 470 people and intend to invest 200 million Rands over the next two years which will create another 110 jobs within our company.
The above is why we believe it is important to lodge our objections regarding the proposed amendments to section 25 of the South African constitution. These amendments will allow ‘nil’ compensation to be paid, for both land and ‘the improvements thereon’, in circumstances that remain unclear and will be decided by Parliament (by ordinary legislation) from time to time. ‘Improvements’ are not defined, but are assumed to include houses and office premises, along with milking sheds, agricultural processing factories and private dams.
Yet, as Judge Antonie Gildenhuys, a retired judge of the Land Claims Court has written: ‘The constitutions of most constitutional democracies worldwide require that the expropriation of a property be subject to the payment of just, fair, full, or adequate compensation to its owner.’ Going against this international consensus and allowing nil compensation on expropriation could seriously damage the South African economy, as private businesses are likely to withdraw investments once the protection of ownership is no longer guaranteed. This will undoubtedly lead to an economic downturn and higher unemployment, which will negatively impact the lives of all South Africans. For Royal De Heus, and many other international companies operating and investing in South- Africa, acknowledging and safeguarding the ownership and investments of private businesses and consumers is fundamental to our confidence in the country. If these rights are no longer protected, we will be forced to reconsider our investments in the coming years.
Safeguarding investments is also vital for nations that wish to be part of the global market. South Africa’s access to global markets is greatly facilitated by international companies, such as Royal De Heus, which do business in the country. Royal De Heus also contributes to capital formation, jobs and economic growth, thereby adding to prosperity and helping to improve living conditions for all.
We acknowledge that there are huge challenges regarding land ownership in South Africa which need to be resolved. However, introducing nil compensation on expropriation will not overcome the real barriers to land reform – yet will surely make existing problems still more severe.
We believe that the proposed amendment will do serious damage to the South African economy as well to the country’s reputation with businesses, consumers and other countries within the global market. Therefore, we strongly urge the government to reconsider the amendment to section 25. This will protect the property rights of all South Africans and enhance the country’s capacity to prosper and grow.
CEO De Heus South Africa