SECTION of DOCUMENT:
SESSION ONE ON THE CURRENT POSITION
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THE LEGAL FRAMEWORK FOR LAND ACQUISITION.
On Friday, November 28, 1997, the Government of Zimbabwe published General Notice no.737/97. In terms of that Notice, 1 471 farms were gazetted as having been targeted for acquisition. The gazetting was, and was intended to be, a major political move. It was a grand step in Zimbabwes much orchestrated land acquisition and redistribution program. In terms of the law, the owners of the gazetted farms were entitled to object to the acquisition of their land within thirty days of the publication of the Notice. All the affected farmers, save seventy, had lodged their objections by the December 28 deadline.
The gazetting of so many farms, in one instance, raises questions as to the extent and limits of governmental power as far as land acquisition is concerned. What rights, if any, do the affected farmers have vis-à-vis Government, how can such rights (if any) may be enforced and, what are the implications of the enforcement of such rights for the land acquisition/redistribution program? In the run-up to the 28 November gazetting and immediately thereafter, the view had been expressed that either no compensation at all was to be paid for the farms to be acquired or, at most, compensation would be paid for improvements only - but no compensation would be paid for the expropriated land itself. As a result, the major concern for the affected farmers, and investor confidence generally, was whether Government could expropriate land without compensation. Whatever the political rhetoric, the question is what Zimbabwean law permits or does not permit Government to do. (assuming of course that Government would always act in accordance with its own laws).
Compulsory land acquisition is governed by the terms of the Land Acquisition Act, Cap. 20:10. Whatever is done under it is to be viewed against the background of the Constitution of the Republic of Zimbabwe.
THE CONSTITUTIONAL POSITION.
The constitution of Zimbabwe is the Lancaster House Constitution that resulted from the independence talks of 1979. The Constitution of Zimbabwe was published as a Schedule to the Zimbabwe Constitution Order 1979 (S.I. 1979/1600 of the United Kingdom). It is interesting to note that the Zimbabwean Constitution is a British law. While this is strictly accurate, it is a bit misleading as in the eighteen years of Zimbabwean independence, that Constitution has been amended no fewer than fourteen times by the Zimbabwean Parliament. The political reality, therefore, is that the Constitution, as it currently stands, is as much a product of the Lancaster House negotiations as it is of much tinkering by the Zimbabwean Government. All the provisions of the Constitution can be said to be part of our Constitution either because the Zimbabwean Zanu-PF Government wants them to be in the constitution, or, does not mind them being there.
In looking at the provisions of the Zimbabwean constitution dealing with the compulsory acquisition of property, it is important to bear in mind that it is internationally accepted that government may, compulsorily, acquire property generally. The requirement is that such compulsory acquisition, generally referred to as expropriation, must be for a public purpose, must be non-discriminatory and, must be accompanied by compensation.
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While the virtually universal viewpoint is that compulsory acquisition of property must be accompanied by compensation to the owner of the expropriated property, there is no unanimity as to the nature and extent such compensation should take. The fifth amendment to the American Constitution simply refers to compensation" without qualifying it. In International Law, in 1938, the American Secretary of State, in a note to his Mexican counterpart, interpreted compensation" to mean prompt, adequate and effective compensation. This was in the context of the nationalization of American properties in Mexico following the 1910-1921 Mexican revolution. The so-called Cordell Hull formulation came to be accepted as the International Law standard for compensation in the case of expropriation of properties owned by foreigners. Let me hasten to add that the International Law Standard per se would be applicable only where a state expropriates the property of a non-national. There is no question of a Zimbabwean national suing the Government of Zimbabwe in the International Court of Justice at the Hague. In fact, even a non-national cannot sue the Zimbabwean Government in the International Court of Justice for the simple reason that the International Court of Justice deals only with disputes between states. As legal jargon has it, only states may be parties to litigation before the International Court of Justice.
What, then, does the Zimbabwean Constitution prescribe?
Four sections of the Constitution are directly relevant to the issue of compulsory land acquisition. They are sections 3, 16, 18 and 24: the most important being section 16. The most important shall be dealt with last.
Section 3 reads as follows:
This Constitution is the supreme law of Zimbabwe and if any other law is inconsistent with this Constitution that other law shall, to the extent of the inconsistency, be void."
The section remains as formulated in the original" Lancaster House Constitution. It is a declaration of the essence of a Constitution. It is the fundamental law to which all other laws and governmental acts must conform. Accordingly, if any provisions of the Land Acquisition Act could be shown to be inconsistent with any of the provisions of The Constitution, those provisions of the Land Acquisition Act would be invalid and of no force or effect. Similarly, any new laws that Government might want to enact have to be consonant with the Constitution. The Constitution itself can, however, be amended by Parliament - provided the amendment is voted for by, at least, two-thirds of the total membership of Parliament. In the present political context, the ruling party would have no problem whatsoever obtaining a two-thirds majority for any amendment to the constitution.
