An open letter to Webber Wentzel on EWC

One of the more astute readers of this paper wrote a critique of the law firm’s apparent dismissal of the concerns around land reform. Some significant flaws have been picked up on.

In light of the recent battle to expropriate a R30 million property in Ekurhuleni, we accepted a critique of some of the legal advice surrounding the egregious law it as used to test. All big five law firms offered similar advice, but Webber Wentzel has been more extreme. In light of this, “Kerm”, posting on X as @_Kermit55, has offered a lengthy and detailed criticism of their stance on the matter, and addresses his concerns to the law firm. 

The original FAQ has been deleted, and no record of it was captured on the Internet Archive. Points 1, 4 and 7 were repeated in their February press release (available here), while points 2, 5 and 8 are repeated in this IOL article.

According to Kerm: “30+ misrepresentations but need to verify. Get a screenshot of this before they remove it. These talking points [are] repeated in interviews, seminars, etc. [I d]id a comparison of 3 of the large 5 and WW seems to be by far the worst. Looked high level at other two. Note that WW locked public comments on their account after I started questioning it. Letter followed this. All the big 5 seem to repeating the same key points (misrepresentations). Will RT you this now (was very high level analysis so need to double check). Legal firms also have a duty in terms of their code of conduct (LPC) to act in public interest and warn about systemic risk. Legal firms have conflict as they will benefit financially from EWC. Anonymous comment under my post states that WW specifically has a retainer with ANC.”

What follows is Kerm’s open letter in full:

EWC will have far-reaching impacts on not only affected property but the entire economy. Protection of private property rights are fundamental to private investment and economic growth. It directly impacts unemployment. A simple comparison to Zimbabwe’s land reform programme, including legislation, should have been enough to raise the alarm about potential catastrophic impacts for South Africa. Please clarify why you have been misrepresenting both the content and potential ramifications of the EWC Bill. Also clarify any vested interest in this matter. You not only have a duty to warn clients, but the public as a whole as it will affect all of us. Various stakeholders also rely on professional positions to inform decisions affecting their livelihoods.

One document (EWC FAQ,2025) also contains multiple misrepresentations. These have also been repeated in various publications and presentations. Please reconsider your official position on EWC. Feel welcome to respond to any claims in the below assessment you believe to be inaccurate.

Q1: What is the Expropriation Act and why does it matter? A (Verbatim): “The Act empowers the state to expropriate property for public purposes or in the public interest (e.g., land reform, infrastructure), subject to ‘just and equitable’ compensation per Section 25(3) of the Constitution. It matters because it addresses historical dispossession while introducing safeguards against arbitrary takings. Unlike the 1975 Act, it explicitly allows nil compensation in limited cases but requires rigorous justification.”

Response: #1: The Act does not “introduce safeguards against arbitrary takings”—the state decides expropriation (Section 5), with owners bearing challenge costs. #2: EWC does not allow limited cases. Examples provided are non-exhaustive “illustrative”. Only condition is that public interest outweighs private interest. Also ignores cases where state offers a fraction of the market price #3: It does not require “rigorous justification”. State can issue notice and onus is on owner to defend in mediation and courts. Courts also only need to determine if public interest outweighs private interest Q: What is Expropriation Without Compensation (EWC) and when does it apply? A (Verbatim): “EWC refers to nil compensation where deemed ‘just and equitable’ under Section 12(3). This applies only in non-exhaustive scenarios: (i) land held for speculative purposes (unused, awaiting appreciation); (ii) abandoned land (owner fails to exercise control despite capability); (iii) state-owned unused land; (iv) land exceeding reasonable agricultural needs; or (v) other equitable cases. Productive land (e.g., active farms) is excluded, as current use (Section 25(3)(c)) favors compensation.” Response: #4: “only in non-exhaustive scenarios” misrepresents EWC. “Only in” also contradicts “non-exhaustive”. Maybe author does not know what non-exhaustive means. Non-exhaustive means that it is NOT limited to the scenarios provided #5: Productive land is not excluded. Likely referred to 25(3)(2) in the constitution. “Use” is only one factor considered when expropriating. It does not mean that productive land is excluded. Use is weighted, not decisive.

(3) Q3: How is ‘just and equitable’ compensation determined? A: “Compensation must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including the factors set out in section 25(3) of the Constitution. These factors are: (a) the current use of the property; (b) the history of the acquisition and use of the property; (c) the market value of the property; (d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and (e) the purpose of the expropriation. “Expropriating authorities bear the onus to demonstrate that nil compensation is just and equitable, considering these factors—provisions that align with constitutional jurisprudence and provide strong defenses for owners. Typically, compensation will be above zero but below full market value; nil compensation is exceptional and subject to court review.” Response: #8: Misleading on onus on expropriating authorities. EA can determine expropriation and offer price in initial notice. Owner needs to defend this in mediation and courts at their own cost. Courts also determine if expropriation valid and final price #9: Statement that compensation “typically” between Nil and market price partially accurate. But no way to determine if will be mostly Nil. Speculates. Also ignores impact on property market as fraction of market price meets this condition. #10: No way for WW to state that Nil will be only in exceptional cases. They’re speculating, without evidence and not transparent. #11: “[Nil] subject to court review” is misleading. State can offer Nil and owner needs to pay for court to review offer. Accessibility major barrier for owner.

