Risks that undermine small businesses are bad business for South Africa. Threats to property rights are one of those risks as veteran anti-Apartheid activist and intellectual Temba Nolutshungu has repeatedly affirmed. Renowned entrepreneur Herman Mashaba has also come out in support of property rights in South Africa.
Sometimes government expropriate land for building new facilities. However, adequate compensation and due process is critically important. Especially as the new Expropriation Bill extends the power to expropriate from the minister of public works to all three tiers of government, allowing 500 or more state entities to expropriate property of all kinds, including farms, mines, shares, patents, and even homes.
Anthea Jeffrey from the South African Institute of Race Relations described the bill as “a drastic, unconstitutional measure” even in its revised form.
Above: Anthea Jeffrey from the South African Institute of Race Relations explaining the new Expropriation Bill
This is a massive extension of power from the Minister of Public Works to all spheres of government. How best to small businesses ensure they have recourse and can protect against expropriation of SMEs?
Fortunately entrepreneurs can be assured that the new bill does what a previous version did not – and that is provide for remuneration on any business expropriated.
The problem is what if the remuneration is not according to the business owners liking and is deemed unjust? The challenge for SMEs is exactly this problem, given one has to go to court to secure a just price.
“In practice, the option of applying to court to decide a different measure of compensation is likely to benefit only those with deep pockets – the relatively few who, despite the loss of their property to the State, can afford the cost of lengthy litigation with little guarantee of success.”
What about SMEs?
Can we be a part of formulating an alternative bill for policy makers that protects our valuable SMEs?
If you are an entrepreneur or small business owner who is concerned about the Exproriation Bill, or would like to find out more about the bill please mail us at email@example.com