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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION PRETORIA

CASE NO: 21424/2020

In the matter between:

DEMOCRATIC ALLIANCE                                                                                      Applicant

and

PRESIDENT OF THE REPUBLIC

OF SOUTH AFIRCA                                                                                   First Respondent

THE MINISTER OF CO-OPERATIVE

GOVERNMENT AND TRADITIONAL AFFAIRS                                   Second Respondent

THE MINISTER OF SMALL BUSINESS

DEVELOPMENT                                                                                        Third Respondent

DIRECTOR GENERAL: DEPARTMENT OF SMALL

BUSINESS DEVELOPMENT                                                                  Fourth Respondent

THE MINISTER OF TRADE AND INDUSTRY                                            Fifth Respondent

ECONOMIC FREEDOM FIGHTERS                                                           Intervening Party

COMMISSION FOR GENDER EQUALITY                                                     Amicus Curiae

 

JUDGMENT

 

THE COURT

 

Introduction

[1] This case concerns the manner in which government has designed a program of financial aid to designated businesses in response to the state of disaster declared in terms of the Disaster Management Act 57 of 2002 (‘The Act’) This declaration took place following the invasion of the Covid-19 virus into South Africa, threatening untold physical, social and economic harm. The nationwide lockdown which followed the declaration of the state of disaster threatened the very fabric of the South African economy. Understandably, government sought to dispense funds to small businesses to assist their effort to ensure their survival during the lockdown.

[2] The Minister of Small Business Development (‘the Minister)’ established two funds to provide financial relief to small, medium and micro enterprises; the Debt Finance Scheme (DFS) and the Business Growth Resilience Fund (BGRF).

[3] The DFS fund was designed ‘for businesses which are negatively affected, directly or indirectly due (to) the Coronavirus pandemic. ‘The scheme ‘is aimed at providing relief on existing debts and repayments to assist SMME’s during the period of the Covid-19 State of Disaster’.

[4] The BGRF was designed for businesses geared to take advantage of supply opportunities resulting ‘from the Coronavirus pandemic or shortage in the local market’. This fund ‘is targeted at SMME’s that are manufacturing what could be considered essential goods’.

[5] The crisp question for determination in this case concerns the criteria to be applied when such funds are distributed to the designated targets. Reduced to its essence, the applicant contends that BBBEE status or criteria such as race, gender and disability cannot be used as a basis for a decision as to the recipients of distributions from these two funds.

 

Applicant’s case

[6] In the founding affidavit deposed to by Mr Mbhele on behalf of applicant, references are made to a series of ministerial statements regarding the two funds. At an inter-ministerial press briefing on 24 March 2020, the Minister said; ‘we are supporting all small and medium size enterprises across SA and there are no race requirements for funding’. On 10 April 2020 applicant’s attorneys wrote to the Minister seeking clarity on the nature of the priority that would be given to women, youth and people with disabilities that had been mentioned in an explanatory document and further whether the race of business owners and their employees would be relevant to the distribution of funds, particularly in that race had not been mentioned expressly in an explanatory document produced by the Minister. On 30 April 2020 the Minister addressed a Parliamentary Portfolio Committee of Small Business Development in which she was asked about this issue and answered thus:

‘BBBEE is a requirement, is a fundamental requirement of transforming the economy of this country.  We cannot choose as and when we use it. BBBEE is a critical requirement, we need South Africans all of us to own and have a share in the economy of the country. So when applications come through we evaluate them on their need but we consider the demographic representation. Which does not only include race. It includes gender; includes geographic location; includes age, which is youth; also includes people with disabilities.’

[7] On the same day the applicant’s attorney sent a further letter to the Minister asking her to explain ‘how race would be considered in evaluating applications or what the legal basis is for making race a criterion for the award of disaster relief.’ According to applicant no response to this letter was received

[8] Subsequent thereto the Minister issued a set of documents which  laid out the qualifying criteria inter alia that the business must be registered with the Companies and Intellectual Property Commission (‘CIPC’), companies must be 100% owned by South African citizens, there must be proof that the business was negatively affected by the pandemic, the latest annual financial statement or management accounts which are not older than three months on the date of application had to be provided. The application was required to include details of the employees registered with UIF and including banking details and whether the applicant is registered with SARS. Further requirements included a six month cash flow projection and a copy of the lease agreement with those businesses that sought assistance in relation to rental relief.

