The Starlink Saga
The Good Things Guy painted a wonderful picture –
“Imagine a South Africa where remote villages are as connected to the internet as the bustling streets of Johannesburg. Picture a future where cutting-edge technology boosts renewable energy efforts, creates thousands of jobs and positions South Africa as a global leader in innovation.”
And last year that seemed like it could’ve been – almost - within reach.
But then the world’s richest man, Elon Musk, took to his social media platform X to criticise his country of birth (more than once we may add), targeting an Expropriation Act and now internet licensing requirements that aim to tackle post-apartheid inequality. He even went on to say that –
“Starlink is not allowed to operate in South Africa, because I’m not Black.”
To say that tensions between South Africa and the United States are high, may be an understatement.
The tensions here have been caused by two issues – the first issue is the Broad Based Black Economic Empowerment or B-BBEE requirements and the second issue is the land laws that have sparked controversy in Washington resulting in the threat of cutting of aid to South Africa.
Clearly these issues need a little explaining as lines seemed to be crossed causing international chaos when all South African’s really want is faster internet.
The harm that X can cause right?
The Expropriation Act
On Feb. 7, President Donald Trump signed an executive order to cut U.S. financial assistance to South Africa, citing disapproval of a new land expropriation act. The White House also said it would produce a plan to resettle white South African farmers and their families as refugees.
But what is this land law that has everyone so riled up?
President Cyril Ramaphosa signed the Expropriation Bill into law on 23 January 2025. The newly assented to Expropriation Act No. 13 of 2024 (“Expropriation Act”) comes 50 years since the implementation of the old 1975 Expropriation Act (“1975 Act”). The content contained in the latest version of the Act has gone through a myriad of iterations, with the first version published in 2008, later in 2015 and the current version first published in 2020.
The Expropriation Act allows the state to expropriate land in specific circumstances and use it in the public interest. In rare cases this could be without compensation.
Ø Expropriation is a tool used by governments in varying jurisdictions across the globe, to take private property for public use, with compensation.
What is the role of compensation in expropriations?
Intrinsic in the legal definition of expropriation, is a requirement for compensation to be paid i.e. expropriation and compensation go hand-in-hand. The amount and methodology of calculating compensation differs in varying jurisdictions. The 1975 Act provided for market value compensation commonly referred to as “willing buyer will seller compensation”.
What does the new Expropriation Act say about compensation?
In contrast, the Expropriation Act now makes provision for “just and equitable” compensation. The concept of “just and equitable” compensation was introduced in our law 29 years ago in Section 25(3) of our Constitution (factors are listed that should be taken account in calculating just and equitable compensation). Between 1975 to date, South Africa has been expropriating using a financial model that was at odds with the Constitution.
Now, the Expropriation Act aligns itself with the Constitution. Factors that must be considered in the calculation of just and equitable compensation include –
i. the current use of the property,
ii. the history of its acquisition,
iii. improvements made in the property,
iv. if there was any State investment made on the property, and
v. the purpose of the expropriation.
The outcome of the application of the just and equitable method of calculation is based on the facts of each case. Whilst it may be possible to arrive at a zero-sum compensation, it would only be in extremely rare circumstances.
Another important factor contained in the Expropriation Act is the inclusion of state power that enables the state to acquire property not only for public purposes, but also in the public interest. This mirrors the Constitutional property clause, which defines the public interest as “including the nation’s commitment to land reform”. This means that expropriations to make land available to enable citizens to gain access to land for land reform purposes now have a statutory basis in addition to the Constitutional basis, which has been in effect since 1996. The inclusion of land reform objectives in the Expropriation Act aligns with section 25 of the Constitution.
In other words, the Constitution has mandated a model of equitable balance whereby the public interest (including the nation’s commitment to land reform) and the interest of the landowner must be balanced. Therefore, if, on a consideration of all relevant factors, it would be just and equitable to pay less than market value for an expropriation, the Constitution not only justifies, but mandates, doing so.
What does the Expropriation Act say about expropriation without compensation (“EWC”)?