Section eighteen guarantees the protection of the law. In subsection (1), it says:
1) Subject to the provisions of this Constitution, every person is entitled to the protection of the law." This provision is, in effect, a preamble to the rest of the section with the subsections following it spelling out in greater detail the meaning of protection of the law" contemplated in the section. The words in italics did not appear in the original (Lancaster house) version of S.18 (1). They were inserted by an amendment in 1993, in the wake of the Land Acquisition Act. The more substantive subsection (9) states:
(9) Subject to the provisions of this Constitution, every person is entitled to be afforded a fair hearing within a reasonable time by an independent and impartial court or other adjudicating authority established by law in the determination of the existence or extent of his civil rights or obligations." Again, the italicized words were introduced in 1993. Subsections (1) and (9) of section 18 had to be amended as indicated because prior to the eleventh amendment to the
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Constitution, the Constitution, by and large, dealt with land under the general rubric of property". The exception was in that the Constitution expressly recognized the category of under-utilized land". Any person who was dissatisfied with any aspect of a compulsory acquisition, be it of land, machinery or shares, could challenge any aspect of that acquisition in the law Courts. The present position is that where land has been acquired, the affected person may not challenge the fairness of the compensation awarded therefore in the law Courts. S.16 now has an ouster clause - a provision displacing the jurisdiction of the courts to deal with the matter of compensation for expropriated land. The words subject to the provisions of this Constitution " were introduced to accommodate the ouster provision in Section 16 of the Constitution.
The Constitution, in Section 16, protects a persons right to property. The section is part of the Declaration of Rights chapter, the part of our constitution which enshrines fundamental Human Rights. Section 24 (1) provides:
Sections 3, 18 and 24 are relevant insofar as they buttress the right to property as protected by section 16.
Originally, Section 16 read, in part, as follows:
(1) No property of any description or interest or right therein shall be compulsorily acquired except under the authority of a law that -
(5) In the case of compensation payable under subsection (1) in respect of the loss of ownership or enjoyment of a piece of land or a substantial portion thereof to:
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(In the above-quoted provision, for General Division" read High Court" and, for Appellate Division", read Supreme Court") The names of these two Courts have been changed.
Thus, Section 16, as it appeared in the Lancaster House Constitution, did not make a distinction between the compulsory acquisition of land and, the compulsory acquisition of property generally. Land was subsumed under Property".) As far as the legality of expropriations was concerned, the section followed the Cordell Hull International Law Standard. An expropriation had to be in terms of a law that provided for the giving of reasonable notice to the affected person. The expropriation had to be for a public purpose. And, the state had to pay prompt, adequate and effective compensation.
prompt compensation" meant just that. The Government had to pay the compensation there and then - subject to administrative procedures of course.
adequate" compensation had been interpreted, in international arbitrations, to mean market value, and no less. Anything less would not do. The expropriatee had to be placed in the same position as he/she would have been in, in financial terms, had the expropriation not taken place. In the case of May & Ors v Reserve Bank of Zimbabwe (1985 (2) ZLR 358 (SC), It was held that adequate compensation" meant market value". Indeed, Government itself had so provided in the Regulations expropriating the shares. The only issue for the Supreme Court was whether market value" meant the price of the shares on the Johannesburg Stock Exchange, or, the price of the shares on the Zimbabwe Stock Exchange - which latter value included a foreign currency premium.
On the international plane, effective compensation" meant that it was pointless to pay compensation in a worthless currency. Accordingly, the expropriatee had to be paid in a currency of choice. It is submitted that subsection (5) of the unamended Section 16 had this effect. The recipient of compensation monies was allowed to remit their monies outside the country. The provision was necessary because exchange controls would, otherwise, have applied.
Thus, the Lancaster House Constitution provided for prompt, adequate and effective compensation. It was against this background that between 1980 and 1992, Government acquired land on a willing seller willing buyer basis. It had to pay the market value for any land acquired.
It is worth noting that the Basic Law (Constitution) of the Federal Republic of Germany, adopted as far back as 1949, had a more liberal approach to the question of expropriation of property. It did not require that the market value be paid therefore. Article 14 (3) of the German Basic Law provides:
expropriation shall be permitted only in the public will. It may be effected only by or pursuant to a law which shall provide for the nature and extent of the compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected."
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Section 16 (2) of the Constitution of Namibia (1990) is more or less along the same lines. It stipulates:
The State or a competent body or organ authorized by law may expropriate property in the public interest subject to the payment of just compensation." Why is it that the Lancaster House Constitution did not have a similar provision instead of the adequate compensation" formula?