[9] The Minister confirmed in her answering affidavit that ‘the Minister is entitled to use a broad range of considerations in determining what considerations to apply when evaluating applications’. She also stated that she has given limited preference to SMME’s  owned  by  “women,  the  youth  and  the  disabled”. She  further stated:

‘businesses owned by women, youth and disabled persons will be prioritised. We have employed these criteria as a way to reach the most vulnerable sectors of our society. This however does not mean that other businesses will be excluded. All applications who meet the criteria will be properly assessed.’

[10] In his replying affidavit, Mr Mbhele continued with his argument that there had been no explanation given by the Minister as to why she had chosen ‘in respect of these funds to discriminate on the basis of gender, age and disability but not race or B- BBEE status. Nor do they provide any assurance that they would not, in the future, discriminate on the basis of race of B-BBEE status.’ (sic)

[11] Significantly, by the time of the deposition of the replying affidavit, the applicant had altered the relief that it sought. No longer did it seek a declaratory order that it was impermissible and unlawful for government to use B-BBEE status, race, gender, ability or disability as criteria for determining which persons or entities will receive economic or other forms of relief or assistance.

[12] It persisted with the following prayers:

1. The third and fourth respondents are interdicted from using B-BBEE status, race, gender, ability or disability as criteria for determining which persons or entities will receive funds under the Debt Finance Scheme and the Business Growth Resilience Fund.

2. The decision(s) of the third and/or fourth respondents to use B-BEE status, race, gender, ability or disability as a criteria for determining which persons or entities will receive funds under the Debt Finance Scheme and the Business Growth Resilience Fund are reviewed and set aside and declared unlawful.

 

Application for intervention

[13] Shortly before the hearing which was set down 1 June 2020 that is on 29 May 2020 the Economic Freedom Fighters (EFF) sought to intervene. The relief that the EFF sought was that the Court declare lawful, the decision of the Minister and fourth respondent (The DG) to use B-BBEE status, race, gender, age and disability as qualifying criteria for determining how the funds in a Debt Finance Scheme and Business Growth Resilience Fund will be distributed and further a direction that the Minister and DG publish within thirty days of this Court’s order a guide as to how the various factors affecting B-BBEE status will be weighted/assessed in the distribution of money from the funds referred to. There was no objection to this intervention application and accordingly the EFF’s submissions in support of the relief for which they prayed were considered at the hearing.

[14] We should also add that the Commission for Gender Equality (The Commission) was admitted as an amicus to these proceedings. The Court is indebted to the Commission’s counsel for their assistance.

 

The applicant’s case

[15] Mr Budlender, who appeared together with Mr Bishop and Mr Tsele on behalf of the applicant, raised as the central argument in substantiation of the relief sought by the applicant, what was referred to as a vagueness challenge. Mr Budlender submitted that any use of race, gender, age or disability as criteria by which to distribute government funds must be based on a predictable system that determines in advance how these factors would be weighed relative to each other and relative to other criteria. In his view, there was no showing of sufficiently clear criteria for awarding the funds .He submitted that the demand for certainty is greater when criteria such as race, gender, age and disability are employed in such decision making. Mr Budlender referred to the papers which, in his view, showed that the only statement as to how these factors would be calibrated in the determination of the ultimate decision as to the award of funds as being that ‘priority will be given to businesses owned by women, youth and people with disabilities or as stated in the answering affidavit, ‘the Minister has given a limited preference to SMME’s owned by women, youth and the disabled’. He contended that this could not  be considered to be a predictable system. He contended that there was no explanation as to how these factors were measured or how important these factors were relative to each other or to other factors set out as criteria to be taken into account in the ultimate decision to distribute funds. He pointed out that no such guidance to a decision maker was provided in the Minister’s answering affidavit as to how’ the priority ‘would be given or what was meant by ‘limited preference’ in the distribution of funds.

