Dear Reader

South Africa is a country in reformation and transformation. After the Apartheid era, numerous mechanisms have been set in place to address issues raised by citizens of the Republic in view of the Constitution. These include laws regulating affirmative action in the work place, the “Forderung� of black economic empowerment in the business arena and gender equality in all spheres of the economy.

Debates have arisen with regard to the ownership of land by foreigners since 1994 as a result of the increasing acquiring of land in South Africa by foreigners. The main concern being that the extent of the land in foreign hands was uncertain. A further concern is that the phenomenon of foreigners owning South African land especially coastal and inland prime tourism and game reserve land is materially influencing land reform as the government will not meet its Constitutional duties to the citizens of all races of the country. The increase in property prices is also seen as a consequence of this trend which in turn has resulted in the perception that South Africans cannot afford to own land in prime / exclusive areas.

After the Land Summit in July of 2005, a Panel of Experts was set up to guide this process of land reform and this report has now been publicised. One of the main questions the panel had to answer was “Who owns South Africa?�

The report has as its basis the fact that the management of foreign land ownership is evident in many countries worldwide. The comparative study reflected upon the land management of countries such as Switzerland, Singapore, Indonesia, Canada, The United States of America, Brazil and China among others.

The summary of the actionable recommendations by the committee emphasise on the disclosure of nationality, race, gender and other information. Currently the Deeds Registries are not subject to providing the above mentioned information and in fact, cannot provide this information. It is recommended that the registration of title be along the lines of FICA (The Financial Intelligence Centre Act) which is already legislation in South Africa. This means that more comprehensive information including nationality among others be required for the registration of all titles in the said Deeds Registry. This would be applicable to past, present and future registrations. That means that persons who already owners of land prior to the coming into effect of these reforms are required to make a declaration with the information required.

It is also recommended that similar declarations be made by companies but in accordance with the provisions of the Companies Bill which is also currently under construction.

A further recommendation is that classified or protected areas be banned from foreign land ownership in total. It is interesting to note that these areas would in most cases be prohibited from ownership by citizens as these would include areas of historical interest, environmental consideration, national interest, cultural interest and national security. These areas include the coastal areas which areas are deemed to be cultural heritage sites.

It is interesting to note that the report recommends a limited moratorium on the acquisition of land by foreigners for a period of two years. This will result in a prohibition of the disposal of land owned by the state. In other words, there would be a prohibition on the sale of land to foreigners which is currently held by the municipality or government. It is important to note that this is not a blanket prohibition.

The recommendations made by the committee indicate that an emphasis on land reform will in fact be the accompanying zoning, land use and planning legislation. This means that a review of the policies relating to the use of land for the development of golf estates, life style farming, polo estates and game farming be brought under review. It is the submission that the manner in which the land is used, not the fact of ownership itself leads to resentment.

The recommendations furthermore approve of the practice in some of the countries studied where medium- and long term leases of public land is seen as an option for future acquisition of land use by foreigners. The idea is that lease holds are of limited periods and may be less controversial that outright ownership of land by foreigners.

The report has made room for the debate as to whether the foreign ownership of land should continue. There are concerns amid interested parties that the restrictions on the foreign ownership of land would be a “red flag� for past and future foreign investors.

You will be interested to note that there have been numerous submissions by parties including estate agents, businesses, communities and also political parties alike. Two of the most important issues raised by these interest groups are investor confidence and of course economic growth. Due to the lack of available statistical data these arguments are based on perceptions. Perceptions cannot be ignored as these are relevant for policy making in democracy.

Suggestions from interest groups have encouraged free market in the property sector as state intervention may result in discouraging investor confidence. The “willing seller, willing buyer� principle is advocated.

The stance of the Land and Agriculture department on the other hand is that foreigners would welcome the certainty of regulations and policy of land ownership and that the ability to purchase land was not a decisive factor in determining whether investments would be made or not.

Certainly the panel faces a dilemma as the Constitution makes a distinction between the obligations of the state towards citizens as opposed to its obligations towards “all persons� which would naturally include foreigners on South African soil. However, at the same time, for this young democracy to develop and for bilateral agreements between South Africa and foreign states to be honoured, foreign investments are necessary and in some instances prescribed.

In closing, the healthy debate shows that as a nation we are at pains to find a middle way to deal with these obligations on the one hand and the need for economic growth on the other. The report does not by any means recommend that the rights of ownership be infringed upon by the state as also these rights also enjoy Constitutional protection.

A copy of the report can be found at http://land.pwv.gov.za