As we can see from the above, the Expropriation Act may go further than the Constitution by expressly stating that expropriation may be zero in certain circumstances. However, a few caveats apply –
i. EWC applies only to land, as opposed to other forms of property, i.e. real rights such as mining rights, limited real rights, intellectual property, and movable property. The Expropriation Act does not contain a special definition for ‘land.’ This is in contrast to the Constitution that provides that property is not limited to land.
ii. EWC applies only where land is expropriated in the public interest as opposed to for a public purpose. This suggests that EWC will be applicable mainly (or perhaps only) to expropriations for land reform purposes, and expropriations in the context of access to natural resources such as minerals and water. Again, in these contexts, the only form of property that can conceivably be expropriated without compensation is land, and not the real rights or limited real rights attached thereto, such as mining rights or water use licences.
iii. In section 12(3), the Expropriation Act lists four circumstances in which it may be just and equitable for EWC may be paid –
a) Where the land is held for speculative purposes and is not being used by the owner;
b) Where the land is held by an organ of state that is not using for its core functions and the organ of state is not likely to require the land for its future activities, and the organ of state acquired the land for no consideration;
c) Where an owner has abandoned the land by failing to exercise control over it despite being reasonably capable of doing so; and
d) Where the market value of the land is equivalent to or less than the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land.
These particular circumstances may justify EWC but must be considered in light of all relevant circumstances, which would no doubt include the factors in section 25(3), mentioned above.
It’s at this point that it must be remembered that in a country with a population of 60-million people, only 4% of privately-held land is owned by Blacks while Whites which make up only 8% of the population own approximately three quarters of privately-owned land – most of which is farmland.
The ANC has therefore defended the law as an attempt to rectify the injustices of the past and has pushed back against what it says is misinformation, pointing out that no expropriations have yet taken place under the law. President Ramaphosa further had this to say on X –
“South Africa is a constitutional democracy that is deeply rooted in the rule of law, justice, and equality. The South African government has not confiscated any land.
The recently adopted Expropriation Act is not a confiscation instrument, but a constitutionally mandated legal process that ensures public access to land in an equitable and just manner as guided by the constitution.
South Africa, like the United States of America and other countries, has always had expropriation laws that balance the need for public usage of land and the protection of rights of property owners.
We look forward to engaging with the Trump administration over our land reform policy and issues of bilateral interest. We are certain that out of those engagements, we will share a better and common understanding over these matters.
The US remains a key strategic political and trade partner for South Africa. With the exception of PEPFAR Aid, which constitutes 17% of South Africa’s HIVAids programme, there is no other funding that is received by South Africa from the United States.”
The Democratic Alliance (DA) on the other hand as the second largest party in the government coalition, has said that the Expropriation Act violates private property rights and has filed a court challenge, calling the act unconstitutional.
Now with the facts as they are, the threat of halting aid may have been done so prematurely and fingers pointed when they shouldn’t have been.
But South African’s are a resilient bunch and as President Ramaphosa said in his State of the Nation Address (SONA) on the 6th of February 2025 –
"We will not be bullied."
Broad-Based Black Economic Empowerment (B-BBEE)
Elon Musk, SpaceX billionaire, has claimed that he can’t operate Starlink (a satellite internet system developed by SpaceX, aiming to provide global broadband internet coverage, especially in remote areas) in South Africa because he “is not Black”. This comes after talks between Musk and President Ramaphosa ensued wherein Musk discussed adjusting regulations that currently limit foreign companies like SpaceX from operating in the country with Ramaphosa.
Specifically, Musk is advocating for the removal or easing of a rule that requires foreign companies to be at least 30% Black-owned. As a trade-off, he’s proposing significant local investments, including the establishment of a Tesla battery production facility.
Ramaphosa who was initially keen to attract Musk’s ventures into South Africa, wanted to align these investments with South Africa’s renewable energy goals. But discussions have gone awry with the President halting further discussions (according to MSN) and Starlink withdrawing its presentation during ICASA’s regulatory hearings for international satellite operators in February.