[16] In support of these submissions, Mr Budlender referred to the decision in Affordable Medicines Trust v Minister of Health  [2005] ZACC 3; 2006 (3) SA 247 (CC) at para   108: ’The doctrine of vagueness, … requires that laws must be written in a clear and accessible manner.  What is required is a reasonable certainty and not perfect  lucidity.  The doctrine of vagueness does not require absolute certainty of laws. The law must indicate with reasonable certainty to those who are bound by it what is required of them so that they may regulate their conduct accordingly‘.

[17] A further explication of this principle can be found in the judgment in All Pay Consolidated Investment Holding (Pty) Ltd v Chief Executive Officer of the South African Social Security Agency 2014 (1) SA 604 (CC) para 88;

‘Vagueness can render a procurement process, or an administrative action, procedurally unfair under s 6 (2) (c) of PAJA. After all an element of procedural fairness – which applies to the decision making process – is that persons are entitled to know the case they must meet … In the context of a tender process the tender documents give notice of the proposed administrative action while the responding bids in effect constitute representations before the decision is made. Adequate notice would require sufficient information to enable respective tenders to make bids that cover all the requirements expected for the successful award of the tender. Given the confusion over the requirements of the tender on the part of both bidders and members of the Bid Evaluation Committee the notice given by the tender documents in this case was inadequate. It did not specify with sufficient clarity what was required of bidders.’

[18] On the basis of these legal principles, applicant’s case was that any person applying for funds should know in advance how their application would be decided The appointed decision makers must be provided with sufficient guidance so that they can make a decision with regard to these applications in a fair and consistent basis. In the view of the applicant, vagueness in the application criteria was but an invitation for arbitrary decision making, procedural unfairness and possibly corruption. En passant, there was nothing on the papers to suggest that any decision regarding the distribution of funds was tainted by corruption nor was this suggested by applicant. The sole point made in this connection was that without clear criteria corruption was always a possibility.

[19] By contrast, Ms Pillay who appeared together with Ms Moshodi and Mr Dawel on behalf of the respondents, submitted that there was a clear list of applicable criteria which had to be applied in the distribution of the funds. Further, so the submission went, it was competent for the Minister to identify policy guidelines to be considered by the decision makers in the exercise of their discretionary powers to distribute moneys from either of the funds. A considerable level of flexibility had to be given to decision makers because the matter was complex, and the decision makers needed to balance competing considerations which would include factors such as the total funds that were available, the number of applicants who would apply, including their demographic composition.

[20] Invoking the decision in Dawood, Shalabi and Thomas v Minister of Home Affairs and others [2000] ZACC 8; 2000 (3) SA 936 (CC) at para 53 as support of this submission, Ms Pillay noted that discretion was an important component of the legal system and that: ‘discretionary powers may also be broadly formulated whether factors relevant to the exercise of the discretionary power in dispute of a clear further situation may arise whether decision makers possess of expertise relevant to the decisions to be made.’

[21] Ms Pillay also submitted that the issue of vagueness had not been properly raised by the applicant in its founding papers. In short, Ms Pillay submitted that in the initial case brought, the applicant wanted this court to impose a blanket ban on the use of empowerment criteria under these emergency situations. She pointed out that in the founding affidavit the applicant had told the court that the main issue may be summarised as follows: ‘Can BBEE status of criteria such as race and gender be used as a basis for parcelling our disaster relief pursuant to the Disaster Act? The DA says no.’ In Ms Pillay’s view, it was only in the replying affidavit that applicant had introduced a new cause of action seeking to interdict and set aside the decision on the basis that the Minister had not disclosed how much priority should be given to gender age and disability. In other words, it had only made out the case it now presented to the court in its replying papers and it had failed to do so in its founding papers.

 

Evaluation

[22] In dealing with the question as to whether the applicant had made out a case for vagueness in its founding papers it is clear that it did do so, notwithstanding that it might have placed an emphasis on the question of race and gender as appropriate criteria for the disbursement of funds. But the following appears clearly at paragraph 90 of the founding affidavit:

‘The rule of law prohibits government decisions and criteria that are unduly vague. Where government is to be adjudicating the applications for relief or assistance it is essential that the criteria that it used be spelt out in advance with sufficient clarity. This applies in all manner of context, tenders, licenses and so on but applies with equal force to the dispensing of government funds as disaster relief.’

