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dispute resolution | 25 Jun 2020
BY Aslam Moosajee AND Joshua Davis
ENSight

dispute resolution


South Africa: Pretoria High Court rules the state must consider race when awarding COVID-19 relief funding to SMMEs

On 19 June 2020, the Pretoria High Court handed down judgment in Democratic Alliance v President of the Republic of South Africa and Four Others. The case concerned:

  • whether the qualifying criteria for two Coronavirus (COVID-19) relief funds for SMMEs, in terms of which “limited preference [could be given] to SMMEs owned by women, youth and the disabled”, were impermissibly vague; and
  • whether the state is entitled to take race, gender, age and disability into account when granting disaster relief in terms of the Disaster Management Act (“DMA”).

Vagueness

The court held that it was impermissible for the qualifying criteria for the relief fund to comprise a "laundry list of hygiene and procedural characteristics buttressed by one vague statement that 'priority would be given to women, the youth and the disabled'”. The court explained that this failed to provide any guidance on what weight is to be given to the gender, age, or disability of the owners of applicant SMMEs and therefore offended the principle that the exercise of a public power must be reasonably certain.

The use of race, gender, age and disability as qualifying criteria for COVID-19 relief funds

The Democratic Alliance argued that the DMA contains no express provision that entitles the state to take race or gender into account when providing emergency relief funding, and that race or gender therefore cannot form part of the qualifying criteria for the state’s emergency relief funding programme.

By contrast, the state argued that its power to take steps to protect and promote the advancement of previously disadvantaged groups is sourced in the Constitution. In addition, section 39(2) of the Constitution requires a court to interpret the DMA to give effect to the empowerment objectives of the Constitution.

The EFF, who intervened as respondents, noted that the DMA 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"(our emphasis).

The EFF argued that the inclusion of the phrase “own resources” indicates that “the state is required to consider the economic position of people by explicit reference to the ‘own resources’ of affected persons” and that “where people have less or fewer resources, as a result of historical discrimination, they should enjoy greater preference for state funded assistance”. In addition, the EFF noted that the DMA requires measures to be taken to reduce “the vulnerability of disaster-prone areas, communities and households”, and that race was a relevant criteria in assessing vulnerability.

The Commission of Gender Equality, in its capacity as an amicus curiae, noted that section 25(1)(c) of the DMA 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.

The court noted that it was required to interpret the DMA in a manner that promotes the spirit, purport and objects of the Bill of Rights and, thus interpreted, it as follows:

  • there can be no appropriate consideration of vulnerability without reference to race; and
  • the DMA entitles the state to take measures to alleviate the effects of the disaster and one of the effects of the disaster is to disproportionately harm black businesses.

The court therefore set aside the criteria employed by the state in awarding relief funding to SMMEs on the basis that it was vague, but held that in reformulating the criteria, the State must take into account race, gender, youth and disability.

Comment

It has now been resolved that:

  • the DMA obliges the state to consider race, gender, youth and disability when awarding disaster relief funding; and
  • the state is required to provide clear criteria, setting out the weight attached to race, gender, youth and disability, for SMMEs applying for disaster relief funding.

Aslam Moosajee

Executive | Dispute Resolution

amoosajee@ensafrica.com

+27 82 461 5917

Joshua Davis

Candidate Attorney | Dispute Resolution

jdavis@ensafrica.com

+27 72 608 6733