After the 1990 and 1993 amendments, the relevant parts of section 16 are now in the following terms:
The first important difference to note is that whereas Section 16, as originally drafted, dealt with the acquisition of land under the general rubric of property", the current version of section 16 accords special treatment to the expropriation of land. With regard to the expropriation of both land and property generally, still, the State may expropriate land only for a public purpose. The Constitution spells out, in greater detail, the meaning of public purpose. And, as it was before, the acquiring authority must give reasonable notice to any interested parties. It is in respect of the compensation aspect that the 1990 and 1993 amendments introduced important changes. Whereas, previously, Government was required to pay adequate compensation i.e. market value, the constitutional requirement now is that fair compensation be paid."
The fair compensation" has to be paid, not promptly, but within a reasonable time. Section (5), which required that recipients of compensation be allowed to remit the monies received has been repealed. The recipient of compensation for expropriated property has to be content with the Zimbabwe-dollar: being otherwise subject to the exchange control regulations generally applicable to everybody else.
The new formulation of fair compensation within a reasonable time begs the question as to what is fair compensation" and, what constitutes a reasonable time". The two concepts are deliberately open-ended. A lot is left to the discretion of the Courts or other determining authority to define the parameters of fair compensation" and reasonable time." All that can be said of the content of fair compensation" is that it is something falling short of the market value. In determining what is fair, the Court would, it is submitted, take into account the following factors:
Since the coming into force of the Land Acquisition Act in 1992, the Courts have not been called upon to define the concepts of fair compensation and reasonable time. There are two possible explanations for this. Firstly, it could be because those whose land has been designated and acquired are quite happy with the compensation paid and the manner of payment. Alternatively, it could be because where designated land is concerned, one is
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precluded from resorting to the Courts for the determination of any question relating to compensation. It would appear that the real reason is the former. Consequently, the provisions of Section 16 ousting the jurisdiction of the Courts in matters of compensation for expropriated land have not been challenged in the Courts. So, the situation we have is that Section 18 of the Constitution guarantees protection of the laws and requires that every person be accorded a fair hearing within a reasonable time by an impartial and independent tribunal in the determination of his civil rights. This protection of the law through the law courts does not, however, apply to compensation for expropriated designated rural land.
THE LAND ACQUISITION ACT.
The 1990 amendments to the Constitution made it possible to pass the Land Acquisition Act Cap.20/10, passed in 1992. Expropriation of land is governed by this Act. The Land Acquisition Act is in line with Section 16 of the Constitution in that acquisition of land may be done only for a public purpose. Section 3 of the Land Acquisition Act reproduces Section 16 (1) (a) (I) of the Constitution.
The Act provides for two different procedures for the compulsory acquisition of land. In the first place, there is what may be termed a simple and straightforward acquisition. Then, there is expropriation preceded by designation. The simple and straightforward process of expropriation applies to any land, rural or urban. Designation applies to rural land only.
Where land is being acquired without being first designated, the acquiring authority publishes, in the Government Gazette, a preliminary notice of intention to acquire the land in question. The preliminary notice must, among other things, specify the purpose for which the land is acquired. The owner of the land thus gazetted has two courses of action open to them. One may decide to contest the acquisition itself, or accept the compulsory acquisition and claim compensation therefore. Where a person objects to the proposed compulsory acquisition of their land, they must lodge an objection with the acquiring authority within thirty days of the notice appearing in the gazette. Government may, however, the objection notwithstanding, go ahead and acquire the land. However, once an objection has been lodged, Government must apply to the Administrative Court for an order, by the Administrative court, authorizing the intended acquisition, or, where the acquisition has already taken place, confirming such acquisition. Where the Administrative Court is satisfied with the validity of the objection, it may refuse to authorize the proposed acquisition, and, order Government to withdraw the preliminary notice. Where the land had already been acquired, the Administrative Court may order that the land be returned to the expropriatee. Unless otherwise withdrawn, a preliminary notice remains in force for one year from the date of publication thereof in the Gazette. For as long as the preliminary notice remains in force, the owner of the land in question may not do the following without the permission of the acquiring authority:
Further, the acquiring authority may prohibit any other activity that he may specify. Significantly, the preliminary notice does not preclude a farmer from mortgaging the land. The reason is quite simple. When land is being compulsorily acquired, Governments title overrides the interests of any bondholders. It is, therefore, up to the lender to decide whether a
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mortgage bond over land that has been gazetted is a security one can bank on. In the event of an acquisition, the lender too would be entitled to fair compensation - whatever that may mean.
