If a government takes land for land reform, do they need to pay compensation? And why?

Owing compensation to an expropriated landowner is one of the tests of property ideology. On the one hand, if a government has good reasons to expropriate private land, the duty to compensate the owner may prevent the government to pursue the public best. The duty to compensate expropriated landowners (in what English law calls “compulsory purchase”) puts serious fetters on the implementation of public policies. On the other hand, the lack of duty to compensate expropriated landowner might tempt governments to lower the thresholds for incursions in the property of private citizens. The purpose of the expropriation of private land is to obtain land that is urgently needed to achieve a valuable public goal; the purpose is not to redistribute wealth from the private to the public sector. The duty to compensate expropriated landowners has a strong ideological foundation. Article 1 of the 1st Protocol to the European Convention on Human Rights does not contain a compensation clause. Still, the European Court of Human Rights invented the duty to strike a “fair balance” between private and public interests in cases of the expropriation of land. For more than 20 years, land reform in South Africa has been tied closely to land markets. Land reform has suffered from the lack of willing buyers, willing sellers. But if the government, instead of buying land, uses its power to expropriate land, the government has to pay compensation to the expropriated owner. Expropriation of land without compensation is a political issue with strong constitutional implications. Apart from exceptional cases, Section 25(3) of the Constitution of the Republic of South Africa (1996) does not authorize expropriation without any compensation. In order to strengthen land reform, two political parties – the ANC and the EEF – consider to change the constitution. The change should allow future land reform to expropriate some private land without compensation. Taking land from a private owner without paying compensation is a substantial interference with private property rights. But there are examples in the history of land policy when this has been done. One example is the German land reform in the 1990s when the Federal Republic of Germany dealt with the vestige of the “democratic land reform” in the Soviet-occupied zone in Eastern Germany 1945–1949. Sanctioned by the European Court of Human Rights, Germany expropriated large swaths of land without compensation in order to promote “transitional justice”. Comparing arguments used for and against expropriation without compensation in the case of South Africa and Germany will show the legal, moral and political options for transformative land reform.