The founding affidavit then continues:

‘In the present case there is no clarity at all on how and to what extent BBEE status, race, gender, age and disability were used to grant the relief concerned. Furthermore, applicants are not only entitled to know what criteria they must meet; they have to know the right to know this in advance i.e. before they make the application. If they know the criteria, they will be able to ask questions if need be particularly where they need clarification. Here applicants have been left to operate in the dark.’

[23] Thus, it is clear that the issue of vagueness was placed squarely before this court in applicant’s founding affidavit in support of the relief sought by the applicant.

[24] We have already dealt in part with the qualifying criteria as claimed to be applied by the Minister. Many of these can be fairly classified as procedural or hygiene requirements: the business must have been registered with the CIPC, and registration documents from the CIPC must be provided as must three months of bank statements. ID copies of directors and/or members, FICA documents, the latest annual financial statements or management accounts not older than three months from the date of application, cash flow projections which are applicable and the relevant industry certification are also required as part of the requirements for application. By contrast, there is a substantive requirement namely that the employees must be 70% South Africans and then there appears the statement ‘priority will be given to business owned by women, youth and people with disabilities. There is simply no guidance given at all as to how these various criteria are to be weighed by a decision maker. It is simply a list of criteria to be taken into account with no guidance as to how ta discretion should be exercised by a decision maker.

[25] There was much debate about the decision in Solidarity obo Members v The Minister of Small Business Development and others (case number 21314/20 : 30 April 2020) where a Tourism Relief Fund for SMME’s which was established in terms  of  regulations which  had  been made  in  terms  of  s  27  (2) of  the Act was sought to be set aside. In this case the Minister of Tourism announced that the decision to disburse amounts from this  fund which provided for a maximum grant  of R 50 000 per entity would be guided by the Tourism Broad Based Black Economic Empowerment Codes of Good Practice. The fund would be administered in line with the objectives of economic transformation and the vision to ensure sustainable and inclusive tourism development.

[26] In this case a set of scoring criteria were established, and preference would be given to an enterprise with the highest score evaluated in terms of these criteria. A scoring criterion provided for a scoring of a maximum of 100 points. These were made up as follows: formal and regulatory matters such as company registration, tax registration, UIF contribution and the like attracted a potential of 25 points. A second category related to what was referred to as functionality and encompassed areas such as business profile, profiles of team members, annual financial statements, bank statements, proof of the effects of Covid-19 on the business and reference letters by the applicant. In this case a maximum of 55 points was allocated. Finally, a total of 20 points was allocated for B-BBEE status and  provides for four levels ranging from 20 points for level 1 to 12 points for level 4. A wholly black owned business would be allocated 20 points while a wholly white owned business would be allocated a minimum of 12 points but could achieve up to level 2 status depending on other initiatives the business may have taken to advance transformation.

[27] Dealing with the attack on the basis of the criteria dealing with race in this case, Kollapen J noted that the criteria associated with race represented in total to 2 – 8% of the total scoring criteria. Given the flexibility of the criteria;

‘It is reasonable to conclude that the scoring system in the main is about ensuring that those impacted upon by Covid-19 are provided assistance and support while a small portion thereof is devoted to matters of empowerment and transformation. If a balance is sought to be struck than the balance was overwhelmingly in favour of all candidates as opposed to those who are black. There can be nothing shameful or objectionable about this.’ (para 43)

[28] These criteria stand in sharp contrast to those which operate in the present situation. It is notable that in the Solidarity case, what I have referred to as procedural requirements and hygiene issues comprised the bulk of the points available. However, in addition thereto, a certain amount of points were allocated to the questions of race. As Kollapen J noted this could amount to between 2-8% of the total scoring criteria. In the present case the only non-hygiene or procedural issues related to the requirement of being South African and, of course, the priority to be given to women, youth and the disabled.  There was  no calibration provided to a decision maker to the relationship between the question of the priority given to women, youth and the disabled and the balance of the criteria set out. No guidance was given to any decision maker as to how to make such a decision nor does an applicant know what criteria are to be adopted.  As Mr Budlender correctly noted,  in the case of women it was not clear as to whether black women would receive the same scoring as white women nor was it clear as to which age group fell within the scope of youth. In short, the criteria which the Minister in the present dispute  claims to pass legal muster simple fall drastically short of such a threshold.

