The Usefulness of Michelman’s Utilitarian Approach to Compensation for Expropriation in South Africa

• Jurisdiction: South Africa
• Published date: 16 August 2019
• Date: 16 August 2019
• Pages: 359-376
• Author: W J (Elmien) du Plessis

359

THE USEFULNESS OF MICHELMAN’S

UTILITARIAN APPROACH TO COMPENSATION

FOR EXPROPRIATION IN SOUTH AFRICA

WJ (Elmien) du Plessis

BA (International Relations) LLB LLD

Senior Lecturer, University of Johannesburg*

1 Introduction

During 1892 and 1893 Monet painted the Rouen Cathedral ser ies where

he captured the faça de of the cathedral at differe nt times of the day and year.

This enabled him to show how different light and atmospheres will inuence

the view of the cathedral. In ot her words, the cathedral as an object remained

the same, but seemed differe nt, depending on the angle a nd the different

effect of the light.1

This ar ticle is the rst in hopefully a series of ar ticles that will look at the

same subject matter, namely compen sation for expropriation, through d ifferent

theoretical lenses. The ai m is to see what various theoret ical explanations

of compensation can teach, or war n, South Afr ica about compensation for

expropriation. The relevance of such a stud y is highlighted by the conti nuous

discussions about re-evalu ating the willing buyer wi lling seller model2 that

is seen as an obstacle to land refor m, and understand ing the theoretical basis

for paying compensation for expropriat ion might aid policy makers in deciding

what route is best to follow for South Africa. To evaluate the useful ness of

such a theory, two recent cases in t he context of land and mineral reform

will be discussed. T his article will st art with a discu ssion of the facts of the

cases, and a summ ary of the judgment. Th is will be followed by a discussion

of the compensation require ment in the Constitution of the Republic of South

* Senior Lect urer, University of Joha nnesburg, law facul ty T his is a paper present ed and prepared for t he

colloquium i n honour of Prof Frank Michelman, Intellectuals and Democracy, SAIFAC, University of

Johannesbu rg, 18-07-2012 Tha nk you to Proff David Bilchitz an d Stuart Woolman for inviti ng me to

present a pape r I feel honou red to have been able to engage wit h Prof Michelman on this topic dur ing

the colloquiu m, and am thankf ul for his tips and dis cussion on the topic I also would l ike to thank then

retired now lat e Chief Justice Chaska lson for his questions an d suggestions Prof Thaddeu s Metz of the

Depart ment of Philosophy at the Unive rsity of Johannesbur g also sent me some valuable i nformation in

this regard , and even though not us ed extensively, it did make me as k different quest ions, and challeng ed

my assumptio ns I a m always grateful for tha t Th is article is based on a cha pter from my dissert ation,

Compensat ion for Expropria tion under the Con stitution LLD d issertatio n Stellenbosch (2009), prod uced

under the ment orship of Prof Andre van der Walt His i nfluence can not be overstated I also had u seful

feedback fro m an anonymous reviewer t hat helped me refocus my argu ment Any faults or voids in the

article, however, re main my own respon sibility

1 I a m aware of G Calabresi & A D Melamed “Prope rty Rules, Liabi lity Rules and I nalienabilit y: One View

of the Cathedr al” (1972) 85 Harv L Rev 1089

2 T hus far the gover nment has lar gely relied on what it cal ls “willin g buyer willing s eller models” to ac quire

land This ha s nothing to do with exp ropriation This “m odel” is acquisition of lan d through negotiat ing

with the land ow ner S ee WJ du Plessis “Silence is Golde n: The Lack of Direction o n Compensation for

Expropriat ion in the 2011 Green Paper” (2013) PER (forthc oming)

(2013) 24 Stell LR 359

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Africa, 1996 (“the Constit ution”) from a utilitar ian perspective. It will st art

with a quick overview of the utilita rian idea of propert y before moving on to

the utilitaria n rationale for expropriation. Thereafter M ichelman’s adaption of

the utilitaria n theory for compensation for expropr iation will be discusse d.3

To conclude, this article will evaluate the possible usefu lness and constra ints

of following a utilitarian approa ch to compensation for the South Afr ican

situation.