(4) Q4: What procedural steps must the state follow before expropriation? A (Verbatim): “Before any expropriation proceeds, parties must engage in good-faith negotiations or mediation, with the option to approach the courts if disputes arise, thereby mitigating risks and promoting equitable outcomes. Key phases: (1) Notice of Intention (Section 7: 60 days’ notice); (2) Objection/Mediation (Sections 9-10: 30 days to object, followed by arbitration); (3) Valuation and Deposit (Section 12: prompt payment of estimated amount); (4) Court Review (Section 11: challenge validity or compensation). The Act imposes stringent procedural requirements… which collectively ensure fairness and prevent arbitrary expropriations.” Response #12: “Good faith negotiations” is not required in EWC – at most implied. State determine expropriation and price. Owner has to negotiate, if this fails need to pay for mediation and courts. State has disproportionate power. #13: Process does not mitigate risks. Owner can only approach mediation and courts if they can afford it and costs need to be allowed for when compared to ANC offer. Only wealthy owners able to afford legal costs. Indirect risks similar to Russian indirect expropriation. #14: Stringent procedural requirements do not ensure fairness. Speculative and biased. State can arbitrarily issue notices of expropriation, use tax payer money to fund legal costs whereas owner needs to fund this himself. Considered “indirect expropriation” and Russia applied this

(5) Q5: Does the Act target productive agricultural land or businesses? A (Verbatim): “Importantly, the Act explicitly safeguards productive agricultural land and other economically viable properties from nil compensation, focusing instead on facilitating equitable access to resources in the public interest without disrupting established investments. Current use and economic purpose weigh against EWC.” Response: – #15: The Act does not explicitly safeguard productive assets. Use is only considered as one factor when determining compensation, not deciding factor nor binding when deriving price. – #16: “without disrupting established investments”. This is nowhere stated in EWC and author deliberately misleads readers. – #17: Use and purpose weighing against EWC overstated – merely considerations. Only factors to consider when determining expropriation and compensation.

(6) Q6: What are common misconceptions about EWC? A (Verbatim): “Misconceptions about EWC as a tool for ‘land grabs’ overlook the Act’s emphasis on compensation tailored to circumstances, including improvements and state investments, which safeguards against unfair outcomes. While the Act enables expropriation without compensation in certain scenarios, it remains firmly within the bounds of Section 25, ensuring that any application of EWC is exceptional and subject to rigorous scrutiny, rather than a default mechanism.” Response: – #18: EWC does not use “emphasis on compensation tailored to circumstances” to “safeguard against unfair outcomes”. WW imagined this. Fairness towards property owners is not the overarching principle of EWC. Public interest only needs outweigh private owners rights. “Just and equitable” is the balancing principle. – #19: EWC is a default mechanism as the state can arbitrarily decide on expropriation and the offer price. Any “scrutiny” conditional and to be funded by the owner – #20: WW already assumes that EWC complies with Section 25 of the constitution. Validity assumed despite ongoing litigation. WW adopts ANC/EFF view of validity and constitutional compliance of EWC. – #21: EWC does not limit Nil to “certain scenarios”. The list is not exhaustive but merely illustrative. Other cases not covered in the list can also be expropriated without compensation.

(7) Q7: How does the Act align with the Constitution? A (Verbatim): “Section 25 of the Constitution has always implicitly allowed for nil compensation where it is just and equitable; the Act merely codifies this without expanding powers, ensuring transparency and accountability in land redistribution. The shift to ‘just and equitable’ compensation, potentially including nil in rare cases, corrects past overpayments at market value that were inconsistent with the Constitution, but it does not undermine property rights—in fact, it promotes a balanced approach to reform.” Response: – #21: WW is adopting the ANC/EFF argument that the Act implicitly allows for Nil compensation. If this was true, ANC would not have attempted to change the constitution. Validity debated – WW adopts ANC/EFF position consistent with rest of content. – #22: “Nill in rare cases” is not in the EWC. WW making unsubstantiated and speculative claims and not being transparent about it. – #23: EWC does undermine property rights. State can arbitrarily decide expropriation and any price for compensation. Owner also needs to fund legal costs. This completely dilutes property rights. No rational investor will invest if principal is not secure. JSE response reaction supports this (Jan 28, 2025) – #24: “Corrects past overpayments” this is not in EWC. Also, WW is of the view that current owners should absorb previous overpayments by accepting underpayments including Nil – #25: “it does not undermine property rights—in fact, it promotes a balanced approach to reform.” Another misrepresentation and incoherent argument. Property rights are directly subjected to serve land reform.

(8) Q8: What risks does this pose for investors and the property market? A (Verbatim): “The Expropriation Act should not alarm investors; its safeguards ensure that South Africa’s property market remains attractive, with EWC limited to scenarios that advance public interest without compromising economic productivity. Critics may view the Act as too restrictive, but for property owners, its procedural hurdles and constitutional fidelity mean it poses minimal risk to legitimate holdings, serving more as a catalyst for targeted reform than a disruptive force.” – #26: EWC does NOT ensure that the property market remains attractive. Safeguards are completely overstated and misrepresented. Uncertainty directly deters investment – #27: WW also does not clarify that property in EWC is not limited to land – #28: EWC IS NOT limited to scenarios that advance public interest without compromising economic productivity. Condition is not stated in EWC, unsubstantiated and wishful thinking – #29: “Critics may view the Act as too restrictive” a nonsense statement. Open ended nature and limitations on state abuse is a MAJOR concern – #30: “Minimal risk” a complete misrepresentation. It’s a major risk to all property holders (not just land) – #31: Procedural hurdles are overstated. State can arbitrarily expropriate and decide offer price. Owners face hurdles as they either need to accept or fund the legal costs. Expropriation also occurs before appeal cases are concluded. – #32: “more as a catalyst for targeted reform than a disruptive force”. This is not in the Act.