[29] As the Constitutional Court stated in Dawood; ‘[I]f broad discretionary powers contain no express constraints, those who are affected by the exercise of the broad discretionary powers will not know what is relevant to the exercise of these powers…that the exercise of a discretionary power may by successfully challenged on this grounds, for example, that it was not reasonable, does not relieve the legislature of its constitutional obligation to promote, protect and fulfil the rights entrenched in the Bill of Rights In a constitutional democracy such as ours the responsibility to protect constitutional rights in practice is imposed both on the legislature and on the executive and its officials.’ (paras 47- 48)

[30] In dealing with the discretion to grant an extension of a temporary residence permit the Court in Dawood went on to say at para 49: ‘there will be circumstances in which there are constitutionally acceptable reasons for refusing the ground or extension of a temporary residence permit but those circumstances are not identified at all in the Act .An obvious example one can think of is where the foreign spouse has been convicted of serious criminal offences that suggest that his or her continued presence in South Africa even under a temporary residence permit would place members of the public at risk…. It is for the legislature in the first place to identify the policy considerations that would render a refusal of a temporary permit justifiable. ‘

[31] In the present case the same reasoning must be applied. It is for the Minister to make sure that the criteria to be employed for the disbursement of public funds are not left to a simple laundry list of hygiene and procedural characteristics buttressed by one vague statement that “priority would be given” to women, the youth and the disabled. Such a broad phrase without any guidance as to what weight is to be given to these criteria simply cannot pass muster in our constitutional democracy The ostensible criteria fall foul of basic principles of the rule of law that such the requirement that the exercise of a public power must be certain, even, if as obviously is the case in these circumstances, discretion to allocate funds is permissible.

 

The inclusion of specific criteria; in particular race, gender, youth and disability

[32] By the time of the hearing before this Court, Mr Budlender had submitted that the appropriate route for this Court was to uphold the vagueness challenge and not prejudge the substantive lawfulness challenge; that is the additional argument that, even if the Minister had set out reasonably certain criteria determining how race, gender, age and disability would be considered in the distribution of funds , the use of these criteria would be unlawful because there is no law that empowers the use of B-BBEE status, race, gender, age and disability as criteria to distribute this form of disaster relief under the Act.

[33] The problem with this submission is that, having found the present criteria to be sufficiently vague so as to justify the relief sought by applicants without more, the Minister would be faced with the difficulty of having to redraft criteria without in anyway knowing whether a significant part of applicant’s challenge namely the lawfulness or otherwise of employing a criteria such as race, gender, age and disability could pass legal muster. For this reason, having heard full argument with regard to the substantive question of whether race, gender, youth or disability could be employed, it is incumbent upon this Court to examine these arguments in order to craft an order that is in the interests of justice.

[34] Mr Budlender submitted that there were only two laws to which the Minister could point to authorise her conduct in the distribution of funds; the Act and the Broad-Based Black Economic Empowerment Act 53 of 2003 (‘BBEEE Act’).

[35] In his view, the Act is the primary statute that regulates the government’s response to national disasters. The Act must thus be seen as the source of the power to take any remedial steps to address the effects of a national disaster so declared, including the provision of relief such as envisaged by way of the establishment of the two funds which are the subject of this application. In Mr Budlender’s view, neither in the preamble nor in any other provision of the Act could it be suggested that the Act can be employed to further any other governmental objectives than those which are connected to addressing the disaster and the necessity of developing an effective response thereto.

[36] In this connection he referred to s 1 of the Act which, inter alia, defines disaster as a ‘progressive or sudden widespread or localised, natural or human caused occurrence which … is of a magnitude that exceeds the ability of those affected by the disaster to cope with its effects using only their own resources’. Because the definition refers to an affected group’s ability to cope, using their own resources, ‘need’ is a central criteria as to what steps government may take to respond to the disaster; that is government is required to assess a group/community’s “own resources” in order to determine their need. On this line of argument, it followed that the need “for economic transformation” and the desire to achieve a more equitable income distribution, are not matters related to disaster management or to ”need” in terms  of the Act for they do not fit any of the clear aims of disaster management.