2 Relevant cases

In Agri South Africa v Minister for Minera ls and Energy4 (“AgriSA ”),

Agri South Afr ica brought an application against t he Minister for Minera ls

and Energy claiming t hat the commencement of the Mine ral and Petroleum

Resources Development Act 28 of 2002 (“MPRDA”), promulgated to

facilitate equitable acce ss to mineral and pet roleum resources, expropr iated

the coal rights of Sebenza ( Pty) Ltd (“S”). The MPR DA brought about a new

mining regime, t hat had the effect of “freezing the ability t o sell, lease or cede

unused old order rights” unti l the Minister of Minerals and Energy conver ted

them into prospecti ng or mining right s.5 It also abolished the entitlement

to sterilise mi neral rights, in othe r words, to “do nothing” with the mi neral

rights. The intention of th is was to reform the trad itional dispensation where

the holding of minerals was li nked to the ownership of the land vest ed in

mostly white owners’ hands, to a disp ensation where the state is the guardia n

of the minerals with the p owers to regulate it as well.6 Although S’s coal

rights continued to exis t after the promulgation of the MRPDA, the tra nsitional

arrangements i n Schedule II required it to apply for a new order r ight under

3 It is i mportant h ere to be aware of the u nique approach t o takings i n the United Stat es of America,

where the quest ion focuses on when com pensation is due In the case of so-ca lled regulatory tak ings,

compensat ion is paid to spread the unequ al burden of a regulation, wh ile in the cases where the sta te

exercises its em inent domain; compensa tion is paid because the stat e acquired propert y Reference to

regulator y takings in t his context is un avoidable This is mai nly because the bu lk of the literat ure is from

the United Stat es of America, where regul atory tak ings are a uniq ue problem Most of the America n

literatu re on expropriatio n concerns itself w ith the question of whe n something is a compe nsable taking

The focus is the refore mostly on when compensa tion is due Nevertheless, the A merican literat ure can,

with carefu l analysis, help to answer the qu estions of why we compen sate, what compens ation is and

how it should be calcul ated Reference to regulat ory takings shou ld not be seen as general pr inciples of

compensat ion, although it is useful in ex plaining when compensa tion is due F Michelman “Propert y,

Utility and Fai rness: Comment s on the Ethical Found ations of ‘Just Compensat ion’ Law” (1967) 80 Harv

L Rev 1165 1169 for exam ple sees these questions as b eing derived from the same b roader question of

“[w]hen a social decision to redirect ec onomic resources enta ils painfully obviou s opportunit y costs, how

shall these co sts ultimately be d istributed am ong all the members of so ciety?”

4 Ag ri South Africa v Mi nister of Minerals a nd Energy 2011 3 All SA 296 (GNP); Minister o f Minerals and

Energy v Agr i SA 2012 5 SA 1 (SCA); Agri South Africa v Minist er for Minerals and Ene rgy 2013 4 SA 1

(CC)

5 Ag ri South Africa v Mi nister for Minerals a nd Energy 2013 4 SA 1 (CC) para 2 To unders tand how these

old rights worked , see BLS Franklin & M Ka plan The Mining and Mine ral Laws of South Afric a (1982);

PJ Badenhorst & R Mal herbe “The Con stitutional ity of the Minera l Development Draf t Bill 2000” (2001)

TSAR 462; PJ Badenhorst & H Mos tert “Revisiting the Tra nsitional Arrangeme nts of the Mineral and

Petroleum Resou rces Development Act, 2 8 of 2002 and the Constit utional Proper ty Clause: An An alysis

in Two Parts – Part O ne: Nature and Content of Righ ts Created by the Transitiona l Provisions” (2003)

15 Stell LR 377; PJ Badenhor st & H Mostert “Par t Two: Const itutionality of th e Minerals and Petr oleum

Resources De velopment Act’s Transitional Pr ovisions” (2004) 15 Stell LR 22

6 For a ge neral discussion on t his, see AJ van de r Walt Constitutional P roperty Law (2 011) 410

360 STELL LR 2013 2

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