PROPERTY RIGHTS IN ZIMBABWE’S DRAFT CONSTITUTION

 

Alex T. Magaisa

 

The right to private property is an important part of any Bill of Rights in a constitution. The institution of private property is a critical part of the economic framework. Normal measurements of a country’s conduciveness as an investment destination invariably refer to the extent to which a country protects property rights. Property rights serve an important role in the market, assisting in facilitating the provision of credit facilities. The general belief is that countries that protect property rights tend to do better economically than countries that have weak property rights systems.  At the individual level, every person who invests his or her time, labour, money and other resources is naturally desirous of protection of the fruits of his or her labour and investment. You do not want or expect someone more powerful to take the fruits of your labour and worse still for that to happen without getting compensation.

 

The institution of property rights has not been without controversy in Zimbabwe. This is reflected in the contestation over land, which has occupied generations. The difficulty of over property rights is reflected in the manner in which it is dealt with in the draft constitution. As we shall observe, agricultural land is separated from all other forms of property and is therefore dealt with under entirely different provisions. For reasons explained below, this paper focuses on all other forms of property except agricultural land.

 

All Other Property

 

• According to Clause 4.28(2), “every person has the right to acquire, hold, occupy, use, transfer, hypothecate, lease or dispose of all forms of property, either individually or in association with others”. This is, however, subject to section 4.29 which deals with agricultural land. It means that these provisions do not apply to agricultural land which is dealt with under section 4.29. Given the sensitivities over and the historic significance of the Land Question, we shall devote an entire blog to the issue of agricultural land and how the contentious question is handled in the draft Constitution.
• Clause 4.28 therefore deals with all other forms of property apart from agricultural land. Indeed, Clause 4.28(1) defines “property” as being “property of any description and any right or interest in property”. Reference to “any right or interest in the property” as constituting property is significant because it includes property rights other than ownership. If you have an interest in a property, that interest constitutes property. In practical terms, if you hold a share in an asset, that interest is a form of property that is protected under this clause. If you are a partner in a business, your interest in the property of the partnership constitutes property protected under this clause. What this means is that schemes such as those falling under indigenisation policies will have to comply with these provisions to the extent that they affect the interests or rights of persons. Although it does not include agricultural land, it includes all other types of land such as urban land.

 

Property Rights to All Persons

 

• Another important point to note is that unlike other rights in the Bill of Rights, the right to private property applies to “every person” and is not restricted to citizens. A closer look at some of the rights in the Bill of Rights shows that they refer to “citizens”, which appears to discriminate against non-citizens. The right to private property applies to all persons, citizens and non-citizens alike. This may seem insignificant but it is important for economic purposes. It means a foreign investor in Zimbabwe would be entitled to as much protection as a Zimbabwean citizen in regards to property rights. Foreign investors and indeed any investor, look to the protection of their investments and economic interests and strong property rights are a useful indicator of a country’s safety as an investment destination.

 

Compulsory Deprivation of Property

 

• Clause 4.28 prohibits “compulsory deprivation of property” unless specific conditions are met. The following conditions must be satisfied:

 

• The deprivation can only be done in terms of a law that applies generally. First, this means that any deprivation of property must be based on law and cannot be arbitrary. If deprivation takes place outside the law it would be a violation of this provision and therefore unlawful. This means that the law must not be targeted at specific individuals or groups. It aims to prevent selective application of the law.
• The deprivation must be necessary for any of the following reasons: in the interests of defence, public safety, public order, public morality, public health or town and country planning;  or in order to develop or use that or any other property for a purpose beneficial to the community. This is not an uncommon exception to the right to private property but other conditions must be satisfied.
• Before depriving a person of his or her property the acquiring authority must:

 

• §Give reasonable notice to everyone whose interest or right in the property would be affected by the acquisition;
• §Pay fair and adequate compensation for the acquisition before acquiring the property or within a reasonable time after the acquisition;
• §if the acquisition is contested, apply to a competent court before the acquisition, for an order to confirm the acquisition. This must be done within 30 days after the acquisition.

Comment

 

There are some important consequences arising from this wording. Traditionally, a distinction has been made between deprivation of property and compulsory acquisition of property. The major effect of the distinction has been that there is a requirement for compensation for compulsory acquisition whereas there is no compensation for deprivation. Our own Supreme Court drew this distinction in the case of Hewlett v Minister of Finance and Another in 1982. This distinction is also drawn in section 25 of the South African Constitution and it is in cases of expropriation (compulsory acquisition) where a constitutional requirement for compensation exists. The major purpose of the distinction has traditionally been to allow the state to have powers to regulate the use of property for the public good without at the same time risking liability to owners of rights who are affected by such regulation.

 

Nevertheless, the way in which Clause 4.28 is worded seems to blur this distinction. The clause refers to both “compulsory deprivation” and the “acquiring authority” as if deprivation and acquisition refer to the same legal concept. Indeed, it refers to “compulsory deprivation”, a term hitherto unused in the constitution. Significantly, the way the conditions for “compulsory deprivation” are stated suggests that deprivation attracts compensation and the traditional distinction between deprivation and acquisition will be consigned to the archives. As far as the rights of persons are concerned, this is not a bad thing as it safeguards the rights against deprivation in the same way as rights against acquisition. The need to develop a doctrine of constructive acquisition, through so-called deprivation will no longer be necessary. Whether a person is deprived of his or her property or that property is acquired, he or she will be entitled to “reasonable notice”, “fair and adequate” compensation and more importantly, to challenge the deprivation/acquisition in a court of law.

 

Right to a Fair Hearing

 

A further point to note is that procedurally, it is the acquiring authority that must apply to court for confirmation of its acquisition. A person who is affected only has to challenge the proposed acquisition.   If the court does not confirm the acquisition, a person is entitled to apply to court “for the prompt return of the property”. The use of the word “prompt” means it must be immediate return. They could have required return of the property “within a reasonable time” but by using the word “prompt”, the intention is clear that it must be immediate. The right to challenge the compulsory deprivation of property is good and consistent with a strong regime for protection of property rights. It is consistent with the right to a fair hearing which is also provided for in the draft Constitution.

 

Compensation

 

Clause 4.28 (3) (e) entitles a person to claim compensation for the deprivation or acquisition of property. Any law authorising acquisition should permit an affected person to apply to a competent court for the determination of the existence, nature and value of their interest in the property, the legality of the deprivation and the amount of compensation. A person should be entitled to apply to a competent court for an order “directing the prompt payment of any compensation”.

 

For the avoidance of doubt, these rights do not apply to agricultural land, which is dealt with very differently and controversially under section 4.29, which we will deal with in the next blog.

 

Conclusion

 

By and large, the property rights clause appears to deal with all other forms of property fairly. The rights are extended to all persons and not restricted to citizens. The right to compensation is recognised. The right to approach the courts challenging the deprivation and amount of compensation is recognised. The distinction between deprivation and acquisition has been removed. This would seem to be a pretty beautiful clause on property rights; one that would promote the country as a safe haven that protects property rights. That would appear to be the case until one looks at the next clause, Clause 4.29, on agricultural land, to which we shall next turn our attention.

 

wamagaisa (2012)

 

This information reflects my personal views and not the views or opinions of any person or organisation with whom or which I may be remotely associated. Anyone who wishes to use this information commercially or otherwise, should seek my express permission prior to using it, and may be asked to make a modest contribution to charity for use of this material. Email: wamagaisa@yahoo.co.uk