[37] Mr Budlender therefore submitted that the critical section namely s 27 (2) of the Act which permits the Minister to make regulations to authorise other Ministers to issue directions about a range of matters had to be interpreted by using this interpretative prism. In other words, regulations and directions may be promulgated for the ‘facilitation of response and post disaster recovery and  rehabilitation’.  Other goals that may be pursued in terms of s 27 (2) include the release of any available resources of the national government including stores, equipment, vehicles and facilities, the release of personnel of a national organ of State for the rendering of essential services, the evacuation to temporary shelters of all or part of the population from the disaster stricken or threatened area if such action is necessary for the preservation of life and the control and occupancy of premises in the disaster stricken or threatened area, the provision, control or use of temporary accommodation, emergency procurement procedures and the facilitation of a response and post disaster recovery and rehabilitation.

[38] Furthermore, a response is defined in the Act as follows: ‘in relation to a disaster, means measures taken during or immediately after a disaster in order to bring relief to people and communities affected by the disaster.

[39] Based upon this analysis of the Act, Mr Budlender submitted that relying on race or gender in respect of the owners of a business as a set of criteria to determine which business should be given relief is at war with s 27 (2) of the Act, in that need as opposed to race or gender is the only operational criterion provided for in the Act. Furthermore, in terms of s 27 (3), the powers contained in s 27 (2) must only be exercised ‘to the extent that it is necessary for the purpose of;

(a)  assisting and protecting the public;

(b)  providing relief to the public;

(c)  protecting property;

(d)  preventing and combatting disruption; or

(e)  dealing with the destructive and other effects of a disaster.

Thus, the promoting of economic transformation cannot be considered to be necessary to achieve any of these limited goals.

[40] Turning to the BBEE Act, Mr Budlender submitted that this Act was inapplicable to the distribution of monies from the two funds in that the B-BEEE Act does not apply to disaster relief. In any event that the Act employs complicated formulae to calculate a business’s BEE rating is not a license to the free floating and unguided use of race, gender, age and disability to distribute funds outside of the calibrated system that it creates. In any event by way of reference to the answering affidavit, Mr Budlender submitted that the Minister had not relied on BEE status and thus the B-BEEE Act but only on gender, age and disability .Thus she had not employed the detailed rubrics set out in the B-BBEE Act for the purposes of establishing criteria for the distribution of moneys from the two funds.

[41] Ms Pillay, on behalf of the respondents, submitted that government’s authority to take steps to protect and promote the advancement of previously disadvantaged groups is sourced in the Constitution[1] and flows through the exercise of all public power. In short, the authority to take account of previously disadvantaged groups does not have to be expressly stated in the empowering provision contained in the Act. Furthermore, s 39 (2) of the Constitution requires the Court to interpret legislation in a manner that promotes the spirit, purport and objects of the Bill of Rights. Thus, it is incumbent upon a Court to interpret the Act  in a manner that promotes rather than inhibits the rights protected and promoted by key constitutional rights such as equality as set out in s9(1) and the remedial measures which are permitted in terms of s 9(2) of the Constitution.

[42] So much is made clear by s 26 (2) (b) of the Act which states that, if a national state of disaster has been declared ‘the national executive must deal with the national disaster in terms of existing legislation and contingency arrangements as augmented by regulations or directions made or issued in terms of s 27 (2).’ Relying on the judgment of Kollapen J in Solidarity supra, Ms Pillay contended that the importance of the transformation of the economy and empowerment of previous disadvantaged groups are inextricably linked to the effects of the disaster in that the pandemic has ‘highlighted the fault lines in our society where it is so evident that more often than not that the poor and the disadvantaged bear the brunt of the crisis.’ (para37)

