‘No need to entertain appeal’, says ConCourt on Tourism fund’s BEE criteria case

The Constitutional Court (ConCourt) says it will not entertain the Department of Tourism’s leave to appeal bid challenging a ruling relating to a relief fund that favoured black-owned businesses.

The department had approached the ConCourt seeking to appeal a Supreme Court of Appeal (SCA) judgment, which ruled in favour of trade union Solidarity and lobby group AfriForum.

In September 2021, the SCA found that then-Tourism Minister Mmamoloko Kubayi had incorrectly applied the law when she allocated Covid-19 relief funds using the Broad-Based Black Economic Empowerment (B-BBEE) criteria.

Kubayi’s decision to include the B-BBEE level of applicants as one of the criteria for the Tourism Relief Fund was, therefore, declared unlawful, with the SCA also ordering the department to pay the legal fees for the case.

Background

The Tourism Relief Fund was established as one of the measures put in place by government to assist businesses adversely affected by the lockdown imposed by the government in March 2020.

R200 million had been allocated to towards the fund to provide once-off payments of up to R50 000 to small, micro and medium-sized tourism businesses (SMMEs) in the tourism industry that were affected.

The department then decided to use the B-BBEE criteria to select businesses that would benefit from the fund, which prompted AfriForum and Solidarity to approach the Pretoria High Court in April 2020.

While they lost their initial case, the applicants were successfully petitioned to the SCA.

Leave to appeal

‘No need’

The ConCourt has since declined the department’s leave to appeal application, saying that the issue was “moot” as the State of Disaster had long been lifted by government.

In its judgment delivered on Wednesday, the apex court also highlighted that the relief funds already disbursed and that “nobody sought to have the money paid back”.

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“This was important because the dispute between the parties related to whether the minister had the power to include B-BBEE selection criteria in selecting SMMEs for relief in a Tourism Relief Fund related to Covid-19,” the judgment reads.

“The minister and the director-general agreed that, although the matter was moot, the court should entertain it because there was a need for clarity on whether the minister had power to use B-BBEE selection criteria.

“AfriForum and Solidarity argued that the matter was moot and there was really no need for the court to decide the issue of powers of the minister in relation to a fund that has also been exhausted.”

‘Increased workload’

The apex court explained that it decided not to hear the application due to an increased workload, which meant the apex court must pick and choose its cases carefully.

“The Constitutional Court concluded that, the matter was moot and there were no sound reasons for it to, nevertheless, entertain the matter, particularly given the fact that its workload had increased significantly since the 17th Constitutional Amendment.

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“It held that it would rather deal with the issues of the powers of the minister to include the B-BBEE selection criteria in the next new matter that will raise such issue. In the result, the Constitutional Court held that it was not in the interests of justice for it to entertain this matter.”

The department has been order to pay AFriForum and Solidarity’s costs.

(3/3) Leave to appeal is refused with costs. CCT 318/21 Minister of Tourism and Others v Afriforum NPC and Another pic.twitter.com/cCZx0AfDnI

— Constitutional Court (@ConCourtSA) February 8, 2023

‘True colours’

Solidarity’s deputy chief executive for legal matters, Anton van der Bijl, welcomed the judgment saying he believes that the fund’s criteria was “downright racist”.

“The government may try to disguise it as transformation, but it has shown its true colours long ago. It was extremely reprehensible to exploit the damage caused to the tourism sector by the government’s unreasonable Covid-19 restrictions to discriminate against people on top of it,” he said in a statement on Wednesday.

“South African citizens are sick and tired of having to witness how the government’s race ideology is crippling the country’s economy. This judgment sends an important message to the government that race can no longer serve as a trump card that takes precedence over all other interests.”

Meanwhile, AfriForum’s campaign officer Ernst van Zyl said: “This judgment is a hard blow for the South African government in its battle to protect its right to discriminate on the basis of race.”

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