Starlink already operates in countries like Nigeria, Ghana, and Botswana, delivering high-speed internet to underserved communities. Expanding this service to South Africa could connect millions of people, enabling better access to education, healthcare, and economic opportunities.
Added to that, the potential Tesla battery production facility could also revolutionise South Africa’s energy landscape. It would create much-needed jobs while advancing the country’s renewable energy efforts. With all this in place, South Africa can only rise.
The “what if’s” are hanging heavily in the air. And the question really is – is it all worth it?
Starlink and the B-BBEE drama
The Independent Communications Authority of South Africa (ICASA), held public hearings on a proposed new licensing framework for satellite services, including Starlink, from February 5th to 7th, 2025. ICASA had published a consultation document on the proposed licensing framework in the Government Gazette on August 14, 2024, and received written submissions from interested parties, including Starlink on the proposed new “Licensing Framework for Satellite Services”.
Viasat, MultiChoice and other mobile operators were present during the hearings. SpaceX, the parent company of Starlink, on the other hand, withdrew its planned participation in the oral presentations, but its written submissions remained.
According to ITWeb, in its submission to ICASA, SpaceX writes that –
“one subject the consultation doesn’t address is the ability for all satellite operators to hold individual licences to provide their services directly to the consumer. Under the current South African regulatory system, companies providing services directly to end-users must hold I-ECNS and I-ECS licences, which require at least 30% shareholding by historically disadvantaged groups.
However, many foreign satellite operators, particularly those with direct-to-consumer business models, have global policies that prevent local shareholding, thus excluding them from the South African market. This holds true even when these operators are willing to comply with B-BBEE requirements and invest in initiatives that directly benefit the target communities.
By aligning the licensing and ownership regulations with the ICT sector code – which recognises equity equivalent programmes as an alternative to local shareholding – ICASA could remove a significant barrier to foreign satellite operators. This would not only increase foreign investment in South Africa, but would also create broader industry benefits, supporting innovation, competition, and long-term growth.”
At the crux of the matter is the B-BBEE regulation that stipulates a 30% BEE requirement for the licensing process for a satellite internet service like Starlink. The B-BBEE regulations as a whole promote the inclusion of more Black South Africans in the economy through ownership quotas, skills development, tax breaks and preferential procurement of goods and services. They have been in place since 2003.
To comply with B-BBEE, at least 30% of SpaceX's South African operations would have to be sold or donated to stakeholders from historically disadvantaged groups, because it’s an international company.
In 2024, SpaceX urged ICASA to reconsider the ownership requirements. Multinationals in specific sectors can already invest in social projects such as skills training and small businesses, as B-BBEE equity equivalents, according to the Department of Trade, Industry and Competition.
According to Reuters, Communications Minister Solly Malatsi issued a policy directive to amend the B-BBEE rule so that instead of selling 30% of their equity, multinationals, including telecommunications companies, would have the option of entering into "equity equivalent" programmes, designed to fulfil the requirements of B-BBEE ownership.
This amendment may pave the way for Starlink’s availability to South Africans legally (keeping in mind that the Starlink kit was illegalised in 2023).
With so much potential, and so much need with so much red tape, there’s just no knowing which way the Starlink (and Tesla) wind will blow.
But we do know there has been a lot of misunderstanding as far as South Africa’s’ laws are concerned.
We hope what we have set out above clarifies some of what has been going on in the news. As with everything that concerns world affairs, this is very much an ongoing area. We will update our readers should anything further become available.
In the meantime, know that we have taken the utmost care to ensure that this information is correct, but we urge you to consult with a suitably qualified legal practitioner who will be able to answer any questions you may have on the Expropriation Act or on B-BBEE requirements. In this regard, we would be more than happy to support you. Please feel free to contact us to see how we can best assist.
We are a law firm that considers honesty to be core to our business. We are a law firm that will provide you with clear advice and smart strategies - always keeping your best interests at heart!
(Sources used and to whom we give thanks – Werksmans; Context here and here; ITWeb here, here and here; Reuters here and here; Business Insider Africa; MSN; Fortune and The Good Things Guy).