[43] Mr Ngcukaitobi, who appeared together with Ms Tabata, Mr Premhid and Mr Marongo on behalf of the EFF, placed considerable emphasis on the context in terms of which relief is distributed. Referring, for example, to the definition of disaster contained in the Act and the particular reference therein to using their  “own resources”, Mr Ngcukaitobi submitted that this definition makes it clear that the State is required to consider the economic position of people by explicit reference to the “own resources” of affected persons. Self-evidently therefore  where people have less or fewer resources, as a result of historical discrimination, they should enjoy greater preference for State funded assistance. Furthermore, s 7(2) of the Act provides that the Disaster Management Framework must especially ‘place emphasis on measures that reduce the vulnerability of disaster-prone areas, communities and households.’ Mr Ngcukatoibi submitted that it is for this reason that the EFF had intervened in order to ensure that any criteria for disbursement of public funds had to include race as part of the criteria, in addition to gender, youth and disability as was presently the case with the criteria published by the Minister.

 

Evaluation

[44] In her answering affidavit the Minister stated that ‘targeting a particular class of people who have been susceptible to unfair discrimination and designing the fund to protect or advance those claims of persons is a legitimate government objective’ and that ‘these considerations are however a small part of a much broader assessment metric’ . Regrettably, notwithstanding the issuing by applicants of a Rule 35 notice seeking a copy of this metric, the Minister did not provide either the applicant or more importantly this Court with this assessment metric.

[45] A further issue which added to the complexity of the present dispute, and the assessment thereof is that the Minister stated in her answering affidavit that only a consideration of gender, youth and disability were taken into account in the disbursement of funds and that race was not part of these criteria.  Nonetheless  she contended that any empowering provision must be interpreted in a way that permits the functionary to exercise the designated law-making power in a way that protects and promotes vulnerable groups in previously disadvantaged groups which by definition must include race. The EFF pointed out in its papers that given this concession by the Minister the omission of race in this regard was inexplicable.

[46] Turning to the Act, the Commission for Gender Equality, in its capacity as an amicus referred to section 25 (1) (c) of the Act which requires that the organ of State which prepares a disaster management plan must set out amongst other considerations specific measures taken to address the needs of women, children, the elderly and persons with disability during the disaster management process. Section 5 which mandates the Minister to establish a National Disaster Management Advisory Forum provides that there should consist inter alia ‘representatives of national umbrella organisations for women, children, elderly and people with disabilities. Hence the argument about whether race in addition to women, youth and those with disability should be part of the designated criteria requires recourse to the indicated approach to the interpretation of the Act.

 

The general approach to legislation

[47] Section 39 (2) of the Act, as noted above, enjoins a Court when interpreting legislation to promote the spirit, purport and objects of the Bill of rights. That in turn means that the process of interpretation must take account of the normative idea animating the Bill of Rights read as a whole. It must be recognized that constitutional adjudication, does, in many cases, involve a contest as to which values require promotion in the process of interpreting and therefore vindicating the promises of the Constitution. Competing visions of the meaning of the animating normative framework of the Bill of Rights may create a level of  uncertainty  but what is not uncertain is that this Constitution read as a whole cannot be construed as a libertarian constitution as some would have it or as a race neutral constitution eliding over an egregious history in which race overlaid by class and gender was the central determinants of the distribution of resources in our society for more than 300 years of its existence.

[48] It is regrettable that no coherent normative framework of the Bill of Rights has yet emerged to guide the interpretation of the Bill of Rights read as a whole, which would lend coherence to constitutional interpretation as a whole and the role of s39(2)of the Constitution in the development of consistent interpretation. That exercise must await another day.  But again what is certain is that our history and  in particular the pattern of disadvantage in which race, class and gender are overlaid have to be taken into account in any process mandated by s39(2) of the Constitution. So much was made clear in the judgment in Azanian Peoples Organisation (Azapo) and others v President of the Republic of South African and others [1996] ZACC 16; 1996 (4) SA 671 (CC) at para 43.