One may decide not to contest the acquisition but just claim compensation. The claim for compensation must be submitted within sixty days of the gazetting of the preliminary notice. Of course, one is entitled to compensation whether ones land is acquired without an objection, or, after an unsuccessful objection. The standard of compensation is the same.
DESIGNATION OF RURAL LAND.
The heading designation of rural land" is tautologous as only rural land may be designated. Any designation is, necessarily, of rural land. The Minister may at any time designate any area or piece of rural land as land that will be acquired in terms of this Act. Designation is not a notice of an intention immediately to acquire. The designation is of land that Government intends to acquire, either immediately, or at some future point in time. Indeed, the notice of designation may indicate the period within which it is intended to acquire the land, which period could be for up to ten years. Any owner of designated rural land or holder of a registered real right in designated rural land who objects to the designation of that land may make written representations to the Minister setting out the reasons for his/her objection. After considering the objection, the Minister may, in his/her absolute discretion, decide whether to amend or revoke the designation. The decision by The Minister is final. The owner of designated land may not sell or lease it without the written permission of the Minister. If one applies for permission, and the permission is refused, one may demand that the land be acquired immediately.
SIGNIFICANCE OF DESIGNATION.
It will be noted that where rural land is concerned, Government may acquire land after first designating it, or, without first designating it. What then is the relevance of designation? I would say that a person whose land is first designated has less rights than one whose land is acquired without designation. If one is challenging a designation, ones objection is made to the Minister who designated the land in the first place. His decision on the matter is final and there is no recourse to the Courts. On the other hand, where there has been no prior designation, a recipient of a preliminary notice of an intention to acquire may object to the proposed acquisition. The objection is considered by the Administrative Court. One may appeal from a decision of the Administrative Court to the Supreme Court.
Where the land has not been designated, the expropriated owner is entitled to fair compensation within a reasonable time. The claim is made to the acquiring Authority and, the claim must specify:
a) the nature of his loss or deprivation of rights; and
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The Act lays down guidelines to be followed by the Compensation committee in the assessment of compensation. The Minister may, also, give the Committee guidelines.
In respect of designated rural land, the Minister is empowered to determine the form and manner which compensation is to take. He can, for instance, decide that the compensation is not to be paid in a lump-sum as long as:
The owner of land that is acquired without being first designated is likely to receive a higher level of compensation than would be the case if the land were first designated. Further, the recourse to the Administrative Court enables him to challenge every aspect of the compensation awarded - a remedy not available to an owner of designated rural land.
GENERAL NOTICE 737/97.
On 28 November 1997, Government gazetted General Notice no.737/97. In terms of that Notice, 1 471 were gazetted for acquisition. Contrary to popular perception, General Notice no.737/97 was not a notice of designation. It was a preliminary notice of intention to acquire the gazetted properties. On its terms, it was, clearly, issued in terms of Section 5 of the Land Acquisition Act, not Section 12, which is the designation section. What is obvious from the General Notice is that it is issued in terms of the Land Acquisition Act. Consequently, it is safe to assume that some public pronouncements notwithstanding, the acquisitions will be in terms of the law, the Act.
In terms of the Act, the fact that the gazetted properties are being acquired without being first designated means that the objections to the proposed acquisitions have to be referred to the Administrative Court. And, from the Administrative Court, one may appeal to the Supreme Court. Both the Constitution and the Land Acquisition Act provide for the payment of fair compensation within a reasonable time. Fair compensation" means fair compensation for the land itself, and the improvements thereon. There is no question of, nor room for distinguishing between the land on the one hand, and the improvements on it on the other. Section 20 of the Land Acquisition Act, which deals with assessment of compensation for non-designated land, expressly provides:
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in assessing such compensation, the value of the land shall be taken into account regard being had to its nature, location and quality and any other factor bearing on its value." The law could not be clearer. Government is obliged to pay fair compensation for the land compulsorily acquired.
The fact that the properties gazetted in General Notice 737/97 were not first designated means that the compensation paid therefore will not be determined by the Ministry of Lands Compensation Committee. Each owner will be entitled to put in his claim and, if there is disagreement, the matter will have to be referred to the Administrative Court.
The gazetting of the 1 471 properties in November last year was done in accordance with the law. There is no reason to believe that the entire process of acquisition will not be in accordance with the Land Acquisition Act. According to that Act, Government is obliged to pay fair compensation within a reasonable time. If the stance is taken that no compensation will be paid for the land, then, that position may be challenged in the law courts. Where land belonging to foreign nationals is expropriated, and the owners are denied access to the Courts, the national states of the affected persons may take up the matter on the international plane.
© Friedrich Ebert Stiftung | technical support | net edition fes-library | August 2001