‘Generations of children born and yet to be born will suffer the consequences of poverty, of malnutrition, of homelessness, of illiteracy and disempowerment generated and sustained by the institutions of apartheid and its manifest effects on life and living for so many. The country has neither the resources nor the skills to reverse fully these massive wrongs. It will take many years of strong commitment, sensitivity and labour to “reconstruct our society” so as to fulfil the legitimate dreams of new generations exposed to real opportunities for advancement denied to preceding generations initially by the execution of apartheid itself and for a long time of its formal demise by its relentless consequences. The resources of the State have to be deployed imaginatively, wisely, efficiently and equitably to facilitate the reconstruction process in a manner which best brings relief and hope to the widest sections of the community, developing for the benefit of the entire nation the latent human potential and resources of every person who has directly or indirectly been burdened with the heritage of the shame and pain of our racist past.’[2]

[49] The very presence of s 9 (2) of the Constitution together with the range of socio economic rights contained in sections 26, 27, 28 and 29 of the Constitution luminously illustrate its commitment to historical redress and the priority that must be given to those most in need. The outbreak of Covid-19 in South Africa has brought sharply into focus the fissures in our society caused by race, gender and other forms of egregious discrimination. The geography of our cities  remain  racially divided, sadly after a more than a quarter of a century of democracy on broadly the same racial lines as was the case before democracy dawned; in turn this has had profound consequences for social distancing, access to clean water and sanitation and the consequences for small businesses in our townships. It is also correct as submitted by Mr Ngcukaitobi that at stake is the assistance of those rendered more vulnerable by the COVID19 state of disaster. He argued persuasively that there can be no appropriate consideration of vulnerability were one to exclude race. He correctly pointed out that the focus of the Disaster Management Act on the socio economic status of individuals and communities rendered vulnerable by the disaster includes race as this overlaps with socio economic status in South Africa.[3] If we need any persuasion about the importance of our past and the seated racial divide in contemporary South Africa and how the need for scarce resources fall overwhelmingly on those who are poor and therefore black, look no further than on whom the brunt of the effect Covid:19 falls. That the Disaster Management Act needs to be interpreted through this framework is clearly mandated by s 39 (2). The Act itself provides inter alia in s 27 (2)(n) that the Minister may make regulations that specify other steps that may be necessary to prevent and escalation of the disaster or to alleviate, contain and minimise the effects of the disaster. (our emphasis).

[50] One of the effects of the disaster is felt by businesses and if those with less resources are assisted as a measure of priority provided that the criteria are carefully and understandably set out, then such steps are clearly what the Constitution would expect to be undertaken by the executive.

 

The appropriate relief

[51] The application by the applicants for declaratory relief was abandoned leaving two legs to the relief still sought; that is interdictory relief and a review.

[52] The applicant seeks a final interdict that the Minister may never consider B- BBEE status, race, gender, age or disability in granting relief and to either the funds. For all the reasons set out this prayer needs to be dismissed.

[53] However, a limited form of relief must be granted by way of a review in that the present criteria have been held to be vague and thus legally non-compliant.  The appropriate course of action for this Court to adopt is to set aside the criteria and refer the matter back to the Minister for a redrafting of the regulations in which the Minister would be required to consider the role of race, gender, youth and disability in the formulation of the criteria to be applied in the new document which she is now required to prepare as the guide to the decision to disburse moneys in terms of the two funds.

[54] Given the constitutional nature of this case, it would be inappropriate to make an award as to costs.

[55] For these reasons therefore

1. The criteria which the third and fourth respondents have employed for determining which persons or entities are entitled to receive funds under the Debt Finance Scheme and the Business Growth Resilience Fund are reviewed and set aside and declared unlawful.

2. The declaration of unlawfulness does not affect any funds which have been distributed in terms of the existing criteria to persons or entities under either the Debt Finance Scheme or the Business Growth Resilience Fund as at the date of the delivery of this judgment.

3. In the reformulation of criteria to be employed in the distribution of funds under either the Debt Finance Scheme or the Business Growth Resilience Fund, the Minister must take into account race, gender, youth and disability.

4. There is no award as to costs.

 

________________

Mlambo JP

 

________________

Davis JP

 

________________

Molefe J

 

Date of hearing: 01 June 2020

Date of judgment: 19 June 2020

 

Appearances:

Counsel for the Applicant: Adv. S Budlender SC

Michael Bishop

Michael Tsele

Instructing Attorneys: Minde Schapiro Smith Inc.

Counsel for the Respondents: Adv. Kameshni Pillay SC

Trudy Moshodi

Michael Dafel

Instructing Attorneys: The State Attorney

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